Attorneys Denise Klug and Aimee Stern, noted authorities on workers’ compensation in West Virginia, offer insight into a important new West Virginia case which is employer-unfriendly.
1. In Peters v. Rivers Edge Mining, Inc., the Court upheld a jury verdict awarding nearly $2 million in damages to a plaintiff who alleged workers’ compensation discrimination.
2. The plaintiff, George Peters, was employed as a coal miner by Rivers Edge, when he injured his wrist at work. Mr. Peters filed a workers’ compensation claim, and was taken off work by his physician for approximately two months.
3. Three days after Mr. Peters was released to return to work, his workers’ compensation case manager received an email from a representative of Rivers Edge, indicating Rivers Edge would place Mr. Peters in its transitional work program, due to his continuing physical restrictions, and he was to contact Mr. Peters regarding his return to work.
4. In his Rivers Edge personnel file, Mr. Peters provided as his contact number the phone number for his mother’s house, where he did not live. Accordingly, the Rivers Edge representative was unable to speak to Mr. Peters until two days later. At that time, Mr. Peters was informed he could return to work at Rivers Edge. However, the parties disputed when Mr. Peters was required to report to work.
5. Rivers Edge claimed Mr. Peters reported for work one day late, thus violating the “2-day rule” of the collective bargaining agreement, providing an employee who is absent from work for two consecutive days without approval, other than for a proven sickness, may be discharged. Rivers Edge terminated Mr. Peters’ employment for violation of the 2-day rule.
6. Mr. Peters’ union filed a grievance on his behalf to challenge the discharge. The grievance was arbitrated, and the arbitrator decided that Rivers Edge demonstrated just cause for terminating Mr. Peters’ employment.
7. Mr. Peters filed a lawsuit, alleging his termination violated the West Virginia statutory provision prohibiting employers from retaliating against employees who applied for worker’s compensation benefits. The jury found Mr. Peters’ termination did constitute worker’s compensation discrimination, and awarded him almost $885,107 in compensatory and $1 million in punitive damages.
8. Rivers Edge appealed to the Supreme Court. The Court affirmed the jury’s verdict, and in so doing, made the following “employer-unfriendly” rulings:
a. The fact the arbitrator found Rivers Edge’s termination of Mr. Peters was proper under the collective bargaining act did not necessarily mean Mr. Peters could not prove his termination constituted workers’ compensation discrimination.
b. The jury’s award of $513,410 for front pay was proper because reinstatement or front pay is available as damages to a plaintiff alleging workers’ compensation discrimination.
c. The $1 million in punitive damages awarded by the jury was affirmed. As support for its decision that punitive damages were warranted, the Court cited the following: Rivers Edge had been “suspicious” of the validity of Mr. Peters’ workers’ compensation claim; it had placed him under surveillance when his doctor did not approve his return to work; once his return to work had been approved, Rivers Edge continued its surveillance of him rather than responding to his attempts to return to work; and although Rivers Edge had known of Mr. Peters’ ability to return to work for six days, it gave him only five hours notice that he was required to return to work. (workersxzcompxzkit)
9. Obviously, this decision will cause concern to many West Virginia employers who think if their termination of an employee is approved in arbitration, they are safe from a lawsuit; however, under this decision, they are not. In addition, the Court condemned the employer for being “suspicious” of the claim and for placing the employee under surveillance, a common practice among employers.
Possibly the best way for employers to protect themselves from a result like the one in Peters v. Rivers Edge is to make sure to conduct surveillance only when there is a reason to believe an employee is engaging in activities inconsistent with his or her claimed injury, and to be sure to thoroughly document the non-discriminatory reasons for every employment decision made with respect to an employee who has filed a workers’ compensation claim.
About the authors
Denise D. Klug is a partner in the Litigation Department of Dinsmore & Shohl, LLP. Denise represents companies in the chemical, hospital, steel, trucking and numerous other industries in Ohio and W. Virginia. Denise counsels clients on violations of specific safety requirements, State Fund issues, premium discounts and establishing Drug Free Work Place Programs. She can be reached at denise.klug@dinslaw.com or 304-230-1700.
