Category Archives: Workers’ Compensation

Trump Policies Bad for Workers’ Compensation

Dr. Richard Victor

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

Dr. Richard Victor, an economist who founded the Workers’ Compensation Research Institute (WCRI) 35 years ago, just presented a paper at the WCRI National Conference in Boston.  He indicated that federal policies on immigration and health insurance promise to make worse the challenges the United States faces by an aging workforce and a widespread labor shortage. He noted that workers’ compensation claims could double and overall costs could expand by over 300% in the next dozen years, without any increase in benefits to workers.  External forces could bring far more cases into the system because of a number of forces, including an aging workforce, labor shortage, slowdown in immigration, and more shifting to workers’ compensation claims that should be paid by group health insurance. Dr. Victor projected current claims out a dozen years to 2030 indicating that claims should actually be down to about ¾ of today’s numbers, but external factors will more than overtake that favorable percentage. Labor shortages caused by baby boomers retiring will increase injury rates.  Research indicates that the older workforce will mean an increase in lost work days and more injuries and a real impact on labor shortage as more baby boomers retire. Dr. Victor indicated “These labor shortages, which will be longer and deeper than anything we have experienced, will lead to significant increase in workers’ compensation claims and longer durations of disability.” During a period of labor shortages, employers relax hiring standards and hire workers they would not have hired in a normal labor market, including workers who are less capable. The overall labor shortfall leads to more workers’ compensation claims.

The Immigration Factor:

Economists have seen immigration as a factor that mitigates against the impact of the labor shortage. The Trump Administration, changing federal immigration policy, will further tighten labor markets and prolong the duration of a labor shortage. Moreover, Trump’s “anti-immigration rhetoric” also discourages people to come to America.  In health care, Victor noted that one in six health care workers is foreign-born including 27% of physicians and surgeons, 15% of nurses, and 22% of home health aide, each of which effects the workers’ compensation system.

Health Insurance

A shortage of people with adequate health insurance is also a problem for workers’ compensation. Health insurance deductibles have risen from the hundreds to many thousands of dollars, and this new reality causes more workers to go without or delay getting medical care for an injury or illness. When they can no longer ignore their condition, many claim it as a work-related condition and seek workers’ compensation (he cited a Rand Research study indicating workers with high deductible or co-insurance plan postponed care in over one-third of cases of the most common kind of workers’ compensation claims – soft tissue injuries.” As the number of workers who lose their insurance grows (since the Trump Administration and Congress ended subsidies and other aspects of the Affordable Care Act) case shifting form health insurance to workers’ compensation could have a major effect, ballooning workers’ compensation claims by as much as 35% in the next dozen years.

Victor’s conclusion: “You end up with a 300% increase in workers’ compensation costs without increasing benefits to injured workers.”

 

Q&A With Senior Partner Matt Funk: Mandatory Arbitration, Sexual Harassment Legislation, Scaffolding & More

Senior Partner Matt Funk

Today’s post comes from guest author Matthew Funk, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

Matt Funk is the president of the New York State Trial Lawyers Association and is a senior partner at Pasternack Tilker Ziegler Walsh Stanton & Romano. The New York Law Journal recently asked Funk to share his opinions on the U.S. Supreme Court’s recent decision on employment contracts and new laws on sexual harassment and scaffold protection.

Q: Do you think the Supreme Court’s recent decision that employment agreements that ban class actions do not violate federal labor laws will have an impact on workers?

A: The Supreme Court decision is a blatant misinterpretation of labor rights that will ultimately harm workers across the country. Individual workers typically lack the resources to take on major corporations by themselves. Through class-action lawsuits, workers can join together to hold negligent employers and bad actors accountable.

By allowing employers to strip this fundamental right away from workers, the Supreme Court is forcing victims to take reported violations to paid third-party arbitrators, usually from an arbitration firm chosen by the employer, which creates a strong potential for bias. It removes the dispute-resolution mechanism from an independent court, and places it into the hands of decision-makers in the pockets of the accused party, making it difficult to hold employers responsible for misconduct and labor violations.

