Work Comp Compensability – Understanding Jurisdictional Questions

Proactive members of the claims management team need to be fully engaged on important issues. This includes handling various questions of compensability that need to be answered on every claim. Common questions include applying the law to the facts of the claim and often making decisions with little to no legal guidance. Questions of jurisdiction are something all proactive team members must understand to run an effective program.

Questions of Jurisdiction

Issues of workers’ compensation jurisdiction vary from state to state. It is important for members of the claims management team to understand the special rules that apply and seek legal counsel if they have any questions.

As a general rule, an employee is covered under a state workers’ compensation act in the state where they are hired or regularly employed. When examining questionable claims from a jurisdictional standpoint, the following questions need to be asked:

In what state did the injury occur?

What state did the “last necessary act” of the hiring process take place? This is mainly a question in cases where the employee is hired via a telephone interview or travels to a different location during the hiring process.

Where does the employee spend a majority of their time or work activities? This is something that needs to be examined in instances where the employee travels or works remotely.

Issues Concerning Concurrent Jurisdiction

In some instances, more than one state can have jurisdiction over a workers’ compensation claim. Members of the claims management team should pay close attention to these cases and engage legal counsel as necessary.

Concurrent jurisdiction in workers’ compensation claims typically arises in instances where the employee was injured in one state but performs a majority of their primary work activities in another. Depending on the text of a workers’ compensation law, or case law interpretation, it can also occur based on the nature of an employment contract or collective bargaining agreement through a labor union.

Investigating Claims with Jurisdictional Issues

Claims that involve jurisdictional issues require immediate action by members of the claims management team. Failure to do so can have a negative impact on the insured and possibly result in penalties.

It all starts with a quick investigation. Find out the specific location of the injury and determine what state it is in.

Review the applicable state law regarding jurisdictional issues. There may also be an issue of “concurrent jurisdiction.” This is the result of conflicting state workers’ compensation laws and may allow the employee to choose the more favorable location to venue their claim.

Review applicable union and employment contracts. This includes a determination on how the employee was hired and where each actor (employee and employer representative) was at the time the hiring process was made official.

Obtain the assistance of legal counsel as necessary. This may include a legal opinion on what exposures are present in various jurisdictions. Using the insurance “roundtable” to discuss these matters is another option.

Communicate findings to your claims management team and insured. It is important to do this promptly so thoughtful decisions can be made.

Conclusions

Although questions or jurisdiction are often clear-cut, it is important for members of the claims management team to understand the nuances of this confusing issue. It all starts with a prudent and effective investigation, understanding of the law and use of legal counsel when necessary. By taking the time now, all claims handlers can reduce workers’ compensation costs and confusion by adding jurisdictional matters to their initial survey of all incoming claims.

Michael Stack - Amaxx Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.