WISCONSIN WORKERS' COMPENSATION CLAIM HANDLING GUIDELINES
- 1 DEFINITIONS
- 2 EXCLUSIVE REMEDY
- 3 JURISDICTION AND LIMITATIONS OF ACTIONS
- 4 COMPENSABILITY
5 EXCLUSIONS AND DEFENSES
5.1 Course of Employment
- 5.1.1 Engaged in the Furtherance of Employer’s Business
- 5.1.2 Not in Furtherance of Employer’s Business
- 5.1.3 Traveling Employees
- 5.1.4 Commuting
- 5.1.5 Premises and Parking Lot Cases
- 5.2 Related to Employment
- 5.3 Intentionally Self-Inflicted Injury or Death
- 5.4 Employee’s Violation of the Law, Intoxication, and Illegal Use of Drugs
- 5.5 Employee’s Violation of Positive Orders of Employer
- 5.6 Personal Animosity
- 5.7 Hostile Attacks
- 5.8 Retirement
- 5.1 Course of Employment
- 6.1 Calculation of Average Weekly Wage
- 6.2 Total Disability
- 6.3 Partial Disability
- 6.4 Amputation or Loss of Use
- 6.5 Disfigurement/Scarring
- 6.6 Loss of Sight
- 6.7 Loss of Hearing
- 6.8 Penalties
- 6.9 Interest
- 6.10 Costs
- 6.11 Counsel Fees
- 6.12 Death Benefits
- 6.13 Medical Benefits
- 6.14 Refusal of Medical Treatment
- 7 SUBROGATION OR CREDIT
- 8 ATTORNEYS
- 9 CLAIMS PROFESSIONALS
10 LITIGATION AND APPEAL
- 10.1 Workers’ Compensation Judge Proceedings
- 10.2 Workers’ Compensation Appeal Board
- 10.3 Circuit Court, Wisconsin Court of Appeals, and Wisconsin Supreme Court
- 11 SETTLEMENT
- 12 INSURANCE
The following constitute employers subject to the Wisconsin Workers' Compensation Act §102.04.
1. The state, each county, city, town, village, school district, sewer district, drainage district, long term care district and other public or quasi-public corporations therein;
2. Every person who usually employs three or more employees for services performed in the state, whether in one or more trades, businesses, professions, or occupations and whether in one or more location; and
3. Every person who usually employs less than three employees provided the person has paid wages of $500.00 or more in any calendar quarter for services performed in the state.
4. Every joint venture electing coverage through the purchase of insurance and notification to the State of Wisconsin is an employer.
5. Anyone who elects coverage is an employer.
A farmer is considered an employer if they are engaged in farming who on any twenty consecutive or non-consecutive days during a calendar year employs 6 or more employees, whether one or more location. This provision applies to an employer ten days after the twentieth such day. Wis. Stat. §102.04(1)(c) .
The use of the term “statutory employer” is not applicable under the Wisconsin Workers' Compensation Act.
The Wisconsin Workers’ Compensation Act defines an employee as every person, including all officials in the service of the state or municipality, or under contract of hire, express or implied, and whether a resident or employed or injured within or without the state. Wis. Stat. § 102.07(1)(a).
There are some exclusions, including domestic servants and any person whose employment is not in the course of a trade, business, profession or occupation of the employer, unless as to any of said classes, the employer has elected to include them. Wis. Stat. § 102.07(4)(a).
Every person selling or distributing newspapers or magazines on the street or from house to house is deemed an employee. Wis. Stat. § 102.07(6). Every member of a volunteer fire company or fire department organized under the definition of a municipality or county. Wis. Stat. § 102.07(7)(a). A person performing uncompensated community service under the criminal justice system is also an employee Wis. Stat. § 102.07(13, 14). Inmates and prisoners are included. Wis. Stat. § 102.16 and Wis. Stat. § 102.17.
Sole proprietors, partners, or members of a limited liability company who elect coverage are deemed employees. Wis. Stat. § 102.07. Please note there must be an election of coverage prior to the alleged injury. Along the same lines, corporate officers must elect coverage in order to be deemed an employee. Wis. Stat. § 102.07(6).
There are many variations to whether a person is or is not considered an employee and a person investigating this issue is recommended to review the statute and all case law addressing the definition of an employee in the State of Wisconsin under Wis. Stat. § 102.07.
The primary test to determine the existence of an employer/employee relationship is whether the employer has the right to control the details of the work. The secondary tests which should be considered are: 1.) the direct evidence of the exercise of the right to control; 2.) the method of payment of compensation; 3.) the furnishing of equipment or tools for the performance of the work; and 4.) the right to fire or terminate the relationship. Kress Packing Co., Inc. v. Kottwitz, 61 Wis. 2d 175, 212 N.W.2d 97 (1973).
