A Guide to Workers' Compensation
by Attorney John A. Becker
CHAPTER 1
Introduction
This booklet is to familiarize employees with the worker's compensation law so that they have some understanding of their rights and remedies and to let them know where they can go for help if a problem arises. Worker's Compensation Statutes have been around for almost eighty years, but they are always changing. This booklet is not intended to make everyone experts in the field of worker's compensation or to be an exhaustive treatise on the law, but to serve as a guide for those who may have a worker's compensation claim.
Purpose of Act
The purpose of the Worker's Compensation Act is to provide financial and medical benefits to the victims of work related injuries, regardless of fault, and to allocate the financial burden to the most appropriate source, which is the employer and, ultimately, the consumer. The Wisconsin Supreme Court has often held that the Worker's Compensation Act is to be liberally construed to achieve this purpose.
Although an injured employee is entitled to worker's compensation benefits, the amount of the benefits is limited by statute. In a claim for worker's compensation, the employee does not have to prove any fault on the part of the employer and, in some cases, recovers benefits even though the employer did not do anything wrong. This is different than a civil suit where, for example, to recover damages in a car accident, you must prove the other driver was more at fault. The theory behind worker's compensation is that, because everyone who is injured on the job recovers regardless of fault, the amount of recovery is limited.
Experience that Makes a Difference
For a free consultation with an experienced workers' compensation lawyer and an honest evaluation of your claim—call us today at (262) 633-7530 or e-mail our Racine, Wisconsin, law offices with a brief description of your situation.
CHAPTER 2
The three basic requirements for a valid worker's compensation claim are:
1. That an employer/employee relationship exists and both employer and employee are covered under the statute;
2. The employee sustained an injury; and
3. At the time of the injury the employee was performing services for the employer.
A. Employer/Employee Relationship
Without explaining the few exceptions, it is safe to assume that almost all employers and employees are covered under the Act. Sometimes a more difficult question is if an employer/employee relationship exists. This problem will often arise in the construction industry in cases involving independent contractors. This is important because independent contractors are not considered employees of the person who hires them. However, an employee who is working for an independent contractor would be considered an employee of the contractor.
B. Injury to Employee
The second requirement is that the employee has to have sustained an injury. An injury is defined as "any mental or physical harm due to industrial accident or disease."
Accidents which result in injuries such as death, amputation, or broken bones are obvious, however, employees are also entitled to recover for mental injuries and occupational injuries.
Mental injuries are compensable "if it arises from exposure to conditions or circumstances beyond those common to occupational or nonoccupational life." An occupational injury or disease is one that arises from a single traumatic event, but develops because of the repetitive nature of the job.
Examples of Occupational Injury
Example 1: A person develops back problems from repetitive bending or lifting.
Example 2: A person develops lung disease from repeated exposure to fumes or chemicals.
An employer takes an employee "as is", and thus if the employee has a preexisting injury or disability, but the disability is aggravated by a work incident or by work exposure, the employee is entitled to worker's compensation.
Example: A person who has a previous back injury reinjures or aggravates his back because of his work.
B. Injury Must Arise Out of Employment
The third requirement is that the injury or disease must arise out of the employment. Claims for occupational or mental injuries often involve as to causation, (i.e.) whether the employee's condition was caused by the work exposure rather than something at home.
Even when dealing with traumatic injuries, questions can still arise as to whether the employee was performing services "growing out of and incidental to his or her employment."
Examples of Injuries Which are Covered
Example 1: Employees who are injured while on a break.
Example 2: Employees who are injured off of the employer's premises but while performing services for an employer.
Generally, even if an employee is injured during working hours but the injury is the result of the employee deviating from the employer's business to conduct personal business, the employee will not be covered.
Examples of Injuries Which are Not Covered
Example 1: A salesman who leaves his route to pick up his laundry and sustains an injury at the Laundromat.
Example 2: A person injured while commuting to and from work.
Practical Reminders:
Report all injuries as soon as possible. Make a list of all witnesses to the accident and to the fact that you reported the injury.
