azcentral.com

Law aids employers on pay to injured workers

by Howard Fischer - Aug. 18, 2011 12:00 AM
Capitol Media Services

A new state law will require injured workers to take alternate jobs offered by their employers or forfeit all or part of their workers-compensation benefits, even if it's the only job of its kind.

The measure removes a requirement that for a job to be considered eligible for consideration as someone's earning capacity that it be available on the open competitive market. The change covers all cases from July 20 on, the effective date of the law.

Jeff Gray, who lobbies for the Arizona Self Insurers Association, said the legislation is designed to address a conflict between state and federal laws.

The Americans with Disabilities Act requires employers to make reasonable accommodations in a job to deal with workers' specific disabilities. Gray said that was amended several years ago to also include those who are injured on the job and cannot go back to their original position.

He said the problem arises when that comes up against the state's workers-compensation laws.

Those laws generally allow someone who is injured on the job and unable to work to collect up to two-thirds of what they were earning before. But the law also says that figure is reduced to the difference of what the person was earning before and what he or she can earn now.

Where the problem comes in, Gray said, is that Arizona courts have said that lower figure can be paid only if the new job is available on the open market.

Jim Stabler, the chief legal counsel for the State Compensation Fund, said the idea is to protect workers from employers who were creating non-existent jobs solely to avoid paying workers-compensation benefits.

"That's nice of you to do that," he said. "But that puts the employee at risk if you have a change of heart or decide you don't need that job any more."

Gray said there also was a concern that a company, seeking to limit its workers-compensation exposure, would create a job so specialized that it did not exist anywhere, effectively trapping the worker in that job.

The bottom line, Gray said, is that the conflict between the two laws means that a company that creates a special job to comply with the ADA still could wind up having to pay lost wages to an employee.

"We had this happen to us a number of times," Elizabeth Rau, the risk manager for Fry's Food and Drug Stores, told lawmakers who were considering the issue.

She cited one instance where a refrigeration mechanic was seriously injured after falling about 30 feet, suffering neck, back, shoulder and knee injuries.

"He ended up with permanent restrictions that precluded him from going back to his refrigeration-mechanic work," Rau said, because that required heavy lifting and climbing ladders.

Rau said the revised ADA required Fry's to make reasonable accommodations.

"We now have to work with these individuals who have permanent restrictions, as they're ADA-protected," she said.

Rau said Fry's had a position available as a dispatcher for maintenance calls.

"He would have been able to triage those refrigeration calls coming in over the phone and actually would have done a great service for us," she said. And the position paid about $21 an hour, which Rau described as approximately what he was earning in his prior position, meaning that the company would not be liable for lost earnings.

The worker rejected the offer.

That case eventually made its way to a hearing, with an administrative-law judge siding with the company. But Rau said that by that time, her company had filled the job, meaning there was no position available.

Had this law been in effect at the time, Rau said, her company would not be on the financial hook, even with that particular job at Fry's no longer available.

"With the current labor market, a lot of companies don't have a lot of job openings," she said. "For that reason, the judge had to rule against us."

But if the law did not refer to available jobs, Rau said, the judge could have ruled that the salary of a dispatcher job was "representative of his earning capacity" and that, because he had a job offer after his injury, there would have been no loss of earning capacity - and Fry's would not have been liable.

No one testified against the proposal when it was at the Legislature.