Workers’ Compensation Handbook
V. What To Expect When You Are On Workers’ Compensation
Once your employer has accepted your claim there are certain rights and obligations, which you need to be aware of so that your benefits will be preserved. Your benefits will begin once your employer has accepted the claim and issued a Notice of Compensation Payable or when a Workers’ Compensation Judge awards you benefits.
There are income reporting requirements, which each employee receiving benefits must follow, or potentially risk fraud charges. You should also understand the duties imposed on your employer when it seeks to stop paying your workers’ compensation benefits.
Generally, an employer who is paying workers’ compensation benefits for wage loss cannot stop paying benefits without the benefit of either your written consent or a Workers’ Compensation Judge’s decision. The ways in which you can consent to stoppage of your workers’ compensation benefits and the circumstances when you should consider such consent are set forth below.
Supplemental Agreements for Compensation
When an employer seeks to reduce your workers’ compensation payments it is necessary to fill out the appropriate paperwork. A Supplemental Agreement is generally used to reduce payment of wage loss benefits once the injured employee has returned to work after being off or on modified duty due to the work injury. It is important that the wording of the agreement contains accurate information. Pay particular attention to how the employer is describing the injury. Many times this description is incorrect and can cause problems in the future for the injured employee when he or she seeks to reopen his or her claim. Once a Supplemental Agreement has been signed, the employee may have up to 500 weeks to potentially reopen the injury claim if there is a worsening of the employee’s condition. Medical benefits should continue indefinitely subject to the employer’s right to challenge the reasonableness and necessity of the treatment and the relatedness of the treatment to the work injury.
If you have any wage loss that is not paid by your employer, including lost overtime or lost incentive pay, you should not sign the Supplemental Agreement until the issue is resolved.
Notification of Suspension
A Notification of Suspension is another document that can be used to reduce or stop payment of workers’ compensation benefits. You must challenge this form within 20 days or your benefits will automatically be suspended. If you are just returning to your job for the first time after your injury, you may wish to challenge this suspension of benefits until you are sure that you are physically capable of performing the job. If the suspension is challenged, a hearing will be scheduled in front of a Workers’ Compensation Judge to determine whether a suspension or reduction of your benefits is appropriate.
Termination of Benefits
As indicated above, it is important to know what affect a document will have on your benefits before you sign it. If a Supplemental Agreement indicates that your benefits are terminated or that you are fully recovered only sign this if your doctor has indicated that you suffer no residual effects from the work injury and no more treatment is necessary. If you agree to a termination, you have agreed that you are completely healed from your work injury and no longer suffer a wage loss, including lost overtime. Termination language on a Supplemental Agreement is generally inappropriate, and it may limit your ability to reopen your claim.
A Final Receipt is a document that should only be signed in certain limited circumstances, as it is very difficult to reopen a claim once this form has been signed. Basically, signing a Final Receipt means that you are fully recovered from your injury and that the employer is only liable for your medical benefits associated with your work-related injury. Unfortunately, some employers represent to the employee that a Final Receipt is simply a receipt for payment of the last workers’ compensation check. The name of the document is misleading because this document is not a receipt for any workers’ compensation check. If an employer withholds your last check because you will not sign the Final Receipt, that employer is violating the Workers’ Compensation Act. A Final Receipt is not a receipt for benefits received; it is a document that means you are fully recovered.
If at the time an employee signed a Final Receipt he or she was sustaining a wage loss, or had not completely healed from the work-related injury, a petition may be filed before a Workers’ Compensation Judge to set aside the final receipt. However, this is not always easily done. If there is any question about whether a document is appropriate or should be signed, it is always a good idea to consult with a workers’ compensation attorney. Be aware that you should never feel pressured to sign a document, simply state that you need a copy to take home and review.
Any petition to terminate, suspend or modify benefits may automatically contain a request for a supersedeas if the petition alleges either that the employee has recovered from the work injury and has attached to it a Physician’s Affidavit of Recovery, or that an appropriate job has been made available. Supersedeas means that benefits can be stopped while litigation is proceeding. A Workers’ Compensation Judge decides whether benefits will continue during the pendency of the litigation on the petition.
