Category Archives: Government

Why Immigration Policy Changes Will Probably Impact Workers Compensation

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore in Nebraska. Very interesting read for potential impact on Wisconsin workers and employers.

In theory, the changes to immigration policy proposed by President Trump shouldn’t impact workers compensation in Nebraska. Workers compensation laws are state laws and Nebraska, like most states, awards workers compensation benefits regardless of immigration status.

But theory is one things and reality is another.

Mike Elk of Payday Report recently ran an article detailing that workplace deaths among Latinos were the highest in 2015 than they had been since 2007. This spike was attributed in part to aggressive immigration enforcement by the Obama administration which immigrant advocates believed made workers afraid to speak out about working conditions over fear of deportation.

During the Obama administration tougher immigration policies were at least coupled with tougher and even innovative workplace safety enforcement by OSHA. In the Trump era, workplace safety enforcement is expected to be curtailed and new OSHA rules are poised to be rolled back.

Immigration and workers compensation is often thought of in the context of Mexicans and central Americans working in industries like meatpacking and construction. This is a misconception, the meatpacking industry in Nebraska and elsewhere employs an uncounted but significant number of Somali workers. Somalis are one of seven nationalities banned from entering the United States under President Trump’s order. Ironically Somalis were recruited heavily into meatpacking work after raids during the Bush administration lead to the deportation of Latino meatpacking workers. Somalis had refugee status so there were few questions about their immigration status or eligibility to work legally. Under the new executive order, their immigration status is less secure and they may be less likely to speak out about working conditions.

A smaller but growing number of Cubans are coming to Nebraska for meatpacking work as well. Like Somalis, Cubans are deemed to be refugees so their ability to work lawfully is not a question for employers. However in the waning days of Obama administration, President Obama ended automatic refugee status for Cubans in an effort to normalize relationship with the Castro regime. There was little public outcry over this order like there was for the so-called Muslim Ban. However because of an executive order, Cuban nationals working in Nebraska may be less inclined to speak out about working conditions or claim workers compensation benefits due to newfound uncertainty over their immigration status.

Gorsuch, Chevron and Workplace Law

Judge Gorsuch

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Employers and their attorneys are widely hailing President Trump’s nomination of 10th Circuit Court of Appeals Judge Neil Gorsuch to the U.S. Supreme Court. Part of the reason that management-side lawyers are praising Gorsuch is his position on Chevron deference. Gorsuch’s views on Chevron could affect how workplace laws are interpreted and how they apply to workers.

Chevron deference is a legal rule that a court will give the benefit of the doubt about the interpretation of the law to how the executive agency charged with enforcing that law understands the law. Gorsuch has criticized Chevron on separation of powers basis, stating that Chevron deference gives too much power to the executive branch at the expense of the legislative and judiciary branches. Recently, government agencies have been interpreting employment laws in a way that is more favorable toward employees. Recent rules issued by the Equal Employment Opportunity Commission regarding the Americans with Disabilities Act are a prime example.

Many workers who get hurt on the job are told that they must come back to work with no restrictions. Chevron deference could be a powerful legal tool for workers faced with such policies. The new EEOC regulations on the ADA outlaw 100-percent-healed policies or policies that require plaintiffs to return to work without restrictions. In the EEOC guidance on the issue, the EEOC cites Kaufman v. Peterson Health Care VII, LLC 769 F. 3d 958 (7th Cir. 2014) as an example of policies that they believe to be unlawful under ADAAA. This case represents a subtle but real shift from current 8th Circuit law as stated in Fjellestad v. Pizza Hut of America, 188 F. 3d 949, 951-952 (8th Cir. 1999) where the 8th Circuit joined other federal circuits that held that failure to engage in an interactive process in accommodating a disability was not per se discrimination, and that there was no duty to engage in the interactive process. The EEOC’s interpretations of the new regulations still require that a plaintiff be able to perform the essential functions of the job with or without reasonable accommodation.

