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Governor Rick Snyder signed a new legislative amendment to the Michigan Workers’ Disability Compensation Act on January 14, 2015 to create the First Responders Presumed Coverage Fund (also known as the First Responders Fund).  As of the date of publication, there is not yet funding available and the various procedures for implementation and/or processing claims for this Fund are still being discussed.

 

The purpose of this legislation is to create a presumption that a “personal injury” has been sustained by a defined group of claimants (primarily full-time, active service firefighters who meet the criteria outlined in § 405) who are diagnosed with various types of cancers.  A full list of the included cancers is listed in subsection (2) of § 405  At the time when the cancer manifests itself, the claimant must have been employed in a position that includes “expos[ure] to the hazards incidental to fire suppression, rescue, or emergency medical services” and have been employed for sixty months or more.

 

If these criteria are met, the claimant’s “personal injury” (cancer) is PRESUMED to be work-related if he or she files his or her claim for workers’ compensation benefits against the First Responders Fund.  In order to claim benefits from the Fund, the claimant must suspend any claim that he or she has directly against the employer.  If he or she files the claim against the employer, no presumption applies; in other words, there is only a presumption of work-relationship if the claim is filed against the newly created First Responders Fund as opposed to the employer.  If a claimant redeems his or her case with the Fund, he or she suspends any claim against the employer indefinitely.  Prior to filing for benefits, subsection (4) requires that a claimant “shall first apply for and do all things necessary” to qualify for any pension benefits “to which he or she…may be entitled.”

 

In order to rebut the presumption, the Fund may submit “scientific evidence that a [claimant] was a substantial and consistent user of cigarettes or other tobacco products within the ten years immediately preceding the date of injury” and that this use “was a significant factor” in the development of the cancer.

 

Please continue to visit the “Newsletter” section of our website for updates on the implementation of this law, as well as any and all other updated information pertaining to workers’ compensation law and practice in Michigan.

Cross v Perfection Associates, Inc., 2013 ACO #95

The Michigan Compensation Appellate Commission recently issued a decision following the plaintiff’s appeal in the case of Cross v Perfection Associates, Inc.

At trial, Magistrate Tjapkes found that the plaintiff suffered a crushing injury to her left arm on April 26, 2011 and had an average weekly wage of $250.16.  However, he did not award the payment of weekly wage-loss benefits on the theory that the “disability” was not causally related to the injury because the plaintiff had not engaged in an appropriate job search.  Namely, she did not make an adequate effort to find subsequent employment post-injury.

The plaintiff advised the defendant’s expert vocational witness that she did not believe she should be looking for a job because of her injury, and she listed restrictions on her resume.  At trial, she testified that when she contacted a prospective employer, her first two questions were “are you hiring?” and “how much does it pay?” (according to her resume, she was seeking $18.00 - $20.00/hour to start).  Finally, according to the job search log submitted at trial, she did not start looking for work until 16 days before trial began.  According to the Magistrate and the MCAC, this did not constitute a good faith job search under the Act.

In support for his decision from a factual standpoint, the Magistrate stated, at page 29 of his Opinion:

I am also not persuaded that plaintiff made a genuine effort to find employment.  She certainly provided evidence that she put in applications at various places.  But even able-bodied people have to do more these days to secure employment.  Plaintiff limited her independent efforts to putting in her resume at Michigan Works, which is hardly a hotbed of employment possibilities.  Otherwise, she seems to have only contacted either places suggested by defendant’s vocational expert, which would have been information received after a delay under the best of circumstances, or a rather random sampling of local retailers and restaurants…Plaintiff also admitted she did not try to find work for some time.

When the December 19, 2011 amendments were ratified, we opined that the court’s definition of what constitutes a “good faith job search” would become a hot issue in the months and years ahead.  We will continue to monitor future decisions as this definition is refined, as well as monitor the anticipated future appeal of Cross.


JACKSON v. SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.

