Category Archives: Workers Compensation

Watch your body clock and time clock for a safe and fair “fall back”

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Early last week most of us felt a little dazed and tired from the end of daylight  savings time. But will that time change lead to more injuries and some workers getting shorted on their paychecks?

The end of daylight savings time and workplace safety

Studies show that daylight savings time in the spring leads to an increase in work injuries. While no studies have been done on the end of daylight savings time, experts state that any changes to the bodies ciciadian rhythms can lead to lower concentration, which can increase the risk of work injury. In short, if you feel a little off in the days after daylight savings time, your chances of injury on the job increase.

Fatigue leads to injuries. The risk of fatigue-related injury at work tends to increase in November and December as many workers take on increased hours or second jobs during the holiday season.

The time shift and wage theft

A tweet from a high-profile New York congresswoman reminded workers who work overnight to check their paystubs as sometime computerized timekeeping records will miss time shifts. Workers in human services, transportation and retailing would be particularly vulnerable to this form of wage theft.

Proving up actual unpaid time is one of the biggest challenges for employees when it comes to wage and hour law. The United States Department of Labor has an app callled Timesheet which allows workers to monitor their own hours.  The law favors employees who bring wage and hour violations to the attention of their employers in a prompt manner.

The federal Fair Labor Standards Act (FLSA) also includes anti-retaliation provisions which protect an employee who brings up a potential wage and hour violation to their employer.

While one hour of unpiad wages would be a small amount of money, an employer would not be able to plead a de minimis defense. That defense only applies in pre and post shift activities. Workers can join together in collective action cases under the FLSA. This allows workers to join together for relatively small amounts of wage loss. But workers are forced to opt-in or affirmatively join those cases. The opt-in provision works to limit the actual damages payable in these cases. I am involved in a collective case now where about 1/10 of the eligible workers decided to opt-in.

Up until 2018, I think it would be fair to say that workers who banded to together to address unpaid wages would also be covered under the National Labor Relations Act. (NLRA) In the wake of the Epic decision, I have some doubts about whether that activity would be protected. The Epic decision also gave employers the ability to take away the right of employees to join together to sue the employer for wage violations.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in Employment, Wage and Hour, Workers Compensation and tagged , , .

Misclassification stymies efforts to measure cost of work injuries

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Workers’ compensation courts do more than just decide workers’ compensation cases. Workers’ compensation courts also collect information about work injuries that is public information. But what happens when workers are classified as independent contractors?

Recently three U.S. Senators found out how difficult it was to find out information about work injuries for independent contractors when Amazon refused to provide information about injuries to drivers contracted with Amazon.

In Nebraska, employers are required to report injuries to the Nebraska Workers Compensation Court and those records are public record. These reports, called First Reports of Injury, at least provide some basic information about the number and nature of injuries.

The fact that First Reports are public is somewhat controversial. Opponents of making first reports public argue the workers’ compensation court is disclosing private health information. Many also find the practice of plaintiff’s attorney using the reports for marketing purposes distasteful.

On the flip side, if insurers and employers always treated their injured workers fairly and lawfully, they wouldn’t call lawyers. Secondly the availability of information about work injuries can help legislators and other policy makers improve workplace safety.

Employer advocates may argue that employers have an incentive to make their workplaces safe because of cost. But when employers, like Amazon, make their workers independent contractors they don’t provide workers’ compensation benefits. This shifts the cost of work injuries onto workers  and society as a whole. When companies classify their workers as independent contractors it is difficult even for powerful United States senators to determine the true cost of work injuries.

State workers’ compensation courts do important work in tracking work injuries. But as readers of this blog know, workers’ compensation laws are state-based laws. What may be a reportable injury in one state might not be reportable in another state. OSHA Rules 300 and 301 create a national standard for when an injury is recordable. But a rule that would have strengthened reporting requirements under OSHA was overturned through the Congressional Review Act. (CRA)

Many rules adopted by the Department of Labor during the Obama administration were overturned through the CRA. Reporting by Mike Elk at Payday Report revealed the dithering by the Obama administration on workplace safety that allowed Congressional Republicans and the Trump administration to overturn these rules.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Do court rules make it harder for PTs to manage pain in workers’ compensation cases?

