L&I Time-Loss & Wage Replacement Compensation
Time-loss compensation, also known as wage replacement benefits, is a partial wage replacement for an L&I claim and is paid every two weeks while you are not working due to a job injury or an occupational illness. See RCW 51.08.178 & 51.32.090. In such cases, the Washington State Department of Labor and Industries (L&I) will reimburse you for lost time and wages—typically between 60-75% of the worker’s earnings prior to the injury or illness up to a maximum cap. The IRS considers time-loss compensation to be a disability benefit, not earned income, so income tax laws do not apply.
One thing to note is that the first three days following your injury are considered a waiting period, and you won’t receive your wage replacement for those days until you’ve been out of work for at least 14 days after the injury.
What Benefits Does L&I Time-Loss Compensation Offer?
If you are approved for time-loss benefits, you may receive compensation for the following:
- Lost wages: The money you’ve lost from being unable to work
- Medical expenses: The cost of treatment required for your work-related injury
- Vocational rehabilitation: The cost of learning new skills that will help you find other employment within the workforce
Why Is L&I Time-Loss Compensation Important For Washington Workers?
Injured workers in Washington State often rely on L&I time-loss because it’s their only safety net, easing the financial burden of their medical expenses and lost income. It may cover injury-related expenses, including:
- Follow-up doctor visits,
- Physical therapy, and
- Prescription drugs.
For those without health insurance or limited coverage, this additional coverage is critical to recovery.
How Do I Qualify For Time-Loss Compensation?
- Have an open and allowed L&I claim.
- Have an Activity Prescription Form (APF) on file with L&I that has been filled out by an approved L&I provider.
- Verify that you are not currently working. You can do this by filling out a Work Status Form and submitting it to L&I.
Watch: L&I Basics
How Much Does L&I Pay For Time-Loss?
Time-loss payments will not be as much as your regular paycheck. Time-loss pays 60-75% of the wage you were earning before your injury. If you are already receiving time-loss, it is important to double-check the calculation as L&I often makes mistakes on wage orders, miscalculates rates, or fails to consider other income sources.
Time Loss Calculator
Your estimated time-loss compensation is
- Maximum time-loss rate: In Washington, the maximum L&I time-loss rate for 2023 is $8,250 per month, equivalent to 120% of the state’s average 2020 monthly wage. For details see L&I’s Maximum Time Loss Rate.
- Minimum time-loss rate: In 2023, the minimum time-loss rate in Washington State is 15% of the average monthly wage plus $10 for the spouse and $10 per dependent for up to five children. This equates to $1,031.35 per month for the worker in addition to the spouse and dependents. For details see L&I’s Minimum Time Loss Rate.
Once your time-loss rate is finalized, it is the wage rate you will be paid for the life of your claim. If you disagree with the amount of your time-loss rate, you have the right to protest the order in writing. An experienced L&I lawyer can help you with the process.
How Are Time-Loss Compensation Benefits Paid?
Your first check will be mailed within 14 days from the date L&I or your self-insured employer receives notice from your doctor that you are unable to work, if you are eligible and no further information is needed.
Checks are mailed (or sent electronically) twice a month, as long as:
- Your approved L&I provider certifies that you cannot work, and
- Your L&I Claims Manager or self-insured employer receives your signed Worker Verification Form.
If you don’t cash your check, it will expire after 180 days.
- You can ask L&I to reissue an expired check, but only if it has been fewer than 2 years since the issue date.
- If your check is lost or stolen, tell your L&I claim manager immediately.
No taxes will be withheld. The IRS considers wage replacement to be a disability benefit, not earned income, so income tax laws do not apply.
How To Apply For L&I Time-Loss Compensation In Washington State
The amount of documentation required for your case depends on how severe your injury or occupational illness is. In most cases, you will need to provide details about your injury, your employment history, and the medical treatment you need or are currently receiving. You will likely require the assistance of an experienced L&I attorney to help you collect all the required documentation.
In order to receive time-loss benefits from L&I there are two very important things that you must do right away, even before a claim is filed:
- Get medical help.
- Tell your employer.
If you are injured at work, you have three options to file a Washington State L&I claim:
- File by phone at 877.561.3453.
