An injured employee may receive sick pay, salary continuation, short-term disability, accident-and-sickness payments, unemployment benefits, or another income-replacement payment while a workers’ compensation claim is pending. Those payments should be placed on one weekly timeline before anyone assumes that a credit is owed.

A wage-continuation or disability payment does not automatically erase workers’ compensation owed for the same period; the funding source, plan terms, week-by-week overlap, and Commission approval matter.

Start with the exact payment and funding source

  • Name of the plan, summary plan description, policy, enrollment record, amendments, and the version in effect on the injury date
  • Whether the employer, employee, union, insurer, or more than one source funded the benefit, including payroll deductions and tax treatment
  • Each payment date, benefit week, gross and net amount, waiting period, offsets, recoupments, and the reason stated on the pay record
  • The workers’ compensation period claimed or awarded, compensation rate, medical-only periods, return-to-work dates, and any partial-wage calculation
  • Commission orders, agreements, hearing issues, carrier ledgers, payroll records, plan correspondence, and any proposed credit calculation

G.S. 97-42 controls employer-payment credits

G.S. 97-42 allows the Commission to approve a deduction for certain employer payments made during disability that were not due and payable under the Workers’ Compensation Act when made. For disability, the statute generally calls for shortening the compensation period rather than reducing the weekly payment.

The statute separately addresses an employer-funded salary-continuation, disability, or other income-replacement plan. Unless the plan provides otherwise, the calculation uses payments made in each week for which compensation was due, without moving an excess from one week backward or forward to another week. That makes a week-by-week ledger more reliable than subtracting one gross total from another.

Haulcy illustrates the proof needed for a plan credit

In the published Haulcy v. Goodyear Tire & Rubber Co. decision, the Court of Appeals affirmed a credit for accident-and-sickness disability payments during the period of retroactive compensation. The record supported the finding that the payments came from an employer-funded plan and identified the payment history.

The decision does not establish a credit for every disability policy. Employee contributions, a privately purchased policy, plan language, nonoverlapping weeks, the type of workers’ compensation benefit, and the evidence presented can produce a different issue.

Unemployment benefits follow a separate statute

G.S. 97-42.1 addresses unemployment benefits for weeks that overlap total or partial disability compensation. Its partial-disability calculation limits the deduction to the amount by which the combined weekly benefits exceed two-thirds of the average weekly wage. Scheduled permanent-partial-disability payments under G.S. 97-31 are treated differently under that section.

Audit the proposed credit before an agreement or award

For every week, show the ordinary wages, work earnings after injury, workers’ compensation claimed, other benefit paid, funding source, proposed credit, and remaining amount. Flag plan repayments, taxes, health-premium deductions, leave restoration, Social Security or other offsets, and any period that does not overlap.

The related North Carolina workers’ compensation benefit-calculation guide explains average weekly wage and the separate total, partial, and scheduled-benefit formulas. This page keeps the narrower credit question.

Rosensteel Fleishman Car Accident & Injury Lawyers provides information about consulting a Charlotte workers’ compensation lawyer about an employer-funded benefit credit. A useful review identifies the legal basis, documents the funding source, and tests the calculation week by week.

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