Q: When did mandatory arbitration clauses really become so entrenched in the agreements and contracts that consumers regularly encounter?

A: Mandatory arbitration clauses have their roots in the Federal Arbitration Act, a law passed in 1925 that granted businesses the ability to resolve disputes outside of the courtroom through third-party arbitrators. The law was designed for business-to-business transactions but over the past 30 to 40 years, the courts have made it easier for corporations to include these clauses in contracts where the individual consumer or employee has no real power to change the contract terms. Eventually, these clauses became par for the course, often cloaked in legalese unrecognizable to the untrained eye.

Consumers often overlook these clauses, unaware of how their rights are being limited until it’s too late to avoid them or take action. The only way to level the playing field, and make sure corporations take consumer safety seriously, is to ban mandatory arbitration clauses in employment and consumer contracts.

Q: What is the association’s reaction to recent sexual harassment legislation passed and signed into law in New York City?

A: The legislation is a major step in the right direction, at a critical moment in the fight for gender equality. Over the past year, women across the country have shared their experiences in the workplace, demonstrating how institutions have reinforced sexism to physically harm and intimidate women, discourage their ambitions, prevent career advancement, and create hostile workplaces.

The City Council recognized that it was imperative to do more than just listen—they needed to act and do something to change the status quo. The legislation will help ensure that all managers and employees are properly trained and educated, creating a foundation for institutional reform that reverberates across businesses and organizations of all stripes in New York City.

Q: I know the association has taken a position on the Scaffold Safety Law in New York. What are the concerns?

A: It’s no secret that construction work is one of the most dangerous jobs in New York. In 2016 alone, 71 construction workers in New York State died in on-the-job incidents, the highest total we’ve seen since 2002. The Scaffold Safety Law is a much-needed source of justice and accountability that is essential to protecting workers and making safety paramount.

Given the risks involved, it’s up to owners and general contractors who have ultimate control over the work site to create a secure working environment, by following safety guidelines and providing proper equipment. When owners and general contractors ignore basic rules and fail to provide adequate gear, they put workers at risk and create tragedies out of sheer negligence and disregard for their employees’ lives.

The Scaffold Safety Law offers workers and their families a way to hold negligent owners and general contractors accountable. In instances where workers are seriously injured or killed as a result of unsafe working conditions, their families are forced to take on the costs of lost wages, medical bills and other impacts that are not adequately covered by workers’ compensation, not to mention the physical and emotional pain that results. The Scaffold Safety Law can help mitigate the financial stresses and devastation facing victims and their families, while delivering them justice. At the same time, it insists that owners and contractors follow safety guidelines and promote worker safety so workers can return home to their families at the end of a hard day’s work.

Q: You’re nearing the end of your term as NYSTLA president. What achievements are you most proud of?

A: Over the last year, I’m particularly proud of NYSTLA’s leadership in expanding and strengthening the legal rights of everyday New Yorkers. Working with a broad network of affected residents and families, advocates, and legislators, NYSTLA has been able to achieve legislative and regulatory victories that deliver justice and practical, meaningful results.

In January, Lavern’s Law was enacted, establishing legal rights for patients harmed by negligent failure to diagnose cancer or a malignant tumor by changing the statute of limitations to reflect the date of discovery. And in 2017, legislation was passed that expands access to SUM auto insurance, promoting better insurance coverage for drivers. Elsewhere on the road, we successfully fought for the implementation of a regulatory framework for ride-share services that is the best in the nation when it comes to protecting consumers, including proper insurance coverage. Not to be forgotten, we also reinforced victims’ legal rights through a bill that allows lawsuits to proceed in the same county where the violation occurred. And, finally, as a workers’ compensation attorney, I am particularly proud of our success working with the labor movement to beat back harmful changes that were proposed that would have gutted the workers’ compensation system.

At the same time, NYSTLA has continued to help young lawyers develop professionally and gain the knowledge they need to make a significant impact through a continuing legal education program that has repeatedly been voted the best in the state.

We believe in leading by example, and our efforts this year serve as a reminder of how the legal community can make a difference on behalf of the public interest.