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Physical therapists are playing an increasing role in pain management in workers’ compensation as the prescription of opioids has been curtailed over concerns over abuse of those drugs. But at least in the Nebraska Workers’ Compensation Court, physical therapists (PTs) may not be able to meet their increased responsibilities due to their ambiguous status as experts under court rules.  

Nebraska Workers Compensation Court Rule 10 holds that the court may admit reports from physical therapists but are not required to admit those reports as expert testimony.

This ambiguity creates confusion about what a physical therapist can testify to through written report in the Nebraska Workers’ Compensation Court. If physical therapists are going to take the lead in treating chronic pain this could mean that a medical doctor would have to ratify the suggestions of a PT when it comes to treating pain for those recommendations to have any weight in the court.

Physician-ratification of functional capacity evaluation tests performed by PTs amounts to an informal requirement for the appointment of a vocational rehabilitation counselor for a loss of earning power evaluation. I’ve written about the gap or squeeze in workers’ compensation cases when injured workers can go for weeks or even months without receiving either temporary or permanent benefits. In my experience the practice of requiring doctor endorsement of FCE results delays the payment of permanent disability benefits and often burdens injured worker with additional expenses.

I believe the requirement that doctors endorse the recommendations of physical therapists would also serve to delay and make it more costly injured workers to get treatment for chronic pain recommended by physical therapists. Additional delay and cost could make pain management without the use of opioid drugs more difficult.

Lawyers for injured workers in Nebraska should not accept the practice of physician-endorsement of physical therapist reports. I had some recent success in getting a loss of earning power ordered based just on FCE results. (Feel free to contact we directly for a copy of the order) But even in that hearing I made sure that those FCE results were endorsed by a doctor.

The plaintiff’s bar should also look to the legislature or the Nebraska Workers’ Compensation Court rule making process to allow the use of PT reports without doctor-endorsement. Last year the court rejected an effort to allow physician assistants to testify by Rule 10 report by a 5-2 margin. There may be a better chance for physical therapist reports to admitted on the same basis as doctors as physical therapists are already included in the language of Rule 10.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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How is workers’ compensation different for top draft picks?

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New Orleans Pelicans forward, Zion Williamson (The Athletic)

It’s hard to imagine an injured highly paid professional athlete as a workers’ compensation claimant. Their wealth shields them for many of the difficulties an injured worker can experience. But their experience as injured workers gives the public insight into the some of the challenges faced by injured workers.

New Orleans Pelicans forward and NBA top draft pick, Zion Wiliamson, injured his right knee in the preseason.  Here are few takeaways on the injury and its media coverage from the perspective of a workers’ compensation lawyer.

New employees are more likely to get hurt – Studies show that new employees are more likely to get hurt on the job. In this respect Zion Williamson is similar to many other new employees.  Injuries to new employees pose all sorts of issues for injured workers. How do you calculate workers’ compensation benefits? What if you have to miss time from work? Williamson likely doesn’t have those problems for a few reasons.

Average weekly wage A major issue for new employees is how to calculate the amount of their workers’ compensation benefits. Even if Williamson wasn’t making millions of dollars, this wouldn’t be a problem for him because he has an actual employment contract that states how much he is to be paid. 

Leave for the injured new employeeA typical employee at-will employee isn’t required to be granted leave until they have been employed for one year.  That assumes the employee is covered by the Family Medical Leave Act. But Williamson is covered by a contract with the Pelicans. He is also covered by a collective bargaining agreement through the NBA Players Association. So unlike the typical new at-will employee hurt on the job, Williamson likely has the time to recover from his work injury without having to worry about losing his job.

Pre-existing injuries and uncertainties over reporting – Williamson injured his right knee playing for Duke in February 2019. At least according to press reports, there is some question about the right knee injury occurred. Nonetheless, I would assume the Pelicans will pick up Williamson’s medical care through workers’ compensation.

But if you aren’t an elite-level NBA power forward and you tell your employer you aren’t sure how you hurt your knee, but you know you hurt it eight months ago, don’t be surprised if workers’ compensation doesn’t cover that injury.

On the off chance the Pelicans deny Williamson’s workers’ compensation, claim based on causation and/or the definition of accident, Williamson probably would have the money to cover his medical treatment. Most other injured workers lack that ability.

