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How does the minimum wage increase effect temporary disability benefits?

The state of California just increased the minimum wage to $15 per hour as of 01/01/2023. This increase in the minimum wage may lead to an increase in the temporary disability (TD) rate, as TD is typically based on a percentage of the employee’s average weekly wage.

In California, the rate of TD benefits is usually set at two-thirds of an employee’s average weekly wage, up to a maximum amount set by state law. If the minimum wage increases, the average weekly wages for many employees will also increase, which could lead to an increase in the TD rate for those employees.

However, it’s important to note that the exact impact of the minimum wage increase on TD benefits will depend on details specific to each case. Calculation of the TD rate can be very complicated.

If you have questions, contact the Law Offices of Siles and Foster, P.C., at 530-898-9600. Consolations are free.

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