Aimee M. Stern is a member of the Litigation Department of Dinsmore & Shohl, LLP with an emphasis on toxic torts, medical malpractice and workers’ compensation. She can be reached at aimee.stern@dinslaw.com or 304-230-1603.
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Employees or Independent Contractors: How to Tell the Difference New York Attorney Ted Ronca, has some tips on how to differentiate between an "employee" and an "independent contractor". Cutting workers' compensation premiums by calling your employees independent contractors is not a new idea or a smart idea. It is a device easily detected, fraught with peril and contains unanticipated "heads-I-win-tails-you-lose" traps for the unwary. At first, the idea seems to have benefits for both employer and employee. The employer ceases paying for workers' compensation, short term disability, unemployment and Social Security – quite a savings. The employees are persuaded to go along by being told of the vast new tax deductions they will have with their new businesses "from home." But what does a truly "independent contractor" (IC) look like? They have: 1. More than one "customer" often called "clients" 2. Variable hours with each customer set by the IC 3. A fixed address that is their own 4. If home based, a "bona-fide" office meeting IRS standards 5. Usually a recorded business name, license, federal identification number 6. A listed business phone number 7. Usually an accountant and filing a business return 8. Usually business cards 9. Their own tools, equipment and vehicles 10. Their own business bank accounts When more than half of these are not present, the scheme quickly falls apart. What also gives it away is the employer is using people as "independent contractors" for tasks almost always performed only by full-time employees. The obvious downside for the employer, when detected, is having to pay past premiums with additional penalties, often quite substantial. But there is more – much more. The IRS becomes involved, as does Social Security and state and local laws. (An audit quickly leads to scrutiny of the returns of ALL employees, not all of whom will cooperate with the scheme or remain silent.) And, in the worst of scenarios, the "independent contractor" might have an injury on the employer's premises. When that happens, the employer is no longer protected by the exclusivity of workers' compensation, unless they, and the employee, immediately confess to the fraud – a course that is unsure at best. As the explanations grow the scrutiny becomes more intense. The amounts of money, if the scheme is being carried on with a number of employees, is enough to attract the interest of state attorneys general and federal law enforcement, as well as disgruntled, or just plain honest, employees who stand to collect substantial rewards for making a discreet phone call. (workersxzcompxzkit) For over a decade, law enforcement has known workers compensation fraud lights up the paper trail to tax fraud – and follows it with zeal. An employer is wise to remain out of that spotlight. Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers' compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100.
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Beginning on July 1, 2009 self-insured employers in Washington will face a number of changes in workers’ compensation wage-replacement or pension benefits.
1. Employers will now pay for a 3.432% cost-of-living incease to injured workers compensation wage-replacement or pension benefits. Washington State law requires benefits be recalculated each year to reflect the change in the state’s average wage from the previous calendar year. The July 1 increase applies to both State Fund and self-insured employers.
2. The amount the Department of Labor and Industries (L&I) pays for a permanent partial disability (PPD) also inceases. The annual increase is based on the change in the Consumer Price Index and PPD awards will rise 4.09% for workplace injuries incurred July 1 and beyond. PPD awards go to workers who have lost a body part or suffered a permanent, disabling injury.
3. Under Washington’s workers’ comp system, injured workers receive from 60% to 75% of their income, up to the legally set maximum, tax free, while they are off the job and recovering. The percentage of income is based on their marital status and number of dependents. For workers injured in 2008, the average monthly time-loss paid was about $1,890.
4. The recalculation of benefits is based on the average annual wage of all workers in Washington. That wage, calculated by the Employment Security Department, rose to $46,256 in 2008, an increase of 3.432% since 2007.
5. As a result, the new maximum monthly benefit will be $4,625, or 120% of the state’s average monthly wage, for workers injured after June 30, 1996. Less than 4% of L&I claimants receiving wage-replacement benefits collect the maximum.
6. Maximum benefits differ depending on when an injury occurred because, in 1996, the state Legislature increased the percentage of the state’s average wage used to set the maximum benefit level.
7. Time-loss payments partially compensate workers for lost wages due to a job-related injury or illness.
8. Pension benefits are paid when a work-related injury or illness causes a worker to be totally and permanently disabled. (workersxzcompxzkit)
9. Pensions also are paid to a worker’s surviving spouse and dependent children when a workplace accident or illness results in death.
