Reductions to Temporary Total Disability Payments and Using Vacation Pay After a Work Injury

An injured worker is eligible for temporary total disability (“TTD”) payments if he or she is unable to return to work while healing from and receiving medical treatment for a work-related injury. TTD payments are paid out at a rate of two-thirds the injured worker’s gross average weekly wage up to an annual maximum (see 2011-2018 Maximum TTD Rates). For example, if your gross weekly earnings are $600, your TTD rate will be $400. While TTD is usually paid out in full, there are various situations where an injured worker’s TTD may be reduced due to the receipt of other benefits or income.

New Income May Offset or Disallow TTD Income

Wages earned from the employer where the injury occurred – or even a separate employer – are offset against the injured worker’s TTD payments if received during a healing period. Said differently, if you are able to work in a different capacity within your medical restrictions for the time-of-injury employer or begin receiving another stream of income from a new employer during a healing period following a work injury, you may not be eligible to receive TTD payments. Your TTD benefits will not be reduced if you continue to work at a second job you held at the time of injury.

Sick Pay and Various Other Income Benefits Reduce TTD Payments

Sick pay benefits from the time-of-injury employer also reduce TTD payments. However, if an injured worker does use sick pay in lieu of TTD during a healing period, the employer is required to reimburse the worker’s sick leave bank in an amount equal to the TTD that would otherwise have been due. Some other common offsets against TTD benefits include: unemployment insurance, Social Security Disability, and holiday pay from an employer.

Employer Gifts & Donations Do Not Reduce TTD Payments

There are some exceptions worth noting that do not reduce TTD payments. First, where an employer simply gives money to an injured worker while he or she is out of work due to a work-related injury, TTD may not be reduced by the worker’s compensation carrier. Keep in mind that this exception only applies when the employer payments are in the form of a “donation” or “gratuity,” not the worker’s actual wages. See Modern Equipment Co. v. Industrial Commission, 247 Wis. 517, 20 N.W.2d 121 (1945).

Vacation Pay Does Not Reduce TTD Payments

The next exception is that use of vacation pay generally does not reduce TTD payments to an injured worker. In Bergstrom v. Necedah Screw Machine Products, WC Claim No. 2000-048136 (LIRC March 2, 2001), the Labor & Industry Review Commission found that because vacation pay is a fringe benefit earned by employees outside of their wages or salaries, it cannot be considered regular income for purposes of reducing temporary total disability payments. While most workers tend to save their vacation pay while they are on temporary total disability, this benefit may be useful if your worker’s compensation claim is denied and you have no other form of income while out of work during a healing period. Workers who use vacation pay after their claim is denied and then dispute their worker’s compensation denial may then claim the full amount of TTD owed without any offset.

Contact Hawks Quindel with Questions on Temporary Total Disability

Total temporary disability benefits are dependent on and affected significantly by the context of your employment, income, and other benefits received. If you have questions about TTD payments or any of your other worker’s compensation rights, contact Hawks Quindel’s experienced worker’s compensation attorneys for a free evaluation of your claim.

Family & Divorce

Labor Law

Social Security

Employee Benefits

Wage & Hour

Worker's Compensation

Disability Benefits

Duty Disability

Brandon Jubelirer