Has the Bargain in Workers’ Compensation Been Lost?

Today’s post comes from Leonard T. Jernigan, Jr. at the Jernigan Law Firm.

Has the Bargain in Workers’ Compensation Been Lost?

In creating the workers’ compensation system a grand bargain was created between the employer and the employee. In exchange for a no-fault system that paid limited but speedy benefits to the employee, the employer got complete immunity from civil lawsuits. Some argue that over the past few decades the bargain has shifted too much in favor of the employer, to the detriment of the employee. See Westphal v. City of St. Petersburg, 194 So.3d 311 (Fla. 2016) (Supreme Court of Florida declared 104-week limitation on temporary total disability benefits to be unconstitutional).

Each state has been creating more and more limitations on the rights and remedies of the employee, but the employer has kept his civil immunity rock solid. In one case, that immunity was extended to claims adjusters and potential outrageous conduct in how they handle claims. See Bowden v. Young, 768 S.E.2d 622 (N.C. App. 2015) (even if intentional conduct is shown in processing and handling a claim, there is no civil action outside the exclusive jurisdiction of the Industrial Commission). In another example, in North Carolina if a 35 year old worker becomes totally disabled, benefits will cease after 500 weeks [9.6 years], even though the on the job injury continues to cause disability on all future employment. So what happens when this employee reaches age 45? The inevitable outcome is that the cost of this injury shifts to taxpayers who start picking up the disability tab under Social Security Disability. The employer/insurance company has legislatively shifted the burden away from the employer.

In North Carolina there are some situations where a severely injured worker (i.e. one who has become paralyzed from the injury) can continue to get benefits beyond the 500 weeks. However, if that employee is also able to obtain full retirement benefits from Social Security the employer/insurance company can reduce workers’ compensation benefits by 100% of the amount being received from this Federal program. Why should the employer be allowed to reduce its liability under these circumstances? The employee’s right to receive retirement benefits is based on his prior earnings and what he has paid into the system during his employment years. Many workers in today’s society get full retirement benefits but work at other jobs to supplement that income. Under this statute, N.C. Gen. Stat. § 97-29(c), the employer is getting the benefit of the employee’s own retirement income. Sounds a bit like age discrimination too.

Each state needs to determine if benefits have been dramatically reduced for the employee under the workers’ compensation system. If benefits have been significantly reduced and the bargain has shifted dramatically in favor of the employer, there is a constitutional argument that the benefits are no longer adequate. See New York Cent. R. Co. v. White, 243 U.S. 188 (1917).

By |March 16th, 2018|Workers' Compensation|Comments Off on Has the Bargain in Workers’ Compensation Been Lost?

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