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What’s the Alternative?

Weighing the benefits and risks of return-to-work programs.

February 13, 2019 Photo

Workers compensation cases can involve a wide range of injuries, from simple sprains or strains to more serious injuries that require surgical intervention. Often, following a period of home recovery, injured workers are permitted by their treating physicians to return to work on “light” or “modified” duty for a period prior to returning to their pre-injury positions.

Treating physicians have found that transitional periods of light or modified duty can have significant benefits to injured workers’ long-term recovery, both in speed and overall success rate. However, while the concept of light duty is beneficial in theory, it has not always been a realistic option for workers. Due to the lack of light-duty positions traditionally offered by employers, some injured workers return to work after unfulfilled orders of “light duty,” only to sustain another work injury because they resume their old duties too quickly or without a transition back to full duty. To avoid this problem, employers would pay workers for lost wages until released to return to full-time duty.

Employers that do not have any available light-duty positions are increasingly implementing alternative return-to-work programs where the injured workers are placed with an outside organization, such as a non-profit or charity, and paid their regular wages until they are released to return to their original positions. Such an arrangement could help get workers back on their feet quicker and may even speed up the healing process by working in conjunction with, or as an alternative to, physical therapy to utilize and strengthen the injured body parts in controlled environments.

Naturally, many employers are hesitant to pay their employees to work elsewhere, especially when there are no obvious tangible benefits to doing so. But the consequences of failing to provide an alternative light-duty program could be significant. History has shown that keeping employees out of work altogether for longer periods of time is more likely to result in those employees never returning. By getting employees back to work sooner, even if not for the employers themselves, employers improve the chances that their employees will recover faster and ultimately return to their original positions.

What’s more, alternative return-to-work programs can actually result in cost savings for employers. If an injured worker was making less than the state-indemnity minimum and is assigned to light or “transitional” duty at a non-profit, the employer can stop making indemnity payments (for total disability) under the workers compensation claim and only pay the worker’s original wages/salary. For example, in New Jersey, the minimum indemnity rate was $241 per week in 2018. That means that if the injured worker’s average weekly wage (AWW) was $344.29 or less, she would be entitled to at least $241/week. So, even if the injured worker’s AWW was $100 per week, she would still be entitled to $241/week. In this scenario, the employer saves by continuing to pay the regular salary.

Many other states have similar minimum indemnity rates, including Delaware, Massachusetts, New Hampshire, and Virginia. Employers should also keep in mind that if an injured worker would make more money through indemnity payments than her own wages, then the worker would have an appealing financial incentive to stay out of work for as long as possible.

Alternative return-to-work programs are also helpful for states that require employers to pay temporary partial disability (TPD) benefits. In states such as Florida, an injured worker is entitled to temporary partial disability (TPD) benefits when released to light duty work status. If the worker returns to work but earns less than 80 percent of the AWW, she would receive benefits equal to 80 percent of the difference between 80 percent of the AWW and the weekly salary the worker is currently earning. Therefore, if the worker’s AWW is $1,000, and the light-duty position only pays $100 per week, then the weekly TPD benefit would be $560. If the injured worker’s light duty status could not be accommodated, she would be entitled to 66.66 percent of the AWW. In applying it to the above example, then the injured worker would receive $666.66 per week without returning to work.

Although alternative return-to-work programs have been gaining some traction in certain fields, some employers are reluctant to provide them due to certain states’ workers compensation laws. For instance, in Pennsylvania, injured workers are entitled to the full indemnity rate if their employers are unable to accommodate a light duty work status. Therefore, rather than paying the AWW, the employer would only have to pay the indemnity rate, which can range between 66.66 percent and 90 percent, depending on the AWW.

Furthermore, many employers prefer onsite return-to-work programs, which would bolster their own workforce by reducing overtime pay, pay for temporary help, absenteeism, and other disability costs. A situation some employers prefer to avoid is the possibility that the injured worker may get re-injured while working at an alternative program. Employers may feel that they have more stringent safety protocols in place to avert or diminish the risk of workplace injuries at their locations. Moreover, employers may be uncomfortable with their lack of control over the protocols at a non-profit. And, if an injury does occur while an injured worker is working at a non-profit, other complex issues may arise, such as the question of who the employer is for purposes of a subsequent workers compensation claim, as well as whether the other entity would be exposed to a third-party claim.

In weighing the pros and the cons of alternative return-to-work programs, employers should first discuss this option with counsel to determine the benefits and implications in their specific contexts. If such a program is already in place, clarity as to the employer/employee relationship should be addressed upfront and communicated as part of the employer’s return-to-work policy, and communicated again to each injured worker at the time of the assignment to a non-profit.

The workers compensation claims professional and assigned defense counsel should always be kept in the loop throughout the duration of the alternative return-to-work arrangement. It may be advisable to seek counsel when any questions/issues arise as to the employment relationship or the alleged injury aggravation or new injuries sustained while working the assignment.

As with traditional early return-to-work programs on the employer’s premises, alternative job placement opportunities provide a viable and sustainable way for employers to control their workers compensation claim costs (lowered indemnity claim counts, reduced indemnity benefits paid, and reduced physical therapy costs with less number of visits required) while simultaneously improving the employment relationship (income stability for injured workers, quicker recovery period, and greater success of returning the injured worker to the pre-injury state). It is truly a win-win for employer and employee alike.

About The Authors
Multiple Contributors
Kiara K. Hartwell

Kiara K. Hartwell is an attorney in the workers' compensation department at Marshall Dennehey Warner Coleman & Goggin. kkhartwell@mdwcg.com

Shirley Hinton

Shirley Hinton is manager of workers compensation at National DCP.  shirley.hinton@natdcp.com

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