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Reduce the Risk of a Workers’ Compensation Dispute

Published on 7/9/2015 12:00:00 AM
reduce risk of workers compensation dispute

​Three Cases with Valuable Lessons

Workers’ compensation provides medical and wage benefits to employees who experience a work-related injury or illness. Under most circumstances, the system works on a “no fault” basis, where the employer provides the benefits regardless of who was to blame for the incident. Sounds simple, right?

Like most compliance matters, it’s anything but. Determining what constitutes a legitimate work-related injury or illness can get fuzzy, as can the conditions in which an employee is entitled to workers’ compensation benefits. As a result, employers may find themselves defending a particular workers’ compensation claim they feel is unwarranted – or in more extreme situations, having their decision overturned in court.

Let’s review three particularly interesting cases – and the important takeaways for employers:

In Munson v. Wilmar/Interline Brands, a Minnesota court awarded benefits to a sales representative who, while working from his home office, was injured when he took a coffee break and fell down a set of stairs. Although the employee fractured his vertebrae and required surgery, the employer and insurer denied the claim. The court, on the other hand, applied the “personal comfort” doctrine, pointing out that the individual was working shortly before he took his break, was conducting tasks required by his employer, and did not engage in dangerous or risky behavior when he went to get coffee. As a result, he was entitled to workers’ compensation benefits.

Lesson learned: An employee injury or illness is eligible for workers’ compensation if it “arises out of and in the course of employment, regardless of the location the injury occurs.” In the case of a remote worker or telecommuter, the coverage typically applies as long as the individual was injured while working. Although you can’t control every aspect of an individual’s home-based work environment (or know exactly what happened with a particular injury, since witnesses are unlikely), you’re still responsible for providing the same safe work environment for telecommuters as for employees working on company property. For this reason, you should create a telecommuting policy that outlines your expectations, limit telecommuting to individuals who work responsibly under limited supervision, and establish guidelines for a productive and ergonomically sound home office.
Out-of-state boundaries
The Supreme Court of Kentucky dismissed a workers’ compensation claim involving a worker’s out-of-state injury due to lack of jurisdiction to hear the claim. In this particular case, the Kentucky truck driver received an application from Rhode Island, which he completed and, after being hired, traveled to Rhode Island to finish paperwork, take a drug test and choose a truck. Since the Kentucky court determined that the contract for hire was made in Rhode Island, it was not obligated to hear the claim for an injury that was also outside state boundaries.

Lesson learned: Workers’ compensation coverage can be challenging when an employer is located in one state but hires interstate employees or conducts business in other states – a common scenario in the trucking industry. A concept called “extraterritorial coverage” often comes into play, where benefits are extended to workers who are hired in one state but injured while working in another state.
This varies by state, however, and each jurisdiction has specific conditions in which this coverage applies, including the maximum amount of time an employee can spend outside the state of hire and still file a claim there. As an employer, you need to be aware of your state’s requirements and how coverage applies to employees temporarily working in other states.
Business-related social functions
In Evans v. Hendrick Automotive Group, a North Carolina appellate court upheld the state Industrial Commission’s decision to award extensive workers’ compensation benefits to an office manager who fell and sustained serious injuries while trying to ride an escalator railing. The manager worked in Texas but had traveled to Charlotte, NC to attend a four-day sales meeting. The incident occurred after a company-sponsored gathering of dinner and drinks and while the office manager was walking back to her hotel. The employer disputed the claim, asserting that the injury occurred during a “deviation from employment,” but the North Carolina court held the claim was viable based on the rule that a traveling employee will be compensated for injuries while returning to his or her hotel.

Lesson learned: While it would seem that many strikes were against this employee and her claim (horseplay, under the influence of alcohol, socializing with her peers), most workers’ compensation coverage applies to traveling employees who are injured while returning to the hotel, while going to a restaurant, or while returning to work after a quick, personal side trip. Something else to keep in mind: Although most workers’ compensation claims involving intoxication are turned down, there is an exception when alcohol is supplied by the employer. Does your company host annual summer picnics or holiday parties involving alcohol? Be aware that you could be liable for an employee’s carelessness arising from intoxication
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Jaime Lizotte
Presented by: Jaime Lizotte,
HR Solutions Manager
Hiring, recordkeeping, time and attendance tracking, employee discipline, filing 1099 and W2s ... all of these tasks create overhead expenses and detract from revenue-generating activities.