Are you a business owner in Minnesota? There are several Minnesota laws and statutes governing how you should compensate injured employees. As an employer, it is in your best interest to be aware of how much workers’ compensation you may be liable to pay.
Thankfully, Minnesota is a no-fault state. This means that while you retain some accountability over a work-related injury, you need not shoulder compensation costs. For this reason, you need to have coverage. You can get yourself coverage from a business liability insurance provider.
Business liability insurance gives you coverage for work-related incidents. One policy under business liability insurance is workers’ compensation insurance.
Workers compensation insurance in Minnesota can include the costs of:
- Medical care
- Rehabilitation or occupational training or restoration
- Wage loss benefits
- Dependency benefits
The amount of work comp paid to injured employees in Minnesota will vary. Mainly, the permanence and extent of injuries are the main determinants of how much workers’ compensation an employee can get. Equally important is how much you were already paying your employee weekly at the time of the injury.
Read on to learn more about how much work comp pays injured employees in Minnesota!
What Determines the Amount of Work Comp in Minnesota?
Insured Minnesota companies will have coverage to pay for workers’ compensation in the event of a work-related injury. Depending on the circumstances, the amounts can differ. For the most part, two factors play a pivotal role in determining how much your work comp insurance in Minnesota should pay.
These factors are as follows:
Your Employee’s Weekly Wages Before the Work-Related Injury
Your employee’s regular wage for a week will be used in the calculation of worker’s compensation. According to Minnesota’s existing statutes on workers’ compensation, the insurance provider should calculate based on a five-day workweek.
The weekly wages are used along with a percentage of an employee’s permanency or impairment rating. The permanency or impairment rating expressed in percentage points can represent how much of the weekly wage is payable as workers’ compensation.
It has to be noted that this type of calculation applies to temporary injuries, as you will see later on.
Your Employee’s Permanency or Impairment Rating
A permanency or impairment rating is a measure of the extent of a work-related injury. The damage or impairment your employee sustains is determined by a physician who issues the rating.
The permanency or impairment rating is expressed in percentages. This figure indicates:
- How permanent an injury is
- The extent of the injury
To learn more about permanency ratings and how they affect workman’s comp in Minnesota, check out our article on the subject.
How Much Does Workers Compensation Insurance in Minnesota Cover?
The amount of work comp insurance companies in the state can provide will vary. Other than the factors mentioned in the earlier section, the amount will also depend on the type of disability or injury.
In Minnesota, there are four categories of work-related injuries. These are:
- Temporary total disability (TTD)
- Temporary partial disability (TPD)
- Permanent total disability (PTD)
- Permanent partial disability (PPD)
Which classification applies to your injured employee depends on the physician’s assessment. From the physician’s assessment is the impairment rating or permanency rating. The results will help determine the calculation of workers’ compensation along with the employee’s weekly pay.
Let’s go over each classification in greater detail.
Amount of workman’s Comp for Temporary Total Disability (TTD)
workman’s’ comp for temporary total disability is based on weekly wages. As the basis for the calculation, weekly wages are divided into two-thirds or .66. The resulting value will be the amount an injured employee receives for a maximum of 130 weeks following his or her work-related injury.
To illustrate, imagine that your employee used to make $1,000 weekly prior to sustaining a lower back injury from lifting heavy boxes. If $1,000 is the weekly wage, your insurance provider needs to pay two-thirds of that.
Two-thirds of $1,000 amounts to around $667.00 (rounded to the nearest whole number). $667 will be what the employee can receive as compensation.
An employee can receive TTD benefits for a maximum of 130 weeks. The benefits will cease in two situations:
- Your employee resumes his or her duties at work
- 90 days after your employee’s physician declares maximum medical improvement following treatment and rehabilitation
Amount of Workman’s Comp for Temporary Partial Disability (TPD)
Injured employees who resume lighter work can receive TPD benefits.
In the case of workers comp for TPD, the mathematical difference between the two types of wages will be the amount payable. More specifically, the amount is determined by taking the pre-injury weekly wage and subtracting from it the post-injury weekly wage.
Two-thirds of the difference will be the amount of TPD payable as workman’s comp. For example, if your employee used to make $1,000 before sustaining an injury, that amount will be the pre-injury benefit.
When the same employee returns taking on a different designation that pays $600 a week, this is the post-injury wage. Subtracting the post-injury wage from the pre-injury wage would yield $400.
Two-thirds of $400 is about $267. The employee can receive this alongside the weekly pay of $600. And, the employee can receive this for a maximum of 250 weeks.
Amount of Workman’s Comp for Permanent Partial Disability (PPD)
Permanent partial disability (PPD) benefits are not the result of calculations. Rather, the benefit is the result of matching the employee’s permanency rating to a set dollar amount determined by Minnesota.
PPD benefits are payable either as instalments or in a lump sum. As an employer, you may negotiate for 5% if you intend to pay the entire benefit in a lump sum.
Amount of Workman’s Comp for Permanent Total Disability (PTD)
According to Minnesota’s statutes, your employee can qualify for PTD benefits if he or she:
- Loses one or more limbs
- Becomes paralyzed
- Sustains partial or total loss of cognitive functions
- Loses sensory capacities
Once the permanency rating determines the above-mentioned, the employee can receive two-thirds of his or her weekly wages as compensation. Also, the employee can receive this indefinitely regardless of whether or not he or she resumes work.
Learn More About Workman’s Comp in Minnesota
As an employer, you alongside your insurance provider need to shoulder the costs associated with workman’s comp. Knowing how much you may have to pay and how to calculate the amount can help your insurance provider prepare in advance.
For more information about how workman’s comp pays in Minnesota, don’t hesitate to reach out. Get in touch with us at Osterbauer Law, Minnesota’s best workman’s comp law firm for both employees and employers!