The Michigan Legislature recently passed a bill providing significant modifications to the Workers’ Compensation Act. The changes are widely considered to be of benefit to Michigan employers. Among the most substantial of the changes passed is a codification of the earlier Supreme Court ruling Stokes v. Chrysler, L.L.C. A plaintiff has the burden of proving disability. Disability is defined as a limitation of an employee’s wage earning capacity in work suitable to her or her qualifications and training resulting from a work-related injury or disease. The Act essentially sets forth a multi-step test which plaintiffs must meet to establish disability:

1. Plaintiff must disclose prior qualifications and training, which include educational skills, experience and training;

2. Plaintiff must consider other jobs that pay his/her maximum pre-injury wage to which Plaintiff’s qualifications and training translate;

3. Plaintiff must be able to establish that the work injury prevents the performance of any of the jobs identified as being within his/her qualifications and training;

4. If Plaintiff is capable of performing some or all of those jobs, Plaintiff must show he/she cannot obtain any of those jobs;

5. Plaintiff must make a good faith attempt to procure post-injury employment if there are jobs that he/she is qualified to perform and Plaintiff’s work-related injury does not preclude performance.

A plaintiff is required to demonstrate a good faith effort to obtain employment and present proof that the injury would preclude the type of duties which any of the available jobs would require. Once the plaintiff establishes all of the above factors, the defendant may then offer evidence which tends to refute plaintiff’s demonstration of a good faith effort. These proofs generally require the use of a vocational rehabilitation expert to perform an assessment with job search activities. The vocational expert then provides testimony regarding the plaintiff’s wage earning capacity and job availability. Wage loss is defined as the amount of wages lost due to a disability. A plaintiff is required to establish a connection between disability and the wage loss.

The Act now takes a step beyond the original Stokes ruling, and addresses the situation in which jobs are available within the plaintiff’s education, qualification and training that pay less than the “maximum wage.” Thus, the plaintiff must show a good faith attempt to secure any employment within his or her physical capabilities, even jobs which pay less than what the plaintiff previously earned. Similarly, the defendant can present evidence of available jobs earning lower wages as evidence the Plaintiff retains a partial wage earning capacity. If the magistrate accepts evidence the plaintiff retains a partial wage earning capacity, his/her entitlement to benefits will be reduced accordingly.

The new provisions of the Workers’ Compensation Act discussing a partial wage earning capacity are of importance. Claims which have been accepted as compensable should be evaluated to determine whether the claimant has a disability, and whether that disability is total or partial. If the disability is only partial, the changes in the Act may provide a significant reduction in exposure. Evaluation of a claimant’s residual wage earning capacity should be considered in light of the circumstances of each case.

At Grzanka Grit McDonald, we remain available to discuss with you the changes in the Michigan Workers’ Compensation Act on either a general or a case by case basis. Please contact us for a consultation.

Mr. Grit will be one of three presenters giving expert guidance at three of the Michigan Chamber of Commerce seminars entitled Disability in the Workplace: FMLA, ADA and Workers’ Comp, March 27, 28 and 29. Does your company have a comprehensive disability compliance policy? Do you know your company’s damage exposure in the FMLA? These are just a few of the topics for discussion at this broad but detailed, day-long workshop designed for businesses people who need the straight facts on complex regulations. The sessions will be offered to chamber members in the Detroit area, Lansing, and Grand Rapids.

To register for one of these sessions, follow this REGISTRATION link.

• Which employees are eligible for protection
• Employer accommodation required or allowed
• What are the limitations on time off work
• What advance notice must employees give for protection
• Required and allowed compensation of employees during leave
• Job, pay, benefits that apply to employees returning from leave
• How reduction-in-force, reorganization, and other business changes impact protected employees
• Employer’s damage exposure
• Record-keeping and posting requirements
• Reasons for leave
• Update on definition of serious health condition
• Update on employer notices
• Applicable rules on certification, recertification, and fitness-for-duty certification

For additional reference, you are also welcome to download the full Amended_WC_Act, dated Dec. 19, 2011. (download size 2.5 MB). If you’d like to print out a copy of our summary, download this PDF: WC Act Changes Memo.

1. MEDIATORS (Section 223)

Section 223 of the Act was deleted, which had called for the mediation of claims and the establishment of mediators to handle smaller matters. Normally smaller claims, medical bill disputes and claims involving employees proceeding without benefit of counsel, were initially handled through the mediation process. On minor claims it was not uncommon for the adjuster to deal directly with the mediator and the employee in the initial stages.

