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New York Workers’ Compensation Basics
Presented By: Joseph P. DeCoursey
Introduction: The workers’ compensation system in New York is designed to provide wage replacement benefits and medical care to injured workers. Physical injuries, mental injuries, and occupational diseases are all covered by the statute. The basic features of the New York workers’ compensation system are:
• The employee is entitled to workers compensation benefits so long as the employee suffers a personal injury “arising out of and in the course of employment” (or contracts an occupational disease);
• The employee’s contributory negligence does not lessen his or her rights;
• There must be an employer-employee relationship between the claimant and the employer. Independent contractors do not qualify for benefits if they are injured and cannot seek benefits from the employer with whom they were working;
• Workers’ Compensation benefits include wage replacement benefits of two-thirds of the employee’s average weekly wage, subject to maximum and minimum compensation limits set by the Law and medical expenses causally related to the injury suffered by the claimant.
• The employee gives up his or her right to sue the employer for damages for any injury covered by the workers’ compensation system. The employee still has the right to sue third-parties whose negligence caused the injury subject to the employer and carrier’s subrogation rights.
• Claims adjudication is the responsibility of the Workers’ Compensation Board, an administrative agency, which operates with relaxed rules of evidence and procedure.
1.0 Exclusive Remedy
There is a special bargain that defines the relationship between the employee and the employer in workers’ compensation. The employee gives up his or her right to sue the employer. The employer gives up its right to contest fault. Although simple in theory, in practice there is much more than fault for both employer and employee to argue about.
1.1 WCL §11 - This section of the law prevents the employee from suing the employer for personal injuries sustained or occupational diseases contracted out of and in the course of employment. The legislative intent in WCL §11 is very clear. It states that the employer’s liability under the Workers’ Compensation Law “shall be exclusive” and “in place of any other liability.” Despite the legislative intent, the burden is still on the employer to plead and prove the exclusive remedy defense by a preponderance of the evidence. Unlike other affirmative defenses in the law, the exclusive remedy defense is waived only if ignored until final disposition of the case. Even if the employee never makes any application for compensation benefits, his or her right to sue is still barred by the exclusive remedy doctrine.
1.2 Employer-Employee Relationship - In order for the NY Workers’ Compensation Law to apply, there must be an employer-employee relationship between the parties. Independent contractors are not entitled to workers’ compensation benefits unless covered by their own insurance policy. The traditional tests for determining whether an employer-employee relationship exist include: substantial control over the work, the method of payment, the right to hire or fire, provision of tools and equipment, and the nature of the work.
The initial investigation of any workers’ compensation claim should include confirmation that there is indeed an employer-employee relationship between your insured and the claimant. Employers sometimes label employees as independent contractors to avoid workers’ compensation issues but New York has never recognized the mere labeling of an employee as an independent contractor to be sufficient to avoid a finding of employer-employee relationship.
1.3 Third Party Actions – Although an injured worker may not sue his or her employer for personal injuries sustained or occupational diseases contracted out of and in the course of employment, he or she may sue third-parties responsible for those injuries. Any recoveries in a third-party action are subject to the insurance carrier’s or employer’s lien rights under WCL §29. This allows responsibility for the injury to be paid by the ultimate wrongdoer—the third party—and allows the employer to come out even. This scheme also prevents the claimant from receiving a double recovery.
2.0 Establishment of a Workers’ Compensation Claim
There are three basic elements, in addition to the existence of an employer-employee relationship between the claimant and employer, needed to establish a workers’ compensation claim. These elements are:
1) An accident or occupational disease arising out of and in the course of employment;
2) Timely notice and claim filing; and
3) Causal relationship between the injury alleged and the occupational accident or disease.
2.1 Accidental Injuries - Liability under the workers’ compensation law requires a showing that the claimant’s accidental injury both arose out of and occurred in the course of the claimant’s employment. What this means is that the injury must be one of the risks connected with the claimant’s employment and must flow from the claimant’s employment as a natural consequence. This is more than mere “but for” causation—not every injury that occurs at work can become an established workers’ compensation injury.
2.1.1 WCL §2(7) - “‘Injury’ and ‘personal injury’ mean only accidental injuries arising out of and in the course of employment and such disease or infection as may naturally and unavoidably result therefrom.”
Analysis of whether a claim arose out of and in the course of employment requires determining whether there is a sufficient nexus between the circumstances of the injury and the claimant’s employment.