The Sixth Circuit Court of Appeals recently issued a decision in the case of Jackson v. Sedgwick Claims Management Services, Inc.  This decision is the latest in the line of RICO cases that have been filed in various jurisdictions over the past several years.

In Jackson, the District Court initially granted the defendant’s Motion to Dismiss on the basis that RICO did not allow for a recovery as pleaded by the plaintiff.  Relying on another decision issued in the companion case of Brown v. Cassens Transport Company, however, the Court of Appeals was divided on how to resolve the plaintiffs appeal following the initial decision.  The majority holding in Brown determined under a similar factual scenario that the plaintiff had properly alleged a claim under RICO, and therefore should survive the defendant’s motion to dismiss.  Specifically, in arriving at this determination, Brown concluded that the plaintiff had a “property interest” in the receipt of workers’ compensation benefits, and that the conspiracy alleged by the plaintiff in preventing the continued receipt of those benefits could potentially be a compensable deprivation under the federal RICO statute.

 

In general, a plaintiff must allege a “proprietary type of damage” in order to establish a RICO claim. 

 

The latest majority decision by the Sixth Circuit in Jackson addressed general concerns about the scope of the RICO statute extending into the “personal injury” realm beyond the initial intent of the legislature.  It also addressed the fact that workers’ compensation is traditionally an area where the state statutes prevail, and there were some concerns about applying a federal statute such as RICO in order to circumvent the state’s exclusive remedy provision in determining eligibility to workers’ compensation benefits.  Ultimately, the Sixth Circuit decided that the alleged entitlement to workers’ compensation benefits did not constitute an injury to “business or property” that would be compensable under RICO.  Therefore, they overruled Brown and affirmed the initial decision from the District Court which granted the defendant’s Motion to Dismiss. 

 

Although we anticipate that the plaintiff will again appeal this decision, the majority opinion in Jackson appears relatively straightforward and is likely to be left undisturbed.  The majority summarizes its determination rather succinctly, in  that “Michigan’s decision to create a workers’ compensation system does not transform a disappointing outcome in personal injury litigation into damages that can support a RICO civil action.” 

 

Additionally, the Sixth Circuit mentions that the plaintiff has an alternative remedy in the state’s workers’ compensation forum to “have their day in court” if they believe that fraud is taking place.  On page 17 of the Opinion, the majority states, “the workers’ compensation scheme Michigan has established provides ample mechanisms by which the employee can contest these actions.”  By using the phrase “these actions,” the majority is referring back to situations where the injured employee may believe that an employer has taken either a meritless position or procured fraudulent evidence in order to support a meritless position. 

 

The prevailing theme, however, is that the proper venue to pursue these type of claims is in the state’s workers’ compensation court and not in the federal courts under RICO.  We will continue to update our website with any future decisions on this or other related cases at www.michigancompdefense.com

 

Mohney v American International Group/Second Injury Fund

The Michigan Supreme Court recently issued an Order in the case of Mohney v American International Group, et al, Supreme Court Order # 146846, regarding whether or not the plaintiff’s injuries “[arose] out of and in the course of” his employment.  The Court reversed an earlier decision from the Michigan Court of Appeals, and remanded the case to the Michigan Compensation Appellate Commission for entry of an Order denying the plaintiff’s claim for workers’ compensation benefits.

Traditionally, the law has held that “an employee going to or from his or her work, while on the premises where the employee’s work is to be performed…is presumed to be in the course of his or her employment.  See, e.g., Simkins v Gen Motors Corp (after remand), 453 Mich 703 (1996).  In Simkins, this principle was held to include injuries that did not occur on the employee’s work-site, i.e., property “not owned, leased, or maintained by his employer,” as long as the individual was travelling in a “reasonably direct route” between a parking area that was “owned, leased, or maintained by the employer” and that person’s work-site.  Id.

