Benefits Questions for Your Workers’ Compensation Provider?

Steven Cesare, Ph.D.

A landscaper from Pennsylvania called me the other day to talk about a recent spate of employee injuries that occurred at her company. After several months of no incidents, three injuries happened within the same week. While two of the injuries were standard fare, the third injury contained some nuances pertaining to the company’s return-to-work program that warranted detailed follow-up from the landscaper’s workers’ compensation vendor.

Keep in mind, workers’ compensation is typically determined by state law, as well as the terms contained within the respective policy a company has with its vendor; as such, it is always prudent to ensure certainty before making any impromptu decisions. With that premise in mind, here are the basic questions I suggested she seek clarification on from her workers’ compensation provider.

If an employee is injured and off from work for an extended period of time, must the company offer modified duty to the employee?
- In almost all cases, the answer is “no.”
If a company offers modified duty to an injured employee and the employee refuses the offer, is there any impact on potential workers’ compensation benefits for the employee?
- In many cases, if modified duty is available and an injured employee refuses the offer, no temporary disability payments will be paid to the employee.
- Per Pennsylvania state law, the company must provide the employee with a written offer letter explaining the modified duty proposal. The letter must include a stipulation that the employee respond within seven days. If there is no response within that time frame, the workers’ compensation vendor can then deny benefits, though they must still pay the medical expenses.
If an employee is on modified duty, can the company reduce his/her pay rate? For example, if a Foreman making $25.00 per hour gets injured on the job and is offered modified duty as a Driver, can the company pay the Foreman a reduced hourly wage?
- In almost all cases, the answer is “yes” as long as the reduced rate is above the minimum wage and the employee was informed of this change prior to accepting the modified duty assignment.
If an injured employee is off from work for several days, does the employee receive temporary disability payments for those missed days?
- In many cases, an injured employee will not receive disability payments for the first three days of absence, unless the employee is off from work for at least 14 days.
- Per Pennsylvania state law, the employee does not receive payment for the first seven days of absence unless s/he is off from work for at least 14 days
If there is no modified duty available for an employee and the employee is off from work for at least 14 days, what is the standard percentage of gross pay the injured employee can expect to receive?
- In many cases, an injured employee can typically expect to receive 2/3s of his/her normal wages as temporary disability payment.
- Per Pennsylvania state law,
  - If an employee earns less than $627.78/week, the employee will receive 90% of his/her normal wages;
  - If the earnings are between $627.79 – $847.50/week, the employee will receive $565/week.
  - If the earnings are between $847.51 – $1,695.00/week, the employee will receive 2/3s of his/her normal weekly pay, up to a maximum of $1,130/week.
Are temporary disability payments considered taxable income?
- In almost all cases, the answer is “no.”

Given the amount of confusion an injured employee may encounter regarding temporary disability payments, it is wise for all companies to confer with their workers’ compensation vendor at the time of policy adoption to ensure the payment process is fair, compliant with state law, and ultimately communicated to the injured employee as early and as clearly as possible.