- File online through the L&I website’s File Fast tool.
- File at your doctor’s office.
You must further:
- Verify that you are not working by completing a Work Status Form for L&I.
- Visit an approved L&I doctor so they can complete an Independent Medical Exam (IME) to evaluate your injury and determine your eligibility for benefits.
L&I will consider your claim and make the determination based on your personal circumstances. Note that if you work with a self-insured employer, you must file your claim with them.
What Activities Are Prohibited While Receiving Time-Loss?
- You may not work while on time-loss unless you are approved for Loss of Earning Power (LEP) benefits. Prohibited activities are those that are unrelated to your job that may indicate that you are physically capable of performing physical tasks.
- Do not post anything on your social media accounts that may contradict your L&I claim.
- Do not miss your medical appointments.
- Follow your doctor’s advice about activities, including sports and recreational activities.
Each time-loss compensation case is different depending on details like marital status and claimed dependents. Our Seattle L&I attorneys will guide you through these complex regulations, which include regular doctor certification of your health condition so that you earn maximum compensation for lost wages due to your workplace injury.
What Are Loss Of Earning Power (LEP) Benefits?
An injured worker can return to their job under LEP benefits with a doctor’s medical clearance. If you are not deemed fit to fulfill your prior duties or responsibilities, your L&I lawyer will help arrange for light-duty or transitional work for you as you continue toward full recovery.
How Do I Qualify For LEP Benefits?
Your loss of earnings must be greater than 5 percent of wages at the time of injury. Some examples include:
- Returning to work for less pay, or
- Returning to work at your regular wage but at reduced hours.
Your doctor must certify that your loss of earning capacity is due to your work-related injury or occupational illness. If your doctor approves a written light-duty or transitional job and you choose not to accept the work, you are not entitled to LEP or wage replacement. You must still be working and earning income salary, wages, or commission.
What Are Examples Of Light-duty Jobs?
Light-duty or transitional work can be:
- Working shorter hours.
- Performing some of your original duties part-time, then gradually increase back to your full-time work responsibilities.
- Performing different duties with lighter physical demands as you transition back to your regular job.
- Adjusting your job or worksite to meet your physical limitations by providing tools, equipment, or the appliances that you need to perform your job as expected by your employer.
Concerns about returning to work—and the possible impact on your claim—are normal, but don’t let these concerns stop you from talking to your employer. You can continue to receive treatment for your claim until you’ve reached maximum medical improvement (MMI).
What Is Kept-On-Salary (KOS)?
L&I offers the Kept-on-Salary (KOS) program to help injured employees obtain prompt, quality medical care and negate the need for time-loss benefits. This voluntary program makes it so that if an injured worker can’t work, their employer can choose to keep them on the payroll while they undergo treatment. This helps eliminate the injured worker’s strain of lost wages as well as the employer’s administrative burden of time-loss compensation in Washington State.
In Washington State, here’s how it works:
- The employee must have a work-related injury that keeps them from working and requires medical care. They must agree to participate in KOS.
- The worker and employee sign an agreement and submit it to L&I for approval.
- The employee gets treated by an L&I-approved medical provider who bills L&I for treatment expenses.
- The employee continues to receive a paycheck and a portion of their benefits while they are being treated for their injury.
- L&I monitors progress.
Work with a Seattle L&I attorney to determine if this might be the right route for you.
Employer Misuse Of The Kept-On-Salary Incentive
Unfortunately, some employers have been known to abuse the program by not paying wage replacement or pressuring injured workers to return to work before they are healed. This not only risks the employee’s health but may also violate their workers’ compensation rights. Some employers even use the KOS program to commit fraud to falsify records, making it appear that a worker is receiving their salary when they are not.
If you believe your employer is abusing the KOS program or violating your rights, consult with an L&I lawyer so you can take legal action to protect your interests.
What If My Time-Loss Payment Is Late Or Missing?
Self-insured employers can be penalized for late or missing time-loss payments. The law assesses a penalty of the greater of $500 or 25% of the amount due. Payment is to the injured worker. For claims managed by L&I there is no penalty.
