SALARY CONTINUATION

CAN SAVE YOU MONEY

Salary continuation allows an employer to pay regular wages to an injured worker in lieu of the injured worker receiving temporary total disability payments (TTD) from the Bureau of Workers' Compensation (BWC).  Employers implement salary continuation because it usually saves money in the long run.  Why?  Because, unlike TTD, wages paid under salary continuation do not count against the employer's insurance premium "reserve."  In other words, employers who implement salary continuation can effectively make the claim look "less costly" when the claim is analyzed for purposes of assessing next year's premium.  Simply put, the more expensive your claims appear to the BWC and/or your third party group administrator, the higher your premiums.  Keeping claim costs down keeps premium costs down too.  Of course, the trick is to figure out where your breakeven point is.  If paying salary continuation ends up costing more than the potential savings that may be realized on the premium, salary continuation is not a cost effective option.

To properly implement salary continuation, be sure to adhere to the following:

• Your injured worker must receive a full check at the next scheduled pay period after the injury occurs;
• Do not wait until the BWC or the Industrial Commission renders a decision on the claim.  If you miss just one scheduled pay period, you cannot offer salary continuation;
• You cannot wait until the injured worker has missed fourteen days in order to pay the first seven days.  You must pay salary continuation when it is apparent that the injured worker will miss at least eight or more days;
• You cannot pay salary continuation once the BWC has ordered TTD;
• To pay salary continuation, you must first notify the BWC before their initial determination is issued. You must also submit the injured workers' previous 52 week record of earnings that occurred immediately prior to the injury and file a C-55 "Salary Continuation Agreement" with the BWC.

Please contact Tom Wyatt, Jennifer Bennett or Jerry Cline if you have questions regarding salary continuation or other workers' compensation questions.