In Mohney, however, the Michigan Supreme Court found after several appeals that Simkins did not directly apply because the parking area at issue was not owned, leased, or maintained by the employer.  The defendant employer did not own the area where the plaintiff was allegedly injured.  The defendant did have access to 77 parking spaces as part of its lease for office space with the building owner, which were provided for free except for a prorated charge for maintenance, and which charge was paid with the rent.  There was no evidence that the parking area was directly maintained by the employer.  Initially on remand, the Magistrate held that there was “constructive maintenance” because of the prorated increase in rent for maintenance costs paid by the defendant employer to the owner of the building.   The MCAC did not agreed with the theory of constructive maintenance, but found that the employer “leased” the parking area under the above-cited facts.  The Michigan Supreme Court reversed, finding that the scenario was factually insufficient to establish ownership, lease, or maintenance of the parking area.

 

SMART Act – Initial Summary of Changes in Workers’ Compensation Practice

 

On January 10, 2013, President Obama signed the SMART Act into law after it passed in the House of Representatives and the United States Senate.  While many of the specific implementations will become known to us in the months ahead, it certainly appears as though this Act contains favorable reforms as part of the interplay between CMS and the administration of workers’ compensation claims.

 

First, it appears as though CMS will now be able to issue a “final demand letter” for conditional payments PRIOR to settlement (up to 120 before the redemption hearing), and implements specific time periods for which disputes will be resolved.  This provision will go into effect 90 days after the signing of the law, and is certainly preferable to the current system where a final demand letter is not issued until after the redemption hearing, which leaves open the possibilities that CMS will request a different amount for conditional payments after the settlement than it requested before the settlement hearing.

 

In 2014, the Secretary will institute a threshold level where conditional payments will no longer be reimbursed.  Very little is known about this provision at the present time, although we look forward to learning more about it in the year ahead.  It may be similar to the $25,000.00 threshold in place regarding MSA’s.  In addition, the new Act provides for a quick turnaround time of 11 days in order to resolve any disputes of reported conditional payments from CMS.

 

The Act also includes a specific statute of limitations for which CMS can recover conditional payments of three years after the receipt of notice of the settlement (or payment, if the case was not redeemed).

 

There are additional provisions regarding the fines for noncompliance with CMS provisions and changes to the reporting requirements that we urge you to discuss with your RRE.  Those changes are still in the process of being clarified.

 

DO YOU USE INDEPENDENT CONTRACTORS?

 

If your business regularly utilizes the services of a person who you have designated to be an Independent Contractor, you should be aware that there has been a change in the Workers’ Compensation law pertaining to whether your company would be considered the  independent  contractor’s  employer  and  liable  for  his/her  workers’  compensation benefits.  As of January 1, 2013, the legislature enacted a 20-factor test to determine if an employer/employee  relationship  exists  for  workers’  compensation  liability. The 20- factors are:

 

1.  INSTRUCTIONS:     If  your business  requires  the contractor comply with its instructions about when, where and how the service is to be done, the contractor could be considered an employee.

 

2.  TRAINING:  If your business requires that the contractor perform the job in a particular  manner then  the contractor could be considered an  employee.   An independent contractor will use his/her own methods to be complete the service and should receive no training from your business.

 

3.  INTEGRATION:  If the services performed by the contractor are an important part  of  your  business  operation  then  the  contractor  could  be  considered  an employee.  The integration of the two businesses indicates that the contractor is subject to your direction or control.

 

4.  SERVICES  RENDERED  PERSONALLY:      If  the contractor is  required  to perform the service personally is an indication that contractor is an employee since an independent contractor is free to assign work to his/her own employees if necessary.

 

5.  HIRING,  SUPERVISION  AND  PAYING  ASSISTANTS:       If  the  business allows the contractor to hire, supervise or pay assistants for the business, the contractor is likely to be deemed an employee unless the contract specifies that the contractor will hire and supervise other as part of the contract.

 

6.  CONTINUING  RELATIONSHIP:      If  the  business  and  contractor  have  an ongoing relationship for the service provided, the contractor could be considered an employee.  The IRS has held that even irregular recurring jobs would qualify as an employment relationship.

 

7.  SET HOURS OF WORK:  If the business requires the contractor to work a set number  of  hours,  the  contractor  could  be  considered  an  employee  since  an independent contractor sets his/her own schedule.

