Michigan Workers' Compensation Law

Wage Loss Benefits Upon Return to Work

Assume a claimant achieves an award of wage loss benefits and then returns to employment that pays less that the average wage earned at the time of the injury. Are benefits payable at all? What is the method for calculating post injury wages if those wages, on average, exceed the average injury wage?

These questions were clarified by the Court of Appeals' opinion in KUZMA v. GREAT LAKES BEV. CO., 2004 Mich. App. LEXIS 1988 which was decided this week.

The importance of the opinion is that when a claimant returns to a lesser paying job, the method for calculating weekly benefits must be made each week. The post injury wages cannot be averaged.

The employer had argued that the claimant is not entitled to ongoing wage loss benefits because he returned to work and his average post injury earnings exceeded his average weekly wage at the time of his injury. The Court of Appeals disagreed and pointed out that the statute is clear: post injury wages must be calculated each week.

Insurance claims representatives and adjusters are therefore encouraged to examine a claimant's post injury wage each week in order to remain in compliance with the law. In the event the claimant has returned to work, the claimant's post injury wages cannot be merely averaged and compared to the injury average. Indeed there maybe certain weeks where the post injury wage exceeds the injury average wage, in which instance no wage loss benefits would be paid. A differential wage loss benefit should be paid however for those weeks where the post injury average does not meet or exceed the injury average weekly wage.

Construction Site Injury: Can someone other than a comp carrier be liable?

In a construction site injury, can someone other than a comp carrier be liable for injuries?

The answer is yes says the Michigan Court of Appeals in Johnson v. A&M 2004 Mich. App. LEXIS 1142. In this case a subcontractor negligently installed a "toe board" and the plaintiff was seriously injured.

How Does The Two Years of Continuous Disability Provision Work?

Claimants subject to two years of continuous disability and who earned less than 50% of the state average weekly wage ($357.56 in 2002) when they were injured may petition for a one time rate increase. A magistrate may award an adjustment up to 50% of the state average weekly wage in the year they were injured. The amount of the adjustment is reimbursable by the Second Injury Fund.

Forcing a disability retirement, not illegal.

Forcing disabled police officer into a disability retirement did not violate Michigan's disability laws...

Employee or Independent Contractor?

When is an employee considered an independent contractor? The Court of Appeals re-visited this issue on June 8 in Reed v. Yackell.

The analysis begins with

Change in Case Law = Supervisor Liability

Previous case law insulated supervisors and managers from individual liability. A supervisor can now be held personally liable for retaliation under Michigan's Civil Rights Act. Although a supervisor cannot be held individually liable for a sexual harassment claim brought under the Michigan Civil Rights Act, there is individual liability for a violation of the act’s antiretaliation provision.

Severance cannot be coordinated with Comp

Often, upon the closing of a facility, severance is paid to employees. Further, the amount of severance is based upon the particular employee's wages. Generally comp. statutes contain sections which coordinate wage loss benefits to avoid a double recovery of wage loss benefits by the employee. For example, wage loss benefits received from a policy of disability insurance are coordinated with workers compensation wage loss benefits. This prevents a double recovery of such benefits, and discourages employees from remaining disabled.

But what about a severance payment that is based upon an employee's earnings? At first blush, it would seem that these benefits should be coordinated. But as we will see, an employee can receive both a severance payment and workers compensation wage loss benefits...

Heart Diseases in MIchigan

The good people at Lynch Ryan (with a name like Ryan, how could they be bad?) reported on their web log, workerscompinsider.com, that they had many recent searches regarding the topic of compensable heart disease cases. This is a mountain of a topic, but from the MIchigan point of view, here are the basics:

Section MCLS 418.301(2) provides in pertinent part: Mental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions, shall be compensable if contributed to or aggravated or accelerated by the employment in a significant manner.

The primary case on point comes from the Michigan Supreme Court in its Farrington decision [See the sidebar for the .pdf file]. This case was defended by Christopher D. Morris from our office. The Court promulgated the two-pronged standard to determine compensability under the Workers' Disability Compensation Act. An employee with an ordinary disease or preexisting condition was entitled to workers' compensation, if it could be shown either that (1) the work accelerated or aggravated the disease or condition, and thus contributed to it, or (2) the work, coupled with the disease, in fact caused the injury.

"Significant contribution" requires a comparison of occupational factors together with the totality of a claimant's health circumstances. There exists a four part test for determining what constitutes "significant contribution." Contribution is significant when it constitutes a vital component or when it contributes a considerable amount toward the progression of the condition. The factors to consider are 1) the number of occupational and non-occupational contributors, 2) the relative amount of contribution of each contributor, 3) the duration of each contributor, and 4) the extent of permanent effect that resulted from each contributor. Martin v City of Pontiac School District, 2001 ACO #118

Even though a claimant's everyday work activities might contribute to a heart injury in a significant manner, a factfinder must also consider the causal effect of everyday work activities in relation to the claimant's other, nonoccupational factors. These factors would include, for example, age, weight, diet, previous cardiac ailments or injuries, genetic predispositions, and the claimant's consumption of alcohol and use of tobacco or other drugs.

Wolf bites back!

Plaintiff Wolf achieves an open award for mental disabilities and the Court of Appeals addressed the "reasonable person" standard and in the process may have made it easier for the plaintiff's bar.

Wolf was a management supervisor for General Motors. He supervised between 35 and 39 production employees. According to the employee, the stress and pressure associated with the position caused him to suffer from disabling depression. He petitioned for and was granted an open award of benefits for a mental disability. The magistrate's decision was upheld on appeal. The magistrate conducted an objective evaluation and concluded that the events and employee's reactions were real and actual, not delusional or imaginary.

Entitlement to benefits for mental disabilities is governed by MCL 418.301(2), which states: Mental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions, shall be compensable if contributed to or aggravated or accelerated by the employment in a significant manner. Mental disabilities shall be compensable when arising out of actual events of employment, not unfounded perceptions thereof.

The standard of review is premised on the Supreme Court's decision in Robertson . The Supreme Court called for an "objective review", or "reasonable person" analysis of the claimant's perception or apprehension of the actual events of employment. Benefits are only appropriate when the claimant proves (1) that there has been an actual employment event leading to his disability, and (2) that the claimant's perception is grounded in fact or reality, not delusion or the imagination of an impaired mind. According to the Robertson court, the magistrate was charged with determining how a "reasonable person" would have perceived the events that plaintiff perceived "humiliating" and "stressful." Because of the introduction of the "reasonable person" standard, the plaintiff's burden of proof was raised.

The Wolf decision has changed the application of the "reasonable person" standard. No longer is there an analysis whether a "reasonable person" would have perceived an event as stressful or humiliating. The Wolf court held that the "reasonable person" test requires only that the magistrate determine if plaintiff's "perception of such events was reasonably grounded in fact or reality." More weight is now placed on the plaintiff's credibility regarding the occurrence of the events and his reaction to those events.

The Court of Appeals justified itself by quoting from a footnote from the Robertson decision: "Our Supreme Court counseled that the inquiry ultimately seeks to ensure that the purpose of the Legislature is fulfilled, i.e. that compensation is limited to "mental disabilities that arose out of actual events of employment, not to those that were attributable to the mere imaginings of the employee." Robertson, at 755 n 11."

In the event that the Wolf decision is appealed the Supreme Court will have the opportunity to review the "reasonable person" standard again.