2.1.2 Mental Injuries - “The terms “injury” and “personal injury” shall not include an injury which is solely mental and is based work-related stress if such mental injury is a direct consequence of a lawful personnel decision involving a disciplinary action, work evaluation, job transfer, demotion, or termination taken in good faith by the employer.” WCL §2(7)
Solely mental injuries (that is, psychic traumas that cause psychological injury) are compensable in New York. InWolfe v. Sibley, 36 N.Y.2d 505 (1975), the claimant found her boss lying in a pool of blood caused by a self-inflicted gunshot wound. This caused the claimant to have severe psychological depression. The Court of Appeals inWolfe ruled—for the first time—that psychological trauma precipitated by psychological stress was compensable just as physical injuries. This case directed led to the 1990 amendment of WCL §2(7) to provide the limitation on mental injuries caused by lawful personnel decisions.
2.1.3 What the statute excludes: WCL §10(1) - “ . . . except that there shall be no liability for compensation under [the Workers’ Compensation Law] when the injury has been solely occasioned by intoxication from alcohol or a controlled substance of the injured employee while on duty; or by willful intention of the injured employee to bring about the injury or death of himself or another; or where the injury was sustained in or caused by voluntary participation in an off-duty athletic activity not constituting part of the employee’s work related duties unless the employer (a) requires the employee to participate in such activity, (b) compensates the employee for participating in such activity, or (c) otherwise sponsors the activity.
2.1.4 Presumption of compensability - WCL §21 - once the claimant has produced evidence to support a claim for a workers’ compensation injury, it shall be presumed compensable until the employer rebuts the presumption with substantial evidence to the contrary. This is why employers have such difficulty in winning controverted workers’ compensation claims.
Keevins v. Farmingdale UFSD, 304 A.D.2d 1013 (3d Dep’t 2003) - this case presents an excellent example of the §21 presumptions in action. The claimant, a schoolteacher, twisted her knee while walking around her desk. The employer did not present any medical evidence to rebut the claim but instead argued that the claimant had an idiopathic injury. The Board disallowed the claim but the Appellate Division reversed, citing §21 and noting that accidents that occur “in the course of employment” are presumed to have arisen “out of” such employment in the absence of substantial evidence to the contrary.
The presumption is even stronger in unwitnessed death cases. In an unwitnessed death case, it is presumed that the death arose out of in the course of employment.Holmes v. Kelly Farm and Garden,Inc., 1 A.D.3d 743 (3d Dep’t 2003). The insurance carrier can shift the burden back to the claimant by producing a consultant’s report indicating that the death was not causally related to the employment.
2.2 Occupational Disease - The other compensable category of events under the workers’ compensation law are occupational diseases. An occupational disease develops over time as a result of repetitive actions or exposures, without a single trauma. An accident is typically identifiable in time and place as a single, traumatic event resulting in injury. In an occupational disease claim, the exposure or repetitive action must arise from adistinctive feature of or the nature of the claimant’s employment.
When you are dealing with an occupational disease claim, do not simply accept from the claimant or the claimant’s physicians a history that the injury arose from repetitive work tasks as adequate for establishing the claim. There needs to be a determination as to what those tasks were and whether those tasks were a distinctive feature of the claimant’s class of employment.
2.2.1 Distinctive Feature - Occupational diseases are not merely conditions related to the claimant’s job but arise from the inherent nature or adistinctive feature of the claimant’s class of employment. Occupational disease claims require careful consideration because of the unique defenses inherent in these types of claims. The fact that the claimant developed an occupational disease at work is not enough; the claimant must have developed that disease due to a distinctive feature of the claimant’s job.
For example, in Engler v. United States Parcel Service, 1 A.D.3d 854 (3d Dep’t 2003), the Appellate Division reversed the Board’s establishment of the claimant’s lung condition as an occupational disease because there was no distinctive feature of the claimant’s job as a delivery truck driver that caused the condition. Rather, the specific environments in which he made deliveries and a defect in the door of his vehicle created a vacuum which caused the claimant’s lung disease. Thus, there was no distinctive feature of the claimant’s job as a delivery truck driver that caused the claimant’s condition.
2.2.2 Ergonomics - Because the key issue in an occupational disease claim is whether the resulting occupation disease occurred from a distinctive feature of the claimant’s employment, claims based on injury resulting from the way in which an employee does his or job or sets up his or her work station are not compensable.
In Bates v. Marine Midland Bank, 256 A.D.2d 948 (3d Dep’t 1998), the Appellate Division found that a bank recovery adjuster who developed a herniated disc from cradling a telephone with his neck while working did not have a compensable occupational disease because the claimant's condition was caused by the configuration of his work space and the manner in which he used the equipment provided, rather than some unique feature of his particular employment.