Practical Application

The elimination of the mediators and mediation process will likely result in a minor increase in smaller claims being filed by way of Application going directly to the magistrate level. Therefore, once any such minor claims are identified, counsel should be informed as quickly as possible so steps can be taken to attempt to resolve the issue prior to engaging in extensive and protracted litigation at the hearing level. By taking such proactive steps, the employer/ carrier can continue to resolve these claims as quickly as possible without extensive expense.

The Agency has indicated it will utilize Directors and initially screen out cases where the employer is uninsured or the employee is not represented by counsel. These cases will be handled telephonically with the Director making contact with the parties. Therefore, situations may arise where your employer/insured may be contacted directly where the employee is not represented and coverage issues exist. If any direct contact is made with your employer/insured by the Director, counsel should be informed immediately so appropriate action can be taken.

2. ELIMINATION OF TERM LIMITS (Section 213)

Previously the Act indicated magistrates could not serve longer than three terms, or approximately 12 years. Those term limits have been eliminated and magistrates will now be evaluated on an annual basis by the Executive Director of the Michigan Administrative Hearing System and the Chair of the Worker’s Compensation Board of Magistrates.

Practical Application

It would appear as if more attention is being given to productivity and competence of the magistrates as it relates to ongoing retention of their positions. The Governor will have the ability to remove a magistrate upon recommendation following these reviews.

3.             MENTAL DISABILITIES (Section 301/401)

The Act previously indicated that to be compensable a mental disability must arise out of actual events of employment, not unfounded perceptions. The Act has been clarified to indicate that Umental disabilities are compensable if arising out ofactual events of employmentl not unfounded perceptions thereot and !1 the employee’s perception of the actual event is reasonably grounded in fact or reality.II

Practical Application

The standard for establishing a compensable mental disability has been made a bit more difficult. More focus will be placed on the actual events of employment and whether or not the employee’s perception of those events is accurate. Therefore, early identification of appropriate witnesses as to the events of employment, in order to ascertain whether or not the employee’s version is “grounded in fact or reality” is imperative to determining whether or not a claim is sustainable.

Please note that there has been no change to the standard of compensability, which indicates that in order for a mental disability to be compensable it must have been contributed to or aggravated or accelerated by the employment in a “significant manner.”

4.             AGGRAVATIONAL LIABILITY/MEDICALLY IDENTIFIABLE CONDITION (Section 301/401)

Under the prior Act, the issue of aggravationalliability and what actual medical evidence was necessary to prove such exposure was unclear. Under the Rakestraw standard the Courts had established that in order for an employee to prove that a work injury or activity had aggravated a condition to the point of disability, it was necessary that the work injury or activity had caused a “medically identifiable condition.”

The new Act clarifies that standard and indicates that such injury is compensable if the work “aggravates pathology in a manner so as to create a pathology that is medically distinguishable from any pathology that existed prior to the injury.” This clarification resolves the issue of whether or not actual”pathologic” change is necessary as opposed to a mere increase in symptomatology.

Practical Application

A review of medical testing and diagnostic studies is imperative to determine whether there has been a change in pathology caused by the work event or activity. A mere increase in symptoms, without additional evidence of a change in pathology, will not support a claim for compensability. Please note the issue will still arise as to whether or not the medical evidence supports a change in pathology absent an objective test result.

5. DEFINITION OF DISABILITY (Section 301(5))

Under the prior Act, the definition of disability had been modified by case law under Stokes, which called for a multi-step analysis to be performed to establish whether or not an employee could make an initial showing of disability. Utilization of the standard has been in place since that decision was rendered and the new Act simply codifies those requirements.

As such, in order to establish an initial showing of disability an employee must:

a. disclose their qualifications and training including education, skills and experience;

b. provide evidence as to jobs they are qualified and trained to perform within the same salary range as their maximum wage earning capacity;

c. demonstrate that the work-related injury prevents them from performing jobs up to their maximum wage earning capacity;

d. if the employee can perform maximum wage earning jobs, they must show that they cannot obtain any of those jobs and evidence “shall include a showing of a good faith attempt to procure post injury employment” at the maximum wage earning positions.

As before, once an employee establishes an initial showing of disability, the employer can present evidence to refute the employee’s position in regard to the availability of maximum wage earning jobs.

Practical Application

This change merely codifies the practice which was already in existence. Therefore, there will be continuation of the need for a vocational assessment by a certified expert, with follow up job search activities to determine whether or not work remains available for an employee up to their maximum wage earning capacity.

6. RESIDUAL WAGE EARNING CAPACITY (Section 301(4))

Prior to enactment of the new Act, the Agency had been directed under the Harder and Lofton cases to make a determination as to whether or not an employee retained a residual wage earning capacity, even if they were not able to perform or find work up to their maximum wage earning capacity.