Author: Robert Elliott, J.D.
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The Missouri Labor Department’s Division of Workers’ Compensation (DWC) is issuing over $2.4 million from the Tort Victims’ Compensation Fund to 62 tort victims who filed claims in 2006, 2007, and 2008.
Tort Victims are individuals who have received little to no compensation after suffering injuries from others (such as in a motor vehicle collision or a hunting accident), who were uninsured or did not have adequate insurance.
“In many cases, tort victims are awarded damages a jury finds appropriate. However, in many instances, little or none of those damages are actually collected,” says Department Director Larry Rebman. “The money sent out to these claimants from the Fund will help them pay medical bills and take care of some of their expenses.”
The Tort Victims’ Compensation Fund is solely generated by a portion of monies paid as punitive damages in civil lawsuits in Missouri. A recent case resulted in a large amount of damages awarded which was then placed into the Fund. Until this recent deposit, the Fund had enough from its share of punitive damages judgments to be able to pay claims up to 2005. This distribution is the largest since the Fund began accepting claims in 2001, with the largest payout of 21.1 cents on the dollar. The average payout is 8.05 cents on the dollar.
A woman from Independence, Missouri, filed a claim against the Fund in 2008 after receiving very little compensation for an injury inflicted on her in 2007 when another driver made a U-turn without warning. The ensuing collision fractured her pelvis and right femur, leaving the 26 year-old unable to work and support herself. She received $75K in insurance, much of which went to pay medical bills and attorney fees. Earning more than $50K a year prior to the accident, the woman now collects less than $1,000 per month from social security disability. As a result of these payouts, she will receive $63K from the Fund.
“While the Tort Victims’ Compensation Fund cannot provide full compensation to the injured parties, it does provide a mechanism to replace a portion of their income,” says Rebman. “This should serve as a reminder to those driving without insurance or with inadequate insurance that people injured in these types of accidents will not only suffer physical disabilities, but they will be denied financial stability.” (workersxzcompxzkit)
The Missouri Tort Victims’ Compensation Fund was created by the legislature in 1987. However, the means for tort victims to receive money from the Fund was not established until 2001, after the General Assembly enacted legislation. Since the inception of the Fund, 503 tort victims have received over $8.7 million. The one-time only payments the recent claimants will receive from the Fund range from $3,231.46 to $63,304.71.
Author: Robert Elliott, J.D.
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The Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC) Peer Review Safety Award Program recognizes Texas employers with comprehensive safety programs. Once approved, these programs serve as models or standards of comparison for employers developing or reviewing their own workplace safety programs. Companies are nominated or can self-nominate, and qualify for the award by having proven safety programs in place and workplace and injury incidence rates below the national averages for their industries for at least three years. Recently recognized are Anthony Forest Products of Atlanta, Eastman Forge Inc. of Beaumont, James Avery Craftsman Inc. of Kerrville and Power Resources Ltd. of Big Spring. Anthony Forest Products a completely integrated forest products company, operates a southern pine lumber producing mill in Atlanta, Texas, with facilities in Arkansas, Georgia, Louisiana, Texas and Canada. To encourage safety rules compliance company management provides resources to maintain company safety policies, rewards employees for good safety and health behavior and addresses poor safety performances through counseling. Eastham Forge Inc. employees 95 workers and forges metal blanks into valve bodies and other items. The company's safety program promotes employee involvement by allowing employee assistance with inspections, accident and incident investigations, hazard correction and employee safety training. The company also has a new employee mentoring program. Mentors participate in the safety training of their newly hired co-workers. James Avery Craftsman Inc. is a jewelry manufacturer with production facilities in Kerrville, Fredericksburg and Hondo and retail stores in Texas, Oklahoma, Georgia, Colorado and Louisiana. A three-time award recipient, the company has an active safety program, in which its 1,500 employees are encouraged to participate on safety committees and report hazards. The company also maintains commendable safety manuals and written policies. Power Resources Ltd., a 212-mega watt natural gas-fueled cogeneration project, has 19 employees. (workersxzcompxzkit) The plant's safety committee coordinates an action plan, requiring employees to inspect hazard controls as part of their daily work routine. The plan empowers each employee to stop any and all operations if they identify an unsafe, hazardous or potentially hazardous situation. The plan also provides incentive programs and bonus pay for safe work practices and has a disciplinary process in place for noncompliance with company safety policies. Author: Robert Elliott, J.D.
