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  • December 15, 2016

    Worker's Comp Refresher for the Casual Practitioner

    Beth Osowski gives a quick update and refresher for lawyers who occasionally face worker’s compensation questions and who practice in the areas of personal injury, employment law, Social Security Disability, or general practice.

    Beth D. Osowski

    smiling industrial worker

    Dec. 15, 2016 – Over the last few years, many sweeping changes were proposed and discussed that would have completely overhauled Wisconsin's worker's compensation system. The changes that were ultimately signed into law were perhaps somewhat less monumental, but still significant.

    Recent Key Statutory Changes

    As of March 2, 2016,1 Wisconsin practitioners faced the following key changes to the worker's compensation laws:

    1. Wis. Stat. section 102.17(4) reduced the statute of limitation for traumatic work injuries from 12 years from the date of injury (or last indemnity payment) down to six years. The statute of limitation for occupational injuries remains at 12 years.

    2. Wis. Stat. section 102.43(9)(e) now provides an exception for payment of temporary total disability (TTD) if the employee was suspended or terminated due to the employee's “misconduct” or “substantial fault” connected to the employee's work during the healing period. This statute specifically adopted the definitions of those terms from the unemployment insurance statute, Wis. Stat. section 108.04.

    3. Wis. Stat. section 102.58 was amended, permitting a total forfeiture of benefits (rather than the prior 15 percent decrease up to a maximum of $15,000) if the employee's violation of the employer's drug or alcohol policy caused the injury.

    4. Wis. Stat. section 102.175(3) now permits a finding that a percentage of the employee's permanent disability following a traumatic injury was attributable to factors other than the work trauma. “The employer shall be liable only for the percentage of permanent disability that was caused by the accidental injury.”

    5. Wis. Stat. section 102.18(1)(b)1 now permits judges to award future benefits for vocational training before the employee starts the course of retraining.

    6. Wis. Stat. section 102.44(4m) requires the Department of Workforce Development (DWD) to create a medical advisory committee to review and revise the minimum permanent partial disability (PPD) ratings every eight years “to reflect advances in the science of medicine.”

    Since, presumably, these significant changes will first apply to injuries occurring on or after March 2, 2016, it is still too early to see the impact of the changes on injured workers, employers, and the insurance companies.

    Beth D. Osowski Beth D. Osowski, North Dakota 1994, primarily practices in the areas of personal injury, worker’s compensation, and civil litigation at Kindt Phillips SC, Oshkosh.

    However, the legislature has also dictated procedural changes now in effect for nearly a year, which are not determined by a date of injury. Prior to Jan. 1, 2016,2 worker's compensation administrative and adjudicative functions were both handled by the DWD. Now, the DWD (or Department) handles the administrative functions, and the Department of Administration's Division of Hearings and Appeals (DHA or Division) takes care of the adjudicative functions.

    Thus, hearing applications are filed with the DWD, but later documents are to be filed with the DHA; it is the DWD that approves compromise agreements in non-litigated cases, while the DHA issues orders for litigated cases.3

    Key Reminders and Citations

    Many of us who do not regularly practice in the worker's compensation field still work on cases with worker's compensation implications. Most of us are also employees and/or employers. We all have neighbors.

    The following are some key reminders and citations for those occasions:

    1. Worker's compensation is typically the exclusive remedy for an employee making a claim against the employer or co-employee for a work injury.4 This similarly bars suits against the employers to whom an employee was loaned.5

    2. There are some exceptions to the “exclusive remedy” rule, including for intentional assaults,6 for injuries due to the negligent operation of a motor vehicle that is not owned or leased by the employer,7 and when the employer acted in a manner that was distinct from its position as an employer.8 When there is a dispute as to whether worker's compensation is the exclusive remedy, the employee's acceptance of those benefits may bar a later negligence claim.9

    3. Employees may be considered to be within the course of their employment more often than some may think. Consider the possibilities that worker's compensation laws might apply when the employee was injured in the work parking lot,10 engaged in a recreational event off the premises,11 while working at home,12 and when doing acts necessary for living while on a trip for work.13

    4. Many times, worker's compensation payments are smaller than a typical tort recovery due to tort claims for pain and suffering, loss of consortium, future vocational losses due to limb injuries, and as a result of the Collateral Source Rule. However, there are times when injured workers may prefer worker's compensation recoveries – such as when there was significant contributory negligence, when statutory minimum PPD payments following a successful surgery are involved, when the worker was also suffering from a relevant pre-existing “occupational disease,” and when lengthy vocational retraining is appropriate.

    5. While the worker's compensation statutes of limitation are significantly longer than for tort cases, the worker's compensation statutes do contain additional notice requirements.14

    6. While tort settlements are typically “full and final,” many worker's compensation settlements are limited to some degree – giving parties much greater flexibility in dealing with Medicare and the unsettled future.

    7. It is not unusual for worker's compensation adjusters who have denied a claim after making payment for some medical bills to ask for the medical providers to repay the funds that were paid under a “mistake of fact.” For some reason, the medical providers often agree to do so. Those bills may go from paid to unpaid to a collection agency in very short order. To get a health insurer to then make payment, it is often necessary to first share the worker's compensation denial and then convince the provider to resubmit the bills to that insurer.

    8. While Wisconsin worker's compensation statutes generally permit injured workers to choose their own medical providers, their health insurance companies may not. Even if worker's compensation is currently paying the bills, the injured workers should jump through all the hoops their own health insurers require in the event the claim is denied down the road.

