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By Eman Yazdchi, Esq. · Certified Specialist in Workers' Compensation Law, State Bar of California Board of Legal Specialization
In California, Labor Code §4653 sets the temporary disability rate at two-thirds of the worker's average weekly wage, subject to a statutory maximum and minimum that adjust annually for state average-weekly-wage growth. The §4653 rate runs alongside §4650 14-day payment timing and the §5814 unreasonable-delay penalty.
California Labor Code §4653 sets the California temporary disability (TD) rate at two-thirds (66 2/3%) of the injured worker's average weekly wage, subject to a statutory maximum and minimum that adjust annually for state average-weekly-wage growth. The §4653 California rule is the wage-replacement benefit that runs during the period the injured worker is unable to perform regular work because of the industrial injury. TD payments under §4653 begin once the California Labor Code §4650 14-day clock has run from the employer's knowledge of disability and continue until the worker returns to work, reaches permanent and stationary status, or hits the California Labor Code §4656 aggregate TD cap.
Under California Labor Code §4653 and the California earnings-calculation rules, the worker's average weekly wage is computed from earnings in the period preceding the date of injury — typically the highest-earning consecutive period that fairly represents the worker's earning capacity. The §4653 California calculation includes regular wages, overtime, shift differentials, and reasonably anticipated bonuses; it includes earnings from concurrent employers when both employers are insured. Two-thirds of that average weekly wage is the §4653 California weekly TD rate, capped at the statutory maximum and floored at the statutory minimum that apply on the date of injury.
Under California Labor Code §4653, the California TD maximum and minimum rates adjust each January 1 for state average-weekly-wage growth. The §4653 California rule means a high-earning worker whose two-thirds rate exceeds the statutory maximum is paid the maximum, and a low-earning worker whose two-thirds rate falls below the statutory minimum is paid the minimum. The §4653 California rate that applies is set as of the date of injury and does not change during the life of the TD claim — even when SAWW continues to grow over multiple years of disability.
Under California Labor Code §4653 and California Labor Code §4656, California TD payments continue until the earliest of: (1) the worker returns to regular work, (2) the treating physician declares the worker permanent and stationary (P&S), (3) the California Labor Code §4656 aggregate TD cap of 104 weeks within five years of the date of injury is reached, or (4) the longer 240-week cap applies for specific catastrophic injuries listed in §4656. The §4653 California TD rate runs throughout this period; once TD ends, California Labor Code §4658 permanent disability payments begin under the §4650 14-day timing rule.
Under California Labor Code §4653 (rate), California Labor Code §4650 (payment timing), and California Labor Code §5814 (penalties), the California TD framework has three pieces. The §4653 California two-thirds-of-AWW rate sets the amount; the §4650 California rule requires the first TD payment within 14 days of knowledge of disability with an automatic 10% self-imposed late-payment increase when payment is late; and §5814 imposes a separate 25% penalty when payment is unreasonably delayed or denied. A California worker whose §4653 TD payment is both late under §4650 AND unreasonably delayed under §5814 can recover both the 10% increase and the 25% penalty for the same payment.
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Tap to call →Last reviewed by Eman Yazdchi, Esq., May 2026.
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