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Throughout the workers' compensation process you will frequently need to write letters requesting information from health care professionals, your claims adjuster, a broker and more. While some tips for writing letters should go without saying: USE SPELL CHECK! And, since spell-check won't pick up – deer for dear, READ FOR CONTENT! Others tips in the workers' compensation industry aren't intuitive. A few basics:
- Consider using a form. Tables with "to," "from," "subject" and "date," for example look professional and keep information crystal clear.
- Use professional language at all times. This is not the time for emoticons or personal references.
- Spell out abbreviations on the first reference, even when you are sure your recipient knows them. You never know who else may handle your letter, including new employees, interns or temps.
- Always include time, date, your title, name and contact info including phone numbers and email address.
- While emailing an attachment of your letter is the conventional method these days, sending a hard copy in the mail isn't a bad idea, especially when requesting sensitive information or documents.
For those who aren't gifted in letter writing, Workers Comp Kit offers sample letters and formatted documents with the proper language. Communication in workers' compensation is critical. Writing letters and documents require care and professionalism. Author: Robert Elliott, J.D.
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Your medical director, medical department or consultant is a key resource to help interpret medical jargon accompanying work-related injuries or illnesses. Medical personnel can help you to determine the extent of work-related injuries and design transitional duty jobs to get injured employees back to work.
Here is a list of duties for your medical director:
- Identify the appropriate contact person to discuss worker injuries and workers’ compensation at your facility. Usually the appropriate person will be the workers’ compensation manager (injury coordinator) or middle manager.
- Visit company facilities serviced at least once per year.
- Observe and document the physical requirements for all jobs to determine which of them have the potential to become transitional duty positions.
- Assess the company’s transitional duty program positions.
- Telephone treating medical providers BEFORE they prescribe time out of work for an injured employee, to discuss the possibility of transitional duty assignments.
- Review injured employee’s file to ensure the necessary documentation is completed. If not, talk to the injury coordinator, who should obtain the documentation.
- Work closely with your injury coordinator to resolve those work-related incidents requiring medical attention or lost time.
- Observe and note the physical requirements of jobs and transitional duty jobs to provide informed recommendations for transitional duty. This also increases employees’ comfort level with the company’s medical director.
- Coordinate with injury coordinator and employees’ treating physician to develop transitional duty job descriptions accommodating physical limitations of injured employees.
- Define and document the boundaries of your role as in-house medical director to ensure delineation between medical director activities and adjuster activities. (workersxzcompxzkit).
- Determine what medical privacy regulations are relevant to avoid potential violations.
Author: Robert Elliott, J.D.
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A major construction safety initiative designed to prevent workplace injuries and fatalities is being launched by United States Department of Labor’s Occupational Safety and Health Administration (OSHA) according to Secretary of Labor Hilda Solis. She made the announcement during her address at the annual gathering of the American Society of Safety Engineers in San Antonio and applauded the efforts of the nation’s safety and health professionals.
“Beginning in July 2009 OSHA will increase the number of inspectors in Texas for a concentrated effort to prevent injuries and fatalities at construction sites,” Solis said. “When these inspectors observe unsafe scaffolds, fall risks, trenches or other hazards, they are empowered to launch an immediate investigation. As I have said since my first day on the job – the U.S. Department of Labor is back in the enforcement business.”
More workers die in Texas than in any other state. In 2008, there were 67 construction industry fatalities, and in 2009, 33 workers have died. The rate of Hispanic fatalities in construction is especially alarming, having increased by 125% between 1992 and 2005. (workersxzcompxzkit)
In 2007 and 2008, more than 3,000 inspections were conducted by OSHA in southeastern states. The agency cited a total of 4,390 violations.
Author: Robert Elliott, J.D.