    9. When it comes to Social Security payments, Wisconsin is a “reverse offset” state. As a result, SSDI payments may permit the worker's compensation carrier to reduce its indemnity payments to the injured worker.

    10. When an injured worker receives worker's compensation benefits and also has a tort claim against a third-party (i.e., non-employer or co-employee), Wis. Stat. section 102.29(1) and the cases interpreting that statute provide much guidance:

      a. Both the injured employee and the insurance carrier have the right to bring the claim. If either one decides to sue, they must give the other notice and an opportunity to join in the action.15

      b. Settlements must be approved by the court of record. If there is no action pending, then the Department or any court of record may approve the settlement.16

      c. The employee and the worker's compensation insurer have an “equal voice in the prosecution of the claim.”17 Thus, a court could compel an employee to accept a third-party settlement upon the request of the insurer.18

      d. The statute also provides the settlement distribution formula to follow.19 Basically, attorney fees20 and costs are first deducted from the settlement and then the plaintiff receives one-third of the balance. The worker's compensation carrier is reimbursed from the remaining funds. If there are funds remaining after the carrier has been fully reimbursed, the balance, or “cushion,” goes to the employee but is used as a set-off for any further liability in the compensation case. All parties may agree to apply an alternate distribution formula.

      e. While Wis. Stats section 632.32(5)(i)2 permits uninsured and underinsured motorist carriers (UM and UIM) to reduce payments by amounts paid/payable under worker's compensation, section 102.29(1)(a) specifically only applies to tort actions; it does not apply to UIM and UM payments. Thus, there is also no need to repay the worker's compensation insurer from a UIM or UM settlement, because those are contract claims.21 Similarly, the carrier may not share in awards for legal malpractice22 or loss of consortium,23 and the carrier may not recover its penalty payments (such as for bad faith).24

      f. When an injured worker is simultaneously pursuing a worker's compensation claim and a third-party case, worker's compensation adjusters routinely push forward with “independent” medical exams (IMEs) and other efforts to reduce the worker's benefits. Sometimes a quick reminder that such actions may hurt the ultimate third-party action (and that carrier's own recovery) is sufficient to get a more cooperative adjuster.

    While not every personal injury or employment lawyer (or helpful neighbor) needs to understand all the complexities of Wisconsin's worker's compensation laws, it is always good to be able to recognize the issues when they present themselves.

    This article was originally published on the State Bar of Wisconsin’s Litigation Section Blog. Visit the State Bar Sections or the Litigation Section’s web pages to learn more about the benefits of section membership.


    1 See 2016 Wisconsin Act 180, published on March 1, 2016.

    2 See 2015 Wisconsin Act 55 (the Budget Act), signed July 12, 2015, and effective January 1, 2016.

    3 Please see Luke Kingree's September 2016 presentation on the “Recent Organization of the DOA” at the 40th Annual Worker's Compensation Update for a more thorough discussion of these procedural changes.

    4 Wis. Stat. §102.03(2).

    5 Wis. Stat. §102.29(7).

    6 Wis. Stat. §102.03(2).

    7 Wis. Stat. §102.03(2).

    8 Henning v. General Motors Assembly Div., 143 Wis. 2d 1, 419 N.W.2d 551 (1988).

    9 Martine v. Williams, 2011 WI App 68, 333 Wis. 2d 203, 799 N.W.2d 449.

    10 American Motors Corp. v. Industrial Comm'n, 18 Wis. 2d 246, 118 N.W.2d 181 (1962).

    11 Continental Cas. Co. v. Industrial Comm'n, 26 Wis. 2d 470, 132 N.W.2d 584 (1965).

    12 Black River Dairy Products, Inc. v. DILHR, 58 Wis. 2d 537, 207 N.W.2d 65 (1973).

    13 City of Phillips v. DILHR, 56 Wis. 2d 569, 202 N.W.2d 249 (1972).

    14 See Wis. Stat. § 102.12.

    15 Wis. Stat. §102.29(1)(a).

    16 Wis. Stat. §102.29(1)(d).

    17 Wis. Stat. §102.29(1)(b).

    18 Adams v. Northland Equip. Co., Inc., 2014 WI 79, 356 Wis. 2d 529, 850 N.W.2d 272.

    19 Wis. Stat. §102.29(1)(b)1-3.

    20 If both the employee's attorney and the worker's compensation insurance carrier's attorney join in “pressing” the claim, then fees for both may be included here. Wis. Stat. §102.29(1)(c).

    21 Berna-Mork v. Jones, 174 Wis. 2d 645, 498 N.W.2d 221 (1993).

    22 Smith v. Long, 178 Wis. 2d 797, 505 N.W.2d 429 (Ct. App. 1993).

    23 DeMeulenaere v. Transport Insurance Co., 116 Wis. 2d 322, 342 N.W.2d 56 (Ct. App. 1983).

    24 Wis. Stat. §102.29(1)(b)2.

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    Litigation Section Blog is published by the State Bar of Wisconsin; blog posts are written by section members. To contribute to this blog, contact Matthew Lein and Heather L. Nelson and review Author Submission Guidelines. Learn more about the Litigation Section or become a member.

    Disclaimer: Views presented in blog posts are those of the blog post authors, not necessarily those of the Section or the State Bar of Wisconsin. Due to the rapidly changing nature of law and our reliance on information provided by outside sources, the State Bar of Wisconsin makes no warranty or guarantee concerning the accuracy or completeness of this content.

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