Chapter 3
Reporting Injuries/Notice
The first thing the employee must do is give notice of the injury to the employer. This notice must be given to the employer writing thirty days after the injury. Notice should be given in accordance with whatever the company policy is for reporting injuries; if the company has no procedure for reporting injuries, giving notice to any superior is sufficient. It is best to give notice of the injury in writing.
The thirty day rule is not absolute. If an employee does not give notice within thirty days, but the employer is not misled by the failure of the employee to give notice, the employee may still be able to pursue the claim. The best practice is to report all injuries as soon as possible. After an injury an employee usually has two concerns--getting paid while he or she is off of work and having the medical bills paid. If there is no dispute as to the injury, the employer should, at least initially, pay all of the medical bills and disability while the employee is off.
All time off of work from an industrial injury must be substantiated by a doctor. If your doctor verifies that you should be off of work the insurance company must pay your temporary total disability (TTD) until a doctor says that you can go back to work. The TTD rate is two-thirds of the employee's gross wages. The reason it is two-thirds and not the full wages, is because the benefits are nontaxable so theoretically it is supposed to balance out. An employee is entitled to his choice of physicians. If the employee is dissatisfied with his first choice, the employee can switch doctors one time. If he or she is dissatisfied with the second doctor and wishes to switch again, the insurance company might not be liable for the bills unless their consent is obtained in advance of the treatment. A referral by one doctor to another is not considered a second choice.
The employer is entitled to have the employee examined by a doctor of the employer's choice, and this is what is known as an independent medical examination (IME). As a general rule, the Department will allow the employer an IME once every six months. Usually the insurance company will not schedule the examination until the employee has been off of work at least a few weeks, but there is no requirement that the employer wait any certain period of time. In many cases after the IME has been conducted, the company's examining physician will give an opinion that the employee can return to work as of the time of the examination. If the doctor renders such an opinion the insurance company will then terminate the employee's benefits.
Usually the insurance company will set up an examination with a doctor and then notify the employee of the date and time that he or she must attend. If the employee does not attend the examination, the insurance company can suspend the worker's compensation benefits. If an employee believes that for some reason he or she should not have to attend the examination scheduled by the employer, they should notify the Worker's Compensation Department and obtain a decision from the Department as to whether they have to attend. Under no circumstances should the employee disregard the notice and just not attend. If the employee's treating physician releases the employee to return to work, and the employee continues to have residual problems, the employee is entitled to additional benefits for the permanent disability.
Statute of Limitations
As noted before, the employee is required to give notice of the injury to the employer within 30 days of the injury. Failure to give notice within 30 days is not fatal to the employee's claim if the employer is not prejudiced by the lack of notice. However, if notice is not given and the employer has no knowledge of the injury, the employee must file an application for benefits within two years after the injury.
If the employer does have knowledge of the injury, or the temporary or permanent disability benefits are paid, the employee has twelve years from the date of the injury or last payment to file an application with the Department for additional benefits that may be due. If an employee ever has any questions regarding his rights or any benefits to which he is entitled, the employee should immediately contact his union representative, an attorney, or the Worker's Compensation Department. Insurance adjusters deal with worker's compensation on a regular basis, and their job is to pay as little in benefits as possible. Never rely on what the insurance company tells you.
Attorney Fees
An injured worker should not be afraid to consult an attorney when they have a question regarding a workers' compensation claim. Attorney's fees are regulated by the statute, and, if an attorney does represent an employee, the attorney is entitled to twenty percent of whatever is in dispute along with any out-of-pocket costs the attorney has incurred. All fees must be approved by the Workers' Compensation Department.
Practical Reminders:
If you miss any time from work due to an injury, be sure to consult a doctor as soon as possible and get the doctor's approval for any time off of work;
If you have any questions regarding your worker's compensation benefits, contact someone knowledgeable in the area of worker's compensation law;
The Workers' Compensation Division will usually be willing to answer questions, and an attorney should not charge for an initial consultation.
CHAPTER 4
Primary Benefits
The most common question asked by injured employees is, "What compensation am I entitled to receive?" For an employee who has or will return to work after an injury, he or she is entitled to payment of the medical bills, to temporary total disability (TDD), and possibly, permanent partial disability (PPD).