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Who is the Responsible Reporting Entity “RRE”?
Quite simply, the party funding the payment directly to the claimant is the Responsible Reporting Entity.
In a continuing effort to help keep you up-to-date on happenings in Medicare contributor Gould & Lamb, offer a summary of important and timely information of who the Responsible Reporting Entity (RRE) is continues to draw many questions throughout the industry. There are various industry opinions and policies contrary to the Centers for Medicare & Medicaid Services’ (CMS) published statements on this topic. CMS’ most current published guidelines on who is the RRE are summarized below. While CMS has indicated they are reviewing this subject, their current policy is very plain. The following is from CMS’ Mandatory Insurer Reporting (MIR) Announcement released in August 2008 and can be found in the CMS Supporting Statement document on Pp 13-14.
Liability Self-Insurance:
42 U.S.C. 1395y(b)(2)(A) provides that an entity that engages in a business, trade or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part. Self-insurance or deemed self-insurance can be demonstrated by a settlement, judgment, award, or other payment to satisfy an alleged claim (including any deductible or co-pay on a liability insurance, no-fault insurance, or workers’ compensation law or plan) for a business, trade or profession. See also 42 C.F.R. 411.50.
SPECIAL CONSIDERATIONS WHERE LIABILITY SELF-INSURANCE WHICH IS A DEDUCTIBLE OR CO-PAYMENT FOR LIABILITY INSURANCE, NO-FAULT INSURANCE, OR WORKERS’ COMPENSATION IS PAID TO THE INSURER OR WORKERS’ COMPENSATION ENTITY FOR DISTRIBUTION (RATHER THAN DIRECTLY TO THE CLAIMANT):
As indicated in the definition of “liability self-insurance,” such deductibles and co-payments constitute liability self-insurance, and require reporting by the self-insured entities. However, in order to avoid two entities reporting with possible confusion where the deductibles and/or co-payments are physically being paid by the insurer, CMS is considering requiring such deductibles and co-payments to be reported as part of the insurer report. CMS specifically seeks comments on this approach. If this approach is not adopted, both entities will have to report in this situation. Regardless of the final decision on this approach, CMS may need to add a few additional data elements (in the form of a question or otherwise) so that it will clearly be able to identify such situations.
It is clear that where the deductible is funded by the insured, CMS is considering this a type of self-insurance and requires the insured to register and report. It should be noted where CMS indicates that if the deductible is paid to the insurer, not the claimant, CMS was considering a position that the insurer be the RRE to avoid the requirement of dual reporting. CMS clarified this position on 3/16/09 with the release of the User Guide. The following excerpt is from the User Guide:
Where an entity is self-insured for a deductible but the payment of that deductible is done through the insurer, then the insurer is responsible for including the deductible amount in the amount it reports as a settlement, judgment, award or other payment.
In summary, if the insured funds payments to the claimant in the form of a deductible they are the RRE. If the insurer funds payment to the claimant within the deductible layer and seeks reimbursement from the insured, the insurer is the RRE. This “funding method to the claimant” philosophy continues to excess insurance and reinsurance as well. See below from the CMS User Guide published on 3/16/09:
For re-insurance, stop loss insurance, excess insurance, umbrella insurance, guaranty funds, patient compensation funds, etc. which have responsibility beyond a certain limit, the key in determining whether or not reporting for 42 U.S.C. 1395y(b)(8) is required for these situations is whether or not the payment (from the excess/reinsurer) is to the injured claimant/representative of the injured claimant vs. payment being made to self-insured entity to reimburse the self-insured entity (for payments made to the claimant). Where payment (from the excess/reinsurer) is being made to reimburse the self-insured entity, the self-insured entity is the RRE for purposes of the payment made to the injured individual and no reporting is required by the insurer reimbursing the self-insured entity.
Again, once the re-insurance or excess insurance level is pierced, it is a function of who is funding the payment to the claimant that determines the RRE. If the insurer begins funding payments, they become the RRE. If the insured continues to fund the payments and seeks reimbursement from the insurer, they remain the RRE.
TO REPEAT:
The party funding the payment directly to the claimant is the Responsible Reporting Entity.