Recovering From Injurty – “Is Heroism the Standard?” Redux

Judge David B. Torrey

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

My friend and colleague, Professor and Judge David Torrey, with whom I serve on the Board of the College of Workers’ Compensation Lawyers, recently posted this blog in response to an insurance industry speaker’s exhortation that injured workers should “ get off their asses” and get better. Here’s his moving response:

Many in the workers’ compensation community complain that seriously injured workers can develop a disability lifestyle, become dependent on drugs, and unreasonably extend their disabilities. Instead of falling into such a lifestyle, these critics argue, disabled workers should show “resilience.” This rhetoric, which I have written about before on this blog, has its genesis in progressive medical/rehabilitation thinking, Muscular Christianity (I think), and, realistically, employer/insurer cost considerations.

The complaint is legitimate, and one with which I have some sympathy. I also believe that some legitimately injured workers do indeed unreasonably extend their disabilities — if only waiting for a generous lump sum settlement. Many readers will know of the sharp critique of this type advanced by Dr. Nortin Hadler in his many books.

On the other hand, the “duty-of-resilience” critique can go too far, and is often articulated in overly simplistic terms. At my agency’s conference in Hershey, Pennsylvania (June 7-8), an articulate industry speaker, addressing an audience about medical marijuana, posited forcefully that the “choice between opioids and medical marijuana [for chronic pain patients] is a false choice….” What workers need to do, instead, is show some resilience and “get off their asses!” After all, a friend of his, who is partially paraplegic, has shown resilience and will often go hiking with him. If she can do it, so can others!

I believe the speaker knew his audience and thus took some pleasure in feeding these lions of the community some red meat, and indeed they rewarded this coarse declaration with a leonine roar of applause.

Yet, his panel partner, Dr. Michael Wolk, thereupon gently reminded the industry speaker — and the audience — that not all people respond to pain and other impairments the same way; indeed, he posited that science has shown that one’s genetic make-up can affect the ability to be resilient.

Dr. Wolk (my God, an astonishing speaker) might also have remarked, as have other physicians at our Pennsylvania conferences, that heroism is not appropriately considered the recovery standard in the first place. Commentators like the industry speaker, talking about resilience, often invoke exceptional individuals, like Christopher Reeve, but most of us realize that not everyone is Superman.

This point was vividly made two years ago in the memoir, A Body Undone: Living on After Great Pain (NYU Press 2016). The author, Christina Crosby, a professor at Wesleyan University, was rendered quadriplegic in a cycling accident, and has been left with chronic pain as well. She recounts in her memoir what life is like with such a catastrophic injury, shows that she indeed has great resilience — but leaves the heroism narrative behind. She makes clear that her circumstances, like education; a life of reflection and discipline; and the unflagging love and support of her family, make her ability to bounce back possible. Most of us know that not every injury victim will have these advantages. (My complete review of Professor Crosby’s book is posted at the research website www.davetorrey.info.)

Is all this not common sense? We have known for a century, after all, that young men respond differently to their traumatic wartime exposures. Some show a grim resilience; some are troubled for life, but are able to continue on; some are broken. In the modern day, most of us would not address such veterans with the admonition that they get off their asses. Injured workers deserve the same respect.

 

Improper Body Mechanics While Lifting Far From Only Cause Of Nursing Injuries

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

A commenter on our firm’s Facebook page stated the use of proper body mechanics will prevent nurses from getting injured. There is some truth to that statement, but there are many ways, probably not limited to this list, that nurses can get injured that aren’t related to lifting at all. Here a few I’ve encountered recently:

  1. Inadequate staffing – There is a strong correlation between staffing levels and nursing injuries. Nurses, especially CNAs, may be forced to lift or move patients on their own because of inadequate staffing or lack of equipment. Nurses may also be forced to prevent patients from suddenly falling. Use of proper lifting techniques may not be possible in such situations.
  2. Patient attacks – Studies show patient attacks on nurses are on upswing. I see a lot of this in nurses that work in mental or behavioral health.  Even they aren’t nurses, many direct care workers and human services technicians who work in mental and behavioral health are vulnerable to patient or client attack. It’s hard to argue a patient attack is the fault of the nurse
  3. Slips and falls – Slip and falls are a common type of work injury. I represented a nurse working at a dialysis clinic who injured their back when they slipped in pool of urine.
  4. Environmental and chemical exposures – In rural areas, many nursing or medical facilities are in older buildings that are vulnerable to mold and other environmental exposure. If you work in a sick building, it’s hard to argue that’s your fault.