But as indicated by Kaufman, courts may be less likely to dismiss cases before trial, or in legal terminology, to grant summary judgment, on the issue of whether a plaintiff could perform the essential functions of the job with or without accommodation if the defendant does not engage in an interactive process or summarily decides that an employee should not be allowed to return without restrictions.

The fact that there is a split between regional appellate courts, a so-called circuit split, over “100 percent healed” policies increases the chances that the U.S. Supreme Court will decide whether 100-percent-healed policies violate the ADA. Another issue where there is a circuit split that the U.S. Supreme Court will decide is the legality of mandatory arbitration clauses in employment agreements.

Many workers unwittingly give up their rights to have employment-law disputes heard in court when they agree to mandatory arbitration clauses as a term of employment. In D.R. Horton Inc., 357 N.L.B. No 184 (2012) the National Labor Relations Board ruled that mandatory arbitration clauses prohibited Fair Labor Standards Act collective action cases because they interfered with protected concerted activity under 29 U.S.C. §157 and 29 U.S.C. § 158. In Lewis v. Epic Systems, 823 F. 3d 1147, 1154 (7th Cir. 2016), the 7th Circuit struck down a mandatory arbitration clause partly based on giving Chevron deference to the NLRB’s decision in D.R. Horton. The 9th Circuit agreed with the 7th Circuit in Morris v. Ernst and Young, LLP, No 13-16599 (Aug. 22, 2016). Unfortunately for plaintiffs, the 8th Circuit disagreed with the D.R. Horton decision in Owen v. Bristol Care, 702 F. 3d 1050 (8th Cir. 2013).

If confirmed, Gorsuch would be unlikely to give much weight to the opinions of the EEOC or NLRB in interpreting employment laws. Chevron deference is an unpopular concept with pro-business conservatives. Recently, the GOP-controlled House of Representatives passed legislation that, if enacted, would abolish Chevron deference.

Conversely, Chevron deference is a popular concept with progressive employee and civil-rights advocates, as it allowed the Obama administration to expand employee protections in the face of a hostile Congress. But with the advent of the Trump administration and his immigration policies, progressives have a newfound appreciation for separation of powers.

Also, employee advocates probably will not like many of the new rules and regulations issued by Trump appointees such as Labor Secretary nominee Larry Puzder. A prospective abolition of Chevron could be helpful to challenging rules made by a Trump administration. An example from the last Republican administration is instructive. In 2007, the U.S. Supreme Court in Long Island Care at Home Ltd. v. Coke, 551 U.S. 158 (2007) gave Chevron deference to Bush administration rules to exclude home health aides from coverage under the FLSA. It was nine years later that the rule was overturned, giving Chevron deference to Obama administration rules regarding home health aides and the FLSA.

Fault: Creeping Back Into Workers’ Compensation

Workers’ Compensation is a compromise. As originally crafted in 1911 and as interpreted, Wisconsin Workers’ Compensation is a compromise in which both employers and employees surrender certain advantages in order to gain others that are deemed more important. Employers give up the immunity that would otherwise apply in cases where they were not at fault and employees surrender their former right to full damages in the few instances when they could recover under tort law and instead accept more modest assured benefits for injuries and deaths (without having to prove fault).

The concept of negligence should play no role whatsoever in the workers’ compensation system. The doctrine of liability without fault is part of the compensation system; the 1911 legislature attempted to guarantee payments by the employer for injuries arising out of and in the course of employment. The economic burden shifted from the employee to the consuming public.  

Traditionally, the only vestiges of fault and negligence that remained in Wisconsin involved penalties involving employer or employee safety violations. If an employee was hurt because of the employer’s safety violation, the benefits to which the worker was entitled were increased by 15% and paid directly by the employer. Similarly, if the employee committed a safety violation causing injury, benefits from the insurance carrier or self-insured employer could be reduced by 15%. 

