4.2 Basic Coverage

• Library: Workers' Compensation Practice in Virginia (Virginia CLE) (2020 Ed.)

4.2 BASIC COVERAGE

4.201 In General. The Virginia Workers' Compensation Act is designed to provide wage loss benefits during periods of work-related incapacity and prompt medical care to quickly allow an injured worker to resume employment. ³ The Act provides for compensation for loss of wages both in the event of total ⁴ and partial incapacity ⁵ due to an injury or occupational disease arising out of and in the course of employment. Where a compensable injury or occupational disease results in death, the deceased worker's dependents may be entitled to wage loss benefits as well as burial and funeral expenses. ⁶

A worker who suffers a loss of use of a body part listed in Virginia Code section 65.2-503 may be entitled to permanent partial compensation benefits. Eligibility for permanent partial benefits are not dependent on disability or wage loss but are designed to indemnify the injured worker for the

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permanent total or partial loss of use of a specific body part. ⁷ In certain limited circumstances where a severe permanent injury to multiple scheduled body parts or the brain occurs, a worker may be entitled to permanent and total benefits for life. ⁸

The compensation payment is based on the worker's average weekly wage at the time of the compensable accident or occupational disease. Once the average weekly wage is established, it is used to calculate all future compensation benefits.

Recipients of temporary total benefits and recipients of permanent and total benefits (including dependents) are eligible for cost-of-living supplements. ⁹

The Act also provides for the payment of medical benefits ¹⁰ and, where applicable, vocational rehabilitation services. ¹¹

To ensure that an injured worker receives all applicable benefits, it is imperative that an initial claim be timely filed with the Commission even if there is no immediate wage loss either because of (i) a lack of disability or (ii) the continuation of regular wages despite either total or partial disability. ¹² Even where the payment of compensation benefits has commenced, in

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the absence of properly executed agreement forms submitted to the Commission and culminating in an award, filing a claim is appropriate to ensure entry of an award by agreement or hearing even if only for medical benefits and to protect the rights for future wage loss or other benefits.

4.202 Waiting Period and Direct Payment. Wage loss compensation benefits are not payable for the first seven calendar days of incapacity. ¹³ The waiting period is applicable only at the time of initial injury and does not apply to any subsequent periods of disability. If disability exceeds three weeks, compensation benefits are retroactively awarded from the first day of incapacity. ¹⁴

Compensation payments must be made directly to the injured worker or dependent beneficiary. ¹⁵ While compensation benefits cannot be made directly to the attorney or other person, ¹⁶ the insurance carrier may deduct any approved legal fees from the workers' compensation payment and forward a separate check for the fee directly to the attorney.

4.203 Benefit Period Limits. Payment of benefits under Virginia Code sections 65.2-500 and 65.2-502 is limited to 500 weeks by section 65.2-518. There are three exceptions to the 500-week limitation: (i) permanent and total incapacity; ¹⁷ (ii) permanent disability due to coal worker's pneumoconiosis; ¹⁸ and (iii) death from coal worker's pneumoconiosis. ¹⁹ The Act authorizes both consecutive recovery (where the period of partial incapacity follows a period of total incapacity or vice versa) and simultaneous recovery (where the

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period of partial disability coincides with permanent loss of a body member). In the latter case, the combined payment of both partial disability under Virginia Code section 65.2-502 and permanent loss of a body member under Virginia Code section 65.2-503(B) counts as two weeks against the total maximum allowable period of 500 weeks. ²⁰

4.204 Maximum and Minimum Compensation Rates. The Act provides for a maximum and minimum weekly compensation rate for temporary total, temporary partial, and permanent partial benefits. ²¹ The maximum and minimum limits are not applicable to permanent and total benefits paid pursuant to Virginia Code section 65.2-503(C). The maximum and minimum compensation payable on a weekly basis under the Act are based on the average weekly wage of the Commonwealth, calculated in accordance with Virginia Code section 65.2-500(B). This figure is recalculated each year. The rate is applicable for injuries occurring on or after July 1 of each year. Effective July 1, 2019, the maximum rate is $1,102 and the minimum rate is $275.50. Because the date of the accident or communication of an occupational disease sets the compensation rate, the annual adjustment is not applicable to workers already receiving compensation benefits except in cases where an individual's average weekly wage produced a compensation rate that exceeded the maximum rate at the time of the compensable injury.

