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Workers' Compensation Award Credit for Actual Earnings

Dec. 8, 2021

In some instances, an injured employee will return to his former position and resume making the same earnings as before the injury. When such an individual has received a workers' compensation benefit, the question arises whether the employer is entitled to a credit on the amount of benefits that were paid to the employee. If the employer paid the employee's wages, intending such wages to take the place of any benefit compensation, then the employer would be entitled to a credit. However, there is rarely direct evidence of the employer's intention in this regard.

Given the usual lack of evidence on the employer's intention that wages serve in the place of benefits, such intention must be gleaned from the relevant circumstances. For instance, if wages were paid, despite the fact that the employee did not work, it would be reasonable to infer the employer's intention. Likewise, if the employee is paid his pre-injury wage, though he performs a reduced workload, the employer's intention could be reasonably inferred. If the employer denies any workers' compensation liability, the wages it pays to the employee cannot be claimed as a credit for a workers' compensation payment. Additionally, any charitable payments made by the employer to the employee cannot be later recovered by way of credit.

If the employer is allowed a credit, the amount of credit is determined on a weekly basis. Basically, the amount of the credit will be determined on a week-by-week basis in relation to the amount of workers' compensation benefits allowed to the employee for such week. No running tally is kept such that the overall total amount of benefits is offset by the amount of wages paid. Consider the employee who earns $400 from the employer in a specific week. The employee's compensation payment is in the amount of $250. Therefore, the employer would be allotted a $250 credit for the week. After that, a new week begins with a separate credit calculation to be made.