A Guide to Workers’ Comp Indemnity Benefits (Wage Loss Benefits) in CO
Learn when you can get workers’ compensation benefits for lost wages after an injury at work in Denver and how to apply
Key points about CO workers’ comp indemnity benefits:
- Wage loss (indemnity) benefits replace part of your income if your work injury keeps you from earning full wages.
- In Colorado, you must miss at least 3 shifts and have an employer-approved doctor write you off work or restrict your duties to qualify for indemnity benefits.
- Benefits are tax-free and based on your average weekly wage (AWW) before your injury, which includes wages, overtime, tips, and commissions.
If you’re hurt on the job in Denver, the sudden loss of income can be just as stressful as the injury itself. Workers’ compensation indemnity benefits—also known as wage loss benefits—are designed to replace a portion of your paycheck while you recover.
In Colorado, these benefits can help you stay financially stable until you’re able to return to work, but figuring out if you qualify, how to apply, and how much you’ll receive can be confusing.
In this article, we’ll break down how indemnity benefits work for injured workers in Denver, including eligibility rules, benefit calculations, and the steps to take when filing a claim in Colorado. We’ll also answer common questions about temporary disability benefits and permanent disability benefits so you understand what to expect at each stage of your recovery.
If you have questions about how much your injury is worth or need help with the claims process, schedule a free consultation with the experienced Denver workers’ compensation attorneys at Babcock Tucker.
What type of insurance protects workers from loss of wages?
Workers’ compensation provides medical care and partial wage replacement during recovery to workers who suffer a job injury or occupational illness.
Under Colorado law, most employers with 1 or more full- or part-time employees—including family members—must carry workers’ compensation insurance for their employees. This coverage ensures that if you’re injured on the job, you won’t have to pay out of pocket for medical care or go without income while you recover.
Workers’ comp wage loss benefits, also known as indemnity benefits, are meant to replace a portion of your regular paycheck if your injury prevents you from working or forces you to work fewer hours.
What is the 3-day rule for workers’ comp in Colorado?
In Colorado, you won’t qualify for wage loss (indemnity) benefits unless your work injury or illness keeps you from working for 3 or more scheduled shifts.
To be eligible, you must be treated by an employer-approved doctor who confirms that your injury prevents you from working at all or limits your ability to perform your regular job duties.
You may begin receiving temporary disability payments through your employer’s workers’ compensation insurance after you’ve missed at least 3 shifts and your doctor issues an order that confirms you’re unable to work at all or can only perform limited duties.
If your injury keeps you out of work for more than 2 weeks, you’ll be reimbursed retroactively for those initial 3 days as well.
How Workers’ Compensation and Disability Benefits Differ
Learn the difference between workers’ comp and private short/long-term disability benefits a worker may have through a group policy from an employer, union, or an individually purchased policy.
How much do you get for lost wages?
How much you receive for lost wages after a work injury in Colorado depends on how much you earned before the injury and whether your injury is temporary or permanent.
Workers’ compensation provides 4 main types of wage loss (indemnity) benefits, each based on your average weekly wage (AWW) and the extent of your disability.
Temporary total disability (TTD) benefits
You can receive temporary total disability (TTD) benefits if your doctor says you can’t work at all while recovering. These cover about two-thirds of your average weekly wage, up to a state maximum that changes each year.
For injuries occurring between July 1, 2025, and June 30, 2026, the maximum amount for TTD benefits is $1,396.85 per week.
TTD benefits are paid until your doctor clears you to return to work or determines you’ve reached maximum medical improvement (MMI)—meaning your condition isn’t expected to improve with further treatment or time.
Temporary partial disability (TPD) benefits
You can receive temporary partial disability (TPD) benefits if you return to work but earn less because of your injury. These benefits cover two-thirds of the difference between what you earned before the injury and what you’re earning now.
Here’s an example of how TPD benefits might be calculated:
Let’s say you earned $1,000 per week before your injury. After returning to light-duty work, you’re now earning $600 per week.
To calculate TPD:
- Subtract your current earnings from your pre-injury earnings:
$1,000 – $600 = $400 difference - Multiply that difference by two-thirds: $400 × 0.6667 =$266.68
In this scenario, you would receive $266.68 per week in TPD benefits to make up for part of your lost wages while you’re on restricted duty. In this scenario, your total weekly earnings would be $866.68.
These payments would continue until you return to full wages or your doctor says you’ve reached maximum medical improvement (MMI).
Permanent partial disability (PPD) benefits
If your injury causes a permanent limitation but you can still work in some way, you may qualify for permanent partial disability (PPD) benefits once your doctor decides you’ve reached MMI.
The amount you receive for PPD depends on a few things:
- The type of injury. Colorado separates injuries into “scheduled” injuries for loss of function to specific body parts like an arm, leg, or hand and “non-scheduled” injuries (for loss of function to major areas like the spine, lungs, or brain).