If a special supersedeas hearing is requested, a hearing shall be held within 21 days of the filing of the petition and the Workers’ Compensation Judge shall rule on supersedeas within 7 days of the hearing. The Judge must grant the supersedeas if the employer provides evidence of a change in medical status or any other evidence relating to modification or suspension. Unless the employee provides compelling contradictory evidence that he or she is likely to prevail on the underlying petition, benefits will likely be suspended until the Workers’ Compensation Judge issues a final decision.
Once you are receiving workers’ compensation benefits your employer may attempt to return you to work either in a modified duty position at your workplace or hire a vocational rehabilitation company to find you a job for another employer that is within your physical restrictions. Both you and your employer have certain rights and obligations in this situation. If you fail to comply with the return to work effort, you risk losing your workers’ compensation benefits.
You have a right to know what the written opinion of the employer’s doctor is and the type of work you are able to perform (i.e. light duty, sedentary duty, etc.). If you have not been provided with this information you have the right to request it.
If your doctor does not believe that you can perform the work your employer is offering to you, you should notify your employer in writing of this medical fact and the reasons why you cannot physically perform this work. At that point, your employer may attempt to reduce your benefits based on the job offered. In these situations, it will be up to a Workers’ Compensation Judge to determine whether your doctor’s restrictions or the restrictions of the doctor chosen by the employer are more credible.
If your doctor believes that you are able to perform the type of work your employer is offering then you must attempt to perform the work. You should keep in contact with your physician once you have attempted to return to work and report any physical difficulties you may experience with the job activities. If you do not attempt to perform the work, you may lose your benefits and possibly your job. Be sure to remind your doctor not to speak directly with your employer. Your employer is entitled to have your medical records, but may not talk to your doctor without your consent. You are not obligated to consent to such conversations.
If you are only able to work limited or modified duty due to a work injury and your employer does not have work available for you, your employer may require you to meet with a vocational rehabilitation counselor, who may interview you, instruct you on how to prepare a resume or do an interview, and/or schedule interviews for you with different employers. The law requires that you make a good faith effort to apply for these jobs. If you do not make a good faith effort, a Workers’ Compensation Judge could either order that your benefits be reduced from total to partial payments, or stopped entirely. In order to make a good faith effort to apply for modified duty work, you should dress appropriately for the interview, be on time, be polite, and fill out the application as completely as possible. You should also document every interview you go on, as this may be helpful to your case if your employer asks a Workers’ Compensation Judge to reduce or even stop your benefit payments. Therefore, after each interview, you should keep a record of each job for which you interviewed, the date of your application and interview, the name of the interviewer, the outcome of the interview, and be sure to note any unusual events that may have occurred during the interview.
Often your employer will send you to a so-called Independent Medical Examination (IME) before sending a vocational counselor to see you. The IME doctor may place fewer restrictions on you than your own treating doctor and the jobs the vocational counselor sends you for may follow the IME doctor’s restrictions rather than your own doctor’s restrictions. You should clarify beforehand with the vocational counselor that he or she is aware of your treating doctor’s restrictions. Also, you should be sure that the vocational counselor accurately describes to you the duties or responsibilities of any job for which you are applying.
It does not matter if a particular job you are sent to interview or apply for is not a job you would choose yourself, it only matters whether you make a good faith effort to apply and perform the job. A notice to report for a modified job should never be ignored. Failure to act on this could cause your benefits and possibly your employment to be terminated. Be sure to promptly consult an attorney.
The employer’s ability to compel you to apply for jobs is not unlimited. An employer is obligated to use good faith in returning you to some form of gainful employment, which is considered bona fide employment. Bona fide jobs are jobs that are not created solely to extinguish your right to workers’ compensation benefits; however, there is no hard and fast rule as to what may constitute good faith. Generally, the employer cannot have you drive outside your general community to apply for jobs and must take into account your available means of transportation to apply for jobs (if you do not own a car, the employer must make sure that public transportation is available to you).
