The Newer Benefits: Maintenance and TPD
The Old Days
The Illinois Workers’ Compensation Act has been around a long time. The initial law created in 1911 didn’t see many changes except to slightly increase fixed benefit levels. That all changed in 1975 when benefits became unlimited. The right to temporary total disability became unlimited. There was no maximum placed on the number of weeks of temporary total disability an employee could receive. It could continue for life or at least until the claimant became permanently and totally disabled. Further the maximum temporary total disability rate was increased to 133 1/3% of the state average weekly wage. Initially, that maximum wasn’t unreasonably high. However, the state’s average weekly wage continues to increase at a bizarrely high rate. Currently, the state’s average weekly wage is set at $1,002.68, which makes the maximum temporary total disability rate $1,336.91. That means in order for an employee to qualify for the maximum temporary total disability rate, he has to be earning in excess of $2,005.36 per week. This means very few employees actually qualify for the maximum temporary total disability rate.
In 1975, when the statute was changed to greatly increase TTD rates, no consideration was given for temporary partial disability. The concept really wasn’t considered. At that time, employees were either off work or they came back to work. Employers would demand full duty releases or accept light duty releases and place claimants back to work for their regular shift and pay their regular pay.
Times changed and employers changed. More and more employers brought claimants back to work at limited duty. However, they didn’t want to pay full wages for partial work. Sometimes they couldn’t bring claimants back to work at full hours. Employees were brought back to work, but they weren’t paid their regular wages for a full work week. Employees were not entitled to TTD since they were back to work. However, they weren’t getting a full paycheck because they had limited abilities or limited hours or both.
For years, employees clamored for temporary partial disability benefits. Many states enacted temporary partial disability provisions in their statue. However, Illinois did not. This issue was litigated frequently. The Commission routinely held that Illinois had no provision for temporary partial disability. Therefore, if a claimant returned to work, his right to TTD ended and no additional temporary total disability benefits would be awarded. Even though a claimant wasn’t making his regular wages, for whatever reason, no temporary partial disability was awarded. There was simply no provision in the statute for temporary partial disability.
However, in certain circumstances, the situation became ridiculous. For example, a claimant was earning $1,000.00 a week but suffered an accident and was disabled. He was being paid TTD at a rate of $666.67 per week while he was off work. A doctor gave the claimant a release to work light duty. The employer could claim that the employee could return to work at light duty. The employer agreed to pay light duty wages of $10.00 an hour. The claimant would return to and be earning $400.00 per week. The claimant would return to work and his right to benefits at a rate of $666.67 tax free was eliminated. He would then be earning $400.00 a week gross, which was closer to $335.00 per week net. The claimant was twice as worse off returning to work than when he was off on disability. In situations like that, the Commission couldn’t award temporary partial disability because there was no provision for temporary partial disability. However, the Commission found the situation inequitable and on occasion fashioned a remedy. The Commission frequently would award temporary total disability even though the claimant had returned to work. The Commission construed the return to work at partial duty not a real return to work and therefore the claimant was still entitled to temporary total disability. However, the Commission would grant the employer credit for net wages paid. The end result would be an award similar to temporary partial disability, but not exactly.
The right to receive temporary total disability was ruled by many court decisions to end when a claimant reached maximum medical improvement. If a claimant received medical treatment and was totally disabled from work, he was entitled to TTD. However, once he reached MMI and was given a release to return to work, whether at full duty or with restrictions, his right to temporary total disability ended.
Many employers took the position that once the right to TTD ended, no further benefits needed to be paid, even though a claimant might have permanent restrictions and was not able to return to work for the employer. The Commission and the courts agreed. The right to TTD ended once the claimant reached MMI and had been given a work release. Temporary total disability meant total disability on a temporary basis. Once an employee reached MMI, he was no longer in a temporary position, he was in a permanent position. He was limited to permanent partial disability under Section 8(e) or 8(d)(2) or permanent total disability under Section 8(f). If he proved a wage loss on a permanent basis, he would be entitled to wage loss benefits under Section 8(d)(1) as a third alternative.