Even if you use proper technique, repetitive heavy lifting can still cause strain and can be disabling in some instances. Nursing personnel are particularly vulnerable to these types of injuries.

I want to make one thing crystal clear: whether a nurse or any other employee is injured because of improper lifting technique THOSE INJURIES ARE STILL COVERED BY WORKERS COMPENSATION! (most of the time) In exchange for no-fault compensation, employees give up the right to sue their employer for negligence. While this might not seem like a grand bargain to a worker who was hurt to no fault of their own, that compromise is the cornerstone of workers compensation.

While the idea of no-fault compensation for work injuries is a winner in a court of law, the idea is more controversial in the court of public opinion as expressed on social media. There is an idea out there that filing a workers’ compensation claim is “milking the system” and that you certainly shouldn’t file a claim if you are at-fault for the injury. Statements that nursing injuries can be avoided, if nurses just use proper lifting techniques is consistent with that line of thinking.

A lot of hostility to those who bring work injury claims and their attorneys stems from concepts like “personal responsibility.” But when a nurse is hurt on the job because of understaffing, slipping on urine on the floor or a toxic building, the employee isn’t fully able to hold their employer responsible for the full extent of their harms even if the employer is fully responsible for the harm.

There is also the assumption that workers compensation claims are fraudulent. But would it be fair to assume that all nursing homes defraud Medicare and Medicaid just because one chain of homes in Florida defrauded the government $1 billion? No, it wouldn’t and the same is true for workers’ compensation claims. Ultimately entitlement to workers’ compensation benefits is determined in court where employees are subject to medical examination from doctors picked by insurance companies. Injured workers are also subject to written and oral questioning from insurance company lawyers. Employees usually have formidable barriers to win compensation in a disputed workers’ compensation case, so the idea that fraudulent claims run rampant is absurd.

Employee Workers’ Compensation Fraud? No – Employer Fraud Rampant.

Attorney Leonard Jernigan compiled a list of the biggest workers’ compensation frauds

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

My friend and colleague Len Jernigan has again compiled the Top 10 Workers’ Compensation Fraud Cases for 2017.

 His results emphasize a theme that has been present for the last dozen years during which he has been compiling a “Top 10” list.  This year the Top 10 non-employee fraud cases resulted in fraud totaling just under $700 million.  Employee fraud cases resulted in zero fraud.  Seven of the Top 10 cases were from California, two from Texas, and one from Tennessee.

The cases involve health care fraud, where doctors prescribed inappropriate medications to pharmacies they operated, overbilling schemes for durable medical equipment, mail fraud, kickback schemes, referral of patients for unnecessary care, and prescribing unnecessary treatment.

A recurring theme, falsifying documents and under-reporting payroll to workers’ compensation insurance companies also appeared in the Top 10.  In one notorious case, the owners of a hotel hid the existence of 800 housekeeping and janitorial workers to avoid paying workers’ compensation insurance rates and payroll taxes.  The list also contains references to dishonest employers misclassifying more and more workers as independent contractors.  This misclassification is a fraud that wrongfully denies these employees workers’ compensation when injured, denies the government millions of dollars in payroll taxes to support Medicare, Social Security, Unemployment Compensation, and the fundamental rights of the workers.  Simply put, this misclassification is another employers shift the cost of accident and injury to the taxpayers and the fraud continues.

Discount Rate And Life Expectancy: What Most People Forget When Valuing A Workers’ Compensation Case

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

What’s my case worth?

I hear that question a lot when I meet a new client. In a workers’ compensation case I tell them it depends on many factors; How much were you earning when you were hurt, what part of your body was injured, how severely you hurt, where you live, how much education you have, whether you can return back to your old job, etc.

