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Bill to change temporary total disability claims bad for carriers and employers

On Behalf of | Sep 6, 2022 | Workers' Compensation Defense |

Passed in June 2022 by the NYS Assembly and Senate, bill S00768 proposes to redefine temporary total disability. If this bill is signed by Governor Hochul, it could result in a substantial increase in payments to workers’ compensation claimants, and as such, an increase in insurance premiums for employers.

The proposed change

The bill, if passed by the Governor, would amend WCL Section 15 (2) to define the term “temporary total disability” as “the injured employee’s inability to perform his or her pre-injury employment duties or any modified employment offered by the employer that is consistent with the employee’s disability”.

In current practice before the Workers’ Compensation Board, “temporary total disability” is defined as the inability to return to the work force in any capacity. For a worker found to have a temporary total disability, the employee is entitled to weekly lost-wage benefits equal to two-thirds of his or her average weekly wage. However, if the worker has a “partial disability”, meaning that the worker could return to work with restrictions but remains out of work, the worker receives a reduced benefit based upon percentage of disability assigned by the treating and/or examining doctor(s).

The bill is moving through channels, and the governor can sign it, veto it, or ignore it (which has the same effect as a veto).

What’s the issue?

Proponents of the bill argue that this bill would resolve any ambiguity and that the previous law was being interpreted too narrowly.  Yet, the Workers’ Compensation Board has been consistently and uniformly defining “temporary total disability” for decades.  Disability is based on a medical opinion from a doctor and awarded by a Workers’ Compensation Law Judge.  If the intent of this proposed legislation is truly to resolve ambiguity, then the currently used definition could be codified.   However, the proposed amendment does not clarify the definition of “temporary total disability”; it changes it entirely.  If anything, the proposed amendment as currently written creates more ambiguity.

What happens when the claimant didn’t file the claim or go out of work until after termination for cause?  Does the employer now have to offer work to the discharged employee?   What happens when the claimant doesn’t file a claim until retirement?  Does the employer still have to make an offer for work?

What happens when the restrictions provided by doctor(s) remove the claimant from being eligible from the line of work for which the employer provides, but the claimant is capable of returning to a different employer? Shouldn’t the injured worker be encouraged to return to the work force instead of incentivized to remain unemployed?

Proponents of the bill also argue that this encourages employers to offer work to injured employees to keep them receiving wages and in the work-force.  While this may be true, it creates a disproportionate burden on small businesses.   Companies with a small staff likely will be unable to find other work that fits within the boundaries of the injury. Moreover, some employment settings leave no room for disabled workers because they would be a safety hazard to themselves and others. The potential law would also run up against employment contracts and union jobs with “fit for duty” requirements.

Another problem with the proposed change in law is that it creates a loophole for injured workers to circumvent a 2017 amendment to the WCL which allows for a credit to carriers for temporary partial disability benefits paid in excess of 130 weeks from the date of accident.  If temporary partial disability is now defined as a total disability where the claimant cannot or does not return to the employer, there is no credit to the carrier, even if the employee malingers, retires, or no longer works at the employer due to termination for cause.   The proposed amendment also would likely increase payouts of lump-sum schedule loss of use awards due to extended periods of “temporary total disability” which would be defined under the current law as a “protracted healing period”.

Awarding total disability indemnity benefits to workers who are not actually totally disabled according to a doctor increases payouts by insurance carriers, municipalities, self-insured employers, school districts and the state, resulting in increased insurance premiums for NY employers.

Keep an eye on this space as we follow this bill to its conclusion.