Benefits and Compensation, HR Management & Compliance

Slippin’ Up: Does Pay Raise After Fall Preclude Disability Benefits?

The Arkansas Court of Appeals recently heard a claim from an injured employee who says he was entitled to permanent partial disability (PPD) benefits after a fall. Did the employee have a case?disability

Background

“Jason” was working as part-time seasonal help for Riceland Foods, Inc., on March 23, 2015, when he slipped off a rice pod (which he described as “like a big old mountain”) and fell 10 to 12 feet, landing on his buttocks. A coworker took Jason to the hospital, where it was determined that he had fractured his spine at the L1 vertebra and required surgery.

Jason was in the hospital for 5 days and in a rehabilitation hospital for another 3 weeks, and he required physical therapy after his accident. He testified at the July 1, 2016, hearing before an administrative law judge (ALJ) that he still had pain from the accident and required pain medication.

Jason’s injury wasn’t controverted (the employer did not contest it). On June 25, 2015, he was cleared to return to light-duty work with restrictions. His anatomical impairment resulting from the accident was evaluated on January 21, 2016, and a doctor concluded that he suffered a 19% whole-person impairment.

The ALJ accepted that rating and further concluded that Jason wasn’t entitled to PPD benefits in excess of the 19% because his pay was raised from $9.75 per hour to $10 per hour after he returned to work. The Workers’ Compensation Commission (WCC) adopted the ALJ’s opinion. Jason appealed.

Arkansas Court of Appeals’ Opinion

On appeal, Jason argued that the WCC erred in finding that he was currently employed at wages equal to or greater than his average weekly wage at the time of the accident and therefore erred in finding that he wasn’t entitled to PPD benefits in excess of the percentage of his permanent physical impairment.

The court explained that Arkansas Code Annotated Section 11-9-522 provides that when a permanent partial disability is apportioned to the body as a whole, the claimant shall be paid compensation for the proportionate loss of use. However, the statute gives the WCC discretion to increase the anatomical rating, and the commission can find a claimant totally and permanently disabled based on wage-loss factors. The court explained that the wage-loss factor is the extent to which a compensable injury has affected the claimant’s ability to earn a livelihood.

The WCC is charged with determining disability based on medical evidence and other matters affecting wage loss, such as the claimant’s age, education, and work experience. The statute goes on to provide, however:

[As] long as an employee, subsequent to his or her injury, has returned to work, has obtained other employment, or has a bona fide and reasonably obtainable offer to be employed at wages equal to or greater than his or her average weekly wage at the time of the accident, he or she shall not be entitled to permanent partial disability benefits in excess of the percentage of permanent physical impairment established by a preponderance of the medical testimony and evidence.

The ALJ concluded that Jason was precluded from additional wage-loss benefits under the statute because he had received a raise when he returned to Riceland on light-duty work. Jason argued that simply looking at his hourly rate didn’t paint the full picture. He argued that since the accident, he has been unable to work overtime or do odd jobs, and even though he got a raise, he was making less money than before.

Jason cited Cook v. Aluminum Company of America, an Arkansas Court of Appeals case, for the proposition that overtime should be included in the calculation when computing an average weekly wage. The issue on appeal in Cook was whether the employer met the statutory burden of proving the claimant had returned to work after the injury to wages equal to or greater than his average weekly wage at the time of the accident.

The court pointed out that the employee submitted evidence that he was making less money after his accident than he was before, and the difference was due to the fact that he was working less overtime after the accident than before. Because the employee did work some overtime when it was offered and because his hourly rate was the same before and after his injury, the court held that was substantial evidence to bar him from receiving benefits in excess of his permanent physical impairment.

In this case, Jason testified that he received a raise upon returning to work. Further, Riceland introduced documentation of the hours he worked and the wages he earned from August 2014 through May 27, 2016. The court pointed out the documentation showed that Jason had worked consistently since returning from his accident, including working a substantial amount of overtime. As a result, substantial evidence supported the ALJ’s findings that he wasn’t entitled to PPD benefits in excess of the percentage of his permanent physical impairment.

Bottom Line

This case serves as a good reminder that under Arkansas law, an injured employee who returns to work at the same or higher pay than he was earning before the injury isn’t entitled to PPD benefits in excess of the percentage of his permanent physical impairment.

In analyzing whether the employee is receiving the same or higher pay after the injury, the fact finder can consider the employee’s hourly rate as well as his ability to perform overtime work.

Steve Jones is an attorney Jack Nelson Jones & Bryant, P.A and an editor of the Arkansas Employment Law Letter. He can be reached at sjones@jacknelsonjones.com.