There are a lot of variables. But in cases where an employee has some reasonable chance of being found to be permanently and totally disabled, in other words unable to find work from their work injury, there are two constants effect the value of any settlement: discount rate and life expectancy.

Discount rate is synonymous with the time value of money. In short, a dollar today is worth more than a dollar in the future. This is important in workers compensation because if a worker is found to be permanently and totally disabled then they will be paid weekly benefit checks for the rest of their life. Under Nebraska law, that benefit check will not increase over time. The question then becomes how much will the value of that money decrease overtime. The discount rate is the expected return on investment on the money. The higher the expected return on investment, the higher the discount rate. But the higher the discount rate, the less a lump sum settlement is worth in present dollars.

An award of permanent and total disability is a form of a pension. Abnormally low interest rates in the aftermath of the financial crises have raised concerns about investment returns for pensions. The Nebraska Workers Compensation Court has used a 5 percent discount rate to value awarded permanent and total disability benefits for at least the last 12 years. But the expected rate of return on investments, as measured by interest rates of declined over the last 12 years. Lump sum payments, like workers compensation settlements, based on a 5 percent long term interest rate undervalue those payments.

For example, a 30 year US Treasury bond yields roughly 2 ¾ percent. If a 50 year-old worker earning $600 per week is found to be permanently and totally disabled, the present value of an award of permanent and total disability would be $334,000 using the 5 percent discount rate and using the court’s life expectancy tables showing a 31.4 year life expectancy. But if the court used the 30 year bond yield as the discount rate, that same award of permanent and total disability would be worth $439,000.

The issue of discount rate and case valuations isn’t widely discussed in Nebraska, but it was a contentious issue in the United Kingdom when the government cut their discount rate in personal injury claims, called the Ogden rate, by 3.25% in February 2017. The Ogden rate was increased by .75-1.75 percent in September 2017 under pressure from insurance companies.

The other variable in valuing an award of permanent and total disability is life expectancy. The Nebraska Workers Compensation Court uses a general life expectancy table to value awards of permanent and total disability that doesn’t vary by gender or nationality/race. The CDC breaks down life expectancy along those lines. Men and African-Americans have shorter life expectancies so they would actually benefit from the use of the Nebraska Workers Compensation Court life expectancy tables. Women and Hispanics tend to live longer so they would not benefit by the use of the court tables. For example, a 50 year-old Hispanic woman is expected to live 35.9 years whereas the Nebraska Workers Compensation Court just assumes a 50 year old has a 31.4 year life expectancy.  Use of the court’s life expectancy tables for a 50 year-old Hispanic woman earning $600 per week at the time of her injury could undervalue an award of permanent and total disability by about $18,000.

But workers who have a reasonable chance of being found to be permanently and totally disabled have other factors to think about when it comes to valuing any settlement of their claim. First, an insurer/employer only has to pay weekly benefits rather than a lump sum of money if a court finds a worker is permanently and totally disabled. They are free to use whatever discount rates and life expectancies they chose in valuing a claim for a settlement.  Court rules about discount rates and life expectancy only come into play when an injured worker wants to take a lump sum settlement on an awarded finding of permanent and total disability.

Secondly many employees who could potentially be awarded permanent and total disability benefits are also awarded social security disability benefits. Social security disability benefits payments can be reduced or offset by any workers compensation benefits received. An offset can have the practical effect of capping the value of any settlement based on the probability of a worker being awarded permanent and total disability benefits. 

The Three Stooges Get Workers’ Comp: Why Backs Trump Knees and Shoulders in Wisconsin

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

Wisconsin’s unique workers’ compensation system contains one significant distinction, between “limb” injuries and “spine” injuries. Limb injuries (shoulders, elbows, wrists, hips, knees) are not worth as much to the injured worker as a spine injury.

To illustrate this problem to my law students, I use the 3 Stooges example: Moe, Larry and Curly work for a tree service earning $15 per hour or $600 per week. A tree branch falls on all three of them, injuring Moe’s shoulder, Larry’s knee, and Curly’s neck. They are all off work for 10 weeks while they are healing from surgeries required by the injury. During that time they received Temporary Total Disability at two-thirds of their wage or $400 per week, a total of $4,000 for each of them. After they are done healing, all three of their doctors assign a 10% functional disability rating for their injury and a 10- pound lifting restriction, which their employer cannot accommodate.