 

8.  FULL TIME REQUIRED:      If the business requires the contractor to work substantially full time to the business, the contractor will likely be considered an


employee since an independent contractor is free to work when and for whom he or she chooses.

 

9.  WORK DONE ON PREMISES:  If the business requires that the services being performed  are  completed  on  the  business’  premises,  the  contractor  could  be considered an employee, especially if the service could be performed elsewhere.

 

10. ORDER OR SEQUENCE TEST:   If the business requires that the service be performed in a  certain order, the contractor could be considered an employee since  the  independent  contractor  can  perform  the  services  in  whatever  order he/she deems appropriate.

 

11. ORAL OR WRITTEN REPORTS: The contractor is required to submit regular reports would suggest an employee relationship since it is a method of controlling the contractor.

 

12. PAYMENTS BY THE HOUR, WEEK OR MONTH:  Payment of wages by a set  schedule   would  suggest  an  employment  relationship  since  independent contractors are traditionally paid by the job and/or commission.

 

13. PAYMENT  OF  BUSINESS  AND/OR  TRAVELING  EXPENSES:       If  the business pays the contractor’s expenses, the contractor would be considered an employee.

 

14. FURNISHING TOOLS AND MATERIAL:  If the business provides the tools and material necessary for the contractor to complete the service, the contractor would likely be considered an employee.

 

15. SIGNIFICANT INVESTMENT:  If the contractor maintains his or her own office, no employment relationship would be presumed.

 

16. PROFIT OR LOSS:  If the contractor can realize a profit or loss by his or her services, then no employment relationship would be presumed.

 

17. WORKING FOR MORE THAN ONE FIRM AT A TIME:  If the contractor performs more than de minims services for other businesses then no employment relationship would be presumed.

 

18. MAKING SERVICE AVAILABLE TO THE GENERAL PUBLIC:       If the contractor  makes  his  or  her  services  available  to  the  public  on  a  regular  or consistent basis then no employment relationship would be presumed.

 

19. RIGHT  TO  DISCHARGE:     If  the  business  has  the  right  to  discharge  the contractor, then an employment relationship could be established.   A business’ right to end the relationship with an independent contractor is typically controlled by the terms of the contract.


 

20. RIGHT TO TERMINATE:     If the contractor has the right to terminate the relationship with the business without incurring liability, then an employment relationship could be established.

 

These factors  are fairly general  and  some will  likely apply to  your business relationship  with  an  independent  contractor.   The  legislature  has  implemented  a process  where  a  business  can  request  a  hearing  to  determine  if  the  contractor performing services is covered with an employment relationship but this request for a hearing will likely take too long for the services to be relevant.

 

It should be noted that the workers’ compensation liability for injuries sustained by an  independent contractor or his/her employees will only revert back to your business if the contractor does not have workers compensation insurance of his/her own.  As such, if your business needs to hire an independent contractor to perform services, it is wise to request a copy of the  contractor’s certificate of insurance for workers’ compensation and even follow up with a call to the agent to ensure that the insurance coverage is still in effect.   If your independent contractor did not  have workers’  compensation  coverage  and  a  claim  is  filed  against  your  workerscompensation carrier, your insurance carrier has the right to audit your records and raise your premium for those uninsured contractors.

 

If you have any questions about this article or workers’ compensation in general, please   feel    free    to   contact    Charfoos   Reiter    Hébert   at    248-626-7300    or firm@micompdefense.com and one of our attorneys will get back to you as quickly as possible.

 

Please see below for a summary of the December 19,2011 amendments to the Michigan Workers' Disability Compensation Act and a very brief guideline summary of the Michigan Act.

Summary of Amendments to the Michigan Workers’ Disability Compensation Act – as Amended, December 19, 2011

 

Governor Snyder signed the amendments to the Michigan WDCA on December 19, 2011. The bill was given immediate effect. The amendments apply to injuries that occur on or after December 19, 2011.

