Workers’ compensation: average annual earnings.

Senator Caballero's workers' compensation reform legislation introduces automatic cost-of-living adjustments to disability benefit calculations starting January 1, 2026. The measure modifies how the Division of Workers' Compensation determines average weekly earnings limits used to calculate temporary and permanent disability payments.

Under the proposed changes, the current earnings thresholds for disability benefits would adjust annually based on the Social Security Administration's cost-of-living adjustment (COLA), which reflects changes in the U.S. Consumer Price Index. This automatic adjustment mechanism would apply to injuries occurring on or after January 1, 2014, with minimum weekly earnings set at $240 and maximum weekly earnings at $435 before annual COLA increases begin.

The legislation maintains the existing framework for computing average weekly earnings based on factors like hours worked, multiple employers, and irregular pay rates. While the bill requires no direct state funding, the Division of Workers' Compensation would need to update its systems to implement the annual COLA-based adjustments. The changes would affect future disability payments for covered workers while preserving current benefit calculations for existing claims.