2.2.3 Date of Disablement - Because occupational diseases do not involve a single, identifiable event, one of the challenges in these types of claims is to determine thedate of disablement. The Appellate Division has given the Board much discretion in determining date of disablement. The Board can consider a number of factors in setting the date of disablement such as: date of first treatment, date of first lost time, and the date that the claimant knew his or her condition was related to work. The date of disablement is a key consideration in determining whether the claim is timely, which insurance carrier has coverage, and even the rate at which the claimant will be paid lost wage benefits.
2.3 Consequential Injuries - injuries consequential to an originally established workers’ compensation injury are compensable. The carrier on the risk is the carrier that covered the original injury. Whether a consequential injury is in fact due to an original injury is a question of fact for the Board to determine.
2.4 Timely Notice and Claim Filing - There are two important timelines to keep in mind in any accidental workers compensation injury. The first is timelynotice under §18 of the statute. The other is timelyclaim filing under §28 of the statute.
2.4.1 Timely Notice - Timely notice under §18 requires the claimant to give his or her employer written notice of an injury within 30 days of an injury. Exceptions to the 30 day notice requirement exist when an employer has actual knowledge of the accident or when the employer is not prejudiced by the delay in claimant’s giving notice. It is the claimant’s burden to prove that the employer is not prejudiced by untimely notice. “Prejudice” refers to prejudice in the employer’s defense of the claim. An example of prejudice would be the unavailability of evidence or witnesses due to the claimant’s failure to provide timely notice. Both the Board and the Courts have stated in many cases that oral notice will suffice. A different section of the statute covers timely notice for occupational disease claims. Under WCL §45, the claimant has two years from the date of disablement or the date the claimant knew or should have known that the disease was due to the nature of his or her employment, whichever is later. Failure to give written notice is frequently ignored by the Board and the failure to give timely notice is ignored just as often.
2.4.2 Timely Claim Filing (statute of limitations) - The claimant must file his or her workers’ compensation claim within two years of the date of accident or disablement. This statute of limitations may be waived if the defense is not raised at the first hearing in which all parties are present or if the employer made an “advanced payment of compensation.” Keep in mind that a medical report from a claimant’s doctor can be considered the filing of a claim.
Whenever a claim appears to have been filed more than two years after the date of injury, you should pursue the statute of limitations defense. This issue should be noted on the Notice of Controversy (FROI-04 or SROI-04) and your attorney must also raise this issue on the record at the first hearing at which all parties are present. You should closely investigate a claimant’s contention you waived a §28 defense because of an advanced payment of compensation. Any advance payment of compensation must carry with it recognition by the employer that there was a compensable injury. A payment that is “compensation neutral,” such as a payment due to a sick-leave policy, will not qualify as an advanced payment of compensation.
2.5 Causal Relationship - The claimant’s main burden is any workers’ compensation claim is to establish the existence of causal relationship or a causal nexus between the claimant’s accident and employment. Causal relationship is proven by medical evidence. Generally this comes from a physician in the form of a narrative report that has a history of the claimant’s injury, a diagnosis, and a statement on causal relationship tying the diagnosis to the claimant’s injury.
The issue of causal relationship usually involves a battle between medical experts. Once the claimant has produced a medical report with the requisite history, diagnosis, and opinion on causal relationship, the burden shifts to the employer to produce contrary medical evidence, usually in the form of an independent medical exam.
In order for awards of temporary disability to continue, the claimant must produce medical evidence of causally related disability on a periodic basis. That time period is every 90 days as of this writing.
2.6 Multiple Injuries and Apportionment - Where a claimant has a work-related injury but has pre-existing or subsequent injuries, the issue of apportionment, that is, how to divide liability between multiple injuries arises. There are three scenarios that come into play when dealing with multiple injuries.
The first is a single accident involving multiple body parts. This is the most frequent situation. A typical example of such an accident would be a work-related motor vehicle accident (MVA) where the claimant injured multiple body parts. Here, the primary concern is avoiding an improper overlap of awards when the claim reaches permanency.
The second situation involves multiple body parts injured in separate accidents either while working for the same or different employers. Here, concurrent awards are permissible, so long as the combined award doesn’t exceed the statutory compensation maximum for the most recent accident. Care must be taken to assign the appropriate compensation amount to each accident.
The third situation involves successive accidents or injuries to the same body part. This is the most problematic and the source of most apportionment litigation in NY Workers’ Compensation. The general rule is that apportionment does not apply during the acute phase of temporary disability but apportionment may apply during permanency.