There were a number of changes, some of which will affect the adjuster’s claim handling on a daily basis, weekly basis or yearly basis.  Some non-substantive changes were of a corrective or grammatical nature.

Independent Contractors

 

           The 2011 amendments added several additional provisions that become effective on January 1, 2013. On and after 1/1/2013 to determine if an employer-employee relationship exists we are to look to the 20-factor test used by the United States Internal Revenue Service. (See Revenue Ruling 87-41, 1 C.B. 296). Additionally if the employer is required to withhold Federal Income Tax this would be prima facie evidence that an employment relationship exists. After 1/1/2013 a business entity may ask for a ruling from the Michigan Administrative Hearing System on an individual case Basis.

Board of Magistrates

The Qualifications Advisory Committee (QAC) has been abolished.  The Governor has the sole power to appoint Magistrates.  The only pre-qualification is the individual has been licensed to practice law in the State of Michigan for at least five years.  The Magistrates are evaluated by the Director of the Agency and the Chief Magistrate on an annual basis.  The Governor has the power to remove the Magistrate based upon their recommendations or what the Governor considers to be a neglect of duties.

The Magistrates are appointed to four year terms and may be reappointed without term limitations. (This eliminates the prior 12 year term limitation)

Wage-Earning Capacity

 

Under the prior § 301(4)(b), “wage-earning capacity” means the wages an employee “is capable of earning” at a job reasonably available to him or her.  The legislature added language “…whether or not wages are actually earned.”  The amendments place an affirmative duty on the employee to seek work that is reasonably available and that a Magistrate may consider a good faith job search in determining that availability.

The employee must:

1.               Disclose his/her qualifications and training, including education, skills and experiences, whether or not they are relevant to the job the employee was performing at the time of his or her injury.

2.               Provide evidence as to the jobs, if any, he or she is qualified and trained to perform within the same salary range as his or her maximum wage earning capacity at the time of the injury.

3.               Demonstrate that the work related injury prevents the employee from performing jobs identified within his or her qualifications and training paying maximum wages.

4.               If the employee is capable of performing any of the jobs identified above, they must show that they cannot obtain those positions.

The Act requires a showing of a good-faith effort to procure post-injury employment on the part of the employee.

The burden then shifts to the defense to refute the employee’s testimony. Therefore, the Act now provides a right of discovery to the employer “if necessary for the employer to sustain its burden and present a meaningful defense.”  The employee may then present additional rebuttal evidence.

Under § 301(8) of the new amendments, if the disability is partial, the employer is responsible for 80% of the difference between the after-tax AWW at the time of the injury and the employee’s “wage-earning capacity after the injury.”  In figuring this differential, we use the new definition that includes what the employee actually earns as well as what he or she is capable of earning.

Police/Firefighters Exception - the wage-earning capacity standard is different for police and firefighters under § 302.  It omits the language contained within § 301 that defines wage-earning capacity as the capability of earning wages “whether or not actually earned.”  We will determine the full impact of that omission from the Michigan courts in the months and years ahead.

 

Aggravation of Pre-Existing Conditions

§ 301 adopted the language from the Rakestraw case relative to aggravation:

A personal injury under this Act is compensable if work causes, contributes to or aggravates pathology in a manner so as to create a pathology that is medically distinguishable from any pathology that existed prior to the injury.

 

Prior to the amendments mental disabilities and conditions of the aging process, including heart and cardiovascular conditions were the only conditions or injuries that were subject to the “significant manner” test. The amendments have added the term “degenerative arthritis” as a condition of the aging process subject to this additional standard of proof. This is a significant change which could have a major impact on cases as we deal with an aging workforce.

Mental disabilities were further defined with the addition of the following language:

…and if the employee’s perception of the actual events is reasonably grounded in fact or reality.

 

We expect the new language requiring perceptions to be “reasonably grounded in fact or reality” will be further clarified by the Michigan courts in the coming years.