Again this was thought to be unfair. The Commission fashioned a remedy. They began to award compensation benefits at the TTD rate and called it “maintenance.” Section 8(a) of the Workers’ Compensation Act relating to the employer’s liability for medical bills states:
“The employer shall also pay for treatment, instruction and training necessary for the physical, mental and vocational rehabilitation of the employee, including all maintenance costs and expenses incidental thereto.”
The term maintenance in that sentence reasonably refers to costs associated with a physical or vocational rehabilitation program. It was never intended to make any reference to compensation or wage replacement benefits to which an employee might be entitled. However, the Workers’ Compensation Act is a statutory construct. There is no common law right to compensation benefits. In order for the Commission to award benefits to a claimant after the right to TTD ended, they had to find some language in the Act to justify the award of the benefits. They couldn’t find any other language in the statute to support a benefit award, so they chose the term “maintenance.” For many years prior to the change in the statute, the Commission began to award compensation benefits after someone reached MMI, and they called it maintenance. The right to maintenance according to case decisions starts after an employee is at MMI and before there is a return to work. The concept is the employee is entitled to maintenance benefits until
(1) he returns to work or
(2) the employer proves that he could have returned to work if he wanted to.
There are several ways to prove that an employee could have returned to work. One would be to make him a job offer within his limitations. Another would be to provide him with vocational rehabilitation until somebody else makes him a job offer. A third way would be to provide him with vocational rehabilitation until he stops reasonably looking for a job. A fourth option would be to produce a labor market survey showing that there are jobs available within the claimant’s restrictions if the claimant actually went out and looked for them. Many cases are litigated on the issue of when the right to maintenance starts and ends. A claimant may pursue his right to maintenance after being declared at MMI by engaging in a documented job search. Written proof of a job search is generally required to sustain a claim for continuing maintenance benefits.
THE NEW ACT – A BRAVE NEW WORLD
Temporary partial disability
The newest version of the Act, effective June 28, 2011, contains a specific definition of temporary partial disability. It is contained in §8(a) of the Act. It states:
“When the employee is working light duty on a part-time basis or full-time basis and earns less than he or she would be earning if employed in the full capacity of the job or jobs, then the employee shall be entitled to temporary partial disability benefits. Temporary partial disability benefits shall be equal to two-thirds of the difference between the average amount that the employee would be able to earn in the full performance of his or her duties in the occupation in which he or she was engaged at the time of the accident and the gross (net amount for cases 2/1/06 to 6/27/2011) amount which he or she is earning in the modified job provided to the employee by the employer or in any other job that the employee is working.”
The creation of a temporary partial disability statute was a reasonable one. It was unfair to have no temporary partial disability statute. The remedy fashioned by the Commission was not unreasonable. However, the statute in effect from 2/1/06 to 6/28/11 was unreasonable. It unfairly penalized employers who brought claimants back to work at less than full wages. The unreasonable nature of the statute was likely the intended result by the drafters. The statute was drafted in a manner to encourage employers to bring employees on lite duty back to work at full wages.
After 2006, the issue of temporary partial disability benefits was frequently litigated before the Commission because the definition is fraught with ambiguity. It is unclear what it means to be employed in the “full capacity” of the job. Frequently litigated will be situations where an employee returns to regular work duties but isn’t allowed to work overtime. Employers will dispute whether there is a right or obligation to provide overtime hours. Further, a question will occur as to whether the average amount the employee would be able to earn in the full performance of his duties means that the employer has to include the overtime hours and overtime pay in the calculation. A claimant could easily be in a situation where the temporary partial disability rate exceeds the temporary total disability rate.
This was especially true where the net amount wasn’t based on a comparison of gross wages before the accident and gross wages after the accident, but rather based on a comparison of gross wages prior to the accident and net wages after the accident. Moreover, an enormous dispute existed as to what constitutes net wages. What deductions will be allowed from gross wages to constitute net wages. Employers could accept deductions for taxes such as federal tax, state tax and FICA. However, deductions shouldn’t be allowed for garnishments, child support orders, alimony, personal medical plans, 401(k) plans, pension plans, etc.