Apportionment to a prior non-work related injury is very difficult to obtain. There needs to be a showing that the claimant remained disabled from work “in a compensation sense” due to the prior injury in order for apportionment to apply. If the claimant is able to work following the first injury, then apportionment is probably not going to apply. That said, there is a special class of cases where apportionment can apply to a prior non-work related condition if the claimant had a permanent pre-existing loss of use that can be reasonably quantified. Scally v. Ravena Coeymans Selkirk Cent. School District, 31 A.D.3d 836 (3d Dep’t 2006).
The same rule applies in situations where the prior injury was the subject of a NY workers’ compensation claim, although WCLJs are a bit more willing to consider apportionment in this situation because there will be another insurance carrier available to pay the apportioned share of benefits. In these cases, one should not expect any successful outcome on an apportionment claim until the claimant reaches permanency and is either classified or given a schedule loss of use award.
2.7 Jurisdiction - Any claim arising from an injury that occurred in the State of New York is subject to New York jurisdiction. Cases involving out-of-state injuries may be subject to New York State jurisdiction if there are sufficient significant contacts between the parties and New York State. Examples of significant contacts can include (but are not limited to): home office location, place of employment contract, residence, and any contract between the parties indicating which workers’ compensation law they wish to apply.
3.0 Average Weekly Wage
The claimant’s awards for wage replacement (indemnity) benefits are equal to 2/3rds of the injured workers’ average weekly wage (“AWW”). Because all awards for wage replacement benefits are calculated based on the claimant’s average weekly wage, it is critical that an accurate average weekly wage be set at the inception of the case.
3.1 C-240 and Records of Wages - An accurate calculation of the claimant’s average weekly wage starts with good records. The Board provides a form from the employer to complete, called a C-240, which provides space for the employer to indicate a record of the claimant’s wages for the year prior to the injury and the number of days the claimant worked over the course of that year. The underlying principle in calculating the claimant’s AWW is to determine as closely as possible the claimant’s actual AWW at the time of the injury.
3.2 Methods of Calculation
Claimant employed in same industry for Full Year: This is the most common situation. It applies where the claimant has worked for the same employer, or other employers doing the same kind of work, for substantially the entire year prior to the injury. For a claimant working five days per week, the total wages for the year prior to the injury is divided by the actual days worked to determine the claimant’s average daily wage. The average daily wage is then multiplied by 260 and then divided by 52 to yield the AWW. Different multiples apply for six and seven day workers. In these cases, the Board will generally use a 300 multiple.
Claimant not employed in same industry for Full Year: Use of the claimant’s actual payroll in this situation may be unfair. In these situations, the statute requires the employer to produce whatever wage information is available for the claimant and the wages of a similar worker for substantially the whole year prior to the injury. A similar worker is an employee of the same class as the claimant.
Claimant whose AWW not Otherwise Calculable: If the claimant’s AWW cannot be “reasonably and fairly” applied by either of the above methods, then the Board will determine the claimant’s AWW using other sources, including the claimant’s actual earnings for the entire year prior to the injury.
Wage Expectancy for Employees under age 25 at the time of injury: When someone is injured before their 25th birthday, a special rule exists for calculating the claimant’s earning capacity. This is called the “minor’s wage expectancy.” Under minor’s wage expectancy, the AWW is increased at the time of permanency to more accurately reflect the future wage loss suffered by young workers. This increase in the AWW only applies to permanent wage loss benefits and not to temporary disability awards.
3.3 Maximum and Minimum Rates of Compensation – The statutory maximum and minimum rates of compensation payable to the claimant are set by the statute. The maximum rate is reset every July and is based on the average weekly wage for all workers in the State.
DOI on or After Max Total Max Partial Min Rate
7/1/14 $808.65 $808.65 $150
7/1/13* $803.21 $803.21 $150
5/1/13 -- -- $150
7/1/12* $792.07 $792.07 $100
7/1/11* $772.96 $772.96 $100
7/1/10* $739.83 $739.83 $100
7/1/09 $600 $600 $100
7/1/08 $550 $550 $100
7/1/07 $500 $500 $100
7/1/92 $400 $400 $40
7/1/91 $350 $350 $40
7/1/90 $340 $280 $30/$20
*Adjusted annually to 2/3 of State AWW
4.0 Temporary vs. Permanent Disability
Lost wage benefits paid to an employee immediately after an injury during his or her period of convalescence are called temporary disability benefits. Lost wage benefits paid to the claimant after he or she has reached maximum medical improvement and legally found by the Board to have a permanent disability are called permanent disability benefits.
