Workers Compensation Social Legislation versus a Vigorous Defense
April 2000
Article on workers comp law
by Jim
Pocius
Marshall, Dennehey,
Warner, Coleman & Goggin
Workers compensation laws in the United States have developed state by state.
The right to workers compensation benefits is an administrative remedy based
upon statute alone, resulting in different laws in all 50 states.
Despite the statutory differences, workers compensation acts do have a number
of common features. These include a right to compensation for all injuries incident
to employment, the elimination of common law doctrines of negligence, the substitution
of a simple and inexpensive scheme for securing a prompt settlement of claims
through an administrative procedure, and immunity from suit for the employer.
The amount of compensation is generally determined by a state mandated schedule
based upon loss of earning power together with payment for a specific loss of
use of limbs or a percentage of loss for the entire body. The laws also provide
for payment of casually related, reasonable, and necessary medical expenses,
including surgical and hospital services, medicine, physical therapy, psychological
therapy, and prosthetic devices.
Because the legislation is considered social, most workers compensation laws
contain provisions that direct the decision maker (judge or referee) to favor
the injured worker. An employer must be creative and thorough when analyzing
workers compensation cases. In general, the employer must make sure that the
claimant is credible and that his or her medical expert has a sound basis for
an opinion of causation. In addition, the employer must always make sure that
the claim was filed in a timely manner, that notice was given, and that all
statutory requirements have been complied with.
Most states also require that an employer file a timely answer. In some states
(Pennsylvania, for example) if a timely answer is not filed, all well-pleaded
facts on the claimant’s complaint are admitted. Thus, if an answer is not filed
timely, the employer cannot contest issues such as causality or whether an actual
workers compensation injury occurred.
In light of the social intent of the legislation, it is imperative that an
employer remain creative and vigorous in the defense of these claims.
Because of the diversity in workers compensation laws, the following general
framework of considerations can be applied. However, these general rules may
be modified depending on the state in which the claim is filed.
The first consideration should always be jurisdiction. State laws are specific.
Employers should confirm that the injury is covered by the law of the state
in which the claim is filed. This is imperative if your employees are traveling
from state to state. Some states benefits are more liberal then others and the
employee will try to file in the state in which benefits are most liberal.
The next consideration should be your employer relationship. State laws generally
require that an injured worker must be an employee. This concept has been blurred
in PEO states where the professional employer organization may be considered
the employer. However, except for those states in which PEO legislation has
been passed, general rules of agency and common law apply. The most simple test
in determining whether someone is your employee is to determine who has control
of that employee. Whoever is directing the work on a day-to-day basis and has
the power to hire and fire generally can be considered the employer. This determination
is very important both from a workers compensation coverage standpoint and from
the standpoint of employer immunity from civil suit.
The next factor that must be considered is whether the injury occurred in
the scope of employment. All workers compensation statutes require that the
injury be causally related to employment.
In general, if an employee is injured on the employer’s premises, he or she
is considered to be within the scope of his or her employment. Problems arise
however, when employees file claims while they are coming to work or going from
work. Generally, if they are fixed place of employment employees (one location
for employment), accidents coming to and going from work are not covered under
workers compensation laws. However, there are exceptions to this rule, and the
facts of each case must be examined very carefully.
Employees who have more then one place of employment (salesmen, truck drivers,
etc.) are generally judged under a different legal rule. As traveling employees,
they are considered to be within the scope of their employment as long as they
do not “abandon the employer’s interest.”
Each state also has applicable statutes of limitation. A workers compensation
claim must be filed within a specific period of time; otherwise, the claim is
barred. Employers must be knowledgeable with regard to these statutes in order
to eliminate any precluded claims.
Finally, states also require that notice be given to the employer. Most states
require an employee to notify an employer when a work injury occurs.
If an employee is injured within the scope of employment and has filed his
action timely, he still must prove medically that the injury was caused by work.
In some jurisdictions a medical report is all that is required, while in other
jurisdictions testimony from the physician is required.
This is another area where employers must be careful with regard to workers
compensation claims. Each medical opinion must be vigorously reviewed. If the
medical opinion is not based on scientific evidence or testing and is unsupported
by the facts of the case, employers must contest that medical opinion by having
the claimant examined by their own medical experts and by having the tests examined
by their experts.
Summary
If the employer is careful and investigates each aspect of a workers compensation
case and vigorously reviews both the positive factors of an alleged injury and
the medical basis for the injury, most false claims will be eliminated. Without
taking these steps, because of the social nature of the legislation, most claims
by employees will be granted.
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author’s employer or IRMI. This article does not purport
to provide legal, accounting, or other professional advice or opinion. If such advice
is needed, consult with your attorney, accountant, or other qualified adviser.