Announced in July 2023, the Maryland Workers’ Compensation Commission increased the 2nd tier Permanent Partial Disability rate. The mid-year change to the 2nd tier rate was the only change issued by the Maryland Workers’ Compensation Commission as all other rates remained the same.
The 2023 2nd tier rate of $467.00 was increased by $1.00 to reflect a new rate of $468.00. The 2nd tier rate is reserved for awards for a period of equal to or greater than 75 weeks, but less than 250 weeks. Compensation for a 2nd tier rate is capped at a rate of 2/3 of an Employee’s Average Weekly Wage, not to exceed 1/3 of the State Average Weekly Wage.
The maximum compensation to be paid in all awards is determined as of January 1st of the calendar year, pursuant to Section 9-603 of the Labor and Employment Article. For the 2023 calendar year, the Maryland Workers’ Compensation Commission announced that the State Average Weekly Wage would be set at $1,402.00.
When calculating an award for compensation at the 2nd tier rate, the maximum compensation based on 1/3 of the State Average Weekly Wage rate of $1,402.00 comes out to $467.33, or $467.00 when rounded down to the nearest whole dollar.
Pursuant to Section 9-604(b) of the Labor and Employment Article, the Commission is required to round off any fractional dollar of compensation to the next higher dollar when computing compensation rates. Under this statute, the Commission is required to increase the 2nd tier rate from $467.00 to $468.00, as the original rate of $467.33 was a fractional dollar amount of $00.33.
The increased 2nd tier rate is retroactive through January 1, 2023 and is to remain in effect through the remainder of the 2023 calendar year. The retroactive application of the 2nd tier increase means that all 2nd tier awards from January 1, 2023 through July 2023, that meet the maximum compensation amount set forth by the Maryland Workers’ Compensation Commission, are subject to an increased $1.00 per week modification to reflect the newly announced increased rate.
Written by Associate Patrick Short.