4.1 Temporary disability benefits remain payable so long as the claimant’s condition is “unsettled,” such as when pain and swelling persist or so long as the claimant condition can be improved with additional medical treatment. In order to continue to be entitled to ongoing lost wage benefits during the period of temporary disability, the claimant must present periodic medical evidence of a continuing medical disability related to the injury. If a claimant needs additional medical attention after the period of initial healing—such as further surgery—the employee may again be considered temporarily disabled. The determination of the claimant’s temporary disability benefits is dependent on periodic medical evidence showing that the claimant remains disabled due to the injuries suffered in the workers’ compensation accident or occupational disease.
4.1.1 Calculation of Award - Compensation for temporary partial disability is two-thirds of the difference between the claimant’s average weekly wage and his wage earning capacity after the accident. WCL §15(5)
4.1.2 Wage Earning Capacity is determined either by the claimant’s actual earnings, if working, or if the claimant has no earnings, the Board “shall fix such wage earning capacity as shall be reasonable, but not in excess of [75%] of his actual earnings,having due regard to the nature of his injury and his physical impairment.” WCL §15(5-a)
Typically, the non-working claimant’s benefit rate will be based on a physician’s opinion of the claimant’s degree of disability. This is often characterized on a percentage basis or by using the terms “mild” (25%), “moderate” (50%), “marked” (75%) or “total” (100%). In New York, the “total disability” refers not to the claimant’s at-injury job but to all jobs in the labor market.
4.2 Permanent disability benefits are appropriate when the claimant has reached maximum medical improvement from his or her injuries. Permanent disability awards are divided into two types: classification and schedule loss of use. Reaching permanency is a significant legal turning point in a workers’ compensation case. Permanent disability benefits carry with them the presumption that the claimant has a continuing disability. Thus, the claimant is relieved of the requirement to present periodic medical evidence of a continuing disability. The level of permanent impairment is based on medical opinion provided in consultation with the Board’s 2012 Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity.
4.2.1 Maximum Medical Improvement (“MMI”)- Consideration of permanency is premature until the claimant has reached MMI from the injuries suffered in the workers’ compensation accident. A finding of MMI is based on a medical judgement that the claimant: 1) has recovered from the work injury to the greatest extent that is expected and 2) no further improvement in the claimant’s condition is reasonably expected. The need for palliative or symptomatic treatment does not preclude a finding of MMI. In cases that do not involve surgery or fractures, MMI cannot be determined prior to 6 months from the date of injury or disablement, unless otherwise agreed to by the parties.
4.2.2 Schedule Loss of Use (“SLU”) Awards - These are awarded for a permanent impairment of an extremity, permanent loss of vision or hearing, or permanent facial disfigurement.
18.104.22.168 Prerequisites for SLU award:
1) Permanent impairment of extremity, loss of vision, or loss of hearing.
2) Impairment must involve anatomical or functional loss such as soft tissue, bone, sensation, atrophy, scarring, deformity, mobility defects, loss of power, shortening, impaired dexterity, or coordination.
3) Treatment terminated and no further improvement is expected or no residual impairment in systemic area (e.g., head, neck, or back).
4) Certain time periods must have elapsed, generally one year from the date of injury or date of surgery to repair the injured body part.
22.214.171.124 Evaluation and award of SLU
1) Loss of use is a medical determination made by a physician with reference to the Workers’ Compensation Board Medical Guidelines. Generally, for extremities, the doctor measures the loss of range of motion of the affected body part and then compares those findings with the Medical Guidelines to determine his or her opinion on the claimant’s percentage loss of use. In many cases, the claimant’s physician will submit an opinion on SLU and the insurance carrier will also have the claimant examined by its consultant for another opinion on SLU. If there is a dispute between the opinions, the parties can compromise or the WCLJ can direct development of the record and decide which opinion he or she finds more credible.
2) Percentage loss of use is then translated into the appropriate number of weeks of compensation payable to the claimant by reference to the table in WCL §15(3). The table indicates the maximum number of weeks of disability payable for each body part. To determine the number of weeks payable for a certain percentage loss of use, multiply the maximum number of weeks for the body part by the percentage calculated by the physician. For example, if the physician determines that the claimant has a 25% SLU of the right arm, the number of weeks payable is 78 weeks (312 weeks total for an arm x 0.25 = 78 weeks).
3) The number of weeks of compensation payable is then multiplied by two-thirds of the claimant’s average weekly wage to determine lump sum award payable to the claimant. Although the statute provides for the SLU award to be paid out over time into the future, a statutory amendment permits payment in a lump sum upon claimant’s request. The carrier will deduct prior payments made during the period of temporary disability from this lump sum.
