Ala. Code § 25-5-68(a) provides that “the maximum compensation payable for permanent partial disability shall be no more than the lesser of $220.00 per week or 100 percent of the average weekly wage.” The “220 cap” on permanent partial disability benefits became effective January 9, 1985.
1985 was the year the late Ronald W. Reagan was inaugurated for a second term as President of the United States. It was also the year that Mikhail Gorbachev become the Soviet Union’s leader, that the sunken Titanic was located; that Nintendo entered the home video game market; that 20 percent of U.S. homeowners had VCRs in their homes; that Microsoft shipped the Windows 1.0 operating system; and that the typical modem speed was 2400 bits/second.
1985 was also the year the Alabama Supreme Court decided Ex parte Beaver Valley Corp., 477 So. 2d 408, 411 (Ala. 1985), in which the Supreme Court held that an employer is not required to pay for graduate school in order to retrain an injured worker. Not a single justice who participated in that decision, (which has been cited 45 times for one proposition or another), remains on the Alabama Supreme Court today.
Yet, the cap on permanent partial disability benefits that was fixed in the law in 1985 at $220.00 per week still applies today. It would have required $376.18 last year to have the same purchasing power as $220 did in 1985. Accordingly, the $220 cap is at least 42 percent too low and it is getting lower each year. In contrast, each July, the Department of Industrial Relations announces the maximum and minimum rates of temporary total disability benefits. For injuries occurring on and after July 1, 2004, the maximum workers’ compensation payable will be $607.00 per week, and the minimum compensation will be $167.00 per week. At the current rate of annual increase, the minimum compensation rate of temporary total disability benefits will exceed the maximum compensation payable for permanent partial disability in just 10 years . Even the rate at which injured workers are reimbursed for mileage costs a they drive to and from medical providers has increased from 25 cents per mile in 1992 to 37.5 cents per mile today.
This oddity in the law produces strange results in some cases. For example, a worker earning minimum wage would not penalized by the $220 cap ($5.15 per hours at 40 hours = $206.00), but a worker who earned more than $8.25 per hour for 40 hours would be effected by the cap. In a time in which our State is attracting more and more higher paying jobs, this cap is even more unfair than it has ever been. The $220 cap can cause a worker who suffers a severe injury on the job to be forced to file bankruptcy.