Sunday, November 13, 2011

Proposed Changes to Michigan's Workers' Compensation Law

Workers' compensation provides wage replacement, medical and rehabilitation benefits to men and women who are injured while at work.  It is essentially a no-fault system that requires an employer to compensate a worker for any injury suffered in the course of the worker's employment, regardless of who was at fault.

Interpretation of workers' compensation law has changed over the years because of contradicting Supreme Court decisions.  Michigan's current law is continually in flux because it is predicated on the whim of an ever-changing Supreme Court. Different judges have different viewpoints and interpretations. One of the most outrageous examples involved three different court decisions that changed the meaning of "disability."  This example, and many others, have only increased litigation and hindered job growth.

House Bill 5002 will stabilize and modernize Michigan's Workers' Compensation Act to rely less on judicial interpretations and more on clear, concise legal principles, and thus provide a more stable and fair workers' compensation law in Michigan, both for injured workers and state businesses.

Michigan businesses and the workers who are injured deserve to know exactly what to expect of our important workers' compensation law.  HB 5002 brings clarity and certainty to the process. Any confusion with our workers' compensation law means time and money for the state's job providers and a potentially unfair outcome for injured workers. The time is now to reform this outdated law and help bring Michigan into the 21st century.

Our current workers' compensation law tries to apply 19th century language in a 21st century world.  Michigan needs an updated workers' compensation law that has relevance for today, not yesteryear. Our current workers' compensation law does not take into account the huge medical advances that have occurred over the past few decades, which has bogged down the system.  For example, knee replacements simply aren't discussed under current law, so each example of this type of surgery requires legal evaluation of the knee as if the implant was not even there.

HB 5002 was passed by the Michigan House of Representatives, and as of this writing (11/13/11) has been referred to a Senate Committee. One of the more controversial provisions that will certainly be revisited in the Senate is the question of disability and wage loss. The bill attempts to create greater incentives for injured workers to get back to work as soon as possible, in the highest capacity the injury allows, as follows:

“Under the bill, a limitation of wage earning capacity would occur only if a personal injury covered under the Act resulted in the employee's being unable to perform all jobs paying the maximum wages in work suitable to his or her qualifications and training, including work that could be performed using the employee's transferable work skills.

The bill would define "wage earning capacity" as the wages the employee earns or is capable of earning at a job reasonable available to that employee, whether or not actually earned. For the purposes of establishing wage earning capacity, an employee would have an affirmative duty to seek work reasonably available to him or her. A magistrate could consider good-faith job search efforts to determine whether jobs were reasonably available.

To establish an initial showing of disability and wage loss, an employee would have to do all of the following:

· Disclose his or her qualifications and training, including education, skills, and experience, whether or not they were relevant to the job the employee was performing at the time of the injury.

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

· Demonstrate that the work-related injury presented the employee from performing jobs identified as within his or her qualifications and training that paid maximum wages.

· If the employee were capable of performing any of the identified jobs, show that he or she could not obtain any of them.

The last showing would have to include evidence of a good-faith attempt to procure post-injury employment if there were jobs at the employee's maximum wage earning capacity at the time of the injury.

Once an employee established an initial showing of disability and wage loss, the employer would bear the burden of producing evidence to refute the employee's showing. In satisfying this burden, the employer would have a right to discovery if necessary. The employee could present additional evidence to challenge the evidence presented by the employer.

The bill would define "wage loss" as the amount of wages lost due to a disability. Wage loss could be established, among other methods, by demonstrating the employee's reasonable, good-faith effort to procure work suitable to his or her wage earning capacity. The employee would have to establish a connection between a work injury and reduced wages in establishing the wage loss.” Senate Fiscal Agency Legislative Analysis for House Bill 5002 (Substitute H-2 as passed by the House) http://www.legislature.mi.gov/documents/2011-2012/billanalysis/Senate/pdf/2011-SFA-5002-S.pdf 

Opposition to the bill has used clever sound bites to characterize this as “yet another attack on workers”, but the intent is to create a more business friendly environment to attract and retain job providers, while at the same time, providing reasonable benefits to injured workers.

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