Nevada’s Division of Industrial Relations Reviews Discount Rate for First Time in Fifteen Years
The Division of Industrial Relations (DIR) has recently announced that it is in the process of reviewing their formula for converting partial disability awards into lump sums after failing to do so for the past 15 years. Although a Nevada state statute requires the DIR to conduct this review annually, they have not done so since 2000 and have not changed their computation rate since 1997.
This formula can add or subtract tens of thousands of dollars from lump-sum awards for workers. This egregious oversight on the part of the DIR has directly harmed injury workers who have for years been routinely cheated out of a fair amount of compensation.
An attorney has brought this matter to the attention of state regulators, but now fears that insurance companies will oppose the request. The real complaint, according to the attorney, is that insurance companies benefitted from the DIR’s negligence in calculating lump-sum payments, and are likely pulling for their oversight to be ignored so that they can continue to benefit at the expense of injured workers.
When an injured worker elects to take a lump sum as opposed to installment payments over time, they can be eligible to claim up to a 25 percent whole person permanent disability award in a lump sum, reduced to present value. The idea behind this is that if this amount is placed into an interest-bearing account and left untouched, then they will eventually receive the same amount of money that they would have received if they had opted for installation payments, but with the current discount rate, this isn’t the case.
Interfering with the discount rates has led to an enormous difference in the amount of partial disability awards that have been paid as present-value lump sums. At the current rate of six percent, Attorney Hunt’s injured clients, for example, have received lump sum payments that were over fifty percent smaller than they could have been if they had been computed with a more accurate discount rate.
The Chief Administrative Officer of the DIR, Chuck Verre, states that the DIR “did not do what we should have done… it’s as simple as that.”
Until the DIR corrects this problem and comes up with an updated discount rate, injured parties should opt for installation payments to ensure they get the maximum amount of compensation to which they are entitled.
Do you have a workers’ compensation case in Las Vegas? Contact a lawyer from Shook & Stone for the representation you need to improve your chances of securing a fair amount of compensation for your injuries. Set up your free consultation by clicking here.