Moe gets 10% of 500 weeks for his shoulder payable at $362 per week, or a whopping total of $18,100 – making his total workers’ comp recovery just over $20,000.

Larry gets 10% of a knee or 42.5 weeks at $362 per week, or $15,385 – making his total recovery just under $20,000.

Curly, who had a neck injury and surgery, gets 10% of 1000 weeks at $362 per week, or $36,200. However, since he cannot return to the tree company, he also gets a recovery for his Loss of Earning Capacity. Based on his 10- pound restriction and his very limited education, he is probably limited to a minimum wage or part time job which would result in a 50% Loss of Earning Capacity, payable for 500 weeks or a total of $181,000. If his disability is serious enough, he may in fact receive his $400 per week for the rest of his life, bringing his total to well over a half million dollars.

That’s why many workers’ compensation attorneys (and insurance companies) focus their attention on spine injuries.

Experience Of New Virginia Legislator Points To Difficulty Of Multi-State Claims For Injured Workers

Democrat Lee Carter, a democratic socialist, won an election to represent Virginia’s 50th District in the state’s House of Delegates.

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Lee Carter took a bad experience with a work injury and turned it into motivation to win election to the Virginia legislature last November. But the nature of Carter’s bad experience with his work injury shows why electing true worker advocates to state legislatures may not be enough to protect injured workers.

Carter was a Virginia resident who was injured in Illinois working for a Georgia company. Carter attempted to bring his claim in Virginia but he was unable to do so because of lack of jurisdiction. Tennessee lawyer Denty Cheatham pointed out on the WILG listserv that Carter’s difficulty in bringing a claim was why national standards are needed for workers compensation.

So-called federalization is controversial in the world of workers’ compensation. Workers’ compensation is a creature of state law by what amounts to a fluke of legal history. When workers compensation laws were passed in the 1910s, the Supreme Court held that regulation of workplace safety was outside of the federal government’s ability to regulate interstate commerce but was within the so-called police power of the states.

Two decades later during the New Deal era, the Supreme Court expanded the definition of interstate commerce in the 1930s which allowed Congress to enact laws impacting the workplace such as the Fair Labor Standards Act, Title VII and the Occupational Safety and Health Act (OSHA).

OSHA was implemented in the 1970s as concerns about the adequacy of state-based workers compensation systems arose from organized labor and the civil rights movement. Part of the OSHA Act was a National Commission that called for minimum standards for workers compensation claims. Part of having standardized state laws would mean that state laws would be more uniform and multi-state claims would be easier to navigate for injured workers.

Our firm is part of WILG which is a national organization of workers’ compensation lawyers. Multi-state or multi-jurisdictional claims are probably one of the most discussed topic on the WILG listserv. Mainly lawyers discuss which state’s have the best laws for a particular case. In some circumstances workers can also bring claims in and collect benefits in multiple states. The current system works for knowledgeable lawyers, but it can fail injured workers who may not even be able to bring claim because of questions over jurisdiction.

Multi-state claims can also subvert democratic rule. A worker has some input over workers compensation laws in the state where he or she lives and votes through their respective state legislatures. A worker who is forced to bring a claim in another state does not have that influence unless they happen to be among the 6 percent of private sector employees represented by a union. But even then, it may be burdensome to bring a claim in another state.

But workers have a say over national laws through their Congressional representatives. Minimum standards and some uniformity in state workers’ compensation laws would give injured workers more say in the types of benefits they would receive if they were hurt out of their home state or hurt for an out of state employer. Minimum standards legislation would also draw more national attention to the short coming of various state workers’ compensation laws. Renewed pushes for federal standards for workers’ compensation happened in the early Obama administration and towards the end of the Obama administration. National standards for workers’ compensation legislation will probably have to wait for a change in the partisan makeup of the two elected branches of the federal government.