Watch: Workers’ Comp Basics And Claims Process
What To Do If Your L&I Time-Loss And Wage Replacement Compensation Claim Is Denied
You, your employer, and your doctor all have the right to protest any decision made about your workers’ compensation claim. L&I must receive a written protest within 60 calendar days of the date the decision was received (15 days for decisions about vocational benefits), and the decision will become final.
You may also appeal directly to the Board of Industrial Insurance Appeals (BIIA). The decision becomes final if your written appeal is not received within the following legal time limits from the date you received the decision:
- 60 days to appeal a claim decision or a payment decision
- 20 days for providers to appeal a billing decision that reduces the amount paid or demands repayment
During this time, you may be eligible for back time-loss compensation, however, if your L&I claim is later denied after appeal with a final order, you must pay back all of the provision time-loss that you received.
Ending Time-Loss Benefits And Closing Your L&I Claim
Your L&I claim closes when a physician certifies that further treatment will not improve your condition, meaning that you have met maximum medical improvement (MMI), or you have returned to work, or that L&I has determined that you are fit to return to work.
What Happens After Your L&I Claim Is Closed?
- If you do not protest or appeal, after 60 days the closing order will become
- If you protest or appeal, then the closing order is held in abeyance.
Reopening An L&I Time-Loss Compensation Claim
If your workplace injury or occupational disease worsens, you and your doctor may apply to reopen your claim. There must be medical evidence from an L&I-approved provider stating that after your claim closed, the condition caused by the original workplace injury worsened and needs more medical attention.
The amount of time that you have to reopen your L&I claim depends on the benefits you are seeking:
- For medical treatment only, you may apply at any time.
- For both time-loss benefits and medical treatment, apply within 7 years of the date your claim was first closed (10 years for eye injuries).
- If your claim has been closed for more than 7 years, you may apply for medical benefits. However, only the L&I Director may grant additional disability benefits such as wage replacement or disability awards for these claims.
Your L&I Claim Is Worth More If You Also Have An Employment Law Claim
A significant number of L&I workers’ compensation claims often involve additional legal claims such as employment law or third-party claims. Many people file their claims without seeking representation from an L&I attorney and thus never discover that in addition to their L&I claim, they may be missing out on the ability to file an employment law claim or a third-party claim. Pursuing additional legal action has the potential to significantly increase a claim’s overall compensation.
What Is An Employment Law Claim?
Many injured workers find that their employer has taken or plans to take adverse action against them because they filed an L&I claim or they are out of work. You can file a lawsuit against your employer for several reasons, including retaliation, wrongful termination, disability discrimination, or unpaid wages. An L&I attorney who is experienced in both L&I workers’ compensation law and employment law can help you with your L&I claim while simultaneously filing a federal or state law claim for the violation of workers’ rights by your employer.
What Is A Third-Party Claim?
A third-party claim is one in which someone other than your employer or co-worker is responsible for your injury. If you have been injured on the job due to someone else’s actions or negligence, you may be entitled to additional compensation through a third-party claim, which combines your L&I claim with a personal injury claim using the same facts.
Unlike workers’ compensation payments, there is no limit to the amount of compensation an injured worker may seek in third-party damages.
Who Is At Fault For A Workplace Injury?
L&I is a no-fault system, ensuring compensation for any workplace injury. However, if a third party is involved in causing the injury, you may be able to pursue legal action against them for additional compensation under third-party claims.
How Do I Know If I Have A Case?
The bottom line is that anyone who isn’t familiar with L&I claims in Washington State should seek the input of experienced L&I attorneys who are.
After years of helping injured workers, Emery | Reddy has recovered millions for our clients. Our team of L&I attorneys is experienced in litigating L&I claims, injury law claims, and employment violations. We understand how to leverage each claim in state or federal court and before the Board of Industrial Insurance Appeals to maximize the value of all of your claims.
Emery | Reddy Can Help You With Your L&I Claim
Emery | Reddy is the only law firm in Washington State that is equipped to provide comprehensive representation on your case from every angle. We thoroughly assess every case to determine if our clients have additional claims, and at times this can extend far beyond the underlying workers’ compensation claim.
If you have been injured in the workplace, call Emery | Reddy today to speak with our legal team for a free case review. Please remember to have your L&I claim number readily available.
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