Recent revisions in the law, effective March 2, 2016, chip away at the “Grand Bargain,” the legislative deal made in 1911 where workers surrendered all rights to sue their employers for negligence in return for which the employer paid for work-related injuries regardless of fault. 

An employee who had sustained a work-related injury and would return to work for an employer has always received the protection of the Workers’ Compensation Statute. Even if the employee was terminated for good cause during a post-injury healing, he was entitled to continued receipt of Temporary Total Disability benefits (2/3 of time-of-injury wages). However, effective March 2, 2016, a new Statute now states that if an employee is discharged or suspended for misconduct or substantial fault, as these terms are defined by the Unemployment Compensation statutes, the employee’s Temporary Total Disability benefits could be suspended. The legal standard for what constitutes “sufficient grounds for termination for misconduct” and “substantial fault” will be defined by the Unemployment Compensation Law (These are employer-friendly changes that were implemented in the UC system in 2014). 

Going forward, administrative hearings in both the Unemployment Compensation and Worker’s Compensation forums will occur. The issue of whether a decision binding on one forum will be binding on another remains to be seen.  A worker could face the “double whammy” of being denied benefits in both the workers’ compensation and unemployment compensation case.

Additionally, the new law indicates that an employee who violates an employer’s drug and alcohol policy at the time of injury (where the violation is causal to the injury) is not entitled to anydisability benefits under the Workers’ Compensation system. This harsh 100% penalty is a substantial change from the now pedestrian 15% diminution that formerly applied to injuries before March 2, 2016.

Lastly, the new law allows apportionment of Permanent Partial Disability in cases of traumatic injuries between that permanency caused by the work injury and that “caused by other factors.” The statute is silent as to the meaning of the term disability, or “other factors,” and the problems raised by the possible interpretations of these terms will be determined in subsequent court decisions.

The net result will clearly be more disputes in the supposedly “no fault” compensation system—likely resulting in more litigation and potentially raising the cost of workers’ compensation for all stakeholders.


1. 2015 Wis. Act 180 (effective March 2, 2016) made significant changes to the workers’ compensation law—for employers and employees.  This blog will explore those changes in a series of upcoming posts.

NEW LAW: Wisconsin Enacts Worker’s Compensation Changes

It’s official. The Wisconsin legislature and Governor recently approved amendments to the worker’s compensation system in our state. We have a new law.

The bill arose from the Wisconsin Worker’s Compensation Advisory Council—the historically stabilizing group, consisting of members of labor and management.  The Advisory Council bill produced common sense reforms and improvements to the worker’s compensation system. A competing bill (informally known as the “work comp destruction bill”) never even received a hearing. In stark contrast, the legislature demonstrated support for the Advisory Council recommendations by unanimously passing the bill (Senate vote was 32-0 and Assembly vote was 97-0), and Governor Walker continued that support by swiftly signing the Council recommendations into law.

The new changes are 2015 Wisconsin Act 180. The bill is effective March 2, 2016.

Importantly, the new bill does not alter the underpinnings of the worker’s compensation “grand bargain”, whereby employees gave up the right to sue in court in exchange for scheduled, fixed benefits without having to prove fault.  Additionally, the new law does not affect an employee’s right to choose their own medical doctor and care, nor does the law impose any type of major medical fee schedule.

The Advisory Council bill was a compromise, as per usual, with provisions that benefit workers and employers. Among the major highlights of the new law:

  • Increased PPD Benefits. An injured worker’s maximum weekly benefits for permanent partial disability (PPD) will increase $20 to $342/week for injuries on/after March 2, 2016, and to $362/week for injuries in 2017.
  • Greater Access to Retraining Benefits. Injured workers with permanent limitations that do not allow a return to the time-of-injury employer can pursue academic retraining benefits (weekly maintenance benefits while in school, along with tuition, books, meals, and mileage). Traditionally, a hearing could not be held until the worker actually was enrolled and taking classes, which could be financially prohibitive when a worker is off work with no income. The new law allows a Judge the authority to issue prospective orders for future retraining benefits before the worker is in school.
  • Allowance for Working while in School. A worker pursuing an academic retraining program will be allowed to work up to 24 hours/week without those wages reducing any weekly worker’s compensation maintenance benefits.
  • Statute of Limitations Reduction for Traumas.  The statute of limitations, running from the date of injury or date of last compensation payment, for traumatic injuries only is reduced from 12 years to six (6) years. The statute of limitations for occupational exposure claims is not changed—remaining at 12 years.
    We anticipate that the traumatic injury statute of limitations change does not apply retroactively, meaning the new 6 year statute of limitations applies to traumatic injuries beginning March 2, 2016.
    The impact of this change will play out in the future. The potential for increased litigation exists as workers file hearing applications to protect their medical treatment expense benefits. For example, if a worker has a knee injury in April 2016 with arthroscopic surgery one month later, all disability benefits paid by the end of 2016, and that worker continues to have periodic difficulties ultimately resulting in a proposed knee replacement in 2023, they may be time-barred if no hearing application was filed within 6 years (or the end of 2022). If barred, those expenses are shifted to the worker, group health insurance, or the government.
  • PPD Apportionment. If a worker suffers a traumatic injury resulting in permanent partial disability (PPD), a physician’s report on PPD shall include a determination of the approximate percentage of PPD caused by the work injury along with the percentage attributable to “other factors” before or after the work injury. A worker, upon request, shall disclose any/all previous findings of permanent disability or impairments that are relevant to the work injury. The provision does not apply to occupational exposure injuries and does not mandate that a physician must find some percentage attributable to other factors (i.e., the entire functional PPD percentage can be attributable to the traumatic work event).Heavy litigation is likely given the provision’s ambiguity. By intent, it appears the language is restricted to functional PPD. The provision should not upset the “as is” rules on legal causation of an injury itself. Additionally, it does not appear the provision would affect liability for temporary total disability, medical expenses, retraining benefits, or potential loss of earning capacity or permanent total disability benefits.Litigation likely will occur over the type of competent evidence necessary to constitute “other factors” apportioning a PPD award. With the worker disclosure requirement, one could argue that only documented, ratable disability findings can be used, as opposed to a doctor’s speculation regarding pre-existing condition (e.g., a worker’s complaint of pre-existing sporadic low back pain is different than a pre-injury accident that resulted in a lumbar fusion procedure with a paid 10% PPD).
  • Lost Time Benefit Denial for Misconduct Terminations. Previous law, under the Brakebush case doctrine, allowed a worker to receive lost time benefits (Temporary Total Disability, or TTD) during a healing period even if they had been terminated for misconduct or allegedly valid reasons by the employer. The new law effectively puts an end to components of the Brakebush doctrine.Temporary disability benefits can be suspended when an employee is released to limited duty post-injury and subsequently is suspended/terminated for “misconduct” or “substantial fault,” as defined under the unemployment insurance law (Chapter 108). Based on the statutory language, TTD benefits, however, are still payable if a worker is completely off work in the healing period, per their physician.These terms “misconduct” and “substantial fault” were recently included in the unemployment laws with specific statutory definitions:
    • “Misconduct” is conduct evincing such willful or wanton disregard of an employer’s interests as is found in (1) deliberate violation or disregard of standards of behavior that an employer has a right to expect of his or her employees; or (2) carelessness or negligence of such degree or recurrence as to manifest culpability, wrongful intent, or evil design in disregard of the employer’s interests or to show an intentional and substantial disregard of an employer’s interests or of an employee’s duties and obligations to his or her employer.
    • “Substantial Fault” equals acts or omissions of an employee over which the employee exercised reasonable control that violate reasonable requirements of the employee’s employer, but not including minor infractions, inadvertent errors, or failure to perform work due to insufficient skill, ability, or equipment.
    With the worker’s compensation act now referring to the unemployment rules for the definitions of both terms, the possibility exists for the worker’s termination to result in the cessation of both worker’s compensation and unemployment benefits.
    The exact interpretation of these terms and the legitimacy of terminations will play out through litigation—and presumably a significant amount of litigation.
  • Benefit Denial for Alcohol/Drug Violation. All indemnity benefits are precluded if an employee violates an employer’s consistently enforced drug policy concerning alcohol or drug use when there is a direct causation between the violation and the worker’s injury. The worker, however, can still recovery/pursue medical treatment expenses.Previous law allowed a potential reduction of a worker’s benefits by 15% if an injury was the result of intoxication or the use of controlled substances.Notably, the new provision is a large injection of “fault” concepts into the otherwise no fault system undergirding the grand bargain of worker’s compensation.
  • Fraud Prevention. Worker’s Compensation Department (at DWD) will fund one Department of Justice position to assist in investigating and prosecuting any “fraudulent” claim or “fraudulent activity” on the part of any player in the worker’s compensation system (insurance carrier, employer, employee, or health care provider)
  • Electronic Medical Records. The cost for certified medical records in “electronic format” is fixed at a maximum of $26 per request.
  • Physician Drug Dispensing. Prescription drug dispensing outside of a licensed pharmacy (i.e., physician dispensing) are limited to the existing pharmacy fee schedule and pharmacist dispensing fee.
  • Review of Minimum PPD Ratings. The new law requires the Department to create a medical advisory committee, consisting of various areas of medical specialization, to review and revise the minimum functional PPD ratings found in the Administrative Code every eight years.