As an aside, if it was determined that Williamson’s knee injury was caused by his play at Duke, those injuries would not be covered by workers’ compensation. Eventhough the NCAA recently allowed student-athletes to make money through endorsements, they aren’t employees who are entitled to workers’ compensation.

General ignorance of workers’ compensation – I like basketball but I don’t follow it closely. I didn’t find out about Williamson’s injury until I saw an article in The Onion entitled “Pelicans HR Informs Zion Williamson Knee Surgery Not Covered Until 90 Days Into First Season.

Employers are required to carry workers’ compensation and employees are covered by workers’ compensation on their first day of work. The Onion is satire but it’s fairly typical of the misunderstanding of workers’ compensation by the media and entertainment industry. California’s Assembly Bill 5 is often described as a bill that provides sick leave and health insurance to gig economy workers. Sick leave and health insurance often aren’t required benefits, but workers’ compensation is a mandatory benefit. AB5 expands workers’ compensation to gig economy workers.

Wall Street Journal columnist Andy Kessler was griping about AB5 in a recent column. Kessler didn’t mention workers’ compensation in his column. Any pundit opining about AB5 who doesn’t understand the fundamentals of employee benefits, should be discounted or ignored.

 

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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The problem with workers’ compensation award ceremonies

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Recently three injured workers were honored at the Comp Laude Gala put on by trade publication Workers’ Compensation Central. The event included a panel with the catastrophically injured workers who overcame their injuries.

Individually the stories of these workers are all inspiring. The Comp Laude Gala should also be credited for giving these workers a place to voice their stories. Too often workers’ compensation lawyers and the insurance industry either talk to or talk about injured workers. It is good to hear their perspective.

But the idea of an event dominated by the workers’ compensation insurance industry giving awards to injured workers bothers me for two reasons — the types of injured workers recognized are atypical and focusing on individuals ignores legal and political issues that impact injured workers and workers’ compensation laws.

Award winners aren’t representative of injured workers as a whole

The Comp Laude Awards recognized workers who were catastrophically injured. Catastrophic injuries and death claims are different than your typical workers’ compensation claim in that it is less likely compensability and nature and extent of injury will be disputed by the insurer. These workers and their families are less likely to have a bad experience with a workers’ compensation insurer or claims administrator.

Catastrophic injury and death claims are more likely to involve third-party liability cases. Injured workers with a viable third-party case have a better chance of being compensated adequately than an injured worker stuck with just workers’ compensation. 

In his post about the Comp Laude injured worker awards, blogger Bob Wilson classified the award winners as advocates. Other types of injured workers were either adversaries or addled types who are less likely to accept their new condition and less motivated to improve their conditions. There is some validity to these classifications. But as other observers have pointed out everyone deals with trauma differently. Heroism should not be the standard that injured workers are held to when it comes to recovery from an injury.

Maybe the industry doesn’t believe that heroism should be the standard for injured workers. But the Comp Laude awards seem to signal that workers with more mundane injuries workers’ compensation injuries that they don’t have it so bad and they should suck it up.

Ignoring the social and political context of work injuries.

Wilson pointed to two police officers who were back to work after catastrophic injuries. It takes time, usually a lot longer than the 12 weeks allotted by FMLA, to recover from a serious work injury. But police officers are usually represented by unions and union workers usually have more generous leave policies that allows them the time to recover from work injuries and return to work. Union contracts also give employees more leverage in accommodating a disability beyond what they have under the Americans with Disabilities Act. But the role of organized labor in injury recovery seems to be ignored in stories that focus on individual heroism.

Focusing on individual tales of “resilience” also diminishes the importance of injured workers and their families taking actions to change laws to improve workplace safety and workers’ compensation laws.  At least for the Comp Laude awardees, workers’ compensation laws seemed to work fairly well. But for no amount of money can replace the life of a family member killed in a work injury. The families of workers killed on the job have started organizing and advocating for workplace safety through United Support and Memorial for Workplace Fatalities (USMNF)

In the Canadian province of Ontario there is an injured workers group active in advocating for injured workers to improve workers’ compensation laws. Injured workers have also taken to protesting that provinces workers’ compensation board through the Occupy Wall Street-inspired organization Occupy WSIB. Sure Occupy Workers’ Compensation would be considered radical by Comp Laude Gala attendees and even by some plaintiff’s attorneys. But the spirit of Occupy speaks to the anger and disaffection felt by many injured workers — the so-called adversaries and addled.

