Florida Weekly Wage and Max Workers’ Comp Benefit See Biggest Jump Since 1980

The Florida Division of Workers’ Compensation has released the maximum weekly wage benefit for 2024 and it’s the largest two-year jump in wages in more than four decades.

Florida law sets the maximum indemnity benefit for injured workers at 100% of the average weekly wage in the state. The average wage rose from $1,099 in 2021 to $1,260 this year – a 15% increase. That much of an increase has not been since the high-inflation days of 1980, which saw a 20% spike in wages from two years earlier, according to a rate table from the DWC.

The latest increase is also partly a result of nationwide inflation, which topped 9% in 2022, the U.S. Bureau of Labor Statistics reports. Florida’s wage inflation, though, has outpaced the U.S. average, which rose just about 4.5% from the previous year. Most states have seen their average weekly wages rise 3% to 4% annually, explained Robert Hartwig, clinical associate professor and director of the Center for Risk and Uncertainty at the University of South Carolina.

But while higher wages will raise payroll and premium for many employers, the pay levels are unlikely to have an impact on workers’ compensation rates, Hartwig noted. As payroll rises, carriers will automatically collect more in premium without the need of higher rates.

Workers’ comp rates in Florida and most states have, in fact, been been dropping steadily over the past two decades. The Florida Office of Insurance Regulation in November approved a record-setting average rate decrease – 15.1% – for 2024, in keeping with a recommendation from the National Council on Compensation Insurance.

The recommendation was based mostly on data from policy years 2020 and 2021, NCCI said. Some, including the Florida Roofing and Sheet Metal Contractors Association, have worried that the lower rates for 2024 could lead to sticker shock and other issues in coming years if costs rise.

The NCCI noted in April, in its State of the Line presentation, that wages around the country are rising, potentially putting pressure on some employers’ payrolls. An NCCI analysis of data from the Bureau of Labor Statistics and the U.S. Bureau of Economic Analysis found that wages for private industry rose in Florida, Idaho, Montana and New Hampshire by close to 30% from 2019 to 2022, faster than in other parts of the U.S.

Florida comp insurers and employers are somewhat shielded from the full impact of higher wages on the cost of benefits. State law limits temporary total disability benefits to a maximum of 260 weeks, a significantly shorter time frame than most other Southeastern states provide, the Workers’ Compensation Research Institute reports.