New Adjustments to Workers’ Comp Benefits in California: Is the Insurer Paying You the Right Amount?

Workers’ compensation benefits provide an essential source of support for employees in California who cannot work due to on-the-job injuries, but those payments are limited by law. The most you can receive is about 2/3 of your regular wage, and because of caps on disability payments, your benefits may be substantially less than 2/3 of your particular wages. The limits are adjusted each year, so it is important to ensure that your payments meet the new standards.

Understanding how disability benefits are calculated and how adjustments are supposed to be made can help protect your rights as an injured worker.

Different Types of Disability Benefits in the California Workers’ Compensation Scheme

The workers’ compensation program provides two primary types of benefits. There are medical benefits to provide care for the injury and wage benefit payments to make up for income lost due to the inability to work. Some of the wage benefits are paid on a temporary basis while an injured worker is recovering. If doctors determine a worker has reached the maximum level of recovery and still retains some disability, then the temporary disability benefits may be discontinued and replaced by permanent disability benefits, which are calculated differently.

How Temporary Wage Benefits are Calculated

When an employee is unable to work at even light duties due to a work injury, the employee should be eligible to receive total temporary disability benefits. These benefits are calculated by:

• Adding up the employee’s gross earnings for 13 weeks. This includes amounts received for regular wages, overtime, tips, bonuses, and the value of some benefits.
• Dividing the 13-week total by 13 to establish the employee’s average weekly wage (AWW)
• Multiplying the average weekly wage by 2/3 (in other words, reducing the amount of the AWW by 1/3)
• Comparing this amount with the minimum and maximum limits and making adjustments accordingly

If 2/3 of the AWW exceeds the maximum, the employee receives the maximum and no more. If the amount is less than the minimum, then the employee would receive the minimum. Finally, if the worker is able to work some but earns a reduced amount, the wage benefits are supposed to equal 2/3 of the difference between the AWW before the injury and AWW after the injury.

Minimums and Maximums Increase Every Year

California law provides for an increase in the minimum and maximum disability payment amounts every year. Starting in January of 2026, the California Department of Industrial Relations has announced that:

• The minimum rate for temporary total disability payments increased from $252.03 per week to $264.61 per week
• The maximum rate for temporary total disability payments increased from $1,680.29 per week to $1,764.11 per week.

The increase is based on a 4.98% increase in the state average weekly wage. If you are currently receiving or applying to receive temporary total disability benefits, it is a good idea to check to ensure that your payments meet the new requirements and that the insurance company is not using outdated information.

Calculation of Permanent Disability Benefits in California

The calculation of amounts paid once a disability is considered permanent rather than temporary is handled differently. A doctor assigns an impairment rating based on the impact of the disability and the degree to which it is work-related. This rating is a percentage. For instance, a worker who suffers long-term effects that make it much harder to work but that still allow for the performance of some work tasks might be assigned a rating of 50%.

This percentage is applied to the weekly benefit rate used for temporary total disability benefits, as adjusted within the minimum and maximum levels. Then the amount will be paid for an amount of time determined by the severity of the disability. If someone is considered 100% disabled, they would receive payments indefinitely. On the other hand, if the impairment rating is 50%, benefits might continue for several years but not forever.

An annual cost-of-living adjustment is applied to workers receiving permanent disability pensions paid to those with significant permanent disabilities. In addition, permanent total disability benefits can also be adjusted to account for the new state average weekly wage.

Ensuring That You’re Receiving the Proper Payments

There are several ways that insurance companies and employers cheat injured workers out of their full benefits. They may fail to account for the increased minimum and maximum benefit amounts. Or they might fail to factor in all the amounts that should be included when calculating an employee’s average weekly wage.

If you believe that your payments are lower than they should be, then it is worthwhile to investigate. Start by gathering records of everything, including pay stub information from at least the thirteen weeks prior to the injury. Locate records that show any bonuses or commissions, and tips. If you received benefits in kind, such as meals or hotel lodging, the value of those should also be included in your average weekly wage. If you recently received a raise or increased hours, those should be included. It may also be necessary to average your earnings over 12 months rather than 13 weeks to get a fair representation.

Getting Help with Workers’ Compensation Benefits in California

The insurance companies that provide workers’ compensation insurance do not part with money willingly. They will often deny claims that should be paid or terminate benefits that should be continued. Employees need to affirmatively assert their rights if they want to get the full benefits they are entitled to under the law. At the Law Offices of Benjamin Arsenian, PC, we’ve seen far too often that employees get taken advantage of if they don’t take appropriate steps to secure their rights. We can help. We know how to overcome the tactics used by employers and insurers to deny, discontinue, or undervalue workers’ compensation claims. For a free consultation to learn how we may be able assist in your situation, call us at 714-400-2000 or contact us online today.