The new Act, codifies this requirement by indicating that a disability is partial if the employee retains a wage earning capacity at a pay level less than their maximum wage in work suitable to their qualifications and training. “Wage earning capacity” is defined as wages the employee earns or is capable of earning at a job “reasonably available” to the employee whether or not wages are actually earned. The employee has a duty to seek work reasonably available to them even for a lesser wage earning capacity. In determining whether or not a lesser residual wage earning capacity can be established, consideration will be given to whether or not the employee engaged in good faith job efforts and whether those jobs are reasonably available.

Practical Application

The above changes clarify that the magistrate must make findings as it relates to whether the employee has retained a residual wage earning capacity, even if the employee can establish they have lost the ability to earn their maximum wage. The employee must also show an effort has been made to find lesser paying jobs, with evidence as to whether or not those jobs are available. This would require additional proofs from the vocational expert as it relates to not only maximum wage earning jobs, but also lesser paying jobs within the employee’s qualification, background and training. Although the new Act speaks in terms of “whether or not wages are actually earned,” it is doubtful the magistrates will utilize any type of hypothetical wage earning capacity when arriving at this decision. Therefore, specific focus will be necessary from the vocational expert as it relates to the lesser paying jobs and, more importantly, the availability of that work, such that a residual wage earning capacity can be imputed to an employee, when the loss of maximum wage earning capacity has been established.

7. 100 WEEK RULE (Section 301(9))

Under the prior Act, if an employee was returned to light/favored work activities for 100 weeks or less, and then lost their job ’10r whatever reason” the employee was entitled to wage benefits subsequent to that separation, regardless of the reason for separation.

Under the new Act, the 100 week rule has been eliminated. The Act states that “if an employee is terminated from reasonable employment for fault of the employee, the employee is considered to have voluntarily removed himself or herself from the work force and is not entitled to any wage loss benefits under this act.”

If the employee was employed for less than 100 weeks on light/favored work activity, and loses their job through no fault of their own, they are still entitled to receive compensation benefits based on their wage at the time of the original injury.

Practical Application

This change effectively eliminates difficult issues which arose when an employee was terminated for cause within 100 weeks of obtaining light-duty work activities. Now, regardless of the time period involved, if termination occurs due to the ’1ault of the employeeⁿ no wage loss benefits would be owing. This will continue to place a premium on early fact finding and identification of witnesses relating to the reason for discharge. In addition, it is anticipated that the magistrates will still closely review separations from light-duty employment which occur within the first 100 weeks, with great scrutiny. Therefore, documentation and development of factual evidence remains significant.

8. 250 WEEK RULE/ ESTABLISHMENT OF NEW WAGE EARNING CAPACITY (Section 301(9))

Under the prior Act, if an employee had returned to light-duty work activities for 250 weeks or more, there was a {(presumption of wage earning capacity” established due to that employment. However, this presumption had been treated as “rebuttable.”

Practical Application

Under the new Act, if the employee was employed for 250 weeks or more of light duty work, lithe employee is presumed to have established a post injury wage earning capacity. ” This would appear to remove any issue regarding how the presumption of a new wage earning capacity is interpreted. It is still important to monitor the amount of time an employee has been on favored work in order to prove that a post-injury wage earning capacity has been established.

9. FURNISHING OF MEDICAL CARE (Section 315)

Under the prior Act, the employer had the ability to direct care for 10 days, prior to the employee receiving treatment with a physician of their choice.

Under the new Act, the employer may direct care for 28 days from the inception of medical care, prior to the employee having the right to choose a physician of their own choosing.

Practical Application

The employer now has the ability to direct care for 4 weeks after the employee initially receives medical care. This will provide additional time to obtain diagnostic studies and direct employees to specialists which will allow better control of ongoing care and treatment.

10. DEPENDENTS (Section 331/353)

Under the prior Act in the case of either death or personal injury, if a wife was living with the husband at the time of the death or injury, she was a “conclusive dependent” for purposes of establishing the right to benefits or calculation of the appropriate workers’ compensation rate.

Under the new Act, the wife is no longer considered a “conclusive dependent,” and must take the same steps to establish dependency as other alleged dependents.

Practical Application

It can no longer be presumed that the wife living with the husband at the time of death or injury is automatically a dependent for purposes of the right to benefits. Factual evidence should be obtained from the wife in order to establish that she was either wholly or partially dependent upon the husband for support.

11. SPECIFIC LOSS BENEFITS (Section 361)

Under the prior Act, specific loss benefits had been interpreted by Trammel to mean that if an employee had joint replacement surgery, and the employee could establish they had lost the industrial use of the affected limb prior to the joint replacement surgery, then specific loss benefits for the affected extremity would be payable.

