Wage Differential Benefits

Permanent Partial Disability (PPD)

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Wage differential benefits are a type of permanent partial disability (PPD) available to injured workers in Illinois who have suffered a loss of earning capacity as a result of a work-related accident or occupational exposure.

Wage differential benefits are set forth in section 8(d)(1) of the Illinois Workers’ Compensation Act:

If, after the accidental injury has been sustained, the employee as a result thereof becomes partially incapacitated from pursuing his usual and customary line of employment, he shall, except in cases compensated under the specific schedule set forth in paragraph (e) of this Section, receive compensation for the duration of his disability, subject to the limitations as to maximum amounts fixed in paragraph (b) of this Section, equal to 66-2/3% of the difference between the average amount which he would be able to earn in the full performance of his duties in the occupation in which he was engaged at the time of the accident and the average amount which he is earning or is able to earn in some suitable employment or business after the accident.

For accidental injuries that occur on or after September 1, 2011, an award for wage differential under this subsection shall be effective only until the employee reaches the age of 67 or 5 years from the date the award becomes final, whichever is later.

820 ILCS 305/8(d)(1) Illinois General Assembly | IWCC PDF.

The Preferred Remedy

The language in section 8(d)(1) of the Act that wage differential benefits are available “except in cases compensated under the specific schedule set forth in paragraph (e) of this Section” does not mean that an injury to a scheduled body part – such as the hand – prevents payment of wage differential benefits. General Electric Co. v. Industrial Commission, 89 Ill. 2d 432 (1982) Google Scholar (“[C]ompensation under section 8(d)(1) is barred only if compensation is actually awarded under section 8(e), not simply because an injury is listed in the schedule as compensable under paragraph (e).”)

Rather, the Illinois Supreme Court has explained that wage differential awards are the preferred remedy when a loss of earning capacity can be established by the injured worker:

Scheduled awards are often not fair. For example, partial loss of use of a finger may be an annoyance to some workers, but a catastrophe for a violinist. Nor are scheduled allowances always fast and certain. It is often easier to calculate how much a claimant’s earnings have decreased since the accident than to assign a percentage partial loss of use. Exclusive scheduled awards cannot be justified as a kind of liquidated damages, an unchallengeable estimate of earnings loss. Rather, the schedule represents a presumed minimum loss, looking toward the uncertainties of future employment prospects. The law recognizes that the loss of a body part will probably catch up with a worker sooner or later, even if his current work happens to be only slightly impeded by the injury. The worker is allowed to recover the scheduled amount without having to demonstrate how the expected eventual loss of earnings will come about. If, however, he can prove an actual loss of earnings greater than the schedule presumes, there is no reason why he should not recover that loss. In theory, the basis of the workers’ compensation system should be earnings loss, not the schedule.

General Electric Co. v. Industrial Commission, 89 Ill. 2d 432 (1982) Google Scholar.

Proving Wage Differential Benefits

“A claimant has the burden of proving the extent and permanency of his injury by a preponderance of the evidence; liability cannot be premised upon imagination, speculation or conjecture.” Chicago Park District v. Industrial Commission, 263 Ill. App. 3d 835 (1994) Google Scholar.

“In order to qualify for a wage-differential award under section 8(d)(1) of the Act, a claimant must prove (1) a partial incapacity which prevents him from pursuing his ‘usual and customary line of employment’ and (2) an impairment in earnings.” Lenhart v. Illinois Workers’ Compensation Commission, 2015 IL App (3d) 130743WC Google Scholar | Illinois Courts PDF.

Calculating Wage Differential Benefits

Section 8(d)(1) of the Act provides that the wage differential benefit is “equal to 66-2/3% of the difference between the average amount which he would be able to earn in the full performance of his duties in the occupation in which he was engaged at the time of the accident and the average amount which he is earning or is able to earn in some suitable employment or business after the accident.” 820 ILCS 305/8(d)(1) Illinois General Assembly | IWCC PDF.

For example, consider a claimant electrician able to earn $1500 per week before his accident. After the accident, the claimant was left with permanent restrictions that prevented him from returning to work as an electrician, and he was only able to subsequently earn the minimum wage of $8.25 per hour, or $300 per week. In this case, the injured worker has suffered a loss of earning capacity of $1170 per week, and his wage differential benefit would be $1170 × 66-2/3% = $780 per week.

The wage differential benefit is also subject to the minimum and maximum benefit rate rules. The Illinois Workers’ Compensation Commission publishes a benefit rate page that shows the minimum and maximum wage differential benefit rates based on the date of accident or occupational exposure.

For example, the minimum wage differential benefit is equal to the minimum “Temporary Total Disability” benefit based on the total number of children under 18 (on date of accident) and spouse. If the accident occurred between July 15, 2016 and January 14, 2017, and the claimant was married with a child, the minimum wage differential benefit would be $253.00 per week.

If the calculated wage differential benefit is low, the injured worker may elect to receive person-as-a-whole benefits under section 8(d)(2) of the Act.

The maximum wage differential benefit is equal to the statewide average weekly wage (SAWW). If the accident occurred between July 15, 2016 and January 14, 2017, for example, the maximum rate would be $1,071.58.

The duration of the wage differential benefit depends on the date of accident. While the wage differential benefit was previously paid for the life of the injured worker, “[f]or accidental injuries that occur on or after September 1, 2011, an award for wage differential under this subsection shall be effective only until the employee reaches the age of 67 or 5 years from the date the award becomes final, whichever is later.”  820 ILCS 305/8(d)(1) Illinois General Assembly | IWCC PDF.

Further reading:

Lenhart v. Illinois Workers’ Compensation Commission, 2015 IL App (3d) 130743WC (“the plain language of section 8(d) prohibits the Commission from awarding a percentage-of-the-person-as-a-whole award where the claimant has presented sufficient evidence to show a loss of earning capacity”) Google Scholar | Illinois Courts PDF.

Cassens Transport Co. v. Industrial Commission, 218 Ill. 2d 531 (2006) (“Although wages are indicative of earning capacity, they are not necessarily dispositive.”) Google Scholar | Illinois Courts PDF.

Flynn v. Industrial Commission, 211 Ill. 2d 546 (2004) (“This rule also leads us to conclude that when a worker is concurrently employed, all of his earnings must  be considered when calculating a wage differential under section 8(d)(1).”) Google Scholar | Illinois Courts.

This article does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.