Gavel to Gavel: New PPD award issues

August 2014

The Journal Record

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Oklahoma workers’ compensation has seen some dramatic changes. The enactment of the Administrative Workers’ Compensation Act poses new considerations for employers regarding permanent partial disability awards, pre-injury and equivalent work availability, and overall strategies for handling work-related injuries.

Previously, workers’ compensation cases involved injuries within the course and scope of employment; receipt of medical treatment; return to maximum medical improvement, or MMI; and determination of permanent impairment. Employers were to pay the resulting monetary awards promptly.

Under the new act for injuries that occurred after Feb. 1, the timing of the PPD award payment has changed. Now, the award shall be deferred and held in reserve if the employee reaches MMI and returns to pre-injury or an equivalent job (pre-injury or equivalent work being simply the same job or other employment offered that pays 100 percent of the employee’s average weekly wage).

Further, PPD awards shall be reduced by 70 percent of the employee’s weekly wage for each week the worker returns to employment. The PPD awards can also be reduced each week the employee refuses to return to work. Assume an employee who earns $500 per week strains his back and is deemed to have a permanent 10-percent impairment. Previously, a back strain injury award of 10-percent impairment, or $16,150, was to be paid within 20 days of the court’s order. Under the new act, for that same injury, the $16,150 award is held in abeyance if the worker returns to employment. That award is reduced weekly by $350 ($500 multiplied by 70 percent) until it is depleted. If the employer can’t provide the pre-injury position or equivalent work at the same pay, the award is due to the worker immediately in a lump sum.

Though the current state of and constitutionality of the new act are still at issue, employers will likely face tough decisions when considering the pros and cons of bringing back an employee after an accident. Continuing the employment of problem employees, accommodating restrictions, potentially creating new positions at pre-injury pay rates or terminating the employment relationship could have drastically different outcomes regarding the payment and cost of workers’ compensation claims. Employers must weigh the effects of accelerated versus deferred permanent impairment awards.

Nick Crews is a workers’ compensation attorney and litigator in the Tulsa office of Fellers Snider.

This article appeared in the August 20, 2014 issue of The Journal Record. It is reproduced with permission from the publisher.© The Journal Record Publishing Co.

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