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Last Reviewed / Modified On 15 Mar 2018.


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The Kentucky Workers’ Compensation Act (the “Act”) mandates that employers furnish workers’ compensation benefits to employees. For purposes of the Act, the following classes of individuals constitute “employers” mandatorily subject to, and required to comply with, the Act:

(1) Any person, other than one engaged solely in agriculture,that has in this state one (1) or more employees subject to the Act;

(2) The state, any agency thereof, and each county, city of any class, school district, sewer district, drainage district, tax district, public or quasi-public corporation, or any other political subdivision or political entity of the state that has one (1) or more employees subject to the Act.

See KRS 342.630.


Because the language of the Act is so broad, this definition of “employer” includes the following individuals:

1. Anyone working under contract for hire, either expressed or implied;

2. Executive officers of corporations;

3. State, county or city employees;

4. Volunteer firefighters;

5. Those who sell and deliver newspapers; and

6. Any person performing services in a trade profession or business.

See KRS 342.650. Nevertheless, there are classes of exempt employees, including:

1. Agriculture employers/employees;

2. Domestic workers in private homes if working in less than two households for a total of less than 40 hours a week of service;

3. Those working for sustenance if with charitable or religious organization;

4. Those covered by a Federal Act providing compensation;

5. Those choosing to voluntarily reject coverage under the Act;

6. Individuals participating in voluntary carpools; and

7. Workers for certain religious organizations.

See KRS 342.650. It is important to remember though, that any employee can voluntary choose to participate in the Workers’ Compensation system, even if not specifically mandated under the Act. See id.

Borrowed Employee

Temporary or “borrowed” employees are also covered under the Act. These individuals are the employees of a temporary service, which is called an “employee leasing company” under the Act. KRS 342.615(5). The temporary service must register with the state and provide benefits to these workers. KRS 342.615(2),(5).

Independent Contractor

While employers are required to provide benefits to employees, generally speaking they are not required to provide coverage to independent contractors (although there is one very important exception for “Up the Ladder Liability” (see Section “Up the Ladder” Liability for Uninsured (Sub)Contractors, infra for a detailed discussion of “Up the Ladder Liability”). The tests courts in Kentucky use to determine whether a worker is an employee or an independent contractor are essentially the same as the tests used in tort actions to determine the existence of a master/servant relationship. See KRS 342.650. More specifically, the Act defines the test of employee status as “Every person performing service in the course of the trade, business, profession, or occupation of an employer.” KRS 342.640(4). Expounding on this standard, courts have asked whether an individual is performing work that is a “regular or recurrent part of [the employer’s] business.” Goldsmith v. Allied Bldg. Components, Inc., 833 S.W.2d 378, 381 (Ky. 1992); Where the answer is “yes,” the individual is an employee rather than an independent contractor. See id., see also U.S. Fidelity & Guar. Co. v. Technical Minerals, Inc., 934 S.W.2d 266 (Ky. 1996) (regular or recurrent part of the work); Daniels v. Louisville Gas and Elec. Co., 933 S.W.2d 821 (Ky. Ct. App. 1996) (same). As a rule of thumb, if a worker has taxes withheld from pay, the worker is presumed to be an employee. See id.

Statutory Employees

The Act also provides for certain classifications of relationships which are considered contractor/subcontractor relationships as a matter of law. These relationships include a “person who contracts with another (a) to have work performed consisting of the removal, excavation or drilling of soil, rock or mineral, or the cutting or removal of timber from land, or (b) to have work performed of a kind which is a regular or recurrent part of the work of the trade, business, occupation or profession of such person.” KRS 342.610(2). However, the Act indicate that it does not apply to the “owner or lessee of land principally used for agriculture.” KRS 342.610(2).


Exclusivity Generally

As in most jurisdictions, the rights and benefits of the Kentucky Workers’ Compensation Act are the exclusive remedy against employers who have secured the payment of compensation. KRS 342.690. As a result, an injured employee can either sue the employee in tort, or recover benefits from the workers’ compensation system, but not both. See id. Importantly, however, if the employee elects to proceed in tort against the employer, the injured employee must prove “the deliberate intention of his or her employer to produce such injury[.]” KRS 342.610(4).

“Up the Ladder” Liability for Uninsured (Sub)Contractors

As alluded to in the previous section covering “independent contractors,” an employee’s status as an independent contractor is not conclusive as to whether an employer will be required to provide compensation. The major exception providing for compensation for some subcontractors and their employees is the concept of “up the ladder” coverage. For purposes of “up the ladder” coverage, the main parties are divided into two classes: (1) contractors and (2) subcontractors. A “contractor” is an employer “who contracts with another to have work performed of a kind which is a regular or recurrent part of the work of the trade, business, occupation, or profession of such person.” See KRS 342.610(2)(b). The “subcontractor” (the individual commonly thought of as an independent contractor) is the one contracted to do this regular or recurrent work. See id. Generally speaking, employees of subcontractors must receive coverage through their immediate “employer” – the subcontractor. KRS 342.610. Importantly, however, if the employees do not receive coverage from the subcontractor, the general contractor (who employed the subcontractor as an “independent contractor”) may become liable for coverage. See id.