Change can mean uncertainty. A number of the statutory enactments and effects will be seen over time and through the litigation process. The key is that the Advisory Council process worked, continuing its vital role in Wisconsin’s beneficial and efficient worker’s compensation system.

Advisory Council Bill Is A Compromise …But The Alternative Is Chaos

Those of us representing injured workers were recently forced into a somewhat difficult decision regarding proposed changes to Wisconsin workers’ compensation law.  As discussed in prior posts, two parallel bills were proposed, one sponsored by the Workers’ Compensation Advisory Council (SB-536 / AB-724) and one sponsored by Republican Representative Spiros (AB-501)  The Spiros bill—aka the worker’s compensation destruction bill —would have completely altered the nature of 100 years of workers’ compensation in Wisconsin, adding the concept of “fault” back into a no-fault system that has been operating based on that premise for a century.  Additionally, the work comp destruction bill would have reduced the Statute of Limitations for filing the claim and claiming medical benefits on the claim from the current twelve years to an incredibly harsh two years. 

The agreed-upon Advisory Council Bill (WCAC bill) also contains benefits for injured workers as well as employer-friendly provisions, some coming at the expense of injured workers. For example, employees who are fired for misconduct or substantial fault could be denied workers’ compensation benefits based upon a definition of misconduct imported from the Unemployment Compensation system. Unemployment Compensation law defines misconduct as a worker showing such a willful disregard of an employer’s interest to be a deliberate violation, or carelessness or negligence showing wrongful intent suggesting an intentional substantial disregard of an employer’s interests. Quite simply, under this provision, injured workers might lose their jobs because of misconduct or substantial fault, thus losing out on both Unemployment Compensation and Workers’ Compensation benefits.

Additional provisions of the WCAC bill would deny benefits to those workers whose injuries have been caused by the use of alcohol or drugs. The Statute of Limitations reduced from twelve to a reasonable six years for traumatic injuries.  Significantly, the workers’ compensation insurance carrier can now ask for medical support to apportion pre-existing disability, which should trigger a substantial increase in litigation. 