4) Protracted Healing - In some cases the time required to heal an injury is greater than average, resulting in a longer period of temporary disability. Because the statute provides that the carrier can deduct prior payments from the final SLU award, injured workers with unusually long healing periods may receive little or no additional benefits under a SLU award. To avoid this, the statute provides an additional award for protracted healing.
126.96.36.199 - Payment of a SLU award is a credit for future lost wage awards that the injured worker may require in the case. In the event of future lost time related to the workers’ compensation injury, the carrier does not need to initiate fresh payments of wage loss benefits to the claimant but instead may credit the lost time payment against that amount of the SLU award not for claimant’s actual lost time.
4.2.3 Classification awards are payable for permanent conditions not otherwise amenable to disposition by SLU award. In fact, the statute refers to classification cases as “other cases.” WCL §15(3)(w). Classification cases generally involve continuing or progressive impairments resulting in permanent disability to the head, neck, spine, lungs, and other body parts not otherwise addressed by WCL §15(3)(a)-(u). Rather than the SLU’s payment of a limited, but certain period of benefits to the claimant, a classification award is potentially unlimited and the amount of the benefits can fluctuate over time.
188.8.131.52 Evaluation - Like SLU awards, the ultimate determination of permanent disability is a medical determination made by a physician with reference to the Board’s Impairment Guidelines. Determining a claimant’s permanent partial disability award requires a determination of the claimant’s level of medical impairment and loss of wage earning capacity.
184.108.40.206 Medical Impairment - Under the 2012 Guidelines permanent medical impairment is assigned a severity ranking from “A” to “Z,” with “A” being the least severe and “Z” being the most severe. The Board has also included a “Medical Impairment Severity Crosswalk” in Chapter 18 of the 2012 Guidelines to allow for some degree of comparison between the severity rankings of different body parts. This is because, for example, a “D” severity ranking for the soft-tissue lumbar spine injury would not necessarily be the same level of impairment as a “D” severity ranking for a respiratory condition. The Severity Crosswalk ranks relative severity across injury classes from “0” to “6” with a “0” representing no disability and a “6” representing a total disability. Recent Board Panel Decisions have translated the A-to-Z rankings of the Guidelines into percentage degree of disability for determining the appropriate benefits rate.
The Guidelines criteria for the most commonly injured body sites are very detailed and focus on objective measurement and clinically verifiable information. Most of the time, there should be very little difference between the impairment rankings from two examinations of the same claimant by different physicians.
220.127.116.11 Loss of Wage Earning Capacity (“LWEC”) - the durational cap on the claimant’s weekly indemnity benefit is dependent on the Board’s determination of the worker’s loss of earning capacity which is a different calculation than the level of medical impairment. Although the claimant’s medical impairment may coincidentally be the same as the percentage loss of wage earning capacity, medical impairment may not be directly translated into loss of wage earning capacity.
Definition - a “determination at the time of classification of the decrease in earning power that an injured claimant has experienced due to the permanent impairments suffered.”Buffalo Auto Recovery, 2009 WL 5177881.
Loss of earning capacity is to be determined by a WCLJ upon a preponderance of the evidence in the record concerning the claimant’s nature and degree of the work-related permanent physical and/or mental impairment, work restrictions, claimant’s age, and any other relevant factors. Buffalo Auto Recovery, Id. This loss of earning capacity will determine the maximum number of weeks of compensation available to the claimant and the weekly benefit amount may fluctuate over time. There is no formula for the determination of LWEC. The determination of same is left to negotiation and/or litigation.
A recent Appellate Division decision, Canales v. Pinnacle Foods Group LLC, 117 A.D.3d 1271 (3d Dep’t 2014) indicates that the claimant’s weekly benefit rate is determined solely by a claimant’swage earning capacityunder WCL §15(5-a)rather thanloss of wage earning capacity. This means that the weekly benefit rate of a classified claimant should be based on the claimant’s actual earnings or medical degree of disability. As this is a new decision and a departure from Board practice, this interpretation is subject to some dispute.
% Loss of Wage Earning Capacity
Maximum Benefit Weeks
Number of Years
0% - 15%
16% - 30%
31% - 40%
41% - 50%
51% - 60%
61% - 70%
71% - 75%
76% - 80%
81% - 85%
86% - 90%
96% - 99%
4.2.4 SLU versus Classification - Sometimes injuries to a body part that normally would qualify for a SLU are more appropriately disposed of with a classification award due to the nature of the claimant’s permanent impairment. An award for a continuing disability award, as opposed to a schedule award, is indicated where the claimant’s medical condition remains “unsettled.”Clifford v. Larkin, 31 A.D.2d 866 (3d Dep’t 1969). Physical evidence of a condition that is unsettled include a continuing condition of pain or swelling, a continuing need for medical treatment, or other conditions listed in the Board Medical guidelines.