Finally, the new statute at least eliminates the gross v. net and imposes a gross v. gross comparison in the temporary partial calculation. There will still be issues as to the calculation but at least now the statute is not fundamentally unfair as it was before.
The creation of a temporary partial disability statute should be one to encourage employers to bring claimants back to work. All sensible parties recognize that bringing an employee back to the work force is good for all. The statute should not be crafted in a manner to discourage employers from bringing claimants back to work at light duty.
Section 8(a) of the statute was also amended February 1, 2006 to define the concept of “maintenance.” The Act states, “The maintenance benefit shall not be less than the temporary total disability rate determined for the employee. In addition, maintenance shall include the costs and expenses incidental to the vocational rehabilitation program.” This section was not amended in the new Act of June 28, 2011.
The Act now states how much the maintenance benefit is to be, although the Act never defines the maintenance benefit. The maintenance benefit is not described anywhere in the statute. The term “maintenance” is simply contained earlier in §8(a) as previously stated. The statute should have defined maintenance. The statute should have set forth the time period when maintenance should have been awarded.
Instead, we are left with Commission decisions and court decisions defining a benefit that never existed under the Act. The intent of the statute was never to create a separate benefit for claimants who were at MMI but not yet employed. The Workers’ Compensation Act is supposed to be a statutory construct and not a common law construct. If the intent is to provide benefits pursuant to a schedule set forth in the statute, the legislature failed miserably and the courts have misconstrued the legislature’s intent.
Case law continues to state that the right to TTD ends when a claimant reaches maximum medical improvement. The obligation remains with the claimant to look for work within his restrictions. The claimant still has the burden of going forward. If the claimant reasonably looks for work and is unable to find it, the right to maintenance starts. The right to maintenance continues until the employer can prove that work is available within the restrictions set forth by the doctor. At a minimum, the employer must present evidence to support the claim that petitioner is employable. A vocational analysis and labor market survey created by a certified vocational rehabilitation counselor is a requirement.
Absent that, the employer must prove to the Commission that the claimant’s job search was not reasonable. Self-directed job searches are not encouraged and are rarely successful.
New minimum PPD and TTD rates were also created by the new statute. This has a significant effect on the rates paid to claimants. A chart setting forth the minimum TTD and PPD rates is attached hereto. Moreover, with the increase in the state’s average weekly wage, the minimum TTD rates and PPD rates have skyrocketed.
The TTD and PPD minimums are tied to the state’s minimum wage or the federal minimum wage. However, in Illinois, the state’s minimum wage ($7.50 effective July 1, 2007; $7.75 effective July 1, 2008, $8.00 effective July 1, 2009 and $8.25 effective July 1, 2010) is much higher than the federal minimum wage ($5.85, increased to $6.55 effective July 24, 2008). As a result, the minimum TTD rate for a single person after July 1, 2007 is $200.00: after July 1, 2008 is $206.67; after July 1, 2009 is $213.33 and after July 1, 2010 is $220.00).
These minimum rates apply to both full-time and part-time workers. The minimums really increase dramatically if the claimant is married or has any dependents. The statute creates an incredible boon for part-time workers who can earn much more on TTD than they ever could working.
There appears to be no cap on the TPD benefit. The maintenance benefit is capped by the TTD maximum – very high. Permanent Wage differential benefits are capped at the State’s Average Weekly wage also very high.
The change in the statute has created new benefits for employees which greatly enhance their right of recovery. The challenge to employers is even greater than before. New TTD and PPD minimums greatly increase exposure for minimum wage employers and employers who hire part-time help. Increased benefit rates for temporary partial disability penalize employers who bring claimants back to work at light duty. The definition of maintenance means employers will pay more benefits after claimants are released to return to work. The changes in the statute create no new incentives for claimants to actually want to return to work.