The new Act, directly overturns Trammel and indicates that “the effect of any internal joint replacement surgery, internal implant, or similar medical procedure shall be considered in determining whether a specific loss has occurred. /I

Practical Application

Under Trammel, the simplistic analysis was that if an employee had undergone a joint replacement procedure, than he could be entitled to specific loss benefits. The focus was on pre-surgical status. Under the new Act, the focus is on the post-surgical result, and whether or not the replacement or implant has caused the loss of industrial use of the extremity. Since

the majority of implantations have at least some positive impact on the employee’s physical condition, specific loss benefits in this circumstance will be quite limited.

12. EMPLOYEE/INDEPENDENT CONTRACTOR (Section 161)

Under the prior Act, the three factors to be considered in determining whether or not an individual is an employee as opposed to an independent contractor were whether or not the alleged employee maintained a separate business, held himself or herself out and rendered services to the public and whether the employer was subject to the Act. It had been held that if any of these three conditions were applicable, then the worker would be held to be an independent contractor. However, this issue has been repeatedly litigated with a number of factors being considered.

Under the new Act, if the employer is required to withhold federal income tax for the individual, that individual is “prima facie” considered to be performing services in employment under the Act, and thus “an employee.”

Also} under the new Act} the prior factors of whether or not the individual maintains a separate business or holds himself out to the public would remain. However, effective January 2013, the employer/employee relationship in these situations will be reviewed using the 20 factor test announced by the Internal Revenue Service. (See attached List of Factors)

The new Act also provides a mechanism whereby an employer may contact the Agency and request a determination as to whether or not a worker is actually an “employee” or “independent contractor.”

Practical Application

The new Act appears to be attempting to more clearly delineate the specific factors which need to be utilized in addressing the employee/independent contractor issue. These factors should be considered in obtaining information from the employer, including employment materials and documentation which will be important in assessing this issue.

Since the new Act does provide a mechanism whereby the employer can seek a determination on this issue, if your employer/insured is adamant that the worker is an “independent contractor,” they can be directed to the Agency to request a determination on this issue. If such an issue arises, contact counsel and the necessary information can be provided for the employer to proceed with this procedure.

13. PROFESSIONAL ATHLETE (Section 360j

Under the prior Act, there were no significant limitations as to whether an athlete would receive compensation benefits while injured in Michigan.

Under the new Act, if a professional athlete is hired under a contract with an employer outside of Michigan, he would not be covered under the Act if the injury occurred while the athlete was temporarily within the state; the employer had obtained workers’ compensation insurance in another state; the other state provides coverage for athletes; and workers’ compensation laws of the other state are the exclusive remedy against the employer.

Practical Application

The new Act essentially provides an exemption for professional athletes under certain circumstances. Therefore, if any athletic claims are filed the above factors need to be taken into consideration before compensability is accepted.

14. REDEMPTION HEARINGS (Section 836)

Under the prior Act a specific redemption hearing was necessary in all cases so the magistrates could review the documentation and make specific findings that were required under the Act, prior to approving settlement.

Under the new Act, if the parties stipulate in writing to the specific requirements that the magistrate must find to approve the settlement, then the stipulation may serve as a waiver of the hearing and the magistrate may approve the redemption agreement absent conducting a hearing.

Practical Application

In some limited circumstances the redemption hearing would not be necessary where there are no issues to be dealt with at the time of a hearing. However, in the majority of cases there are specific issues involving payment of medical bills, lien satisfaction, Medicare and Medicaid obligations, and other agreements that are outside the normal documentation. In those cases, a hearing will still be necessary to clarify these issues and provide appropriate protection for the employer/carrier.

15. SUBPOENAS (Section 853)

Under the prior Act, it was necessary for any subpoenas that were being issued during the course of litigation to be approved by the magistrate, with a signature being required.

Under the new Act, the approval and signature of the magistrate is no longer necessary. As such, counsel of record have the authority to issue subpoenas on their own and without oversight by the Agency.

Practical Application

Although this will streamline the subpoena process, the employer/carrier needs to carefully monitor if any subpoenas are forwarded directly to them with requests for documentation or information. It is imperative that counsel for the employer/carrier be notified immediately if any such subpoena is provided to the employer or carrier, and that no information is provided to the employee counsel, without input from counsel for the employer/carrier.

16. TIMING FOR EFFECT OF CHANGES

All of the above changes apply to injuries that are incurred on or after December 19, 2011.