Injured workers who fight for themselves and others in the political arena are advocates in the true sense. Workers’ compensation professionals, whether they represent employees or employers deal with the anger of injured workers on a regular basis. These workers don’t need lectures about mindfulness or acceptance. They need a way to channel their legitimate anger in a productive way to change workers’ compensation laws. Injured workers and their families are starting to do this across North America. Merely celebrating resilience among a select set of injured workers will not improve workplace safety or workers compensation laws.

 

 

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Nebraska leads on first responder workers compensation benefits, but needs to do better

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The words “Nebraska” and “ahead of the curve” aren’t often used together. But when it comes to mental-mental workers compensation benefits for first responders, Nebraska has been well ahead of states like Florida, Washington and Oregon in providing those benefits.

Thomas Robinson, the author of the leading treatise on workers’ compensation, recently published an article summarizing recent state legislation expanding mental-mental benefits to first responders. Mental-mental workers’ compensation injuries are mental distress injuries not related back to a physical injury.

Nebraska first created mental-mental workers’ compensation benefits for first responders in 2010. The benefits were made permanent in 2012. In 2017 the benefits were expanded to prison guards and other state employees who work with high-risk individuals. Nebraska was well ahead of Florida, Washington, Connecticut, Oregon, New Mexico and Idaho which only recently expanded mental-mental workers’ compensation benefits to first responders.

Many first responders in Nebraska are volunteer firefighters. Those volunteers aren’t paid wages, but they are still covered by workers’ compensation in Nebraska. The coverage includes benefits for permanent and total disability.

I agree with Robinson’s arguments questioning the constitutionality of giving mental-mental workers’ compensation to first responders but not all workers. Robinson uses the example of truck drivers. I’ve written frequently about  the violence that low paid retail workers are exposed to in their work.

Workplace violence struck close to our office last week when a local man rammed his truck through the window of a Chick-Fil-A near Southpointe Mall in Lincoln. The man was armed with a stun gun and was shot by a sworn officer who reportedly driving through the drive-in. Under Nebraska law, the Chick-Fil-A employees could not make a workers’ compensation claim solely for mental distress. The officer would have a stronger argument for mental-mental workers’ compensation benefits.

I also agree with Robinson that teachers deserve mental-mental workers’ compensation benefits. The recent passage of mental-mental workers’ compensation benefits was partly motivated by a response to various high-profile school shootings. Other responses to school shootings have been less helpful. In April I wrote about work injuries sustained by teachers in Indiana during a mass shooting drill. In that injury a teacher was shot “execution style” with a paintball gun. The union representing teacher’s in Indiana drew attention to this incident in legislative testimony about school safety. That is one example of how unions help improve workplace safety.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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New law eases receipt of death benefits for foreign dependents

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Last week we wrote about legislation that will go into effect on September 1 that will make it harder to collect medical debt related to a workers’ compensation claim. On the same day, legislation will go into effect that will make it easier for the families of foreign workers to collect benefits for workers killed on the job.

The new law amends Neb. Rev. Stat. 48-122 to streamline the ability for a foreign dependent to proceed with litigation on behalf of a deceased family member. In other words, if a family member dies in a work accident, but his/her family does not live in the United States, the foreign dependent is able to collect workers’ compensation benefits for the death. In the past, however, in order to proceed with litigation, the dependents and their lawyer would need to get approval from a foreign consul of the country where the dependents lived. This was difficult and cumbersome to get feedback from a counsel that had little to nothing to do with a Nebraska workers’ compensation claim. The process could be even more difficult for Cuban nationals whose country doesn’t have diplomatic relations with the United States

As a result, this statute was amended so that a lawyer may simply proceed to represent the foreign dependent even if the foreign consul does not consent or fails to respond to the request for consent to the representation and litigation. The only potential pitfall to this bill is that there is a potentially expensive bonding requirement. But our firm has experience with setting up conservatorships that could help get around the bonding requirement,

The collections bill and foreign dependents bill both passed as part of LB 418 that passed the Legislature 35-0. Our firm was happy to work on this legislation, but this legislation was largely passed because of the outcome of the 2018 Legislative elections.  Senator Cavanaugh, who sponsored the bill won a close election. Due to the election outcome, Sen. Matt Hansen of Lincoln was also elected to chair the Business and Labor Committee that handles most legislation related to workers’ compensation. Senator Hansen’s leadership was helpful in getting passing this legislation.