4.2.5 Permanent Total Disability - classification with a permanent total disability qualifies the claimant for lifetime receipt of two-thirds of his or her AWW for the rest of his or her life.
18.104.22.168 Upon the facts of the case - A claimant may be found permanently totally disabled based on substantial medical and vocational evidence in the record. This is a factual issue for the Board’s determination.
22.214.171.124 Statutory Permanent Total Disability - Certain serious injuries automatically qualify the claimant for a permanent total disability. These injuries include: the loss of both hands; both arms; both feet; both legs; both eyes; or any combination of loss of one member of two or more of these categories. Actual physical loss of the body part is not required; a finding of total loss of use is sufficient.
4.3 Aggregate Trust Fund – This trust fund was created to ensure that long-term benefits for permanent disability or death were protected and guaranteed. (See WCL §27).Private insurance carriers that were responsible for long-term awards were required to pay the present value of the award, computed by the Board, into the Aggregate Trust Fund (“ATF”). Self-Insured employers and the State Insurance Fund (which manages the ATF) are not required to make ATF deposits. Cases in which a mandatory ATF deposit is required include:permanent partial disability cases where there is no §15(8)(d) concession from the Special Funds and certain permanent total disability cases. Permanent total disability cases that are not of the type requiring an ATF deposit are known as discretionary cases and the ATF deposit in such cases is only directed by the Board at its discretion.
4.4 Attachment to the Labor Market - This is a defense to ongoing payment of a claimant’s partial (either temporary or total) disability benefits created by the Courts in cases dating back almost to the inception of the Workers’ Compensation Law. A claimant who has a partial disability and who has not been found to have involuntarily retired due to his or her workers’ compensation injury must demonstrate an attachment to the labor market by seeking employment within his or her medical restrictions in order to maintain entitlement to continuing compensation benefits.
4.5 Death Benefits – If a work-related injury causes death, bi-weekly benefits may be payable to the decedent’s surviving spouse and, depending on the circumstances, to the decedent’s surviving child or children, subject to the maximum rates listed in the Table on page 8 above and a $30.00 per week minimum.WCL §16. Status as a surviving spouse or child is determined on the date of death, not the date of the injury. “Child” also includes posthumous children. If is no surviving spouse and no children, dependent parents, grandparents, grandchildren, and siblings under the age of 18 may be eligible for benefits. If there are no surviving dependents entitled to receive death benefits under the statute, then §16(4-b) provides that the sum of $50,000 must be paid to the decedent’s surviving parents (even if they were not dependent on the decedent for support) or if no surviving parents, to the decedent’s estate.
4.6 Special Funds Conservation Committee – Responsible for managing and defending liability of the Special Fund for Second Injuries (§15(8)) and the Special Fund for Reopened Cases (§25-a). The §15(8) Fund permits reimbursement of the carrier in certain cases of permanent disability and death after the retention period of either 260 or 104 weeks. The §25-a Fund assumes liability for the claim after passage of seven years from the date of injury and three years since last payment of compensation in “truly closed” issues. Both of these Special Funds are in the process of being phased out. The §15(8) fund was closed to claims with dates of injury on or after 7/1/07. The §25-a fund was closed to new applications for transfer on 1/1/14. Whether §15(8) has been established on a claim is of relevance to private insurance carriers in determining whether there will be a mandatory ATF deposit in permanent partial disability cases.
5.0 Medical Care and Choice of Provider
The most important benefit to most injured workers are the hospital and medical expenses provided under the Workers’ Compensation Law in connection with an injury or compensable occupational condition. The statute provides that a claimant will be provided with virtually any medical care needed for the treatment of his or her injury without cost and without limitation to duration or amount for the remainder of the claimant’s life. This is of concern to insurance carriers and employers given the marked increase in the cost of medical care over the last several years. In many claims, the cost of medical benefits will far exceed the cost of indemnity benefits.
5.1 WCL §13(a) - the employer (or its insurance carrier) must provide to the injured worker “ . . . such medical, surgical, optometric, or other attendance or treatment, nurse and hospital service, medicine, optometric services, crutches, eye-glasses, false teeth, artificial eyes, orthotics, functional assistive and adaptive devices and apparatus for such period as the nature of the injury or the process may require.”
