Under Iowa law, injuries to body parts such as the head, neck, back, and hips were traditionally compensated based on their effect on a workers’ future earning capacity.

Among the statutory changes that went into effect for injuries after July 1, 2017 was an amendment to Iowa Code Section 85.34(2)(v) which provides:

“If a worker who is eligible for compensation under this paragraph (head, neck, back, or hip) returns to work or is offered work for which the employee receives or would receive the same or greater salary, wages or earnings than the employee received at the time of the injury, the employee shall be compensated based only upon the employee’s functional impairment resulting from the injury, and not in relation to the employee’s earning capacity.”

The intended effect of this amendment was to lower the amount of workers’ compensation benefits an injured worker would receive.  For example, a low back injury with a 10% whole body impairment, and work restrictions might traditionally receive an award between 100 to 200 weeks of permanent partial disability benefits.

Under the new statute, if the same worker with a low back injury received the same or greater salary, wages, or earnings after the injury, the functional award would work out to be 10% of 500 weeks for compensation of only 50 weeks of permanent partial disability benefits.

The cases where Iowa Code Section 85.34(2)(v) come into play have started to be litigated at the trial level over the last year or so.  The first workers’ compensation appeal decision involving the amended statute was issued on April 9, 2021 in the case of McCoy v. Menard, Inc. and XL Insurance America, Inc.

The Commissioner’s Appeal Decision pointed out that the statute left a number of questions unanswered:

  1. When should the comparison of pre-injury and post-injury earnings take place? For example, should the post-injury earnings be calculated a month after the injury? A year after the injury? At the time of the trial concerning the injury?


  1. How many weeks are to be considered in making this comparison? For example, in calculating the weekly rate at which a worker should be compensated, the general rule is to use the average of 13 weeks of earnings.  Additionally, there are a large number of rules for specific situations such as a low earning week, missing work for personal illness, etc.  The Iowa Code Section 85.34(2)(v) does not clarify how the pre and post earnings should be calculated.

In the McCoy v. Menard, Inc. and XL Insurance America, Inc. case the Deputy Commissioner who presided over the trial interpreted the statute to mean that if any one of the itemized factors are met – salary, wages, or earnings – then the injured workers’ disability should be measured by the lower value functional impairment method.

However, the Commissioner noted that if a worker previously worked 40 hours a week at $20.00 an hour, and then after his injury was offered one hour of week at work at $20.00 an hour, under the Deputy Commissioner’s reasoning the worker would be limited to the functional value of his injury.

Therefore, the Commissioner held in his Appeal Decision that a Claimant’s hourly wage considered in isolation is not sufficient to limit a Claimant’s compensation to functional disability.  The Commissioner also ruled that a Claimant’s hourly wage must also be considered with the actual number of hours worked or offered by the employer.

However, the facts of the McCoy v. Menard, Inc. and XL Insurance America, Inc. case were that the Claimant worked on a part-time basis and was offered 16 hours of work per week at the same rate both before and after the injury.

The Commissioner followed the general legal principle that he should not decide theoretical controversies that are not present in the case.  Therefore, we will have to wait for more appeal decisions from the Commissioner to provide more guidance.  Additionally, the Commissioner’s legal interpretation of the workers’ compensation statutes is appealable to the District and Appellate Courts.  Therefore, it will take additional time for the Commissioner’s rulings to be reviewed and ruled upon in the judicial system.

In my cases opposing counsel and I have been able to agree that the pre and post injury earnings should be based on the weekly rate calculated under the same method as the worker’s weekly rate is calculated.  Additionally, we have been able to agree that the post-injury earnings should be calculated as close to the trial date as possible.  Additionally, in my cases so far it has always been clear whether a workers’ earnings went up or down.  In closer situations each side would have more of a motive to fight over the details of the comparison.

I think when the issue is completely litigated in front of the Commissioner and the Court system, that the final approved procedure will be to:

  1. Calculate the pre- and post-trial earning rate in the same way that an injured employee’s weekly workers’ compensation rate is calculated.


  1. Use a post-injury earning rate based on the worker’s earnings 30 to 90 days before trial.