DI 52120.230 South Dakota Workers’ Compensation (WC)
A. Types of WC payments
1. Temporary Total (TT) –
no payment unless the worker is incapacitated for 7 consecutive days. If the incapacity lasts for 7 consecutive days or more, compensation is then computed from the date of injury. Maximum period is duration of the disability.
2. Temporary Partial (TP) –
payable until the worker is returned to full employment or until maximum improvement
3. Permanent Total (PT) –
payable for life but subject to review every 5 years.
4. Permanent Partial (PP) –
payable on a weekly or biweekly basis unless the Division of Labor & Management allows a lump sum payment. Maximum period is duration of the disability.
5. Vocational Rehabilitation (VR) –
South Dakota pays compensation at the TT rate during rehabilitation. These payments are in lieu of TT benefits and are offsettable, per DI 52110.005, Vocational Rehabilitation (VR) Payments. See also DI 52120.230E below.
All payments are made in installments at the same intervals at which the wages or earnings of the worker were paid at the time of the injury, or if this is not feasible, then the installments are paid weekly. Automatic penalties of 10 percent are added if payments are over 10 days late. Such penalties are not offsettable. For a list of payments not considered WC, see DI 52105.015.
B. Cost-of-living adjustments (COLAs)
An annual increase in the amount of PT commences on July 1st, which is at least twelve months following the date on which the benefit was first payable.
Compensation rate for all other WC benefits is based on the average weekly wage at the time of the injury. There are instances when the weekly compensation rate for benefits may be increased. This occurs when the worker can show that the earnings have substantially changed since the date of injury.
C. Attorney fees
Attorney fees must be approved by the Division of Labor & Management and cannot exceed:
25 percent of the disputed amount for settlements
30 percent of the disputed amount awarded at lower court level
35 percent of the disputed amount awarded at the State Supreme Court level
South Dakota allows attorneys to charge their clients sales tax, which the attorney deducts from the worker’s settlement. Include the sales tax as an excludable attorney fee expense.
D. Retirement insurance benefit (RIB) considerations
For injuries occurring on or after 07/01/ 1993, PT benefits are limited to the difference between 150 percent of PT weekly benefits and amounts received for SSA RIB. However, the difference cannot exceed the PT weekly benefit. This reduction does not apply to a worker who is entitled to SSA RIB at the time of the injury.
For example: Figuring PT when a worker receives SSA RIB. Assume the worker receives WC checks weekly.
X = unadjusted PT weekly check
Y = SSA RIB monthly benefit
(1.5X) x (52/12) – Y = adjusted PT check
E. Supplemental wage benefit
If a worker is not totally disabled but is unable to return to his or her usual and customary employment, the employer may, in lieu of rehabilitation, require the worker to accept, in addition to earned income, a supplemental wage benefit to be paid by the employer:
The supplemental wage benefit, together with earned income, is equal to the WC benefit rate at the time of the worker’s injury.
An additional “return to work incentive” equal to 20 percent of the TT rate is payable, provided the worker is actually offered employment or is employed.
The supplemental wage benefit is offsettable.
F. Lump sum settlements
A precedent ruling, PR 02505.046, involved a case where the lump sum settlement attempted to circumvent workers’ compensation offset by assigning a starting date of age 65. In that case, using the date in the award document to determine the start date of course resulted in no offset. This would contravene the purpose of the offset provision, which was to prevent duplication of disability benefit payments. The start date was then determined as the date the payment was made, or, if periodic payments pr