Some would suggest that the Advisory Council bill is not “worker-friendly.” It is more appropriately viewed as a COMPROMISE. Labor and management representatives bargained for the changes. The Advisory Council bill is the result of give-and-take compromise and an acknowledgement by labor of the current political reality in Wisconsin.   In any compromise, parties get and give up certain things.  This compromise is the stabilizing force for the successful worker’s compensation system in our state. Lone wolf legislation without consideration by the compromises of the Advisory Council should be rejected. 

Support the Advisory Council process and Agreed-Upon Bill.

Work Comp Advisory Council Officially Produced an Agreed-Upon Bill

As anticipated, on December 22, 2015, the Worker’s Compensation Advisory Council (WCAC) approved its Agreed-Upon Bill.  The official statutory language and bill summary can be found here. The bill now goes to the Wisconsin legislature for consideration and, hopefully, passage.

Production of this Agreed-Upon bill underscores the success and stabilizing hand of the Advisory Council.  The WCAC, composed of members of labor and management (including the Wisconsin Manufacturers and Commerce), typically produced a biennial “agreed upon” bill for approval by the Legislature. The WCAC produces reasoned, incremental changes that maintain the stability of the system for all stakeholders—employers, carriers, and workers.  The WCAC immunized the substance of the Wisconsin WC system from partisan politics and election cycle swings commonly found in other states.

The Advisory Council bill deserves full support of all Wisconsinites that care about our nationally respected worker’s compensation system.  There is, however, lone wolf legislation floating about.  We previously talked about a bill (being pushed by Rep. John Spiros, head of the Trucking Industry Defense Association) that is properly seen as the “worker’s compensation destruction bill.” These ideas in the Spiros-led bill (AB-501) were NOT considered or vetted by the Advisory Council.  The Council protects against just this sort of unchecked effort—protecting against random or crackpot ideas from severely damaging the reputable system.

In stark contrast, the Advisory Council carefully considered changes and produced a reasoned bill that improves or system and benefitsall stakeholders, especially the employers of our state.  Indeed, some “employer-friendly” provisions include the following:

  • A worker’s violation of alcohol or drug policy (if causally related to the injury) denies benefits.
  • No lost time benefits (TTD) if terminated for good cause (using recent unemployment standards)
  • A reasonable and manageable reduction in statute of limitations from 12 to 6 years.
  • Establishing a Dept of Justice position for investigating/prosecuting WC fraud.
  • Apportionment of functional PPD payments, so employers not responsible for pre-injury disability amounts.

Workers also have some incremental, important benefits in the Agreed-Upon bill.  The permanent partial disability payments receive slight annual increases.  Workers also will be allowed to work a certain amount of hours while pursuing academic retraining without having a decrease in work comp benefits, and workers will be allowed to ask a judge for “prospective” retraining claims (benefitting a worker who does not have the financial ability to enroll in school unless the work comp carrier will be paying).

The Advisory Council bill maintains the stability of Wisconsin’s first-class worker’s compensation system.  Lone wolf legislation should be dismissed. We urge the Wisconsin legislature to whole-heartedly endorse the reasoned Advisory Council bill.

States with Opt-Out Workers’ Comp System are Strict on Injured Workers

Dallas attorney Bill Minick (Photo credit Dylan Hollingsworth for ProPublica)

Today’s post comes from guest author Hayes Jernigan, from The Jernigan Law Firm.

Texas and Oklahoma have both adopted an “opt-out” system for Workers’ Compensation. ProPublica along with NPR recently published an in-depth look at the results in these two states. Under this system, employers can opt-out of state mandated workers’ compensation insurance by creating their own policy for injured workers. These employer-written policies give employers 100% control over the terms, the benefits, and even settlements.

Specifically, ProPublica and NPR found that these employer-created policies generally have strict 24-hour reporting requirements or even require an injury to be reported by the end of a shift. This means, if an employee does not report their injury within their shift, or within 24 hours, they are prevented from bringing a claim at all. Period. End of discussion. Employers can also dictate how much benefits will be paid and some employers have capped death benefits for employees who are killed at work at $250,000. Whereas under the State Workers’ Compensation system, if a deceased worker leaves behind minor children, they will continue to receive benefits until they turn 18 (which could easily end up being well over $250,000 when you factor in lost wages until the worker would have been 65). This is potentially detrimental to a young widow or widower who is left with very young children.