Because the maximum and minimum rate changes from year to year, an attorney handling a workers' compensation case should consult the Commission's website to determine the applicable rate. ²²

An injured worker whose average weekly wage at the time of the accident or communication of an occupational disease exceeds the maximum rate is limited to the maximum rate. If the maximum rate is subsequently raised, the worker's benefits may be increased up to the new rate.

If an injured worker's average weekly wage at the time of the accident or communication of an occupational disease is less than the minimum rate, benefits are payable based on two-thirds percent of the individual's average

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weekly wage. Compensation benefits cannot exceed a worker's pre-injury average weekly wage. ²³

4.205 Penalty for Late Payment. section 65.2-524 of the Virginia Code provides for the payment of a 20-percent penalty to be added to any payment not made within two weeks after it becomes due. An exception exists where the Commission determines that the payment was made as promptly as practical and (i) there was good cause outside of the employer's control or (ii) a self-insured employer issued the payment to the injured worker as part of the next regular payroll after the due date. ²⁴ A penalty cannot be issued during the period in which a review may be filed pursuant to section 65.2-705 of the Virginia Code or the time for which a notice of appeal may be filed pursuant to section 65.2-706. ²⁵

4.206 Third-Party Settlements. A workers' compensation carrier has a right of subrogation against any recovery secured by the employee or on his or her behalf against a third party. The rights of the compensation carrier are contained in sections 65.2-309 through 65.2-311 of the Virginia Code. The employer has a lien against any verdict or settlement secured on behalf of the employee's behalf. ²⁶

4.207 Average Weekly Wage Calculation.

A. Statutory Methods. The average weekly wage refers to the injured worker's earnings in the position he or she was working at the time of the injury or communication of an occupational disease. ²⁷ This figure is the

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basis for computing all present and future compensation payments. The injured worker, the employer, and the insurance carrier must agree upon the figure to be used as the average weekly wage at the outset of the case. Once agreed upon and ratified by the Commission, the figure becomes binding. If, however, the award was the result of fraud, mutual mistake of fact, or "imposition," ²⁸

the Commission has the authority to revise the average weekly wage even when an amount has been agreed upon and incorporated into an agreement between the parties and an award issued on which the time to appeal has run.

In most cases the parties agree to the average weekly wage. To assist in resolving any average weekly wage issues, the parties may use the Commission's wage chart. ²⁹ When the parties cannot agree, the Commission, based on wage records, testimony, and, where necessary, other documents, will adjudicate the average weekly wage issue.

The starting point in determining the amount of benefits due an injured employee is the "average weekly wage" under section 65.2-101(1)(a) and (b) of the Virginia Code, ³⁰ which lists five separate methods to calculate the average weekly wage:

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1.	If the employee has been employed in the same position as at the time of the accident for one year or longer, the average weekly wage is calculated by dividing the employee's earnings for the 52 weeks before the accident by 52;
2.	If a period of seven consecutive days or more were lost by the employee, the lost time is excluded from the calculation; 31

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3.	If the employee has been employed in the same position as at the time of the accident for less than 52 weeks, the employee's total earnings are divided by the number of weeks and parts thereof that have been worked; 32
4.	If the methods listed above are impractical or unjust, the average weekly wages for the previous 52 weeks of a person employed in the same grade and under the same conditions who works in the same class of employment in the same locality or community may be used; and
5.	When for "exceptional reasons" the previous four methods of calculation would be unfair to either the employer or the employee, the parties may use a method of computation that would "most nearly approximate the amount which the employee would be earning were it not for the injury." 33

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B. Accrual of Eligibility for Benefits. The date of accident, not the date of disability, is the determining date for computing the average weekly wage. ³⁴

C. Value of Perquisites. Earnings include all compensation paid in lieu of wages. ³⁵ Tips, ³⁶ bonuses, ³⁷ meals, ³⁸ room and board, ³⁹ uniforms, vacation pay, ⁴⁰ overtime, ⁴¹ expense...