Practical Application

Any of the changes to the Act which signify a departure from prior law will only receive PROSPECTIVE application. This would be the case with the specific loss analysis under Trammel. However, wage earning capacity and disability issues which were previously being analyzed under the standards set forth in Stokes, Harder and Lofton, would still be analyzed in that fashion for injury dates prior to the enactment of the changes. Therefore, special care should be given when assessing which of these issues are applicable to only prospective dates of injury.

LIST OF EMPLOYEE/INDEPENDENT CONTRACTOR FACTORS

1.     INSTRUCTIONS: A worker who is required to comply with other persons’ instructions about when, where, and how he or she is to work is ordinarily an employee. This control factor is present if th person or persons for whom the services are performed have the RIGHT to require compliance with instructions.

2.     TRAINING: Training a worker by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings, or by using other methods, indicates that the person or persons for whom the services are performed want the services performed in a particular method or manner.

3.     INTEGRATION: Integration of the worker’s services into the business operations generally shows that the worker is subject to direction and control When the success or continuation of a business depends to an appreciable degree upon the performance of certain services, the workers who perform those services must necessarily be subject to a certain amount of control by the owner of the business.

4.     SERVICES RENDERED PERSONALLY: If the services must be rendered personally, presumably the person or persons for whom the services are performed are interested in the methods used to accomplish the work as well as in the results.

5.     HIRING, SUPERVISING, AND PAYING ASSISTANTS: If the person or persons for whom the services are performed hire, supervisor, and pay assistants, that factor generally shows control over the workers on the job. However, if one worker hires, supervises, and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor status.

6.     CONTINUING RELATIONSHIP: A continuing relationship between the worker and the person or persons for whom the services are performed indicates that an employer-employee relationship exists. A continuing relationship may exist where work is performed at frequently recurring although irregular intervals.

7.     SET HOURS OF WORK: The establishment of set hours of work by the person or persons for whom the services are performed is a factor indicating control.

8.     FULL TIME REQUIRED: If the worker must devote substantially full ti me in the business of the person or persons for whom the services are performed, such person or persons have control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor on the other hand, is free to work when and for whom he or she chooses.

9.     DOING WORKING ON EMPLOYER’S PREMISES: If the work is performed on the premises of the person or persons for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Work done off the premises of the person or persons receiving the services, such as at the office of the worker, indicates some freedom from control. However, this fact by itself does not mean that the worker is not an employee. The importance of this factor depends on the nature of the service involved and the extend to which an employer generally would require that employees perform such services on the employer’s premises. Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places as required.

10.  ORDER OR SEQUENCE SET: If a worker must perform services in the order or sequence set by the person or persons for whom the services are performed, that factor shows that the worker is not free to follow the worker’s own pattern of work but must follow the established routines and schedules of the person or persons for whom the services are performed. Often, because of the nature of an occupation, the person or persons for whom the services are performed do not set the order of the services or set the order infrequently. It is sufficient to show control, however, if such person or persons retain the right to do so.

11.  ORAL OR WRITTEN REPORTS: A requirement that the worker submit regular or written reports to the person or persons for whom the services are performed indicates a degree of control.

12.  PAYMENT BY HOUR, WEEK, MONTH: Payment by the hour, week or month generally points to an employer-employee relationship, provided that this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job or on § straight commission generally indicates that the worker is an independent contractor.

13.  PAYMENT OF BUSINESS AND/OR TRAVELING EXPENSES: If the person or persons for whom the services are performed ordinarily pay the worker’s business and/or traveling expenses, the worker is ordinarily an employee. An employer, to be able to control expenses, generally retains the right to regular and direct the worker’s business activities.

14.  FURNISHING OF TOOLS AND MATERIALS: The fact that the person or persons for whom the services are performed furnish significant tools, materials, and other equipment tends to show the existence of an employer-employee relationship.

15.  SIGNIFICANT INVESTMENT: If the worker invests in facilities that are used by the worker in performing services and are not typically maintained by employees (such as the maintenance of an office rented at fair value from an unrelated party), that factor tends to indicate that the worker is an independent contractor. On the other hand, lack of investment in facilities indicates dependence on the person or persons for whom the services are performed for such facilities and, accordingly, the existence of an employer-employee relationship. Special scrutiny is required with respect to certain types of facilities, such as home offices.

1.     REALIZATION OF PROFIT OR LOSS: A worker who can realize a profit or suffer a loss as a result of the worker’s services (in addition to the profit or loss ordinarily realized by employees) is generally an independent contractor, but the worker who cannot is an employee. For example, if the worker is subject to a real risk of economic loss due to significant investments or a bone fide liability for expenses, such as salary payments to unrelated employees, that factor indicates that the worker is an independent contractor. The risk that a worker will not receive payment for his or her services, however, is common to both independent contractors and employees and thus does not constitute a sufficient economic risk to support treatment as an independent contractor.