Although this may lead to unexpected liability for those employing independent contractors under the faulty assumption that the independent contractors have coverage, there are remedies for the employer who has been caught in an “up the ladder” liability case. For example, even if a contractor must pay benefits for a subcontractor’s uncovered employee, the contractor is subrogated to the subcontractor’s rights, and the contractor may recover the cost of providing benefits to the injured employee from the subcontractor. Also, because they are subrogated to the subcontractor’s rights and obligations, contractors enjoy the same tort immunity that any other employer would under the Act with exception for intentional acts. See KRS 342.690.


Jurisdiction Generally

The jurisdiction of the Kentucky Workers’ Compensation Act is statutorily authorized by KRS Chapter 342, et. seq. Disputes concerning coverage and care are initially heard in an administrative court before an Administrative Law Judge (“ALJ”). Appeals from the final decision of an ALJ are taken to the Workers’ Compensation Board. KRS 342.249. If either an employer or a claimant is not satisfied with the Board decision, it may be appealed to the Kentucky Court of Appeals. CR 76.25, see also KRS 342.290. If either an employer or a claimant is still not satisfied with the Court of Appeals’ decision, the parties both have a right to appeal to the Supreme Court, without the normal procedural hurdle of the discretionary review process. CR 76.36(7), see also Vessels by Vessels v. Brown-Forman Distillers Corp., 793 S.W.2d 795, 798 (Ky. 1990).

Extraterritorial Jurisdiction

In addition to jurisdiction in the Commonwealth, Kentucky extends the jurisdiction of the compensation system to extend to injuries occurring outside the geographic are of Kentucky, if any of these criteria are met:

1. The employee’s regular employment is principally localized in Kentucky;

2. The employee is working under a contract of hire made in Kentucky for employment not principally localized in any particular state;

3. The employee is working under a contract of hire made in Kentucky in employment principally localized in another state whose workers’ compensation law is not applicable to the employee’s employer; or

4. The worker is working under a contract of hire made in Kentucky for employment outside the United States or Canada.

See KRS § 342.670.

Time Limitations


Kentucky law requires an employee to report an accident or injury to the employer “as soon as practicable” after it occurs. KRS 342.185. There is no bright-line rule for determining whether a report is timely; rather, courts consider several factors on a case-by-case basis, including:

1. Whether the employer was notified in enough time to have a meaningful opportunity to place the employee under a physician’s care in order to minimize the harm to the employee;

2. Whether the employer had sufficient notice and an opportunity investigate the accident as soon as possible;

3. Whether the lapse in notification time was consistent with the public policy to prevent filing false claims when the lapse makes it difficult to prove a claim is false.

See Harlan Fuel Co. v. Burkhart, 296 S.W.2d 722 (Ky. 1956). As a result, the employee must notify the employer in writing of the occurrence of an injury, if practicable. See id. If notification in writing is not practicable, then, at a minimum, oral notification to a supervisor should occur. See id.

Discovery of the Injury

Considering that an injured employee must report an injury to the employer “as soon as practicable,” after it occurs, problems may arise if the injury is slow to develop. This could result in a situation where the worker may not realize that he or she is suffering an injury. As the Kentucky Supreme Court has observed, this results in “[a] gradual injury generally aris[ing] imperceptibly, from the physical strain of numerous instances of minor workplace trauma, also referred to as minitrauma.” Brummitt v. Southeastern Kentucky Rehabilitation Indus., 156 S.W.3d 276, 279 (Ky. 2005). As a result, this would suggest that it is possible for the worker to suffer an injury and have the limitation and/or notice period expire before making a claim. To avoid this problem, Kentucky courts use the time of reasonable discovery as the time the limitation period begins to run. Brummitt, 156 S.W.3d at 279 (“For this reason, the courts have applied a rule of discovery for establishing the date of injury. Hence, a gradual injury becomes manifest for the purpose of notice and limitations with the worker’s knowledge of the harmful change and the fact that it is caused by the work.”). The employee is not required to self-diagnose an injury; however, the date of discovery may be evidenced by the date a medical physician diagnoses the injury. See Husky Coal Co. v. Ratliff, 2003-SC-1060-WC, 2004 WL 2364849, *4 (Ky. Oct. 21, 2004).

Statute of Limitations


The limitations period for filing an injury claim is two years. See First Property Man. Corp. v. Zarebidaki, 867 S.W.2d 185 (Ky. 1993). This period begins to run at the date of the injury or from the last temporary total disability payment made by the employer, whichever is later. See KRS 342.185(1).


For the death benefits provided by the Kentucky Workers’ Compensation Act, the limitations period is two years, and begins to run from the time of death. KRS 342.185(1).

Change in Condition

When a claim is closed, and the injured worker’s condition changes, the award can be modified through a motion to reopen the award and/or settlement. A motion to reopen the award must be filed within four (4) years following the date of the original award. KRS 342.125(3).

Occupational Disease Claims

Occupational disease claims must be filed within three (3) years after a disease becomes known and disabling, but a maximum of five (5) years from the time of the last work-related exposure to the disease causing agent. KRS 342.316(4)(a); Armco, Inc. v. Felty, 683 S.W.2d 641 (Ky. Ct. App. 1985).


General Rule

Definition of “Injury”

“Injury” means any work-related traumatic event or series of traumatic events, including cumulative trauma, arising out of and in the course of employment which is the proximate cause producing a harmful change in the human organism evidenced by objective medical findings. KRS 342.0011(1). “Injury” does not include the effects of the natural aging process, and does not include any communicable disease unless the risk of contracting the disease is increased by the nature of the employment. “Injury” when used generally, unless the context indicates otherwise, includes an occupational disease and damage to a prosthetic appliance, but does not include a psychological, psychiatric, or stress-related change in the human organism, unless it is a direct result of a physical injury. See id.