Favored Work

          The 2011 amendments state in 301(9) (b) “If an employee is terminated from reasonable employment for fault of the employee, the employee is considered to have voluntarily removed himself/herself from the work force and is not entitled to any wage loss benefits under the act.” It appears from this language that the forfeiture of wage loss benefits is permanent. Please note that medical and other benefits are not forfeited, only “wage loss” benefits. Reasonable medical care is still required.

If the employee after being employed doing “favored or accommodated” work loses his/her job through no fault of the employee and if the employee is still disabled they are then entitled to benefits as follows: if the favored work was less than 100 weeks then you are required to reinstate wage loss benefits. If the favored work lasted longer than 100 weeks but less than 250 weeks the 2011 amendments state that the employee must first exhaust their unemployment benefits and then there is a rebuttable presumption that they have established a new wage earning capacity. Benefits are to be reinstated but based upon the new wage earning capacity and not the original wage at date of injury. The burden is upon the employee to file a petition to prove that he/she has not established a new wage earning capacity. Note that this is a complete switch of the burden from the prior law. As indicated above under the prior law if the favored work was for less than 100 weeks the presumption was that the employee had not established a new wage earning capacity and the employer had the burden of going forward with proof that a new wage earning capacity had been established.

If the favored work is for more than 250 weeks there is a presumption that a new wage earning capacity has been established. It appears from the language of the new amendments that this presumption is “non- rebuttable”. 

These are significant changes from the old law relative to favored work. Before the 2011 amendments fault was not a factor in less than 100 week cases and the act stated benefits “shall” be reinstated. Now that is true only if the employee was not at fault in losing his/her job. Under the old law the rebuttable presumption was that a new wage earning capacity had not been established and the burden was on the employer to prove otherwise. Under the 2011 amendments the reverse is true.

Medical Care and Treatment

§ 315 Allows the employer/carrier to direct treatment for 28 days “from the inception of medical care.”  As in the prior act, there is a provision which allows the employer/carrier to file a Petition with the Board of Magistrates objecting to the employee’s choice of physician “for cause.”  The Magistrate will have the power to order treatment discontinued if “good cause” is shown. This type of hearing should have “60 day” rush status.

Rehabilitation Hearings

Rehabilitation hearing determinations will now be appealed directly to the appellate commission as opposed to the Board of Magistrates. This means that future rehabilitation hearings will need to be conducted “on the record.”

Dependency and Coordination

The amendments have removed the “conclusive presumption” that an injured employee’s wife is a dependent.  Also, if an employee is already receiving old-age social security benefits at the time an injury occurs, the coordinated social security reduction under § 354 cannot lower the weekly workers’ compensation rate below 50% of the full benefit rate that would be in place if the individual was not on social security.  The employer may take a credit for old-age social security or pension benefits regardless of whether the employee is receiving those benefits.  However, they cannot be forced to apply for a pension or old-age social security.

Specific Loss/Trammel

One final significant amendment considered specific loss benefits and the standards outlined by the recent decision in Trammel v Consumers Energy. The amendments state that the effect of the joint replacement “shall be considered” is determining whether a specific loss has occurred.  Under Trammel, the standard revolved around the “pre-corrected” state.  It is not retroactive and all pending cases will be evaluated under the old Cain II standard.

Miscellaneous

The inconsistencies between Chapter 3 and Chapter 4 have been eliminated.

There were several amendments to the section covering professional athletes. Basically, these changes prohibit the filing of petitions in multiple states.

There were some final administrative changes regarding subpoenas, redemption hearings and mediation that are still being developed.  We expect guidance from the Agency and/or publication of new rules on how these procedural changes will be implemented. Mediation will be eliminated and the mediators transferred.  Future mediations will be conducted by a Magistrate.

Please note: The firm is in the process of revising our desk manual and an updated version including the 2011 amendments will be available in the near future. If you are interested in receiving a copy of this 85 +page manual please email us at:

firm@micompdefense.com 

Michigan Workers’ Disability Compensation Guidelines

Charfoos Reiter Hébert, P.C.