2.     WORKING FOR MORE THAN ONE FIRM AT A TIME: If a worker performs more than de minimis services for a multiple of unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor. However, a worker who performs services for more than one person may be an employee of each of the persons, especially where such persons are part of the same service arrangement.

3.     MAKING SERVICE AVAILABLE TO GENERAL PUBLIC: The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor relationship.

4.     RIGHT TO DISCHARGE: The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which caused the worker to obey the employer’s instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications.

5.     RIGHT TO TERMINATE: If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship.

Prior to the enactment of Public Act 266 of 2011 Michigan courts had ruled that for specific loss claims under Section 361(2) the loss was to be measured in its uncorrected state. Further, the Michigan Supreme Court in Cain v Waste Mgmt, Inc, 465 Mich 509, 638 NW2d 98 (2002), appeal after remand, 472 Mich 236, 697 NW2d 130 (2005), held that specific loss benefits under Section 361(2) did not require actual amputation. It was enough for an employee to show they had lost the use of the limb involved.

The “uncorrected” standard was further clarified by Michigan Worker’s Compensation Appellate Commission in Trammel v Consumers Energy Co, 2009 ACO #126. The Commission in this case held that the claimant had demonstrated a specific loss of the leg, even though his injured knee had been repaired with a surgically inserted implant. As such, the Commission held that the “uncorrected” standard applies even when there is a permanent “correction” to the limb. As a result of the Trammel decision there was an influx of filings by claimants requesting specific loss benefits for the loss of a limb when they underwent knee replacement, shoulder replacement, and hip replacement surgeries.

Public Act 266 of 2011 revises the standard by which specific loss is determined under Section 361(2) of the Act. The new law requires that the effect of any internal joint replacement surgery, internal implant, or other similar medical procedures be considered in a determination of whether a specific loss had occurred. In essence, Public Act 266 of 2011 requires that any specific loss claim must be measured after any possible correction. For instance, in a petition filed by an employee who alleges the specific loss of a leg for an injury that requires a total knee replacement, the Worker’s Compensation Magistrate will have to evaluate that claim based on the condition of the employee’s knee after the corrective total knee replacement surgery. If the claimant maintained use of the leg after the surgery then claimant’s specific loss allegation would be denied.

The change to the specific loss standard of Section 361(2) of the Michigan Worker’s Compensation Disability Act is just one of many changes to the act incorporated into Public Act 266 of 2011. This bill was passed by both the Michigan House of Representatives and Senate, and was signed by Governor Snyder on December 19, 2011. The amendatory act will apply to injuries incurred on or after its effective date.

If you have any questions regarding this change to Michigan’s Worker’s Compensation Act or any of the other changes made under Public Act 266 of 2011 please do not hesitate to contact the Grzanka Grit McDondald law firm at 616-956-5559.

May your travels be safe and time spent with loved ones joyous.

We look forward to helping you and your company usher in a prosperous 2012!

Sincerely,
Charles Grzanka

Case Name: Jackson v Sedgwick Claims Management Services Inc., 24 MIWCLR 28 (E.D. Mich. 2010)

Ruling: The U.S. District Court, Eastern District of Michigan, granted the defendants’ motion to dismiss and denied the plaintiffs’ motion for leave to amend. Because the misconduct that the defendant’s allegedly agreed to commit does not amount to a RICO violation, the plaintiffs’ RICO conspiracy claim failed as a matter of law.

What it means: RICO does not provide a remedy for the fraudulent denial of benefits because an injured worker may not use RICO as an “end run” around the exclusive procedures and remedies prescribed by the WDCA. Alternatively, a violation of the administrative duties created by statute under the WDCA, even when fraudulent, does not amount to mail or wire fraud sufficient to give rise to RICO liability.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 4 April 9, 2010)

~ Insufficient Disability Analysis Stalls Truck Driver’s Open Award~

Case Name: Davis v Quickway Services., 24 MIWCLR 20 (Mich. W.C.A.C. 2010)

Ruling: The Commission remanded the magistrate’s open award to a truck driver for further analysis pursuant to Stokes. The plaintiff did not show what jobs he is qualified and trained to perform within the same salary range as his maximum wage earning capacity at the time of injury.