Particular Types of Injuries

Injuries Resulting from Cumulative Trauma

“Traumatic event or series of events” within the language of Kentucky Workers’ Compensation Act has been interpreted to mean any physical incident that involves harm or disability, no matter how slight or temporary. Lexington-Fayette Urban County Govt. v. West, 52 S.W.3d 564 (Ky. 2001). In West, the claimant was a police officer who had many physical struggles over the years while apprehending suspects, resulting in cuts and abrasions. When the officer developed post-traumatic stress disorder that was directly related to the stress of the conflicts, the court held that stress developing after the physical trauma was compensable as an injury, and was cumulative of the series of conflicts. See id., see also KRS § 342.0011(1) (including “cumulative trauma” within the statutory definition of “injury”).

One important consideration when assessing claims for cumulative trauma is the statute of limitations. The statute of limitations begins to run when a worker first is put on notice that an injury has manifested itself. Special Fund v. Clark, 998 S.W.2d 487, 490 (Ky. 1999). Thus, it is possible that the statute of limitations has begun to run on an injury, even though the injury is gradually worsening and has not reached its full degree of disability. However, it is also important to keep in mind that the issue of notice with regard to cumulative trauma is something that arises from a physician’s diagnosis, rather than a patient’s self-diagnosis. See Hill v. Sextet Mining Corp., 65 S.W.3d 503, 507 (Ky. 2001). Thus, where a patient is not on notice by a doctor’s diagnosis of a cumulative work-related trauma, the statute of limitations has not begun to run. See id.

If the claim is timely reported, the gradual cumulative increase in injuries would be fully compensable if the claimant continued to work and receive injuries. See id. Nevertheless, if a worker is aware of an injury because of a diagnosis, and fails to report it within the two-year statute of limitations, the injury will not be compensable. See id.

Unexplained Falls and Idiopathic Injuries

Because the term “injury” is defined so broadly by the Kentucky Workers’ Compensation Act, an unexplained fall or idiopathic injury is likely to be covered, so long as the employee can show that the fall or injury was related to work. For example, a fall that occurs on the employer’s premises would likely be covered, because a rebuttable presumption arises that an unexplained workplace fall arises out of the course and scope of employment. Vacuum Depositing, Inc. v. Dever, 285 S.W.3d 730, 733(Ky. 2009).

On the other hand, an employer can rebut that presumption by showing that the cause of the fall was actually related to a personal cause. See, e.g., Workman v. Wesley Manor Methodist Home, 462 S.W.2d 898, 900-02 (Ky. 1971) (finding that a worker’s claim concerning an idiopathic fall at work conflicted with her testimony in an unrelated civil claim that her back had been symptomatic and caused her to fall before the incident at work). Explaining the process to rebut the presumption of compensability, the Court of Appeals has noted that the employer may come forward with sufficient evidence to raise a substantial doubt that the work was a contributing cause of the fall. |Workman, 462 S.W.2d at 900-901. When the employer does so, the rebuttable presumption is reduced to a permissible inference, and an ALJ is free to decide whether a fall was work related or not. Id. The rebuttal evidence need not be “substantial” in the sense of requiring a conclusion that the work was not a contributing cause; it need only cast enough doubt on the validity of the initial presumption in the case at hand to justify a reasonable person in disregarding it. Id.

Psychological Injuries

Claims for psychological injuries can be compensable, so long as the psychological claim is secondary or cumulative of an injury, or there is at least an underlying physical contact. See Lexington-Fayette Urban County Govt. v. West, 52 S.W.3d 564 (Ky. 2001). See also KRS § 342.0011(1), (“[Injury] shall not include a psychological, psychiatric, or stress-related change in the human organism, unless it is a direct result of a physical injury.”). The Kentucky courts have tended to hold that even any physical job-related contact, which does not itself cause and injury, could provide a secondary claim for psychological stress. Richard E. Jacobs group, Inc. v. White, 202 S.W.3d 24 (Ky. 2006). In White, a police officer shot a suspect, and then administered CPR. Later, the officer claimed job-related psychological injuries. The court held that the physical exertion and contact during the CPR was itself a traumatic event within the meaning of the statute if the exertion lead to later psychiatric harm. See id.

Hearing Loss Claims

Hearing loss claims may be compensable, but must be determined based on an impairment rating from the American Medical Association Guide to the Evaluation of Permanent Impairment, 5th Edition. KRS § 342.7305(1). Tinnitus is not compensable, and a minimum binaural impairment rating of 8% must be present for benefits. KRS 342.7305(2). When testing reveals that an employee has a hearing impairment compatible with hazardous noise exposure, and the employee provides evidence of such exposure in the workplace, a rebuttable presumption arises that the last workplace where such exposure occurred shall be exclusively liable for benefits. KRS 342.7305(4).

Injuries During Ingress/Egress

Whether ingress/egress issues are compensable generally turns on whether an employee was at work, or more specifically on the business premises while working. Kentucky generally follows the “coming and going” rule, which provides that an employee injured during the commute to or from work is not within the scope of employment. Fortney v. Airtran Airways, Inc., 319 S.W.3d 325, 328 (Ky. 2010). On the other hand, when an employee is actually on the employer’s premises, an injury during that ingress/egress is likely covered. See Ratliff v. Epling, 401 S.W.2d 43 (Ky. 1966).

