What renewed concerns over inflation could mean for analyzing loss of earning power in workers’ compensation

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Last week the United States Department of Labor announced inflation reached a 30 year high. Here in Nebraska, the Governor announced a $8 p/h or 40 percent pay increase for corrections officers. But how could eye popping wage increases and renewed attention to inflation impact workers’ compensation in Nebraska?

Back in February, I wrote a post about a Mississippi decision that took wage inflation into account when determining loss of earning power. Loss of earning power determines how permanent disability (and sometimes temporary disability) are paid. Put another way, the Mississippi court held that just because overall wages increase that doesn’t mean an employee’s earning power increases along with wages. After all, earning power is a measure of an employee’s ability to compete for jobs not necessarily wages earned.

The issue of wage inflation matters in workers compensation because workers are often stuck with benefit rates based on their wages at the time of the accident. In some cases, loss of earning power, or how the injury impacts their ability to work may not be decided until a few years after the accident,

Put yet another way, employers try to use wage inflation to reduce loss of earning power benefits. In times of more moderate inflation, it seemed as if some courts would adopt those arguments.

But with renewed attention to inflation and news of major wage increases, hopefully workers’ compensation courts will start raising an eyebrow when an employer argues that wages have increased for an injured worker since the time of their injury.

In Nebraska, loss of earning power is often calculated by vocational counselors who write loss of earning power assessments. I used a wage inflation argument to get a counselor to nudge up a loss of earning power assessment for a lower wage worker with a small amount of loss of earning power. I was also using wage inflation data between 2018-2020 before the post-pandemic labor shortage really took effect.

The state of Nebraska will announce wage inflation numbers 2021 shortly and those will be adopted by the Nebraska Workers Compensation Court. My educated guess is that plaintiffs should be able to use these numbers to push up the value of loss of earning power assessments further. Every 10 percent of loss of earning power is worth $12,000 to a worker making $15 p/h on a 40 hour week.

Wage inflation should become a good argument for plaintiffs in workers compensation cases.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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