Even if the employer is violating its good faith obligation, it is safest to fill out the application and attend the interview so that you have cooperated fully. The Workers’ Compensation Judge will take this type of information into account when deciding your case.
Labor Market Surveys
Another step your employer may take to reduce your benefits is to request a vocational counselor to perform a labor market survey, otherwise known as an earning power assessment.
If your employer attempts to modify your benefits based on the earning power assessment, whether by asking a Workers’ Compensation Judge to reduce or stop your wage loss payments, your employer will have to produce evidence that it referred you to then-open jobs that you are able to do based on your medical restrictions.
However, neither your employer nor the vocational counselor have to refer you to a modified job. The vocational counselor may simply issue a survey on the kinds of jobs you can do with your medical restrictions, and the number of such jobs available in your geographic area. In this instance, the number of available jobs becomes important. The employer does not have to actually offer you a job but just show that potential jobs are available in your area and that your employer does not have a job at its facility for you.
Layoffs – Involuntary, Economic and Voluntary
An employer is obligated to reinstate an employee’s wage loss benefits if the employee is laid off while working restricted duty due to a work injury. In most cases, the employer will not voluntarily reinstate benefits and the employee must file a Petition to Reinstate Compensation Benefits. If the employee can demonstrate that he or she was laid off while on restrictions for a work-related injury, the employer must then demonstrate that the employee was completely healed from the work injury at the time of the layoff. If the employer cannot demonstrate that the employee was completely healed at the time the employee was laid off, the employer must reinstate workers’ compensation benefits.
If the layoff was due to purely economic factors and the employee’s layoff was not related to the work injury or the employee’s inability to work, there is still a likelihood that benefits can be reinstated depending on the nature of the employee’s condition. However, if an employee accepts a voluntary layoff, it is unlikely that the employee will be entitled to reinstated workers’ compensation benefits. Voluntary retirement can preclude you from receiving ongoing workers’ compensation benefits. Never retire on workers’ compensation without consulting an attorney.
Refusing Medical Treatment
Wage loss and medical benefits for your work-related injury could be suspended or terminated if you refuse to undergo reasonable and necessary medical treatment. If you refuse to undergo suggested medical treatment, the employer may file a petition to attempt to stop your benefits. If your treating physician does not believe that you should undergo the suggested treatment, he or she should advise the employer in writing. If the Workers’ Compensation Judge decides that you should undergo the medical treatment, your choices are to either undergo the medical treatment or lose your workers’ compensation benefits. If you lose your benefits and later undergo the suggested medical treatment then you can petition to have your benefits reinstated.
Notification Requirements and Verification
An employee has an obligation to report a change in employment status no later than 30 days after the change in employment occurs and must cooperate with the employer in the investigation of employment.
The employer may request that the employee fill out a verification form which must be returned within 30 days of receipt. If the verification form is not returned, the employer can stop payment of benefits until the verification is received. This verification can be requested twice a year.
The employee must provide the employer with the proper authorization to secure information regarding receipt of Social Security Retirement benefits. The employee is required to regularly report the receipt of unemployment compensation, wages, Social Security Retirement benefits, and severance or pension benefits to the employer, which postdate the compensable injury.
Under the Workers’ Compensation Act, fraud is defined as any act of an employee who knowingly and with the intent to defraud fails to report required information about employment or self-employment, including wages, dates of employment or self-employment, and the names of employers. It is also considered fraudulent for an employee to receive total disability benefits while employed or receiving wages. There is a five-year statute of limitations for fraud.
Violations for the fraud provisions shall result in fines of $5,000.00 for the first offense, $10,000.00 for the second offense, and $15,000.00 for every subsequent offense. Each day that alleged fraud has occurred can potentially become a separate misdemeanor count for fraud.
Employers can also be charged with fraud for certain violations.