Nevertheless, when an employee is on the business premises during non-work hours, or using a specifically prohibited means of ingress/egress, an employee would not be in the scope of employment. Cf. Bill Church Painting Company v. Blankenship, No. 2010-CA-000522-WC, 2011 WL 2039326 (Ky. Ct. App. May 20, 2011).

One other important situation to consider is whether an employee has to travel off the employer’s premises for work, in which case the employee would still be in the scope of employment, even though no longer technically on land owned by the employer. See Fortney, 319 S.W.3d at 329. However, there is an exception when the employee substantially diverts away from work-related travel and engages in risky conduct on a personal errand, which would not be covered. Ratliff, 401 S.W.2d at 46.

Communicable Diseases

Communicable diseases are generally not compensable where the risk of contracting the disease is no greater for the employee than it is for the public at large. KRS 342.0011(1). If, on the other hand, the employee is at a greater risk of contracting the disease because of his or her work, the employer may be liable for benefits. See id.

As one example of work-related conditions resulting in compensable disease, where an employee is exposed to the cold and damp to a greater degree than the general public, pneumonia may be a compensable communicable disease. Dealers Transport Co. v. Thompson, 593 S.W.2d 84 (Ky. Ct. App. 1979). As the Court of Appeals explained in Dealers Transport, pneumonia is compensable as a work-related injury among dock workers “for the simple reason that the general public was not working on a loading dock . . . in cold and damp December weather.” Id. at 89.

Heart Attacks

Under KRS 342.0011’s definition of “injury” as a “harmful change in the human organism,” heart attacks could clearly come within the realm of compensability. The issue in such cases is in determining when a heart attack is work-related, which requires consideration of the facts of each individual case. Hudson v. Owens, 439 S.W.2d 565, 568 (Ky. 1969). Medical evidence is merely one factor concerning the question and is not controlling. See Roberts v. Estep, 845 S.W.2d 544, 547 (Ky. 1993). If the heart attack is not work related, even though the employee has serious heart disease, there is no compensable injury. Pierce v. Kentucky Galvanizing Co., Inc., 606 S.W.2d 165, 168 (Ky. Ct. App. 1980); Sowders v. Mason & Dixon Lines, Inc., 579 S.W.2d 380, 381 (Ky. Ct. App. 1979). As a result, proof that a heart attack happened at work, without proof of the cause of the injury, is not sufficient. Pierce v. Kentucky Galvanizing Co., Inc., 606 S.W.2d 165, 168 (Ky. Ct. App. 1980); Armco Steel Corp. v. Lyons, 561 S.W.2d 676 (Ky. Ct. App. 1978).

The difficulty in resolving some heart attack cases also arises from the fact that courts have recognized that work may cause a heart attack which is also the result of some pre-existing heart disease. In these cases, involving work exertion that causes a pre-existing condition to result in a heart attack, the heart attack will be considered work-related. Stovall v. Dal-Camp, Inc., 669 S.W.2d 531 (Ky. 1984). In contrast, in a case where an employee suffered pain from heart-disease related angina, but the underlying cause of the heart disease was not work related, the employee could not recover compensation for the angina. American Bakeries Co. v. Hatzell, 771 S.W.2d 333, 334 (Ky. 1989). The Kentucky Supreme Court held that angina is a symptom, not an injury. The “injury” was the non-work-related heart disease, and because it was not work-related, the employee could not recover. Id.


Course and Scope of Employment

The most basic defense to a claim is to assert that an injury did not occur within the course and scope of employment. KRS 342.0011(1) requires that a compensable injury must arise both “out of” and “in the course of” the employment. The phrase “arising out of and in the course of” actually serves two functions: (1) “In the course of” refers to the time, place, and circumstances of an injury while (2) “arising out of” refers to the cause of the accident. Masonic Widows and Orphans Home v. Lewis, 330 S.W.2d 103, 104 (Ky. 1959); Stapleton v. Fork Junction Coal Co., 247 S.W.2d 372, 373 (Ky. 1952); Abbott Laboratories v. Smith, 205 S.W.3d 249, 253 (Ky. Ct. App. 2006) (citing Masonic Widows, 330 S.W.2d at 104); Clark County Bd. of Educ. v. Jacobs, 278 S.W.3d 140, 143 (Ky. 2009). These requirements have been construed to be basic causation elements that are necessary before an award may be made. Additionally, “[t]he burden is upon the claimant to prove the causation of injury was work connected.” Jones v. Newberg, 890 S.W.2d 284, 285 (Ky. 1994). As a result, a claimant must prove that the work element was a “proximate cause” of the injury to satisfy the course and scope of employment requirement. See KRS 342.0011.


An employee’s intoxication can constitute a defense to a compensation claim. The intoxication defense involves two elements. First, the employer must prove that the worker was under the influence of alcohol or an illegal drug at the time of a work injury. Second, the employer must prove that such influence or intoxication was a substantial factor in actually causing the work injury. See KRS 342.610(3); Woosley v. Central Uniform Rental, 463 S.W.2d 345, 347 (Ky. 1971); Banks v. Department of Ed., Bureau of Rehabilitation, 462 S.W.2d 428, 430 (Ky. 1971).