A. Medical Expenses
If the employee selects a doctor and, in good faith, follows that doctor's advice, then the employer is liable for all of the medical bills.
B. Temporary Disability
TTD benefits are payments that an employee receives in lieu of wages. The rate is two-thirds of the employee's gross wages, although there is a maximum rate, which is currently $582.00 per week (2001).
TTD is paid during what is known as the healing period. The healing period is the period of time during which an employee is recovering from the injury. Once the employee has reached his or her maximum healing, even if the person has not completely recovered, they are said to have reached a healing plateau.
The employer is liable for TTD benefits while the employee is in the healing period. TTD benefits must be paid unless the insurance company has a doctor who says that the employee can return to work. If the insurance company sends the employee to a doctor for an independent medical examination, and that doctor renders an opinion that the employee can return to work, the insurance company will cut off the TTD benefits.
At that point the employee is often faced with a very difficult decision and has one of two choices: (1) go back to work against his own doctor's advice or (2) follow his own doctor's advice, stay off of work, but not get paid.
I will usually suggest that the employee consult with the treating physician to see if that doctor believes it is okay to at least attempt a return to work. If an employee attempts to return to work and then finds that he or she cannot perform the job, the employee can always come back off of work. Experience has shown that hearing examiners look much more favorably on these applicants than on one who has never even tried to return to work. (This is not to say that one should return to work because the company doctor has said that they should. One should always check with his or her own physician before returning to work).
The TTD does not have to be continuous after the injury. When an injury flares up or additional treatment is needed at a later date, if the employee must come off of work again he or she would be entitled to a renewed period of TTD benefits.
A doctor may believe that, although the employee has not reached a healing plateau, the employee can return to either part-time or light duty work. If the employer has no such jobs to accommodate the employee, the employee is entitled to remain off of work and continue receiving TTD. If an employee temporarily returns to a part-time or lower paying job, the employee may be entitled to temporary partial disability which would be a percentage of the TTD, and this would depend upon the wages that the employee receives at the new job.
C. Permanent Disability
Once a person reaches the healing plateau the TTD stops, and, if the employee has any residual problems from the injury, he or she is entitled to permanent partial disability (PPD) benefits. PPD benefits are computed in a completely different manner than TTD benefits. All permanent disability is computed in terms of weeks of disability (the 2001 rate is $184.00 per week and the rate for 2002 is $212.00 per week).
There are two types of permanent disabilities-scheduled and unscheduled. Scheduled injuries are injuries to any of the appendages (arms, legs, fingers, toes, etc.); unscheduled injuries are injuries to the head, back or torso.
The disabilities get their names from the statute because the statute has a schedule that sets forth how many weeks of disability an employee receives if an appendage is amputated. With a scheduled injury a person who returns to work will receive no more or less money than someone who cannot return to his or her old job.
(For purposes of the following examples a PPD rate of $200/week will be used for simplicity.)
Example: A works at company X and B works at company Y. In 2001 both A and B lose an arm in an industrial accident. According to the schedules in the statute, a person whose arm is amputated at the shoulder is entitled to 500 weeks of permanent disability.
Both A and B will receive TTD while they are in the healing period and recovering from the injury. After reaching a healing plateau, A is given a job with company X that he is able to perform with one arm. For his permanent disability A will receive $200.00 per week for the next 500 weeks ($100,000.00 total) and he will continue with his job. Company Y does not have any jobs that can be done with one hand so B is terminated. B will also receive $200.00 per week for the next 500 weeks ($100,000.00 total). Although B is certainly much worse off than A because he no longer has a job, he will receive no more or less money than A.
A person need not sustain an amputation to be entitled to recover for permanent disability. If an employee sustains an injury to his arm that results in some disability but not complete amputation, the doctor must assess a percentage of disability and the PPD benefits are based upon that percentage. (An employee who cannot return to his old job may be entitled to some retraining benefits which will be discussed later.)
PPD Based on Loss of Earning Capacity
An employee who cannot return to work following an unscheduled injury is entitled to additional benefits. The starting point for an unscheduled injury is 1,000 weeks, but obviously no one can lose his or her head, back or torso so the doctor must estimate a percentage of disability.
