If you are a high wage earner, a settlement based upon a percentage loss of use of a body part may not adequately compensate you. In such cases, the Act allows for what is known as a wage differential award.

Suppose you are a plumber who was earning $26.00 an hour before you suffered a work-related injury to your knee. Because of the injury, you are no longer able to kneel or squat in the manner required of a plumber's job.

You are now only able to earn $9.00 an hour repairing small engines. A typical Workers' Compensation settlement based on a percentage loss of use of the leg may not be enough to make up for a lifetime of future lost earnings, especially if you are younger.

This would be an appropriate case for a wage differential award. The employer would compensate you for the remainder of your working life for the difference between what you could have earned as a plumber and what you are now able to earn as a small engine repairman.

Although the employer would be required to pay that difference for the rest of your working life by writing you a weekly check, the employer and the employee often agree to a single large payment to settle out the case. This is known as a "lump-sum settlement."