This morning we tweeted a recent ABC news article that a worker was killed when he fell at a construction site in Charlotte. I’d hate to think that his or her family would be limited to recovering only $250,000 in the event the worker left behind dependent family members and young children. Money can’t begin to replace someone who is lost to us too early from an accident at work, but $250,000 would hardly cover a lifetime of income that the family will lose, especially if young children are left behind.

 

To read more on how the Opt-Out system is affecting injured workers in Texas and Oklahoma, go to: ProPublica: Inside Corporate America’s Campaign to Ditch Workers’ Comp.

LEGISLATIVE ALERT: Worker’s Compensation Destruction Bill?

Time to wake up Wisconsinites! In a short timeframe, the current administration and legislature in Wisconsin has altered the landscape of our state in ways too numerous to count. Well, now we face another attempt to make-over and deform a progressive era landmark: Wisconsin’s Worker’s Compensation System.

A recent bill (LRB 1768) proposes direct and major changes to our state’s nationally recognized model worker’s compensation (WC) system. The proposed changes would dramatically alter and potentially devastate the stability of the system for all stakeholders. We urge all legislators not to support LRB 1768. Instead, there will be a separate, reasoned bill produced by the Worker’s Compensation Advisory Council.

Current System Works for All Stakeholders

Under the grand bargain of Wisconsin’s first-in-the-nation WC system from 1911, injured workers gave up the right to court lawsuits in exchange for timely, lesser, defined benefits without having to prove fault. Employer, in turn, are protected from unknown jury damage awards. Employers purchase WC insurance for this administrative dispute resolution process. The system safeguards the concept that work injury expenses appropriately are an employer’s cost of doing business rather than costs shifted to taxpayers through public assistance such as disability payments and Medicare and Medicaid.

The current system is highly effective for all stakeholders—making our system the gold standard compared to the rest of the country. Wisconsin traditionally has low and stable employer premiums. We have over 300 private section WC insurance carriers collecting premiums (in excess of $1.7 billion). We have faster return to work rates than in most states. We have incredibly low litigation costs and low litigation rates (only 10-15% of work injuries).

Work Comp Advisory Council (WCAC) is the bedrock of Wisconsin’s WC system 

Much of the credit for the beneficial metrics in our national model is from the stability offered by the Worker’s Compensation Advisory Council (WCAC). This Council, composed of voting members of labor and management (including the Wisconsin Manufacturers and Commerce, WMC), has typically produced a biennial “agreed upon” bill for approval by the Legislature. The WCAC produced reasoned, incremental changes that maintained the stability of the system for all stakeholders—employers, carriers, and workers. The WCAC generally has immunized the substance of the Wisconsin WC system from partisan politics and election cycle swings commonly found in other states.

Importantly, the WCAC successfully produced a reasoned Agreed Upon bill in the past weeks! (more details below).

The Proposed GOP Bill (LRB 1768) Would Decimate Worker’s Compensation in Wisconsin

A recent video highlights the egregious nature of the proposed bill:

The bill proposed by GOP legislators was not from or considered by the Advisory Council—it is an end-run around the stability-producing model.  LRB 1768 is a direct legislative attack on the WC system, introducing dramatic and foreign concepts to our system. Among the more outlandish proposal are the following:

