A decision from the New York Appellate Division 3d Dept., “Schirizzo v Citibank NA-BANKING” signals a return to the original method of measuring workers’ compensation payments after a lapse of more than 65 years.
A worker with a permanent disability (other than arm, leg, fingers and toes not requiring further treatment) receives in New York a ”permanent partial” or “permanent total” disability. According to the NY Workers’ Compensation Law, the amount of payment is measured by the “loss of earning capacity” not the severity of the injury. A clerical worker with a college degree would have far less of a loss of earning for an intermittent painful bad back than an unskilled assembly line worker.
Workers Were Receiving Far Greater or Far Below What Was Warranted
However, starting around 1947 the New York system casually abandoned the wage loss system on measurement in favor of medical disability (minimal, mild, moderate or marked disability) which awarded a percentage of the average weekly wage, regardless of the impact of the injury on future earnings. The medical “severity” yardstick was a lot easier in terms of trials and appeals since it eliminated the need for vocational testimony, but it led to cookie-cutter adjudication which swiftly led to the majority of decisions resulting in a fixed 50% disability. It sounded reasonable but, in fact people with little or no disability received the same payments and settlements as the most disabled, who were receiving far below what their disabilities warranted.
The new decision, published on 5/28/15, involves a person with a 75% medical disability who was awarded 99% wage loss awards; essentially a total disability. The court distinguished between medical damage and loss of earning capacity. The worker, who had a back injury, had little education and had an unskilled job requiring constant standing and lifting.
Decision Signals Return to Original Statutory Plan & Increases Importance of Return to Work
The decision signals a return to the original statutory plan, which will require vocational, in addition to medical, assessments before making extended disability payments. What will be the effect on employers? For some using unskilled workers, probably higher compensation costs. For others, with a clerical/professional workforce, probably a lot lower costs. (A lot will depend on the willingness of parties to become involved, provide objective information and resist the 50% settlements.)
The decision will also reward employers who provide return to work programs, which almost always reduce the amounts of permanent disability awards. As helpful as vocational testimony might be, an actual return to work resolves all doubts.
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. firstname.lastname@example.org
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