What it means: Where the record only reveals that the plaintiff cannot perform his last job, the Commission may order a remand for the magistrate to perform additional analysis to determine whether the plaintiff’s impairment meets the definition of disability set forth in MCL 418.304(4), Sington, and Stokes.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3 March 26, 2010)

~ Commission Issues Remand to Grant Hearing on Merits for Defendant ~

Case Name: Dulic v Sweet Express, LLC,, 24 MIWCLR 23 (Mich. W.C.A.C. 2010)

Ruling: After remand of an open award for injuries sustained by the plaintiff in a work-related motor vehicle accident, the Commission again remanded to the magistrate to grant the defendant a hearing on the merits, including an opportunity to introduce evidence.

What it means: Although the Commission does not have a duty to decide Constitutional issues, it may issue a remand, as in this case, where the defendant has not been given a fair hearing or adequate notice of a hearing.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3, March 26, 2010)

~ Inconsistencies Between Hypothetical Questions, Plaintiff’s Testimony Warrants Remand to Reconcile Differences ~

Case Name: Edlinger v. Delphi Automotive Corp, 24 MIWCLR 25 (Mich. W.C.A.C. 2010)

Ruling: Upon review of an open award to a factory worker for bilateral varicose veins, the Commission affirmed the magistrate’s disability analysis, but remanded for additional analysis on the issue of causation. On remand, the magistrate should try to reconcile the differences in the plaintiff’s trial testimony, the medical records, and the hypothetical questions posed to the medical experts.

What it means: Where significant differences exist between hypothetical questions posed to the witnesses and the plaintiff’s testimony about the work he actually performed, the Commission will probably remand for the magistrate to reconcile such differences.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3, March 26, 2010)

~ Lack of Supporting Medical Testimony on Causation Nixes Continuing Benefits ~

Case Name: Easley v Sunrise Assisted Living Center, 24 MIWCLR 26 (Mich. W.C.A.C. 2010)

Ruling: The Commission modified the magistrate’s decision, terminating the plaintiff’s wage loss benefits as of March 26, 2006, as the plaintiff failed to present any evidence that her work-related injuries caused any disability beyond the date of her doctor’s examination.

What it means: A plaintiff’s lay testimony can establish her physical limitations. However, lay testimony does not trump medical opinion on causation. In this case, the magistrate has ignored the lack of a causal link between the plaintiff’s physical limitations and the alleged work injuries. Accordingly, the plaintiff failed to establish a work-related disability finding.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 3, March 26, 2010)

~ Deputy’s Failure to Establish Causal Connection Dooms His Retaliation Claim ~

Case Name: Belanger v. Oakland, County of, 24 MIWCLR 31 (E.D. Mich. 2009)

Ruling: The U.S. District Court, Eastern District of Michigan, granted the defendants’ motion for summary judgement against the plaintiff, who filed a complaint alleging 14th Amendment substantive due process violations, 1st Amendment retaliation, conspiracy, and workers’ compensation retaliation. A reasonable jury could not find a causal connection between the filing of a benefits claim and adverse action that predated both the incident and the claim.

What it means: The elements required to establish a retaliatory dischare claim are: (1) the plaintiff was engaged in a protected activity; (2) the defendant knew of the protected activity; (3) the defendant acted adversely to the plaintiff; and (4) the protected activity caused the adverse employment activity. Where the employee concedes the fact that less favorable work assignments began before he filed a workers’ compensation claim, the employee has failed to establish a causal connection between filing for workers’ compensation benefits and adverse action by the defendants.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 4 April 9, 2010)

Case Name: Coulter v. General Motors Corp., 24 MIWCLR 2 (Mich. W.C.A.C. 2010)
Ruling: After remand, the Commission reversed the Magistrate’s supplemental opinion awarding benefits.  The plaintiff did not establish that she was disabled pursuant to Stokes. What it means: If the plaintiff does not produces the testimony of a vocational expert to establish her qualifications and training, she must prove that she has conducted a good-faith, thorough job search or prove that her disability is so severe that she cannot as a practical manner seek work.  Failure to do this will prove fatal to a plaintiff’s claim for benefits.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 1 February 26, 2010)

~ Magistrate’s Insufficient Disability Analysis Mandates Remand

Case Name: Kleinhardt v Kleinhardt, 24 MIWCLR 16 (Mich. W.C.A.C. 2010)  Ruling: The Commission affirmed the Magistrate’s finding of an injury, but remanded for additional disability and wage loss analysis.  What it means: Where the magistrate fails to find the jobs that constitute the universe of employments suitable to the plaintiff’s qualifications and training that pay the maximum, and then fails to detail how the plaintiff proved that his work injury caused the inability to obtain those jobs, remand is necessary for additional disability analysis.

