How does the Workers’ Compensation System Decide What is Fair to Pay to an Injured Worker?

By Barry Lovell

When the workers’ compensation system was implemented early in the 20th century, New York adopted two overlapping methods for determining awards to workers. In 2007, the legislature made major modifications to the system, but left intact the different methods. In the past two years, New York State’s Appellate Division, Third Department, issued several decisions that look to fundamentally change the way in which the reformed methods interact with one another.

For injuries to specific body parts like the hand or foot, Section 15 of the workers’ compensation law provides for what is commonly referred to as schedule loss of use awards. The law designates each body part as worth a certain number of weeks. For example, an arm is worth 312 weeks while a leg is worth 288 weeks. A 10 percent loss of the leg would pay 28.8 weeks of benefits. Doctors use the Workers’ Compensation Board guidelines to testify as to the percentage loss of use. Workers’ Compensation Law judges use this medical testimony to make awards to workers.

The law, however, recognizes that some injuries do not lend themselves to this type of classification. Injuries to the back, or to multiple body parts that are particularly severe, receive awards of unscheduled benefits. Prior to the reform, claimants who had not returned to work and who were found to be permanently totally or partially disabled, received lifetime awards up to two-thirds of the worker’s average weekly wage, subject to a maximum of two-thirds of the statewide average weekly wage—currently $966.78.

In 2007, New York reformed its system and imposed caps on the duration of unscheduled awards to permanently partially disabled claimants. Permanently totally disabled claimants still receive lifetime awards. Awards now range from 225 weeks for 15 percent or less, to 525 weeks for 95 percent or more. Prior to 2007 these percentages were based upon the medical degree of disability, affecting the amount of a weekly award but not how long the award was paid. Post-reform, the law judge uses the medical testimony in combination with other testimony to determine the Loss of Wage-Earning Capacity (LWEC) percentage, which now determines both the size and duration of the award. LWEC considers non-medical factors like the age, language skills, or education level of a claimant.

One of the key differences between the types of awards is that scheduled benefits are paid regardless of whether an employee returns to work. An employee with a leg injury could receive workers compensation benefits for the time that they were out of work, return to work, and then still get a check for thousands of dollars. Unscheduled benefits are paid only when an employee is not working or has not returned to work at their full salary. What happens when

Barry Lovell is the President of Lovell Safety Management Co., LLC. He can be reached at 212-709-8600 or blovell@lovellsafety.com.

workers have both schedulable and unschedulable injuries? Up until last year, case law precluded an award for schedule benefits when an employee was eligible for unscheduled benefits. Two recent decisions determined that an employee eligible for unscheduled benefits who returns to work at full pay can now receive benefits for their schedulable injuries. The latest decision, Matter of Arias v City of New York, published at the end of February of 2020, has produced a rising tide of litigation, as claimants who are currently working now seek additional awards.

We now find ourselves at a perplexing moment, where many claimants who are working at their pre-injury salary are classified as having lost wage earning capacity, even though they haven’t lost any actual wages. These same claimants, the court has ruled, now qualify for additional compensation awards. Some argue that this outcome is fair, even if the process itself is now self-contradictory. All, however, agree that this circumstance guarantees more litigation.

THE 2021 SMACNA OF SOUTHEASTERN NY BOARD OF DIRECTORS

Sitting, from left, Secretary Steve Mulholland, Treasurer Dan Harden, Mark DiPasquale, Board President Lou Doro

Standing, from left, CCA Executive Director Alan Seidman and William Haskell

Missing from photo: Vice President James D’Annibale, Michael Briggs, Frank Ferrucci, Walter “Chip” Greenwald and Dennis LaVolpa, Jr.

On behalf of the SMACNA contractors and board of directors, I would like to express the appreciation we have for the CCA staff and the constant communication that has kept us informed throughout this turbulent year.

Lou Doro We all share the same feeling Board President that we have not experienced anything like the events of this past year in our lifetime, nor do we want to ever experience them again. The beginning of the year looked very promising as the economy was doing well, the mild winter contributed to a great start to the building season and many local building projects were getting approved or were under way. 2020 looked like a great year to be in business in the tri state area and we were all looking forward to golf outings, weddings, family get togethers and enjoying some fun times. Then life changed.

Without rehashing the good and bad decisions that were made by our government, I would like to believe that we all learned something this year and will use those lessons to make our businesses and families more resilient in times of strife. We can no longer have this myopic view in our industry as competition from out of state, along with competition within our state, looks to further degrade the market share of the decent, local contractors that provide a good, living wage to thousands of hard-working and skilled residents in our area.

The SMACNA contractors and SMART Local 38 leaders recently held a joint meeting to discuss ways to regain the market share we have lost and how to prevent losing it again when we do get it back. It was a great meeting that put labor and management on the same team, and we all look forward to more meetings like this. Thankfully, many of our contractors survived without too many bruises this year but we need to work together to prevent losses in case a second or even a third pandemic wave threatens the economy. Most of our contractors have some type of service entity to them that is fairly recession-proof but we still need to maintain the customer relationships that we have and do whatever we can to retain their loyalty to us. I would encourage all of you to go beyond your daily routines to let your customers know you care for them and appreciate their trust in you. While on that note, let your families, employees and friends know how much you care for them as we share our struggles together and remember that we live better as a team, not as foes.

We are looking forward to 2021 being a better year for our business by focusing on the service to our customers. Exploring solutions to help them increase efficiency, reliability, safety and comfort for their staff and their customers will help them retain loyalty and allow them to be profitable. As you work with your customers do not be hesitant to give a little more of your time or your talents as you will see fruit blossom from this in trust and confidence with your organization.

I wish all of you and your families a very safe and happy holiday season and that you have a prosperous new year. Be well, my friends!

Lou Doro Lou Doro Vice President, Clean Air Quality Service, Inc. President, SMACNA SENY

THE 2021 CCA OF THE HUDSON VALLEY BOARD OF DIRECTORS

Mark Stier 1st Vice President

Mike Adams 2nd Vice President

David Campbell Secretary-Treasurer

Board President The Construction Contractors Association, like all Americans, looks forward to the deployment of a vaccine that will end the physical and financial strain from the coronavirus pandemic and allow us to again live free from fear and to see businesses open without any

Dan O’Kane health risks.

Alan Seidman Executive Director Ron Bloomer Scott Dianis It will be great for everyone to get back to normal as we move into 2021. We as an organization are poised to participate in the recovery and support our communities as we always do.

The future is bright and a release of pent up demand for in person activity will drive the recovery.

Ira Gold Jay Harrison Joseph Jerkowski

Robert Kaehler James McGowan Joseph Perez

Paul Taphorn Alfred D. Torreggiani Charlotte Van Horn We will continue to provide skilled local labor through our network of contractors and their employees. Remembering that local contractors support local businesses.

While 2020 has been a challenge for all, some much more than others, there is an excitement building as we put our lives and businesses back together.

On behalf of myself, as well as all the contractors in the CCA, we are honored to be part of the rebirth in 2021.

Dan O’Kane Dan O’Kane President, O’Kane Enterprises, Ltd. President, Construction Contractors Association Board of Directors