Claims Adjudication Tune-Up (CAT-U)
October 2024 edition
October 2024 Edition
Welcome to Self-Insurance’s (SI) Claims Adjudication Tune-Up (CAT-U) newsletter. This is where we share best practices and information, as well as highlight opportunities for improvement. The focus of this month’s edition is Kept On Salary (KOS).
Revised Code of Washington (RCW) 51.32.090(8) has this to say about Kept on Salary (KOS):
"Should a worker suffer a temporary total disability and should his or her
employer at the time of the injury continue to pay him or her the wages which
he or she was earning at the time of such injury, such injured worker shall not
receive any payment provided in subsection (1) of this section during the period
his or her employer shall so pay such wages: PROVIDED, That holiday pay,
vacation pay, sick leave, or other similar benefits shall not be deemed to be
payments by the employer for the purposes of this subsection.”
Take away: A worker that is ‘kept on salary’ will receive the full amount of their date of injury wages when they are certified as being unable to work. If an injured worker is instead being paid part of their missing wages through benefits such as…
- Holiday or vacation pay
- Sick leave
- Paid Time Off (PTO)
- Shared leave
- Disability insurance
- Separation cash out of accrued leave
…then that worker is not Kept on Salary since part of their normal wages are being covered by a benefit. Instead, they should be paid their full time-loss entitlement.
What does ‘wages’ mean in this context?
Per Washington Administrative Code (WAC) 296-14-522, “What Does Wages Mean”, consider the gross wages paid by the employer for services performed, including tips that are reported to the employer for federal income tax purposes. It includes bonuses paid by the employer of injury, as well as the reasonable value of other compensation.
The Board of Industrial Insurance Appeals’ significant decision, In re Miguel Escorcia, BIIA Dec., 17 12979 (2018), says that a worker’s calculated date of injury wages as determined by final department order would set the amount owed under Kept on Salary provisions. This essentially means that a worker should be receiving at least 100% of their calculated Date of Injury gross monthly wage to be considered Kept on Salary.
What if the worker has another job?
RCW 51.08.178(1) states that wages include earnings from all employment at the time of injury. This means that if a worker had another job on the date of injury, their wages would include earnings from the other jobs. When a worker is Kept on Salary, the employer is paying 100% of the date of injury wage for all employment, as calculated under the RCW.
What if the worker returns to work in one or both of their jobs?
If the worker with multiple employers continues to work at any of the jobs held on the date of injury, the employer is only responsible to pay for actual job of injury wages due to the injury or occupational disease as Kept on Salary. For example, a worker injured while working their day construction job also has a part-time evening clerical job. They are unable to work their job of injury, but are able to keep doing the clerical job without restriction. If the employer pays 100% of the lost wages from just the construction job of injury, the worker will still be considered Kept on Salary. This is because between the Kept on Salary pay from the job of injury, and the earnings from the second job, they are receiving 100% of their pre-injury wages.
Should a worker return to light duty in either job at a reduced earning capacity, Kept on Salary would not be appropriate, and loss of earning power (LEP) benefits should start. Kept on Salary cannot be paid at the same time as time-loss or LEP per the RCW cited above.
Reminders/tips from the SI teams:
- Kept on Salary is not a medical only claim! Kept on Salary is a wage replacement, just like time-loss or loss of earning power. This means that allowance must be requested from the department even if a worker is being Kept on Salary.
- You must check the “KOS” box on the Claim Allowance Request form (CAR), and attach documentation of the time-loss that would have been due if the worker had not been KOS.
- Remember to send the worker the "Start, Stop, or Deny Compensation Benefits” letter (F207-225-000)within five days of the date time-loss would have started, and use the language:
“Time-loss compensation benefits are denied effective (date), because
you were kept on salary (KOS).”
More reading/resources:
WAC 296-15-420 “Requesting allowance or denial, or interlocutory order from the
department”.
WAC 296-15-425 “Communicating to injured workers during the course of the claim.”
Self-Insurance Claim Adjudication Guidelines, “Time Loss” chapter, “Kept on Salary” section.
Self-Insurance 2024 Quarterly training: Course title and dates (check out What’s New in Self-Insurance, or sign up for our email bulletins to get reminders for registration)
For more information, email: SITrainerQuestions@lni.wa.gov
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