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Does Workers Comp Pay Lost Wages?
Yes — workers comp replaces a portion of an injured worker’s weekly wages while they’re unable to work, providing financial stability through recovery.
- ✓Typically replaces 66.67% of average weekly wage
- ✓Payments begin after a waiting period of 3-7 days
- ✓Benefits continue until the worker can return to work or reaches MMI
- ✓Maximum weekly benefit caps vary by state
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How Wage Replacement Is Calculated
Temporary total disability (TTD) benefits are calculated as a percentage of the injured worker’s average weekly wage — typically 66.67% (two-thirds). The average weekly wage is calculated from the worker’s earnings over the 52 weeks prior to the injury, or sometimes a shorter period if they’re a recent hire.
Most states cap the maximum weekly TTD benefit at a percentage of the state’s average weekly wage. For example, if a state cap is $1,000 per week, an injured worker who earned $2,000 per week would receive $1,000 — not $1,333 (66.67% of $2,000). The cap is state-specific and changes annually.
There’s also a minimum benefit in most states — even very low-wage workers receive at least some minimum weekly amount. This prevents workers earning very little from receiving negligible benefits.
How Long Lost Wage Benefits Continue
TTD benefits continue until one of three things happens: the worker recovers fully and returns to their pre-injury job; the worker reaches maximum medical improvement (MMI) and is evaluated for permanent impairment; or the worker is offered a modified-duty job they can perform given their medical restrictions.
If a worker reaches MMI with permanent impairment, the type of benefit changes. A partial permanent disability (PPD) settlement may be negotiated, or ongoing permanent partial disability benefits may be paid based on the impairment rating.
As an employer, you can reduce your TTD exposure by having a modified-duty program. The moment you offer the worker a job within their medical restrictions, TTD benefits stop — even if the modified job pays less than their pre-injury wages. This is the most direct way to control claim cost.
Make Sure Your Policy Is There When Your Workers Need It
The right policy with the right carrier pays quickly and coordinates care smoothly. We make sure you’re with a carrier that serves your workers well.