- Your impairment rating. This is a percentage your doctor assigns to show how much permanent damage or loss of function you have in a specific body part or your whole body.
- Your average weekly wage (AWW). Your payments are based on a portion of what you earned before the injury, up to the state’s legal maximum.
Together, these factors determine how long you’ll receive payments and how much total compensation you’ll get for your permanent injury. PPD benefits may be paid in installments or as a lump sum, depending on your case.
Permanent total disability (PTD) benefits
If you suffer a catastrophic injury that prevents you from returning to any type of work, you may qualify for permanent total disability (PTD) benefits.
These payments generally equal two-thirds of your average weekly wage, up to the same state maximum as TTD ($1,396.85 per week for injuries between July 1, 2025, and June 30, 2026).
PTD benefits are often paid for life, since the injury permanently prevents you from earning a living.
If you’re unsure whether your benefits are being calculated correctly or workers’ comp has offered you a settlement amount that seems unfair or would not cover the full extent of your expenses related to the injury, reach out to a Denver work injury attorney who can calculate the value of your claim and negotiate with insurers on your behalf to maximize your compensation.
What Not To Do While on Workers’ Comp in Colorado
Avoid these common mistakes that could hurt your workers’ compensation claim in Denver.
What is the average weekly wage in Colorado?
In Colorado, your average weekly wage (AWW) is what determines how much you’ll receive in workers’ compensation wage loss benefits. It’s meant to reflect what you typically earned each week before taxes at the time of your injury—and it includes more than just your base pay.
To figure out your AWW, you’ll need to look at all the income you earned leading up to your injury.
What wages are subject to workers’ compensation in Colorado?
When calculating your average weekly wage, you should include your total gross income—not just your regular paycheck. This can include:
- Regular pay or salary
- Overtime or shift differentials
- Vacation or sick leave pay
- Tips, commissions, or piecework
In some cases, the value of things like employer-provided housing, meals, health insurance, and mileage reimbursement can also be included if they’re considered a form of salary or are discontinued during your disability.
Once you’ve added up your total gross income for a set number of weeks, you divide that amount by the number of weeks you worked during that period to get your AWW.
You can also calculate it by dividing your yearly income by 52 or by multiplying your monthly income by 12 and then dividing by 52. If you had another job at the time of your injury, calculate that income separately and add both totals together to get your combined AWW.
Your AWW is one of the most important numbers in your claim—it directly affects your wage loss payments. If you’re unsure whether your calculation is accurate, be sure to consult a Denver workers’ compensation lawyer.
Does workers’ comp cover lost wages for part-time employees?
Yes. In Colorado, part-time employees are covered under workers’ compensation. Just like full-time workers, your wage loss benefits are calculated based on your total gross income before the injury. Even if you work fewer hours, you still have the same right to medical care and wage replacement benefits as full-time employees.
How to qualify for wage loss benefits in Colorado
To receive wage loss (indemnity) benefits in Colorado, your injury, illness, or disease must be work-related—meaning it happened while performing your job duties or as a direct result of your work environment.
Once that’s established, there are a few important steps you need to take to qualify for benefits:
- Report your injury. Colorado law requires you to notify your employer in writing about your injury or illness as soon as possible, but no later than 10 days after it occurs. Failing to report on time can delay your benefits.
- Get medical care from an approved doctor. If it’s an emergency, seek immediate treatment. For ongoing care, you must see a physician approved by your employer—their documentation will help prove your injury is work-related.
- File your workers’ compensation claim. Submit form WC 15 (“Worker’s Claim for Compensation”) to the Colorado Division of Workers’ Compensation. You have up to 2 years to file, but it’s best to do it quickly to avoid delays in processing your claim.
Once your doctor confirms that your injury prevents you from working and you notify your employer, they are required to notify their insurance company. The insurer must approve or deny your benefits within 20 days. If approved, you’ll begin receiving wage loss benefits to help replace your income while you recover.
If your workers’ comp claim is denied, seek help from a Colorado work injury attorney. They can guide you through the process of filing an appeal so you can get the benefits you deserve.
Need help getting wage loss benefits after a work injury in Denver?
Wage loss benefits are meant to help you stay financially stable while you recover from a work injury—but getting them isn’t always simple.
At Babcock Tucker, we live right here in the same communities we serve. Our local Denver work injury attorneys know Colorado’s workers’ comp system inside and out—from the Division of Workers’ Compensation to the local employers and insurance companies that handle these claims. That experience helps us spot problems early, address them quickly, and get claims processed more efficiently.
If your claim has been denied, delayed, or undervalued after a serious or fatal work injury, we want to help you set things right. Contact Babcock Tucker today to schedule a free consultation to learn how we can help maximize your benefits.