Describing the legal standard another way, it is possible for an intoxicated worker to be entitled to benefits, so long as the injury is not caused by the intoxication. To illustrate how that standard would work in practice, if a bus driver driving a bus into a garage injures a garage worker through no fault of the garage worker, the garage worker receives benefits, even if the garage worker happened to have a blood alcohol level exceeding the amount permissible to operate a car. This is because the intoxication was incidental to the injury, rather than the injury’s cause. However, if drugs or alcohol caused the garage worker to stumble or fall in the path of the bus driving into the garage, the garage worker’s employer would have an intoxication defense, because the intoxication caused the injury, by causing the fall into the path of the bus.

One complication arising in intoxication cases is where a possibly intoxication employee dies as a result of the injury. Kentucky provides a presumption in death cases that the death is not caused by intoxication. See KRS 342.680. To overcome this presumption, there must be substantial rebuttal evidence of intoxication. See id.; see also Wilson v. Wizor, 544 S.W.2d 231, 233 (Ky. 1976).

Intentional Assaults

The mere occurrence of an intentional act, like an assault, will not automatically result in a compensable injury. To be eligible for worker’ compensation benefits, the victim must prove there is a connection or “nexus” between the work and the assault itself. One example of such a causal nexus is where a hospital staff are grabbed or struck by an Alzheimer’s patient. The “nexus” in such a case is between the patient, the worker, and the job the being done at the time. See January–Wood Co. v. Schumacher, 231 Ky. 705, 22 S.W.2d 117 (1929). On the other hand, random assaults or murders occurring in the workplace are usually not covered. See, e.g. Carnes v. Tremco Mfg. Co., 30 S.W.3d 172, 175 (Ky. 2000) (finding a workplace murder not work-related where the reason for the murder was a broken off an extra-marital affair between two co-workers, rather than the nature or conditions of employment).

Suicides or Other Self-Injury

The Kentucky Workers Compensation Act requires a presumption against intentional self-injury. Where the claimant has died for instance, there is a presumption that the death was not caused by the employee’s desire to injure himself. KRS 342.680. However, courts have created a limited exception to this provision and will allow compensation for some suicides. See, e.g., Wells v. Harrell, 714 S.W.2d 498, 501 (Ky. Ct. App. 1986) (finding a suicide compensable where the employee sustained an underlying compensable injury and developed a mental disorder from the injury, which ultimately culminated in the claimant’s suicide). In a similar vein, a suicide may not bar the continuation of disability benefits that the family would normally receive upon the death of the employee. Where, for example, an employee was receiving benefits for a back injury, and commits suicide in a manner unconnected with the work injury, the family is still entitled to the continuation of the benefits, per KRS 342.730. Advance Aluminum Co. v. Leslie, 869 S.W.2d 39 (Ky. 1994).

Intentional Failure to Use Safety Equipment

Although not a complete defense to coverage, an employee’s failure to use safety equipment or to obey safety rules can result in a reduction of benefits. For example, if the employee intentionally fails to use supplied safety equipment or to follow safety rules, benefits are required to be decreased by a statutory factor of 15%. KRS 342.165; see also Whittaker v. McClure, 891 S.W.2d 80 (Ky. 1995). This reduction is not automatic; rather, to take advantage of the reduction, there must be an attempt by the employer to require the use of the safety equipment or compliance with safety rules. Barmet of Kentucky, Inc. v. Sallee, 605 S.W.2d 29, 33 (Ky. Ct. App. 1980).

It is important to remember that a failure to use required safety measures can also expose the employer to liability. For instance, the Kentucky Workers’ Compensation Act provides for additional benefits in a “penalty” amount of 30% when an employer intentionally ignores safety standards, resulting in a work-related injury. See KRS 342.165 (“If an accident is caused in any degree by intentional failure of the employer to comply with any specific statute or lawful regulation made thereunder, communicated to such employer and relative to installation or maintenance of safety appliances or methods, the compensation for which the employer would otherwise have been liable under this chapter shall be increased thirty percent in the amount of each payment.”).


Calculating the Worker’s Average Weekly Wage

Almost all benefits provided by the Kentucky Workers’ Compensation Act rely in one form or another on the injured worker’s average weekly wage (“AWW”). The AWW is determined based upon 66 and 2/3 % of the employee’s actual average weekly wage, or a percentage of the State’s Published Average Weekly Wage. The State AWW can be found online at the Department of Workers’ Claims website under “Publications”. “Stacking” of wages from concurrent employment is permissible, so long as the employer from whom benefits are sought was aware of the concurrent employment prior to the injury. KRS 342.140(5).

When determining the employee’s actual AWW, the AWW is fixed at the time of the injury. KRS 342.140(1). If, at this point, the worker’s wages were fixed in a weekly amount, “the amount so fixed shall be the average weekly wage.” See id. If the employee’s wages are fixed in a monthly amount, that figure is to be multiplied by 12 and then divided by 52 in order to determine the average weekly wage.KRS 342.140(1)(b). If the wages are fixed by the year, that figure is to be divided by 52 in order to determine the average weekly wage. KRS 342.140(1)(c).

Special problems can arise in the case of seasonal workers or other workers who are not employed in a continuous fashion throughout the year. To determine the AWW of a seasonal employee, the total wages earned by the employee from all occupations during the 12 months before the injury are added together for a total, which is then divided by 50. See KRS 342.140(1), (2); Desa Internat’l., Inc. v. Barlow, 59 S.W.3d 872, 873 (Ky. 2001).