5.2 Choice of Provider - The injured worker has virtually unfettered right to treat with the authorized health provider of his or her choice. The only real limitation to the claimant’s choice of physician lies in those employers that choose to use a preferred provider organization to treat injured workers under N.Y. Work. Comp. Law Article 10-a.
5.3 Medical Treatment Guidelines - Claims involving the neck, back, shoulder, knee, and carpal tunnel are subject to the Board’s medical treatment guidelines. Additional Medical Treatment Guidelines regarding the treatment of chronic pain are forthcoming. These guidelines impose a mandatory standard of care for these body sites. The Guidelines are supposed to provide an evidence-based approach toward the medical care of claimants in the workers’ compensation system.
The Guidelines are focused on the premise that medical care should be designed to restore functional ability. A positive patient response is, under the Guidelines, generally one that results in increased functional ability that can be objectively measured.
Medical treatment that is pre-approved by the Board is detailed in the Guidelines. Should a claimant’s physician wish to provide treatment that is outside of that detailed in the Guidelines, the burden of proof is on the physician to demonstrate the appropriateness and medical necessity of the treatment. Additionally, the physician must state that the claimant agrees to the proposed care and why alternate care under the Guidelines is not appropriate or sufficient.
5.4 Independent Medical Examinations - The other source of medical opinions in a workers’ compensation claim come from physicians who are hired by employers and carriers to provide an independent medical examination. The use of independent medical examiners (“IMEs”) is highly regulated. Some of the major provisions concerning IMEs are as follows:
1) A copy of the IME report must by submitted on the same day and in the same manner to the Board, the carrier, the claimant, the claimant’s attorney, and the claimant’s treating physician. If the IME received a request for information from a party, a copy of that request along with any answer to the request must be sent to the Board within 10 days of such request or reply.
2) If the carrier is under a direction to continue indemnity payments at a certain rate, an IME report cannot be the used to automatically suspend or reduce continuing compensation benefits, but may be used as the basis for an application to the Board to reduce or suspend benefits.
3) A physician must be authorized by the Board to perform IMEs.
4) The facilities where IMEs take place must be suitable for the examination as well as accessible, safe, and located a reasonable distance from the claimant’s residence.
5) No one may cause a report to be filed that differs substantially from the professional opinion of the physician who performs the IME.
6) The claimant shall have notice by mail at least 7 business days prior to the examination of the date of the examination.
7) A physician may not perform an IME of the claimant if that physician has treated that claimant for the same disability or if someone if the physician’s practice, managed care provider, or preferred provider organization has treated the claimant for the same disorder.
5.5 Communication With Healthcare Professionals - Any written communication with a health care provider must be served on the opposing parties and their legal representatives. The failure to provide such notice of a party’s contact with a healthcare provider may result in the Board precluding any information obtained through that communication.
6.0 Section 32 Settlement Agreements - A settlement agreement under Section 32 of the Workers’ Compensation Law allows the parties to settle on a final basis all issues or specific issues at any stage of the proceedings. Typically, most settlements close out both medical and indemnity on a final and conclusive basis; this waiver of benefits is the most significant feature of the Section 32 settlement. The actual agreement is generally prepared by the attorney for one of the parties and circulated to the other parties for review. Once there is agreement on the final form, all parties will sign the agreement and it is sent to the Board, which will schedule a hearing to review the agreement. At the hearing, the WCLJ will review the agreement with the claimant to make sure that the agreement is not unconscionable and to make sure that the claimant understands the agreement. Once the WCLJ approves the agreement at the hearing, the parties have 10 additional days to withdraw from the agreement if they wish. Once the 10 days elapses without objection, the agreement is final and payment (if any) is due. Certain Federal laws concerning the Social Security program and Medicare have complicated the parties rights and obligations with respect to Section 32 settlements.
The Medicare Secondary Payer statute, 42 U.S.C. §1395y and its corresponding regulations at 42 C.F.R. §411.11 et. seq., state that workers’ compensation is a primary benefit payer and the Medicare is a secondary payer. What this means is that Medicare does not want to pay for any medical care that is properly the responsibility of the workers’ compensation carrier.
Claimants who are Medicare eligible and settling the medical portion of their claim should apply for approval of a Medicare Set-Aside with the Centers for Medicare and Medicaid Services (“CMS”). A Medicare Set-Aside is a calculation of the expected future medical treatment that the claimant will require in the future as a result of the workers’ compensation injury. Only that treatment that would be covered by Medicare is included in the calculation.
For further information, please contact Ronald Weiss at 585-262-6390 or email@example.com