During the height of the COVID-19 pandemic, it appears that some employers told their injured workers something to the effect of “I know you’re hurt and can’t do your job anymore. Normally we would have light duty for you, but because of the pandemic we don’t have work. So why don’t you just apply for unemployment.”
So what’s wrong with that scenario? The answer is that worker should be receiving workers’ compensation benefits – specifically temporary total or temporary partial disability benefits – when they are under a doctors care and unable to work because of an injury.
While the COVID-19 pandemic was and is a unique situation, the law has answered many of the questions raised by COVID-19 in earlier cases. At least in Nebraska, a plant closure or lack of overall work with an employer is not a legal defense to paying temporary disability benefits.
Temporary disability and unemployment during the pandemic
Normally workers compensation is a better deal for injured workers than unemployment for a few reasons. One, higher benefit rates and two the fact that workers’ compensation benefits are exempt from taxes while typically unemployment benefits are taxable.
But COVID-relief legislation has changed that equation somewhat. The federal government has supplemented meager state unemployment benefits and exempted some unemployment benefits from taxes. Nebraska law also prohibits workers from getting unemployment while collecting temporary total disability.
So, sure an argument can be made that an injured worker is better off on unemployment than workers’ compensation. But if a worker collects unemployment after a work injury, does that mean they can’t come back and collect temporary disability after an injury?
Collecting temporary disability and unemployment: timing is everything
Under Nebraska law a worker who collects unemployment after a work injury, but is denied temporary disability by their employer can be awarded temporary disability without it effecting what they collected in unemployment. So in some sense, you can double collect unemployment and temporary disability. But you can’t collect them at the same time. Timing is everything.
Conversely, an employee can claim unemployment after temporary benefits expire. Unemployment is one way to lessen the effects of the delay between the end of temporary disability and the beginning of permanent disability. But the delays in processing unemployment benefits caused by the pandemic make that a less effective strategy.
Permanent disability and unemployment
In theory a worker can collect permanent disability and unemployment together. I think a worker is on solid legal footing if they are collecting benefits for a scheduled member injury. An employee claiming workers compensation benefits on an injury on loss of earning power basis faces a more difficult time obtaining unemployment. Normally a worker needs to show they are able and available to work to obtain unemployment. It’s hard to square that with a claim you are permanently and totally disabled due the purposes of workers compensation.
Granted, during the pandemic unemployment benefits were paid out regardless of ability to work. However states have been aggressive in trying collect supposed overpayments of unemployment benefits back from citizens. Workers who collecting workers compensation benefits should be cautious in claiming unemployment and seek legal counsel before doing so.