Permanent Partial Disability

An award for a permanent partial disability (“PPD”) is capped at a maximum benefit of 66 2/3 % of the employee’s AWW or 75 % of the State AWW, whichever is lower. The benefit must be based on a rating from the American Medical Association Guide to the Evaluation of Permanent Impairment, 5th Edition. The basic weekly benefit is calculated by multiplying the AMA rating by a statutory multiplier from KRS 342.730(1)(b), and then multiplied by the PPD rate.

If the employee cannot return to the same level of work that was performed pre-injury, or employment at the same or similar wages, the benefit will be multiplied by the 2x or 3x factor as determined by KRS 342.703(1)(c)(1) or (1)(c)(2).

PPD is paid for 425 weeks or until the claimant reaches old age disability per the Social Security Administration if the AMA rating multiplied by the KRS 342.730 factor is less than 50%. If it is greater than 50%, PPD is payable for 520 weeks or until the claimant reaches old age disability per the Social Security Administration.

Permanent Total Disability

Unlike PPD, permanent total disability (“PTD”) is determined using an occupational disability standard, so the American Medical Association impairment rating is a starting point, rather than a maximum. Ira A. Watson Dept. Store v. Hamilton, 34 S.W.3d 48 (Ky. 2000).

PTD is paid bi-weekly from the date of the injury through the date the worker would qualify for social security retirement benefits. KRS 342.730(4). The maximum benefit is the lower of 66 and 2/3% of the employee’s AWW or 100% of the State AWW.

PTD benefits are payable when an employee has a complete and permanent inability to perform any type of work because of a work-related injury. Entitlement to PTD is presumed in the following instances:

1.Total and permanent loss of sight in both eyes;

2. Loss of both feet at or above the ankle;

3. Loss of both hands at or above the wrist;

4. Loss of one foot at or above the ankle and loss of one hand at or above the Wrist;

5. Permanent and complete paralysis of both arms, both legs, or one arm and one leg;

6. Incurable insanity or imbecility; or

7. Total loss of hearing.

Temporary Total Disability

Temporary Total Disability (“TTD”) payments are made when an employee is temporarily unable to return to work following a work-related injury. Temporary total disability is by its nature a temporary benefit, designed to help the employee while the employee recovers from a work-related injury. Robinson v. Newberg, 849 S.W.2d 532, 534 (Ky. 1993). TTD that is awarded during the pendency of the claim is an interlocutory matter and is not subject to appeal until a final award is made with respect to the claim. Ramada Inn v. Thomas, 892 S.W.2d 593 (Ky. 1995). Payments are due bi-weekly per KRS 342.040(1), and continue until:

1. The worker returns to work; or

2. The worker is released to return to the same type of work; or

3. The worker reaches maximum medical improvement (“MMI”), whichever occurs first.

Double L Const. v. Mitchell, 182 S.W.3d 509 (Ky. 2005). TTD is not payable for periods where the employee received unemployment benefits. KRS 342.730(5).

Like Permanent Total Disability, TTD is calculated based on the employee’s average weekly wage, and has both a cap and a floor. The employee is entitled to recover a total of 66 2/3% of his average weekly wage, but not to exceed 100% of the state average weekly wage. KRS 342.730(1)(a). Moreover, the benefit may not be less than 20% of the state average weekly wage. See id. TTD is due if an employee is off work for more than one week, but is retroactively payable to the first day off work if the employee misses more than two weeks of work. KRS 342.040(1).

Death Benefits

When an employee dies within four years of a work-related injury, the worker’s estate and dependents are entitled to two types of death benefits. Like any other award of benefits, the award of death benefits requires that the death be caused by work. See KRS 342.750 (“If the injury causes death . . . .”). The first benefit is a one-time, (originally $50,000, but increased for inflation to a current amount of $73,933.98), which is intended to be used for transportation and burial of the deceased worker. KRS 342.750(6).

The second death benefit comes in the form of income-based benefits payable to the worker’s dependents, based on factors set out in KRS § 342.730(3).

For example:

1. A surviving spouse with no children under age 18 is entitled to 50% of a what the decedent’s award for income benefits would have been (KRS 342.750(1)(a));

2. A surviving spouse with children is entitled to 45% of the benefits, or 40% if the child is not living with the surviving spouse (with 15% payable to the child)(KRS 342.750(1)(b));

3. If no surviving spouse, then 50% to a single surviving child or 65%, split equally, among multiple surviving children (KRS 342.750(1)(d)); or

4. If no surviving spouse or children, then in an amount specified by the Department of Workers’ Claims to any surviving dependent parents; or to the surviving spouse on remarriage for up to two years (KRS 342.750(1)(f)).

The amount of income death income benefits is based on the worker’s AWW, subject to the following three limits

1. The AWW cannot be more than 100% of the State AWW, per KRS 342.750(3);

2. The weekly benefits cannot exceed the amount the worker would have received for a PTD award (KRS 342.750(3); and

3. The total to all beneficiaries cannot exceed 75% of the employee’s AWW, per KRS 342.750(4).

Medical Benefits

Medical Benefits Generally

The employer is required to pay for all “reasonably necessary” medical treatment to provide for the cure and relief of work-related injuries. KRS Chapter 342.0011(1), 342.735. Although the employee has the burden of proof with respect to entitlement to services, the employer has the burden of proof with respect to reasonableness or non-necessity of treatment. KRS Chapter 342.0011(1). Because the Kentucky Workers’ Compensation Act entitles the injured worker to future medical expenses “during disability,” it is possible for an employer to be liable for future medical expenses related to the injury for the worker’s lifetime. Cf. Kroger v. Ligon, 338 S.W.3d 269, 274 (Ky. 2011). That does not mean, however, that future medical payments could not be contested by the employer, who may initiate a medical fee dispute if such expenses are not reasonable and necessary. See id.

