What is a cost of living adjustment?

A cost of living adjustment, also known as a COLA, is a legal term used in workers’ compensation law in Florida and other states. It refers to an increase in the amount of benefits an injured worker is entitled to due to changes in the cost of living in the state. The adjustment is based on the consumer price index (CPI) for the state, which is updated each year. The COLA percentage increase is determined by the difference in the average CPI from the prior year. For example, if the CPI increases from 202 to 209, the COLA would be 3.5 percent. This means that the worker’s compensation benefits for an injury that occurred in the prior year would be increased by 3.5 percent. The worker must make a claim for the increase, and the employer must pay it. The purpose of the COLA is to ensure that injured workers are able to maintain the same level of living after their injuries even if the cost of living increases. This is important since many injured workers are unable to work due to their injuries, and they may not have additional income sources to offset the increase in the cost of living. The COLA provides a measure of financial stability for workers who have been injured on the job.

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