There are two caps on workers' compensation benefits in Alabama. There is a cap on temporary benefits and a cap on permanent benefits.
In July of each year, the Alabama Department of Industrial Relations announces the maximum and minimum rates of temporary total disability benefits. For injuries occurring on and after July 1, 2010, the maximum workers’ compensation payable is $740.00 per week, and the minimum compensation will be $204 per week. This means that if you were earning $1,110 per week and were injured on the job, you would receive 66 2/3 of $1,110 per week (or $740.00 per week) in tax free workers' compensation benefits during the "healing period" while you are receiving medical treatment.
Once you are released from your medical treatment, get ready for the shaft!
If you are injured on the job and end up permanently disabled but not permanently and totally disabled (that is, if you are one to 99 percent disabled), it does not matter how much money you earned on the date of your injury, the most you will get from workers' compensation is $220.00 per week!
Ala. Code § 25-5-68(a) provides that “the maximum compensation payable for permanent partial disability shall be no more than the lesser of $220.00 per week or 100 percent of the average weekly wage.” The “$220 cap” on permanent partial disability benefits became effective January 9, 1985. IT HAS NOT CHANGED SINCE 1985! 1985 was the year the late Ronald W. Reagan was inaugurated for a second term as President of the United States. It was also the year that Mikhail Gorbachev become the Soviet Union’s leader, that the sunken Titanic was located; the year the Nintendo entered the home video game market; the year that 20 percent of U.S. homeowners had VCRs in their homes; the year that Microsoft shipped the Windows 1.0 operating system; and that the year the typical modem speed was 2400 bits/second. In 1985, minimum wage was $3.35 an hour (I remember earning that wage as I worked my way through college!)
Yet, the cap on permanent partial disability benefits that was fixed in the law in 1985 at $220.00 per week still applies today. It would have required $439 this year to have the same purchasing power as $220 did in 1985. Accordingly, the $220 cap is at least 50 percent too low and it is getting lower each year.
Not only that, but at the current rate of the annual increase in temporary benefits, the minimum compensation rate of temporary total disability benefits will exceed the maximum compensation payable for permanent partial disability in just a few years. Even the rate at which injured workers are reimbursed for mileage costs a they drive to and from medical providers has increased from 25 cents per mile in 1992 to 50 cents per mile today.
This oddity in the law produces strange results in some cases. For example, even a worker earning minimum wage would be penalized by the $220 cap ($7.25 per hours at 40 hours = $290.00). In a time in which our State is attracting more and more higher paying jobs, this cap is even more unfair than it has ever been.
What I can do? I'm glad you asked. Contact your legislators and DEMAND they change the law! The $220 cap needs to be indexed and increased so that people who find themselves in the unenviable position of being injured on the job don't have to file bankruptcy. The $220 cap can cause a worker who suffers a severe injury on the job to be forced to file bankruptcy.
Contact your Senator and Representative by calling the Senate (334) 242-7800 or the House (334) 242-7600 or by clicking here: http://www.legislature.state.al.us/misc/zipsearch.html
Call, email, write, fax or make a personal visit and request their help in changing this unbelievably unfair aspect of Alabama law.
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