What Is Salary Continuation in NC Workers Compensation? [2024]

When employees face the monumental task of dealing with work-related injuries, one of the most common questions is “What is salary continuation in NC workers’ compensation?” Understanding how salary continuation works in North Carolina is essential for workers trying to navigate the complexities of workers’ compensation laws, especially when comparing it with traditional workers’ comp benefits.

Salary continuation, a concept that allows injured workers to receive a continuous income while recovering, offers an alternative way to receive financial support without the need for weekly workers’ compensation payments. However, it’s important to understand the distinctions, benefits, and eligibility requirements surrounding salary continuation and how it operates within North Carolina’s system.

Differences Between Salary Continuation and Workers’ Compensation Benefits

Salary continuation and traditional workers’ compensation benefits share the goal of providing financial support to injured employees, yet there are key differences between them:

1. Payment Source: In salary continuation, the employer directly pays the injured employee, often continuing through the company’s regular payroll. In traditional workers’ compensation, however, the insurance company handles payments.
2. Amount of Compensation: Workers’ compensation benefits generally pay around two-thirds of an employee’s average weekly wage (up to a state-mandated cap). In contrast, salary continuation may offer the full salary amount or a percentage closer to the employee’s typical earnings.
3. Administrative Requirements: Workers’ compensation typically involves a formal claims process, medical assessments, and a determination of eligibility. Salary continuation can bypass some of these administrative hurdles, allowing injured employees to avoid complex filing requirements.
4. Duration and Coverage: Workers’ compensation payments are subject to state laws, which may limit the duration of benefits. Salary continuation, however, can last as long as the employer and employee agree, under the condition that it does not conflict with state regulations.

How Salary Continuation Functions Within North Carolina Workers’ Compensation Law

North Carolina allows employers to use salary continuation plans as an alternative to traditional workers’ compensation benefits. Employers who offer salary continuation plans must make sure the plan meets the legal requirements under North Carolina’s workers’ compensation statutes, as it must align with protections for injured employees. While salary continuation can offer some advantages, it must not disadvantage the employee or deprive them of necessary benefits.

Additionally, employers cannot force employees to accept a salary continuation plan instead of filing for workers’ compensation if that is their preference. For some workers, the choice between these options may come down to personal preference or the specific terms of the salary continuation policy.

Advantages of Salary Continuation

Salary continuation can be a convenient option for both employers and employees. Here are a few reasons why salary continuation might be beneficial:

• Full Pay: For employees who are used to a higher salary, receiving full or close-to-full pay through salary continuation may be preferable to the capped workers’ comp benefits.
• Ease of Process: Salary continuation can streamline the compensation process and reduce the amount of paperwork or administrative tasks associated with workers’ compensation claims.
• Stability: Instead of relying on weekly checks, employees may prefer the consistency of receiving regular payroll deposits.
• Relationship Building: Salary continuation can signal goodwill from the employer, potentially building trust and morale with the injured employee.

However, salary continuation isn’t ideal for everyone. Employees with more complex injuries or longer recovery times might find that traditional workers’ compensation—which is structured to provide benefits for longer-term or severe injuries—is more suitable.

Salary Continuation Plans and Employee Rights

If a salary continuation plan is offered, it should be presented as a clear option rather than an obligation. Moreover, salary continuation must provide equivalent—or better—benefits than the employee would receive under the standard workers’ compensation insurance plan.

An employer cannot penalize a worker who decides to opt out of a salary continuation plan and instead files a workers’ comp claim. Furthermore, if an employee’s injury or illness becomes permanent or long-term, they may choose to transition to workers’ compensation benefits rather than remaining on a salary continuation program.

Who Is Eligible for Salary Continuation?

In North Carolina, eligibility for salary continuation often depends on the employer’s discretion and policies. Not every employer offers a salary continuation program, and those that do may set specific criteria. Employers may choose to offer salary continuation for particular types of injuries, while others may reserve it for long-standing or full-time employees.

Typically, eligibility criteria are determined based on the nature of the injury, the likelihood of recovery, and how soon the employee is expected to return to work. If salary continuation is an option, the employer generally notifies the employee about its availability as they navigate the workers’ comp process.

Salary Continuation and Returning to Work

One of the goals of salary continuation is to ease the transition back to the workplace. Since salary continuation is often intended for temporary disabilities or injuries with predictable recovery timelines, it can support a smooth return to regular work activities. Employers may offer modified work duties or flexible hours during the recovery period.

If a worker is unable to return to their original position, they may transition from salary continuation to a long-term benefits program under workers’ compensation. This may involve an assessment of the injury’s impact and a determination of whether vocational rehabilitation or job training is needed.

FAQs

Q: Who Funds a Salary Continuation Plan?

A: Salary continuation is funded directly by the employer, as opposed to workers’ compensation, which is covered by an insurance provider. However, salary continuation may not be a choice for many employees who are injured while on the job, as they may require expensive medical treatment to address their injuries. Usually, salary continuation is offered at the employer’s discretion.

Q: Does Accepting Salary Continuation Affect My Long-Term Workers’ Comp Eligibility?

A: In some cases, choosing salary continuation might impact one’s long-term workers’ compensation eligibility, depending on the terms of the employer’s plan and the duration of the disability. Before deciding which route to take, it would be wise to consult an attorney. Legal counsel can guide you toward the most appropriate path and determine what the long-term consequences or advantages could be.

Q: Can I Accept Workers’ Compensation Benefits While Taking Salary Continuation?

A: No. Salary continuation is an alternative option for workers’ compensation, which means you cannot receive both concurrently. That said, employees still retain the right to file for workers’ compensation later, especially if the injury gains long-term status or becomes a disability. Your employer can’t penalize you for switching to workers’ comp.

Q: Is Salary Continuation Taxable in North Carolina?

A: Yes. Salary continuation is taxable, as it is considered regular income. Workers’ compensation benefits, however, are non-taxable and protected from federal income taxation. If you’re unsure whether salary continuation or workers’ comp is the right option for your situation, a workers’ comp lawyer can assess your situation after reviewing your case.

Consult the Knowledgeable Attorneys at Ayers, Whitlow & Dressler

If you are offered salary continuation or seeking workers’ compensation benefits after a work-related injury, the team at Ayers, Whitlow & Dressler is prepared to advocate for your rights and financial stability. Contact Ayers, Whitlow & Dressler today to schedule a consultation.