Is It Possible To Receive Back Pay For Workers’ Comp Settlements?

Understand the difference between back pay and lost wages for workers’ comp

By Canaan Suitt, J.D. | Last updated on January 29, 2023

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Workplace injuries are often life-altering events. Injured workers frequently have to miss weeks or months of work while recovering from their injuries. 

Fortunately, many injured employees have the option of filing a workers’ compensation claim to cover the costs of medical care and lost wages resulting from their injuries. 

“Workers’ compensation is a law that allows for people who are employees to receive benefits when they’ve been injured at work,” says Pennsylvania workers’ compensation attorney Alfred J. Carlson. “It covers wage loss benefits… and medical benefits to cover the employee’s medical bills when injured at work.” 

This article will explain what worker’s comp is and how it works. Typically, “back pay” refers to when an employer didn’t pay an employee for their work or paid them less than they should have.  

In the context of workers’ comp, “back pay” is often used to refer to the wages that a worker didn’t earn due to being out of work for their injury.  

Lost wages due to an injury are not technically back pay since the employee didn’t work those hours. However, injured employees are often entitled to a portion of the wages they would have otherwise earned if they were not injured on the job. 

How Do Workers’ Compensation Benefits Work? 

Nearly every state has workers’ compensation laws that require employers to carry workers’ compensation insurance for possible workplace injuries. Depending on state requirements, the insurance carrier may be public or private.  

The workers’ compensation insurance company will investigate the incident when a worker gets injured on the job and reports it. The insurance company will assess whether the worker’s claim is compensable. The process and timeframes for a workers’ comp claim vary from state to state. You can learn more about the process by reading this article.  

Because of the complexity of the process, it’s a good idea to speak with a workers’ compensation lawyer to ensure a fair settlement. 

What Does Workers’ Compensation Cover? 

Workers’ comp covers medical expenses, including future medical treatment costs. 

Workers’ comp also covers a portion of wages lost due to being injured and out of work. In many states, workers’ comp benefits for lost wages equal two-thirds of an employee’s average weekly wages before the incident. 

How long does workers’ comp last? This ultimately depends on each individual’s situation. Generally, workers’ comp payments end if the employee returns to work.  

However, workers’ comp payments may continue after an employee returns to work. For example, some injured employees reach “maximum medical improvement” (MMI), a point when further medical treatment won’t improve their condition. When this happens, employees may be approved for light duty work at their former place of employment.  

This means the employee works less frequently or is only allowed to perform less physically demanding tasks due to their injuries. If the light duty work pays less, the employee may continue receiving workers’ comp to compensate for the lower amount. 

How Does Workers’ Compensation Pay You? 

When you reach a workers’ compensation settlement with your employer, you generally have the option of taking the settlement in a lump sum payment or in smaller payouts (typically, on a monthly or weekly basis).  

What kind of settlement should you take? This depends on your circumstances. Some considerations include: 

  • The nature of your injuries 
  • How long you’ll be out of work 
  • The kinds of expenses you need to cover 

To figure out the kind of settlement to accept, speaking with an experienced workers’ comp attorney is a good idea. An attorney can review your state’s options and assess the best course of action, given your needs. 

What is Back Pay?  

Back pay is the difference between what your employer actually paid you for your work and what you should have been paid for your work.  

Federal law makes it illegal for an employer to: 

  • Not pay their employees for their work 
  • Underpay their employees for their work 

It is definitely possible to sue your employer for being underpaid—this is called a wage theft lawsuit. 

However, here’s the crucial point: when you miss work due to a workplace injury, you are not necessarily missing unpaid wages. Your employer didn’t fail to pay you for work you actually did. Instead, you were not paid because you were injured and missed work. 

With regards to workers’ comp, what is meant by “back pay” is actually “lost wages,” due to missing work for an injury. Every state has different workers’ comp rules, but in general, you can get compensated for lost wages through workers’ comp. 

Questions for a Workers’ Comp Attorney 

“Being involved in a work-related accident can be a life-altering event for an injured worker,” says Carlson. “It’s important for anyone injured at work to consult an attorney so that they receive the compensation they’re entitled to for the work-related injury, whether it be wage loss benefits, medical benefits, or both.”  

Getting “competent legal counsel” means you don’t have to take “the journey [alone],” says Carlson. To effectively navigate the legal process, consider speaking with an attorney about your workers’ compensation case as soon as possible. 

Many workers’ comp attorneys provide free consultations to hear the facts of your case. These meetings allow you to get legal advice and decide if the attorney or law firm meets your needs. 

To see if an attorney is a good fit, ask informed questions such as: 

  • What are your attorney fees? 
  • Do you charge on a contingency fee basis? 
  • How much money can I expect in my workers’ compensation settlement? 
  • Can I get lost wage benefits? 
  • Should I take a lump sum settlement or monthly payments? 

Look for a workers’ compensation attorney in the Super Lawyers directory to help with your workers’ comp claim.

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