Disputing Medical Treatment

When an employer suspects that a claimant’s proposed treatment may not be reasonable after submission through the utilization review process, a formal medical fee dispute is initiated by filing a Form 112 (medical fee dispute), which must be presented within 30 days of the date the employer receives a statement of services from an claimant’s treating physician. 803 KAR 25:012 §§ 1(6), (8).

Generally, medical fee disputes are determined by a hearing before an administrative law judge (ALJ). When a claim is still open, the employer may initiate the fee dispute by filing a Request to Resolve Medical Fee Dispute Form 112. If a case has been closed, a motion for reopening Form 112 is needed to initiate a fee dispute. 803 KAR 25:012(6). When filing a motion to reopen, it is important to remember that the employee’s medical provider is a necessary party and must be joined in the dispute. 803 KAR 25:012(4).

During a litigated claim or fee dispute, Kentucky law allows the workers’ compensation insurance carrier or other opposing party to have the claimant examined by competent medical experts. The IME is at the requesting party’s expense. KRS 342.205 Expenses that the employer must reimburse for an IME include the claimant’s mileage, at the state mileage rate, as well as food and lodging by submission of receipts. KRS 342.205(2). Remember, the employee has the right to have a physician of his/her own present, at his cost, in addition to the physician conducting the IME.


Subrogation Rights Generally

Subrogation of benefits paid under workers’ compensation is governed by KRS 342.700(1). When a third-party injures an employee, the employee can collect benefits from his employer, or sue the third-party, but not both. If the employee sues the third-party, the special fund, insurance carrier, or employer has a subrogation right up to the total amount of benefits paid for the employee’s treatment. KRS § 342.700(1).

It is important to remember that the employer’s subrogation rights are derivative of the employee’s tort rights, AIK Selective Self Ins. Fund v. Bush, 74 S.W.3d 251, 254 (Ky. 2002). As a result, the third-party tortfeasor has all the same defenses against the employer that he/she had against the employee, including the statute of limitations and comparative fault defenses. See id. For example, when an employee was 25% at fault for an accident, an employer’s subrogation recovery would likewise be reduced by 25%, because that is what the concept of comparative fault would have required of the employee’s recovery. See id. at 255.

Subrogation Credits

An employer must give a subrogation credit to the claimant for his/her legal fees, even if the amount of that credit wipes out the ability of an employer to recover the costs that it would otherwise be entitled to claim from the third party. AIK Selective Self-Insurance Fund v. Minton, 192 S.W.3d 415, 419 (Ky. 2006).


Attorney Fees

Attorney fees are subject to the approval of an Administrative Law Judge. KRS 342.320. For a claimant’s attorney, the maximum fee allowed is 20% of the first $25,000 of the award, 15% of the next $10,000, and 5% of the remainder, not to exceed a total of $12,000. See id. In considering the propriety of fees, the Administrative Law Judge considers the extent, complexity, and quality of the services rendered. Attorney fees are based upon additional income benefits awarded to the plaintiff, and are to be paid from those proceeds.

Defendant’s attorney’s fees are also limited to a maximum of $12,000, but are not contingent upon the outcome of the case. Separate attorney fees may be awarded for multiple claims, even if the separate claims are filed on one application. Lamb v. Fuller, 32 S.W.3d 518 (Ky. Ct. App. 2000).

Claims Professionals

Kentucky requires all claims adjusters to be licensed by the Kentucky Department of Insurance. See, generally, KRS § 304.9-080. The Kentucky Department of Insurance will issue licenses for independent or staff adjusters who are not residents of Kentucky, provided that the following requirements are met:

1. The adjuster is currently licensed in good standing as an independent, staff, or public adjuster in the adjuster’s home state;

2. The adjuster has submitted the proper request for licensure, and has paid the licensing fees required by KRS § 304.4-010;

3. The adjuster has submitted a uniform application for licensure; and

4. The adjuster’s designated home state issues nonresident independent, staff, or public adjuster licenses to persons of Kentucky on the same basis.

KRS § 304.9-430(13)(a). An individual licensed as an independent or staff adjuster has the authority to adjust workers’ compensation claims. See KRS § 304.9-430(7)(b). Additionally, while out-of-state adjusters require licensing to adjust such claims, a licensed Kentucky attorney does not need any additional licensure to act as an adjuster. KRS § 304.9-430(9)(b). There is no continuing education requirement for an independent or staff adjuster in Kentucky.


Qualifications of the Administrative Law Judge

The Governor has the authority to appoint, with the consent of the Kentucky Senate, the Administrative Law Judges (“ALJ”) who preside over workers’ compensation claims. The ALJs serve for a term of four (4) years. At any one time, there cannot be more than nineteen (19) ALJs, each of whom must be an attorney with at least five (5) years’ experience in the Commonwealth of Kentucky in the practice of workers’ compensation law or a related field. Each ALJ is paid the same salary as a Circuit Court Judge (which is the type of judge in Kentucky exercising general jurisdiction). KRS 342.230(3).

