Minimum Wage Goes Up 1/1/16 – Are You Ready?
Happy Monday, dear readers!
As many of you are traveling for the holidays, I figured I’d give you a little insight into life of days gone by.
Back in the days of the Cold War, as children in the West were already growing tired of their Christmas presents, their soviet counterparts saw the approach of New Years eve, which brought with it visits from “Ded Moroz,” a soviet version of Santa Clause who was muscular and aggressive.
Unlike American Children, soviet children looked forward to gifts of coal, which ensured survival of the cold winters. January 1st brought with it both the start of a new year and presents, a secular Christmas of sorts.
Had the Soviet Union won the Cold War, Americans would be enjoying unwrapping potatoes and coal today (fortunately, it went the other way).
This January 1st, however, some Californians will still get to unwrap a present of sorts, provided by their benevolent government. As of January 1, 2016, California’s state-wide minimum wage goes from $9 per hour to $10.
In places like San Francisco, where the minimum wage is already $12.25, there won’t be much of a change, but not all counties and cities have a minimum wage which exceeds the State’s.
What does this mean for us in the workers’ compensation world?
Well, let’s say that you have an injured worker who was making minimum wage at the time he sustained injury ($9/hour). At 40 hours per week, that would be $360 per week, entitling him to TTD at a rate of $240 per week. Well, as of January 1, 2016, had he not sustained an injury, he would likely be earning $400 per week, which would generate a TTD rate of $266.67 per week.
But wait, temporary disability benefits are set by average weekly wages, right? In fact, Labor Code section 4453(c) pretty clearly lays out how to calculate average weekly wages “[w]here the employment is for 30 or more hours a week and for five or more working days a week” and that’s to multiply daily wages by working days in the week. Simple, no?
Not so fast.
There is a long string of cases which have held that post-injury developments, including completion of studies and union raises, result in an increase in the average weekly wage calculation.
So, realistically, we can expect demands for minimum wage workers to increase temporary disability benefits to account for the minimum wage increase. On the bright side, all things considered, this really isn’t a lot of money, and it might be better to pay it now rather than having it come up at an MSC and be the subject of a penalty petition.