CMS may change their rules and this is a fluid environment, but due to the enormous number of questions being posed on this topic and the confusion it has generated, we felt it was prudent to revisit CMS’ current policy with all clients. If you have been receiving conflicting information from any party, please feel free to share this communication with them and obtain their source and reference for their current position regarding who the RRE should be. Please feel free to contact us with any comment or questions.
Author: Gould & Lamb welcomes questions feedback and comments. Contact them at: 866-MSA-FILE (672-3453).
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Here’s what Tom Robinson, J.D., writer for Lexis Nexis Workers Comp Law Center reveals . . .
The “Going and Coming Rule” Applies Only to Workers Who Have a Fixed Place of Employment, BUT, once again it all depends on how courts interpret the law. (See WCK Blog “Can Traveling Healthcare Providers Receive Workers’ Compensation Benefits?”) http://blog.reduceyourworkerscomp.com/?p=412%20
Here’s What Happened
An employee worked as a photocopier salesman. He had an office in his home and generally traveled to clients’ places of business to discuss their photocopier needs. He sustained injuries in a motor vehicle accident that occurred while he was traveling from his home to his employer’s place of business. At the time of the accident, the employee had arranged to meet a prospective customer at the employer’s workplace in order that the employee could demonstrate a photocopier for the prospect.
The employee’s workers’ compensation claim was disallowed by the Bureau of Workers’ Compensation, and the decision was upheld by the Industrial Commission of Ohio. The employee sought further review from the trial court, which granted the employer’s summary judgment motion on the grounds that the employee’s claim was barred by the “coming-and-going” rule set forth in Ohio Rev. Code Ann. § 4123.01(C). The employee again appealed.
Here’s How the Court Ruled
The Court of Appeals (Sixth Appellate District), in Bennett v. Goodremont’s, Inc., 2009 Ohio 2920; 2009 Ohio App. LEXIS 2467 (June 19, 2009) disagreed with the trial court. The court first reiterated the rule within Ohio [Editor's Note: and within most other jurisdictions]: that generally “an employee with a fixed place of employment, who is injured while traveling to or from his place of employment, is not entitled to participate in the Workers’ Compensation Fund because the requisite causal connection between injury and the employment does not exist.”
The court of appeals observed that the rationale underlying the rule is that workers’ compensation statutes contemplate only those hazards that are encountered by an employee in the discharge of employment duties, and not those hazards or risks that are encountered similarly by the public generally, such as those hazards or risks involved in travel to and from the place of employment. The court added that where traveling itself was part of the employment, either by virtue of the nature of the occupation or by virtue of the contract of employment, the employment situs is non-fixed, and the coming-and-going rule is, by definition, inapplicable.
The court concluded that the facts in the case, viewed in a light most favorable to the employee, demonstrated that he was a traveling salesman who did not commence his substantial employment duties only after arriving at a specific and identifiable work place designated by his employer. Rather, the traveling itself, to and from his clients’ places of business, was a fundamental part of his employment. On the basis of those facts, a reasonable factfinder might well conclude that the employee’s employment situs was non-fixed, in which case the coming-and-going rule would not apply to preclude recovery. Accordingly, the court of appeals reversed and remanded the case for a determination of the issues of fact. (workersxzcompxzkit).
WHAT???
Readers may have some natural difficulty distinguishing the facts in this case from those described in a recent blog (link above and see related to another June, 2009 Ohio decision, Gilham v. Cambridge Home Health Care, Inc., 2009 Ohio 2842, 2009 Ohio App. LEXIS 2400 (June 15, 2009).
In that case a home health care nurse operated out of her home and traveled each morning and afternoon to one of many patient residences designated by her employer. She sustained injuries in an auto accident as she traveled from one patient’s residence to another. The court found that she was a “fixed situs” employee and barred her claim under the going and coming rule. It appears that traveling from one patient’s residence to another’s is not part of the overall service being provided by the nurse, but traveling to demonstrate a copier is. Go figure.
See generally Larson’s Workers’ Compensation Law § 13.01[1], 14.01, 14.02
Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter(LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook(LexisNexis). Attorney Robinson is an authority in the area of workers’ compensation and we are happy to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
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