Example: In 2001, A and B sustained similar back injuries and the treating doctors assess a five percent disability. Each collects $10,000.00 for the functional disability assessed by the doctor (1,000 weeks x 5% x $200.00/week). If A returns to work his recovery is limited to the functional disability.
B's case becomes more complicated. If B cannot return to work, or does return to work and is making less than eighty-five percent of his preinjury wage, it becomes necessary to evaluate his vocational disability. This is done by obtaining restrictions put on by the doctor (for example, no lifting over 30 lbs.) and having the case reviewed by a vocational expert. The vocational expert may render an opinion that B's earning capacity has been decreased by thirty percent. In such a case B's compensation for PPD would be based on thirty percent, or $60,000.00 (1000weeks x 30% x $200/wk.) instead of $10,000.00.
If a person's restrictions are so limited that no regular or suitable employment exists, the person would be one-hundred percent permanently totally disabled. If a person is found to be permanently totally disabled, he or she would be entitled to receive benefits at the TTD rate for the rest of their life.
The question of when the healing period ends and the extent of permanent disability are two of the most common issues in worker's compensation. The insurance company will always rely on the doctor who assesses the shortest healing period or the lowest estimate of permanent disability. Employees should be aware that they are not bound by this determination and should seek to recover all benefits which they are due.
Practical Reminders:
Know what benefits you are entitled to, and if you (do not know, find out-,
If a dispute arises, or if your benefits are terminated, contact an attorney, the Worker's Compensation Division or your union representative as soon as possible.
CHAPTER 5
Late Payment and Bad Faith
If benefits are due, and there is no dispute as to the benefits, the Department can order a ten percent penalty if the company is late in making the payments. If the Department determines that an employee's benefits were not paid or were terminated as a result of bad faith on the part of the employer or insurance carrier, the Department can award additional benefits of up to 200% of the total compensation due.
Unreasonable Refusal to Rehire
If an employee is able to return to work after an injury, the employer must rehire the employee if suitable work is available within the employee's restrictions. It the employer unreasonably refuses to rehire an employee, the employer can be liable to the employee for up to one year of lost wages. This does not mean, however, that an employer has to create a job to accommodate an employee's limitations.
Vocational Retraining
If after an injury an employee is unable to return to work, the employee may be entitled to be retrained for other employment. This retraining is in conjunction with the Department of Vocational Rehabilitation. The employee may be entitled to have the worker's compensation insurance carrier pay temporary total disability benefits during the first forty weeks of retraining, and this can be extended for an additional forty weeks.
Occupational Hearing Loss
An employee who sustains hearing loss due to prolonged exposure to noisy employment is entitled to compensation for that loss. The loss cannot be claimed until the employee leaves the noisy employment either by transfer to a non-noisy environment or leaving employment with the company.
Death Benefits
If an industrial accident or disease causes death or a person dies while receiving permanent total disability, the law provides for payment of various death benefits to a spouse, parent or certain other relatives. In all cases the insurance company must pay burial expenses of up to $6,000.00. Death benefits vary depending on the earnings of the deceased, with a maximum of $174,600 . Additional benefits are available if the deceased is survived by dependent children.
Safety Violations
Worker's Compensation Law also provides for a fifteen percent increase in compensation if the injury sustained is caused by a violation of a safety regulation or the Wisconsin Safe Place Statute. The Wisconsin Safe Place Statute requires that the employer maintain the place of employment reasonably safe and do everything reasonably necessary to protect the life, health, safety and welfare of employees and frequenters. On the other hand, if an employee violates a safety regulation or is intoxicated, the employee's compensation will be decreased by fifteen percent.
Practical Reminders
When making a claim for violation of a safety statute, be sure to get witnesses as to the condition of the place of employment at the time of the injury (take pictures if possible).
CHAPTER 6
Procedure
It is not uncommon with injuries such as back injuries for a person to notice the pain in their back but not believe it is going to be a serious problem. Often people will not report the injury until some time later when the problems gradually become worse. Generally, the longer period of time between the date of injury and the date when it is reported, the more difficult it is to prove a work related injury. Because the employee may not realize the extent of the injury at the time it occurs, the best practice is to report all injuries when they happen. If the injury is not reported at the time of the accident, it should be reported as soon after as possible.