(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 2, March 12, 2010)

~ Plaintiff Fails to Prove Compensable Lower Back Injury ~Case Name: Vorcac v. Memorial Medical Center of West Michigan, 24 MIWCLR 17 (Mich. W.C.A.C. 2010)
Ruling: The Commission affirmed the Magistrate’s decision denying benefits to the plaintiff for an alleged work-related lower back injury.
What it means: Where a condition of the aging process is found, MCL 418.301(2) provides that such a condition will only be compensable if  contributed to or aggravated or accelerated by the employment in a significant manner.   In this case, although the magistrate did not specifically reference Section 301(2) and the significant manner test, he did a significant manner analysis weighing the various work related and non-work related factors that may have contributed to the plaintiff’s condition.
(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 2, March 12, 2010)
~ Plaintiff Fails to Connect Kienbock’s Disease to Work ~
  Case Name: Burns v. Forest River, Inc., 24 MIWCLR 18 (Mich. W.C.A.C. 2010)
  Ruling: The Commission affirmed the Magistrate’s decision denying benefits related to the plaintiff’s Kienbock’s disease in his right wrist and granting the defendant’s petition to stop payment of benefits because the plaintiff unreasonably refused surgery.
  What it means: Where the magistrate does not accept the plaintiff’s testimony because it is inconsistent with the medical histories and her previous testimony, and she rejected plaintiff’s surgeon’s testimony because the doctor admitted that medical experts have not found an etiological basis for Kienbock’s disease, substantial evidence supported the magistrate’s decision denying benefits for the plaintiff’s condition.
(Source: Michigan Workers’ Compensation Law Reporter, Highlights, Volume 24, Issue 2, March 12, 2010)

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Sec. 845.  The bureau shall have jurisdiction over all controversies arising out of injuries suffered outside this state where the injured employee is a resident of this state at the time of injury and the contract of hire was made in this state.  Such employee or his dependents shall be entitled to compensation and other benefits provided by this act.

Following the amendment, Section 845 now provides the following for Applications for Mediation or Hearing filed on or after January 13, 2009:

Sec. 845. The worker’s compensation agency shall have jurisdiction over all controversies arising out of injuries suffered outside this state if the injured employee is employed by an employer subject to this act and if either the employee is a resident of this state at the time of injury or the contract of hire was made in this state. The employee or his or her dependents shall be entitled to the compensation and other benefits provided by this act. [emphasis added].

On its face, this amendment adds a requirement of having the Claimant’s employer being subject to the act, but, by replacing the word “and” with “either” the amendment makes it easier for Claimant’s to assert jurisdiction in Michigan.  In other words, prior to the amendment, those Claimant’s employed by Michigan-based companies who were injured out-of-state, normally qualified for workers’ compensation benefits under the law of the state in which they were injured.

The amendment to the Section 845 of the WDCA makes it easier for such Claimants to also qualify for Michigan statutory workers’ compensation benefits. Under the amended Section 845, a Claimant may elect to receive benefits from one or both states.

However, it should be underscored that Michigan law provides that a Michigan-based employer is entitled to a credit for those benefits received from another state against the benefits a Claimant may receive under Michigan law.

In effect, the amendment to Section 845, supercedes the Michigan Supreme Court’s ruling in Karaczewski v Farbman Stein & Co 478 Mich 28 (2007).  In Karaczewski, the Court held that the WDCA should be strictly construed to require that a Claimant prove that the contract of hire was entered into in Michigan and that the employee was a resident of Michigan at the time of injury in order for the Claimant to recover worker’s compensation benefits from a Michigan employer.

A link to the actual executed legislation can be found at the following web address:
http://www.legislature.mi.gov/documents/2007-2008/publicact/pdf/2008-PA-0499.pdf

Version 10.0 of the calculation program is now available. This includes rates for the year 2009. This is still a single user system. Please do not attempt to install in a networked environment and make accessible by more than one user, as both calculation and program errors will occur.  This application is also not supported in a Windows NT or Citrix environment. Click here  Calculation Program Help Manual to view the help manual which includes instructions on installing this program. It may be helpful to print these instructions before continuing. If you have a previous version of this program on your PC, it must be uninstalled first. Once you have printed and read the install instructions, click here setup.exe to download the new version to your computer. You MUST save this file to your hard drive and install it from there. The file size is almost 13MB, so it may take a few minutes depending upon the speed of your connection.  If you wish to install this program on more than one computer, you can save the setup.exe file to any external media (i.e., flash drive, CD, etc.).If you do not have internet access, you may obtain this program on CD-ROM. If you would like a copy, please send a letter to Sandra Adams at the Workers’ Compensation Agency, P.O. Box 30016, Lansing, Michigan 48909 . The letter must be accompanied by a padded, stamped ($1.65 worth of postage), self-addressed mailer at least 7″ x 9″ in size.