How Does L&I Work – Common Workers' Compensation Questions (2024)

No. The IRS considers time-loss compensation and other awards for your injury to be a disability benefit, not earned income, so income tax laws do not apply.

Additionally, Washington State tax does not apply to workers’ compensation benefits. You will not receive a W-2 or any tax notification documents.

However, if you are receiving workers’ compensationas well as Social Security disability income, there may be a tax notification.

Anis a special category of pension only awarded to the mostseverely injuredworkers. If you are eligible for an L&I disability pension, you will receive a non-taxable payment every month for the rest of your life.

Under Washington state law (WAC 296-14-150), gainful employment is defined as a regular occupation (in any position) for income, salary, or wages. If your doctor or Vocational Counselor says that you cannot ever work again because of a job-related injury or illness, you may be entitled to Washington State Labor and Industries pension benefits.

It’s not easy to be granted an L&I disability pension — you must be committed to the process. As these lifetime benefits are so valuable, the system is set up to derail your claim at every step along the way.

The process involves complicated bureaucratic hurdles and red tape, along with consultations with L&I Claims Managers, employers, Vocational Counselors, and Independent Medical Examiners who do not always have your best interests in mind. These parties have blocked many workers before you and will try to stop you from securing an L&I pension. Anwith a proven track record of avoiding those traps is your best bet for successfully navigating the system.

You may receive a monthly L&I disability pension if you are certified as permanently and totally disabled, AND:

• The medical and vocational evidence finds that your injury prevents you from becoming gainfully employed, OR
• You have lost, or lose the use of, both legs, both arms, an arm and a leg, or your vision.

• Education:The less education you have, the better for obtaining a pension. Without a degree, you do not have certain qualifications employers seek during the rehiring process.

• Work experience:A smaller amount of work experience rather than a long-term career shows that you do not have as many transferable skills.

There are many common workplace injuries that could lead to PPD, including:

• Amputation,
• Back injury,
• Cardiovascular orrespiratory disease,
• Depression,
• Hearingor vision loss,,
• Knee injury,
• Musculoskeletal disorders,
• Post-traumatic stress disorder (PTSD), and
• Shoulder Injury.

PPD awards are based on the type of injury and the level of severity of the injury and are measured by animpairment ratingcalculated with theL&I PPD Awards Charts. In general, the higher the rating, the bigger the payout.and the right doctor are usually the winning combination to unlocking the maximum amount ofto which you are entitled.

• Permanent partial disability in Washington state is calculated when L&Icloses your claim.
• Your impairment is rated by a doctor or your attending physician during a PPD rating exam, followed by an approved L&I doctor during anIndependent Medical Exam (IME)once you have reached maximum medical improvement (MMI).
• You will receive your award after you get medical care for your injury, become employable, get a rating exam, and have your claim closed by L&I.
• If the award amount is less than three times the state’s average monthly wage at the date of injury, L&I or the self-insured-employer (SIE) sends a check for that amount.
• If the award exceeds more than three times the state’s average monthly wage at the date of injury, L&I or the SIE makes a down payment. They then pay the balance of the award once a month in installments equal to the worker’s monthly time-loss compensation (at the time of closure).

Athird-party claimis one in which someone other than your employer or co-worker is responsible for your injury. If you have been injured on the job due to someone else’s actions or negligence, you may be entitled to additional compensation through a third-party claim, which combines yourwith apersonal injuryclaim using the same facts.

Unlike workers’ compensation payments, there is no limit to the amount of compensation an injured worker may seek in third-party damages. Third-party claims are private matters and are typically litigated directly with theWashington State Superior Court.

All Washington state workers have the right to be represented by an attorney in a workers’ compensation claim. If your injury prevents you from doing significant parts of your job or makes it difficult to work, ancan be very helpful in advocating for the full amount of benefits to which you are entitled based on your injury’s severity.

You may need aworkers’ compensation attorneyif:

• You or your loved one suffered a workplace injury or occupational illness.
• Your employer is not supportive of your L&I claim.
• Your workers’ compensation claim or benefits were denied.

When looking for aworkers’ compensation attorney, make sure to find someone with a track record of positive results who can build a case and gather evidence to present your claim as effectively as possible.