Retirement can affect your workers’ compensation benefits. If you are receiving workers’ compensation benefits for wage loss and you subsequently retire, your retirement should not affect your benefits as long as you are retiring due to your injury and your injury occurred before June 24, 1996. If your injury occurred on or after June 24, 1996, however, there may be a reduction of workers’ compensation benefits by your pension amount, which will be discussed later in this booklet. Always consult an attorney before retiring if you are receiving workers’ compensation benefits.
Sometimes pension agreements provide that a pension will be reduced or offset by the amount of workers’ compensation benefits being received. Therefore, you should consult with your union representative and a qualified attorney before deciding to retire if you are concerned about a potential offset.
If you retire before you receive your workers’ compensation benefits and you retire in whole or in part as a result of a work-related injury, condition or disease, your retirement should not prevent you from receiving workers’ compensation benefits. If, however, you have retired for reasons unrelated to your work injury, condition or disease, and you have no intention of returning to the work force; you may be prevented from receiving workers’ compensation benefits. If you feel that you are forced to retire in whole or in part as a result of a work-related injury, condition or disease, you should make clear to your employer when you are retiring that your work injury, condition or disease has played a role in your decision to retire. If your work-related injury occurred on or after June 24, 1996, then your workers’ compensation benefits may be offset by the amount of your pension.
As employers often attempt to reduce or stop the payment of workers’ compensation benefits when employees apply for either a pension or social security retirement benefits, you should consult with a qualified attorney prior to making such applications.
Credits and Offsets – Social Security, Pensions and Other Compensation
For injuries occurring on and after June 24, 1996, workers’ compensation benefits are offset by one-half of Social Security Retirement benefits unless Social Security eligibility occurred before the work-related injury. Employer funded pension benefits and severance pay will be offset if it is received from the employer who is directly liable for the payment of the workers’ compensation benefits, except in cases in which the compensation benefits are for a specific loss (i.e. scar, disfigurement, amputation) rather than a disability. For example, if you receive $1,500.00 per month in workers’ compensation benefits and your pension is $1,000.00 per month; your workers’ compensation benefits would be reduced to $500.00 per month.
In some instances, Social Security Disability benefits may be offset by workers’ compensation benefits depending on how much you are receiving in workers’ compensation benefits. The Social Security Administration will advise you of the amount of any offset. Usually the reduction to Social Security Disability benefits is only partial, so it is financially beneficial to seek these benefits if your work injury prevents you from working your time of injury job.
The employer receives a credit for unemployment benefits received by an injured worker during the same time period that the employee should have or did receive workers’ compensation benefits. Remember that unemployment benefits are taxed and workers’ compensation benefits are not. If your workers’ compensation benefits are reduced by the amount of unemployment compensation that you have received, you may file an amended tax return to regain some tax paid.
Workers’ compensation benefits are also reduced by the amount of sickness and accident benefits received. If your claim is in litigation, it is necessary for the employer to specifically ask the Judge for this credit or they may not receive it.
Lump Sum Settlement
Once you are receiving workers’ compensation benefits, there may come a time when it is in your best interest to settle your claim for a lump sum. The 1996 Amendments to the Workers’ Compensation Act permit lump sum settlements known as Compromise and Release Agreements. A Workers’ Compensation Judge must approve these agreements. Once the Judge reviews the documentation and listens to testimony, the Judge must determine whether or not the employee understands the agreement.
A settlement of this kind generally means that an employee is resolving either wage loss benefits or medical benefits or both. These settlements often have an affect on other benefits such as Social Security Disability, Medicare, health insurance and pension benefits. A resignation of employment is often requested as one of the terms of the settlement.
Before an employee accepts a settlement, it is important to carefully review the terms and conditions and be sure that proper value is being offered for the rights and benefits that the employee is giving up. It is also very important to analyze what effect, if any, a settlement will have on the benefits you may be entitled to in addition to the workers’ compensation benefits. Often, a lump sum settlement is the best possible outcome in a contested work comp case. Obtain the advice of an experienced workers’ compensation attorney before signing away your benefits.