 30500 Northwestern Hwy, Suite 450

Farmington Hills, Michigan  48334-3177

Telephone: (248) 626-7300

A Charter Member of NWCDN

For a copy of our comprehensive desk manual:    e-mail: firm@micompdefense.com

 

TIME LIMITS AND REPORTING REQUIREMENTS:

Employer’s Basic Report of Injury - Form WC-100: An employer/carrier shall report immediately to the Agency on Form WC-100 all injuries, including diseases, which arise out of and in the course of the employment, or on which a claim is made and results in any of the following: (a) Disability extending beyond seven (7) consecutive days, not including the date of injury; (b) Death; (c) Specific losses.  In case of death, an employer shall also immediately file an additional report on WC-106. This form may be downloaded at: http://www.michigan.gov/documents/wca_WC-100__fillin_121830_7.pdf

 

Notice of Dispute - Form WC-107:  In all cases where the right to benefits is disputed, the employer/carrier shall report to the Agency on or before the fourteenth day after the employer has notice or knowledge of injury or death on Notice of Dispute Form 107.

 

Report on Rehabilitation - Form WC-110:  Reports are due three months from date of injury where indemnity benefits are being paid and every 4 months thereafter.  All reports are to be accompanied by a current medical report. This Form is available at: http://www.michigan.gov/documents/wca_WC-110_fillin_122029_7.pdf

 

Medical Treatment:  The employer/carrier has the right to direct medical care for 28 days “from the inception of medical care.” Note: Medical bill reimbursement to worker should be made within 30 days after notice or penalty may apply.*

 

Notice of Compensation Payments – Form WC-107:  This form is used to report to the Agency payment of weekly compensation benefits made to the employee.  A copy of the Form and additional instructions are available at: http://www.michigan.gov/wca/0,4682,7-191-26917-41039--,00.html

 

WEEKLY WAGE LOSS BENEFITS: Due and payable on the 14th day.  Note: Penalty may apply if over 30 days late.*

 

The weekly compensation rate is determined by establishing the Average Weekly Wage (AWW) and the number of dependents.

 

The AWW is the average of the highest 39 weeks of the 52 weeks immediately preceding the date of injury.  If there are less than 39 weeks worked, the wage is determined by calculating the average of those “weeks in which work [was] performed.”

 

This formula is correct unless there are “special circumstances.”  Consult the Michigan Workers’ Compensation Agency’s website for a complete rate chart at:

http://www.michigan.gov/documents/wca/wca_2012_Rate_Book_369620_7.pdf

 

Year      Max Rate   2/3 State AWW    50% SAWW     25%

 2012    $775.00        $573.56            $430.17      $215.09

 2011    $742.00        $548.90            $411.68      $205.84

 2010    $746.00        $552.49            $414.37      $207.18

 2009    $752.00        $556.53            $417.40      $208.70

 

Note: If fringe benefits are discontinued, the employer’s cost of those fringe benefits must be added to the AWW if the claimant’s compensation rate is less than 2/3 of the State Average Weekly Wage (SAWW).  50% of the SAWW is the minimum benefit for death cases.  25% of the SAWW is the minimum benefit payable for specific loss and total and permanent disability benefits.  

 

MILEAGE REIMBURSEMENT RATE:

 

Mileage is to be reimbursed to the claimant for all medical related travel expenses.  As of 10/1/11, the reimbursable rate is .555 per mile.  For a complete mileage rate chart see:

http://www.michigan.gov/documents/wca/Travel_Reimbursement

 

*See Section 418.801 for all penalty provisions

DEFINITION OF DISABILITY/WAGE EARNING CAPACITY:

 

MCL 418.301(4)(b) states “wage-earning capacity” means the wages an employee “is capable of earning” at a job reasonably available to him or her.  As of 12/19/2011, the legislature added language “…whether or not wages are actually earned.”  The amendments place an affirmative duty on the employee to seek work that is reasonably available and that a Magistrate may consider a good faith job search in determining that availability.  For injuries on or after 12/19/2011 an employee must:

 

1.                Disclose his/her qualifications and training, including education, skills and experiences, whether or not they are relevant to the job the employee was performing at the time of his or her injury.