The employer is responsible for notifying the worker's compensation insurance carrier. Often the insurance carrier will obtain the necessary reports from the doctors to establish the employee's claim. Some physicians can be very slow in providing reports so, to speed the process along, the applicant can request that the doctor complete a form when he is in the doctor's office. The Worker's Compensation Division provides a form called a WC16-B which is a very easy form for the doctors to complete. If the doctor completes the report properly, the report can be admitted into evidence at a hearing and it is not necessary to have the doctor personally come in to testify.
If the employee needs to be off of work for any period of time, the absence must be substantiated by a doctor. It is imperative that the doctor be given an accurate history of how the injury occurred and any prior problems the employee may have had in the past.
Filing a Claim
If a dispute does arise as to whether the employee should return to work, the extent of permanent disability, or any other issue, the first step in the dispute process is the filing of an application with the Worker's Compensation Division. In the application the employee sets forth what claims he or she is making. The employer must answer the allegations in the application within twenty days.
In the past the Department scheduled all cases for pre-hearing, and then about six to nine months later the case was set for a final hearing. It was often well over a year after an application was filed before a final hearing was scheduled.
Hearings
In an effort to expedite the cases, many cases are now set directly for final hearing without a preheating conference. At a hearing both sides present their evidence and the decision is made by an administrative law judge.
Although the hearings are not as formal as courtroom proceedings, it is advisable to be represented at the final hearing. An attorney who is experienced in handling workers compensation claims represents the employer in almost all cases. The hearing will involve the presentation of expert witnesses or reports and it is imperative that the cases be fully prepared at the time of the hearing. If the matter must be appealed, no new evidence can be presented on appeal and the reviewing court will base its decision solely on the evidence that was presented at the hearing.
Settling a Claim
If a case is settled prior to hearing, there are two ways in which a case can be resolved-by stipulation or compromise. If a case is resolved by a stipulation it means that the insurance company will concede certain benefits that may be in dispute, and the remaining matters would either be adjourned or the application might even be dismissed. If the application is dismissed, it would be with the right to reopen the case at a later date if new issues arise.
A compromise acts as a complete release and forecloses the employee from raising any more claims in the case. A case can also be settled by a limited compromise whereby portions of the claim would be compromised and the employee would not have a right to relitigate those issues, but any other issues not specifically compromised would be left open. A compromise agreement should never be signed without it first being reviewed by someone knowledgeable in worker's compensation law.
Most claims for worker's compensation are not disputed, although some employers and insurance companies are worse than others about denying claims. Employees should not be deterred from filing valid claims by the fact that an employer tries to make it difficult for them to collect the benefits that they are entitled to under the law.
Practical Reminders:
- See a doctor as soon as possible after the injury;
- Be sure to give the doctor an accurate history of the injury and any prior problems;
- Never sign any settlement papers without having them reviewed.
CHAPTER 7
Third Party Claims
Employees sometimes wonder what they can do if they are injured on the job but the injury is caused by someone other than the employer.
Worker's compensation law is clear that an employee's only remedy against his employer is worker's compensation. Likewise, if the injury is caused by a co-employee, the remedy is still limited to worker's compensation. (There are some exceptions to this rule including if the injury by the co-employee was intentional or the co-employee was driving a motor vehicle that was not owned or leased by the employer.)
If an industrial injury is caused, at least in part, by a third-party, the employee can bring a civil suit against the third-party. This is what is known as a third-party action.
Example 1: An employee, while on the job, is injured in an automobile accident with a non-employee; the employee can bring a third party action against the other driver;
Example 2: A machine malfunctions and causes an injury to the employee; the employee can bring a third party action against the manufacturer of the machine;
Example 3: A machine lacks adequate warnings or safeguards and, as a result, the employee is injured; the employee can bring a third party action against the manufacturer.