  • Reducing WC benefits by amount of employee negligence!
    • This proposal eviscerates the “grand bargain” of WC, whereby a worker who suffers an on-the-job injury receives lower, defined benefits without regard to fault and employers, in turn, are protected from unknown jury damage awards.
    • It would force employees to prove the injury was not their fault while still protecting employers with the WC exclusive remedy (and with no corresponding change in benefits for employer negligence/fault)
    • Also, without any method provided for determining negligence, there would be a massive increase in uncertainty, litigation, and claims costs/premium. 
  • Employer-Directed Medical Care
    • Currently, workers have the right to medical providers of their choosing—creating a system where workers have access to timely, specialized medical care. This quality, unrestricted medical care produces great results: faster return to work rates than most states in the country!
    • Proposed employer-directed medical care allows the employer to choose a specific practitioner for an injured worker (e.g., a podiatrist could be designated to address work injuries, including a back claim). As such, a worker may not receive the appropriate specialized medical care, like physical therapy, chiropractor, psychology, or orthopedic specialist.
    • Employer directed medical care likely means a race to the bottom, focusing on which doctors best minimize WC benefits. The focus should be on swift access to quality medical care.
  • Harsh Reduction from 12 year to Two (2)-Year Statute of Limitations (SOL)
    • WC injuries can result in lengthy healing periods and long-term medical care.
    • A 2 year SOL directly cost-shifts the burden for WC injuries to the taxpayers (Medicaid, Medicare, SSDI).  Taxpayers should not be left holding the bag for the cost of work injuries.
    • A 2 year SOL will result in exponential litigation of WC claims.  WC attorneys will be forced to file applications on any/all claims to preserve the SOL.  Wisconsin could turn into Illinois (!) where litigation rates are 80-85%, versus our current 10-15% rate.
  • Elimination of PPD ratings
    • Current law utilizes minimum permanent partial disability ratings, established by an independent panel of physicians decades ago.
    • The GOP proposed bill would eliminate PPD minimums.  Further explosion in litigation would result as previously uncontested claims would now result in disputes between worker and adverse physician ratings.
    • Notably, the recently-produced WCAC bill provided a reasoned approach to any concerns over PPD ratings, by recommending an independent physician panel review of the ratings.
  • Elimination of benefits if misrepresentation on employment application
    • This ill-considered provision precludes benefits if an employee lied about physical condition on employment application.
    • Such a provision introduces potentially discriminatory quizzing of prospective employees.  It further introduces more litigation issues into this no fault system

The cumulative effect of the GOP bill provisions were not adequately deliberated. The result would be an exponential increase in litigation and a destabilizing effect on the WC system—meaning increased litigation costs, lengthy delays in claims, and increased employer premiums. Any crack in the grand bargain could open the floodgates to potential unlimited damages in personal injury liability lawsuits. One major injury could result in significant jury awards (See http://nypost.com/2014/12/18/injured-construction-worker-gets-record-62m-single-plaintiff-award/)

In stark contrast is the recent WCAC bill ….

WCAC Successfully Produced a Reasoned Reform Bill

The Advisory Council, on October 26, 2015, successfully produced an Agreed-Upon WC Bill. This reasoned WCAC bill was agreed to by labor and management—including the Wis. Manufacturers & Commerce (WMC), who sit on the Council. All stakeholders should get behind this Advisory Council bill. The full statutory language will be available in the upcoming weeks.

As opposed to the GOP bill (LRB 1768), the Advisory Council bill creates WC changes that benefit all stakeholders, especially the employers of our state. Some “employer-friendly” provisions include the following:

  • Worker’s violation of alcohol or drug policy (if related to injury) denies benefits.
  • No lost time benefits (TTD) if terminated for good cause (using recent unemployment standards)
  • A reasonable and manageable reduction in statute of limitations from 12 to 6 years  (vs a 2 year SOL which would drastically alter the system).
  • Establishing DOJ position for investigating/prosecuting WC fraud.
  • Apportionment of functional PPD payments, so employers not responsible for pre-injury disability amounts.

Thus, the Advisory Council produced a bill that addressed many management/employer concerns about the WC system. The Advisory Council listened and—as it has done for decades—successfully produced reasoned changes to the system. The stability of the system is preserved for all stakeholders. The WCAC Agreed-Upon Bill should be supported.