2.                Provide evidence as to the jobs, if any, he or she is qualified and trained to perform within the same salary range as his or her maximum wage earning capacity at the time of the injury.

3.                Demonstrate that the work related injury prevents the employee from performing jobs identified within his or her qualifications and training paying maximum wages.

4.                If the employee is capable of performing any of the jobs identified above, they must show that they cannot obtain those positions.

 

AGGRAVATION OF PRE-EXISTING CONDITIONS:

 

A personal injury under the Michigan Workers’ Disability Compensation Act is compensable if work causes, contributes to or aggravates pathology in a manner so as to create a pathology that is medically distinguishable from any pathology that existed prior to the injury.  As to mental disabilities and conditions of the aging process (and degenerative arthritis as of the amendments in place effective 12/19/2011), the claimant must show that the condition was aggravated in a significant manner.

 

MENTAL DISABILITIES:

 

Mental disabilities must be based on actual events of employment and the employee’s perception of which must be reasonably grounded in fact or reality.  The employment event must aggravate or cause the mental disability in a “significant manner.”  MCL 418.301(2).

 

FAVORED OR ACCOMODATED WORK:

 

During the first 100 weeks of favored work, if the employee loses his or her job through “no fault of the employee,” he or she shall be entitled to weekly benefits at the original rate.  If the employee is terminated as a result of his or her fault, benefits may be terminated.  After 100 weeks of favored work, there is a presumption that the employee has established a new wage earning capacity.  After 250 weeks of subsequent employment, that presumption is conclusive.

 

COORDINATION OF BENEFITS:

 

Old-Age Social Security benefits (50% of monthly benefit amount) and regular pension benefits may be coordinated against wage loss benefits.  Under certain circumstances, disability pensions may be coordinated.  The claimant is required to provide a release of information form and/or proof of application and award letter.

 

If the employer provides disability benefits to the claimant, those benefits can also be coordinated against the workers’ compensation wage loss liability.  See MCL 418.354.  There is a special method of calculating the amount of the benefit to be coordinated.  This program can also be found in the Agency’s website at:

www.michigan.gov/wca.

 

INTENTIONAL MISCONDUCT:

 

Michigan bars receipt of benefits when the employee is injured as a result of his or her intentional misconduct.

 

INDEPENDENT CONTRACTORS:

 

As of January 1, 2013, the Michigan law on independent contractors will be controlled by the 20-factor test used by the IRS.  (Revenue Ruling 87-41, 1C.B. 296).  One of the provisions states that an individual will be considered an employee if federal income tax was withheld from his/her pay.

 

For additional information on

Charfoos Reiter Hébert, P.C.

Visit our web page at: www.michigancompdefense.com

 

© Charfoos Reiter Hébert, P.C. March 1, 2012

August 17, 2011

 

Dan Hébert and Jim Ranta recently conducted two “in-house” seminars for clients in Indianapolis, Indiana.  Dan noted that with the centralization of claims handling he spends quite a bit of time doing in-house or mini seminars for clients in various parts of the country.  It not only gives him a chance to get out of the office but also to meet clients personally on a one on one basis. 

Jim Reiter was recently re-appointed as the liaison to the Workers’ Compensation Committee for the American Bar Associations Labor & Employment Law Section.  Additionally Jim continues to serve on the Board of Governors of the College of Workers’ Compensation Lawyers and on the Executive Committee for the National Workers’ Compensation Defense Network.

Earlier this summer Dan Hébert was privileged to serve on a panel addressing the issue of _Integration of Claims Handling/Litigation from the Employer to the TPA to the Attorney in front of the Michigan Self-Insured Association at their annual meeting in Traverse City, Michigan.

If you are interested in an on-site “in-house” seminar please feel free to contact any attorney in the firm. 

Charfoos Reiter Hébert

www.michigancompdefense.com

 

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