A legislature friendly to workers is no guarantee in 2021. Worker-friendly Kate Bolz will be term-limited out in a district that isn’t particularly friendly for workers in southeast Lincoln. Grand Island Senator Dan Quick, a union electrician who was hurt at work, could face a tough re-election challenge. Pay attention to state legislative races, support pro-worker candidates, vote and tell your friends and family to vote as well.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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How workers’ compensation policy makers should respond to the threat of recession

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Fears of a recession emerged recently as long-term interest rates dropped below short-term interest rates leading to a so-called inverted yield curve.

This is Nebraska Workers’ Compensation Watch not CNBC, so I’m not going to play Mario Bartirehmo and go into the why and how of the inverted yield curve or make economic forecasts. (Blogger Joe Paduda wrote a good post about how a recession could impact workers’ comp. if you want to read about that sort of thing.)

Instead I will write about how workers’ compensation policy makers and regulators should respond to the threat of a recession and lower long-term interest rates.

The importance of state regulation

Workers’ compensation is first and foremost a form of insurance. Insurance is regulated at the state level. (You can read about the why of that here) In Nebraska, workers’ compensation insurance is regulated by the Department of Insurance and the Nebraska Workers’ Compensation Court. State regulators and lawmakers need to be doing two things to protect injured workers in any future recessions.

Preserve Guaranty funds – Guaranty funds pay out for claims from insolvent insurers. In Nebraska insurance companies need to pay into a guaranty fund. Insurance companies are financial institutions who make their money by collecting premiums and investing those premiums. In a recession, those investments can go bad. If bad investments lead to insolvency, a guaranty company can pay out claims from an insolvent insurer. Even if the economy doesn’t tip into a recession, low interest rates can lead to bad investment decisions and create problems for financial institutions like insurance companies.

The problem with guaranty funds is that politicians like to use them to balance state budgets instead of cutting programs or  raise taxes. A quick Google search reveals that such bi-partisan paragons of fiscal responsibility such as  Montana Governor (and Democratic Presidential Candidate) Steve Bullock and former New Jersey Governor (and former GOP presidential candidate) Chris Christie raided guaranty funds to balance state budgets. Cutting a workers’ compensation guaranty fund is essentially cutting benefits if the fund can’t pay legitimate workers’ compensation claims.

Strict scrutiny for self-insureds: Nebraska allows companies to self-insure for workers’ compensation. NWCC Rules 70-76 spell out the rules for self-insurance. The rules require yearly approval of for self-insurance and only a small number of employers are self-insured. I am not aware of a guaranty fund for self-insureds in Nebraska. Nebraska Workers’ Compensation Court rules requires a showing of financial responsibility in order to self-insure which should give workers’ some reassurance. But in the worst case scenario an injured worker would become a creditor in a bankruptcy proceeding if a self-insured went bankrupt.

The challenge of high deductible insurance – Financially unstable companies tend to have high deductible insurance for workers’ compensation. Those companies are more vulnerable to bankruptcy. In those cases, as Iowa law firm Gilloon, Wright and Haeml points out on their blog, insurance companies may want to delay payment until the bankruptcy is settled. Injured workers should retain counsel to preserve their rights in that situation.

Settlement value and interest rates

Last year I wrote how Nebraska’s mandated 5 percent discount rate lead to the undervaluing of permanent total disability claims. Long-term interest rates are good measure about the safe return on a long-term investment. The higher those rates the less an insurance company needs to put aside in order to meet their obligation to pay out an award of permanent total disability. The lower the rate of return the more they need to set aside to meet that obligation.

Traditionally the Nebraska workers’ compensation court would approve the settlement of litigated permanent total disability claims for 80 percent of the present value of the claim. In the last few years, the court has not been willing to follow the 80 percent rule. I suspect the difference between long-term interest rates and the mandated 5 percent discount rate is part of the reason that the court won’t follow that custom.

In the wake of low interest rates, the United Kingdom lowered their settlement discount rate. I believe jurisdictions in the United States need to follow suit. Long term interest rates have reached a historic low and are even negative in many countries. A 5 percent discount rate doesn’t make sense in these economic conditions.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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