Procedure for Filing and Adjusting Claims

The claimant initiates a workers’ compensation proceeding by filing an Application for Resolution of Claim form, also identified as a Form 101 At that time, an initial medical report is also filed. See 803 KAR 25:010 § 5 (d). Within 60 days from the filing of the Application for Resolution of Claim form, the Department of Workers’ Claims will issue a Scheduling Order. 803 KAR 25:010 § 8(2)(a). The employer/defendant must file a notice of acceptance/denial of claim Form 111, which is analogous to an answer in a civil case, within 45 days of Scheduling Order from Department of Workers Claims. If a claim is denied, the carrier/employer is required to provide to the employee “as soon as possible” in writing the specific reasons for denial of a claim, and any additional information needed to accept the claim. 803 KAR 25:240 § 5.

After conducting discovery, the parties will submit oral and/or written evidence to the ALJ at a final hearing. The ALJ must issue an award, order, or decision within sixty (60) days of the final hearing on contested issues in a case. KRS 342.275. A decision or order should include findings of fact, rulings of law, and any other matters pertinent to the issues in dispute, and should be sent to the parties. KRS 342.275(2).

Once a determination has been made on an award, the ALJ’s final findings may be appealed to the Workers’ Compensation Board. KRS 342.249. If an employer or claimant is not satisfied with the Board decision, it may be appealed to the Kentucky Court of Appeals. CR 76.25, see also KRS 342.290. If an employer or claimant is still not satisfied with the Court of Appeals’ decision, the parties both have a right to appeal to the Supreme Court. CR 76.36(7), see also Vessels by Vessels v. Brown-Forman Distillers Corp., 793 S.W.2d 795, 798 (Ky. 1990).


Parties may settle workers’ compensation claims, and are encouraged to do so. With respect to PPD claims, any settlement may include benefits up to the statutory cap of 425/520 weeks, pursuant to KRS 342.730.

A settlement may include a waiver of the possible available benefits, including:

1. The right to reopen an award;

2. The right to vocational rehabilitation benefits; and

3. The right to past and future medical expenses.


Limitation on “Bad Faith” Refusal to Provide Benefits

To ensure that the workers’ compensation system works, the Kentucky Workers’ Compensation Act provides both a series of penalties that may be imposed against employers, and protections that may be used by the employee. However, the protections provided in the statutes are exclusive. As a result, if the employer or insurance carrier stops paying benefits or refuses to pay benefits, the employee must seek recovery under the provisions of the statute; there is no separate civil cause of action for bad faith. Zurich Ins. Co. v. Mitchell, 712 S.W.2d 340, 341 (Ky. 1986). On the other hand, certain civil actions are, of course, specifically allowed by the statutes, such as a cause of action for retaliatory termination for filing a workers’ compensation claim. See, KRS 342.197.

Employer penalties

Any employer who fails to comply with the provisions of the Kentucky Workers’ Compensation Act is subject to specific civil and criminal penalties. Civil penalties are initiated by the Commissioner of the Department of Workers’ Claims by citing the appropriate party. See KRS 342.990; Davis v. Turner, 519 S.W.2d 820, 822 (Ky. 1975). An employer must respond quickly to the citation, because if the penalty is not contested with fifteen days, it is final. KRS 342.990(4). On the other hand, if the employer contests the penalty, it should be heard by an ALJ as soon as possible, and a ruling issued within fifteen days of the hearing. KRS 342.990(5). The ALJ’s ruling may be appealed to the Board, KRS 342.990(6), and to the Court of Appeals, just like any other final order in a compensation claim. KRS 342.990(7). The Kentucky Workers’ Compensation Act also provides specific penalties for each type of violation. See KRS 342.990(7).

Criminal penalties against an employer are initiated by the Commissioner of the Department of Workers’ Claims, by causing a complaint to be filed with the appropriate local prosecutor. KRS 342.990(8). If the prosecutor fails to initiate the criminal complaint, the Commissioner must certify the action to the Attorney General, who has a statutory duty to initiate the complaint. KRS 342.990(8). Similar to the civil penalties, the Kentucky Workers’ Compensation Act also states the specific penalties for criminal complaints. See KRS 342.990(9). All fines from both the civil and criminal penalties are to be paid to the Special Fund, which provides benefits to workers when employers fail to provide coverage. KRS 342.990(10).

In addition to the civil and criminal penalties, an employer who fails to comply with the Kentucky Workers’ Compensation Act’s provisions may also face injunctive relief. The Board may seek a temporary restraining order or a permanent injunction against such an employer. See KRS 342.402.

Providing Coverage to Uninsured Employees

If an employer fails to have workers’ compensation insurance, the Kentucky Workers’ Compensation Act provides for benefits to the injured employee in place of the non-compliant employer. For instance, the workers’ compensation system provides for payment of benefits from an Uninsured Employers’ Fund (“UEF”). See KRS 342.760(1); KRS 342.760(4). These provisions establish the fund and allow a method of recovery against employers whose failure to have insurance results in fund liability. See KRS 342.790. When the UEF pays benefits to the injured worker, it is subrogated to the rights of the employer, and may seek indemnity against the employer for the amount of benefits paid. See KRS 342.760(4).

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