In each example the employee is entitled to worker's compensation benefits; however, worker's compensation alone may not fully compensate the employee for the injuries sustained. Although in some cases the employer and employee may be partially at fault in causing the accident, the employee still has a right to bring a claim against the third-party.
The employee is entitled to recover from the third-party if the employee can prove that the third-party's negligence is greater than that of the employee. The employer's negligence does not affect the employee's right to recover from the third-party.
The employee's recovery will be affected by the amount of worker's compensation that he or she received. There is no question that the employee is entitled to worker's compensation benefits regardless of the outcome of the third-party action, but, if the employee does recover from the third-party, some or all of the worker's compensation benefits may have to be paid back.
Many third-party actions involve claims against manufacturers of machines that malfunction or were negligently designed. These products liability cases are often costly and difficult to prove. If an employee believes that a third-party might have been at least partially to blame for an injury, the matter should definitely be reviewed to see if a valid third party claim does exist.
Malpractice in Treatment for a Work Injury
Along the same lines, an employee sometimes sustains an industrial injury and, in receiving treatment for that injury, the doctor commits malpractice. The employee is entitled to worker's compensation benefits for both the initial injury and any aggravation caused by the malpractice. In addition the employee has the right to maintain a separate malpractice action against the medical care provider.
The statue of limitations in Wisconsin for bringing a third party claim is three years from the date of injury or the date of the malpractice. The right to bring a third-party action is not per se a worker's compensation benefit. Actually it is a right that an employee has which is outside of the Worker's Compensation Act and it is a right that employees should not overlook.
Practical Reminders:
All potential third party claims or medical malpractice claims should be reviewed by an experienced trial attorney.
CHAPTER 8
Conclusion
Every working man and woman should have some familiarity with the laws of worker's compensation. The Worker's Compensation Act was passed to protect employees, and, although worker's compensation does not always fully compensate an injured employee for all of his or her damages, every employee should at least obtain the maximum amount of benefits he or she is entitled to under the statute. Unfortunately, a surprisingly large number of employees do not know what rights they have and what compensation they are entitled to when they sustain an injury.
One of the problems with worker's compensation is that the limitations put on the weekly benefits and the benefits for permanent disability were for many years ridiculously low. Another problem is that the employee's compensation is based upon his date of injury.
For example, an employee is injured in 1995, but returns to work after the injury. After working on and off for several years his doctor determines in 2002 that he is no longer physically capable of continuing his employment. Although the permanent disability rate for 2002 is $212.00 per week, the rate in 1995 was $164.00 per week and the employee's recovery is based upon the 1995 rate.
Even the recovery that employees are entitled to receive is not meant to compensate an employee for the pain and suffering or physical hardships that an employee has suffered. The compensation an employee receives for temporary disability is to compensate solely for lost wages. Theoretically, the permanent disability that an employee receives is to compensate a person for the effect that the injury will have on his or her ability to earn a living in the future, not for pain and suffering.
Although most worker's compensation cases do not result in disputes such that applications must be filed, employees can protect themselves by knowing what their rights are and what to do if a dispute arises.
In summary, the following is a list of practical reminders employees can keep in mind when they have a worker's compensation claim:
- Report all injuries as soon as possible;
- Make a list of all witnesses and discuss with the witnesses what they saw as soon as possible (this will help them remember at a later date);
- Consult a doctor as soon as possible after the injury;
- All time off from work must be substantiated by a doctor;
- Be sure to give the doctor an accurate history of the injury and any prior problems;
- Learn what rights you have under worker's compensation, and if you have any questions regarding worker's compensation, contact someone knowledgeable in the area of worker's compensation law;
- Attorneys will not charge for an initial consultation and cannot charge a fee unless they obtain benefits which the insurance company is disputing;
- If a dispute arises with the instance company, file an application or contact an attorney as soon as possible;
- Never sign any settlement papers without having the documents reviewed;
- Be aware that if an injury is the result of the negligence of a third person, you may have a claim against that third person in addition to the right to receive worker's compensation benefits.
Insurance companies are in business for one reason, and that is to make money. The less they pay out in claims, the more money they make. Worker's compensation laws were enacted for your benefit and you should not hesitate to demand all of the benefits to which you are entitled.
