On March 13, 2007 new methods of dealing with permanent partial disability went into effect. Prior to that date, a worker who had a permanent partial disability could collect weekly benefits for life, if the post-injury earnings were lass than before the accident. Carriers must offer a Section 32 settlement to all claimants who have been classified as permanently disabled
Under the new law, the maximum number of weeks that will be paid will depend on the severity of the disability – ranging from 225 weeks for least severe ratings to a maximum of 525 weeks for more than 95% loss of earning capacity.
What is Loss of Earning Capacity?
Loss of “earning capacity” is the difference between wages at the time of the accident and wages after. If there are no wages, the extent of disability is measured by medical and vocational assessments, which account for the bulk of all testimony at the Board.
Therefore, a worker who does not return to work runs a risk of being rated with a minimal disability, leading to a maximum of 225 weeks of benefits. However, if a worker returns to a low paying job, not necessarily with the same employer, the earnings are PRESUMPTIVELY the correct measure of disability.
What does this mean for the employee?
All lawyers in work comp in NY know this but in the past did not have to invoke it to obtain substantial awards. Now, however, knowing how to structure return to work can result in more than $180,000 in tax free benefits additional to the worker. A lawyer who does not explain all this to a client runs the risk of a substantial malpractice suit. Such suits were never seen for decades in NY work comp but are now beginning to appear.
What does this mean for the employer?
An employer who takes an employee back at less than former wages may, in fact, be guaranteeing a maximum award because the differential is greater which establishes a presumption of MORE disability. The employer has nothing to fear from workers trying to reestablish earnings but needs to be wary of return to work with a hidden agenda, especially where a worker readily accepts minimal wages or part-time work. The employer is better off paying the employee their regular salary/wages even if the employee is working in a transitional duty capacity with fewer hours or lower wages.
In 1990 the maximum compensation rate was substantially raised for new accidents occurring after July 1, 1990. Thousands of workers, out on disability for years, suddenly returned to work shortly after the new law went into effect. They remained at work for a few weeks and then left, filing a new injury claim. As predictable as this was, the Board never disallowed the “new” claims, all of which had prominent law firms as counsel before and after the accident. IP Reg Tag:workersxzcompxzkit
Further articles will discuss what employers can do to deal with these new situations.
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.
Do not use this information without independent verification. All state laws vary.
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