The form of compensation required to determine a relationship status does not necessarily need to be money. Free food and drink and merchandise vouchers can constitute compensation. Hills v. Labor and Industry Review Com’n, 2001 WI App 75, 242 Wis. 2d 473, 625 N.W.2d 360 (Ct. App 2001) (unpublished).
The Labor and Industry Review Commission has indicated that undocumented workers sometimes referred to as illegal aliens are not excluded from the Wisconsin Workers' Compensation Act and qualify as employees. Arista-Rea v. Kenosha Beef, 1999 WL 370027, (LIRC May 5, 1999).
The Wisconsin Workers' Compensation Act defines temporary help agencies as employers as noted above. However, the determination of who an employee is working for as an employee can get confusing when an employee is loaned or leased to another employer.
If the lending employer is not a temporary help or leasing agency, then the Wisconsin Supreme Court has identified that an employee who is on loan to a borrowing employer becomes a loaned employee of the borrowing employer and shall, for workers' compensation purposes be treated as the employee of the borrowing employer. The four part test set forth in the Seaman Body Corporation v. Industrial Commission of Wisconsin, 204 Wis. 157, 235 N.W. 43 (1931) is 1.) Did the employee actually or impliedly consent to work for the borrowing employer? 2.) Whose work was the employee performing at the time of the injury? 3.) Who had the right to control the details of the work being performed? 4.) For whose primary benefit was the work being done.
The main concern in the definition of employee and the borrowing employer is whether or not the exclusive remedy doctrine will apply to the loaning employer and/or borrowing employer.
The Wisconsin Workers' Compensation Act provides a very strict definition of who is or is not an independent contractor. In order for a person to be identified as an independent contractor and not an employee, they must meet all of the following conditions:
1. Maintains a separate business with his or her own office, equipment, materials and other facilities.
2. Holds or has applied for a federal employer identification number with the federal internal revenue service or has filed business or self-employment income tax returns with the federal internal revenue service based on that work or service in the previous year.
3. Operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work.
4. Incurs the main expenses related to the service or work that he or she performs under contract.
5. Is responsible for the satisfactory completion of work or services that he or she contracts to perform and is liable for a failure to complete the work or service.
6. Receives compensation for work or service performed under a contract on a commission or per job or competitive bid basis and not on any other basis.
7. May realize a profit or suffer a loss under contracts to perform work or service.
8. Has continuing or recurring business liabilities or obligations.
9. The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures.
All nine of the tests must be met in order to establish the person is an independent contractor and not an employee. Wis. Stat. § 102.07(8)(b).
The Wisconsin Workers' Compensation Act is the exclusive remedy available to employees who sustain work related injuries. Liability exists for the employer when the following conditions are met: 1.) The employee sustained an injury. 2.) Where at the time of the injury both the employer and the employee are subject to the provisions of the Workers' Compensation Act. 3.) Where at the time of injury, the employee’s performing services growing out of an incidental to his or her employment. Wis. Stat. § 102.03(1)(a)(b) and (c). The workers' compensation benefits provided under the Wisconsin Workers' Compensation Act are the employee’s exclusive remedy against the employer, insurer, co-employees, employer’s medical staff and any union or company safety advisory organizations.
Exceptions Recognized by the Workers' Compensation Act
There are very few exceptions allowed under the Wisconsin Workers' Compensation Act to the exclusive remedy doctrine. Three statutory exceptions allow an employee to bring an action outside the Workers' Compensation Act against a co-employee. The first is when an employee is injured by an intentional assault. Wis. Stat. § 102.03(1)(d) and Jenson v. Employers Mut. Cas. Co., 161 Wis. 2d 253, 468 N.W.2d 1 (1991). The second exception is for negligent operation of a motor vehicle by a co-employee in a vehicle not owned or operated by the employer. Wis. Stat. § 102.03(2). The third exception to co-employee immunity is when the injured employee can file suit against a co-employee under a collective bargaining agreement.Wis. Stat. § 102.03(2).
JURISDICTION AND LIMITATIONS OF ACTIONS
When both the employer and employee are subject to the provisions of the Wisconsin Workers' Compensation Act liability exists whenever an employee sustains an injury. Simonton v. Department of Industry, Labor and Human Relations, 62 Wis. 2d 112, 214 N.W.2d 302 (1974). Wisconsin does not confer automatic “site jurisdiction” for injuries occurring within the state. Rather, the injury is compensable if the definition of the employee and employer is met within the definition of the Act.
The Wisconsin Workers' Compensation Act accepts injuries which occur outside of the state if an employee, while working outside the territorial limits of Wisconsin suffers an injury, that if it had occurred within the state, would be entitled to benefits if, at the time of the injury, any of the following apply:
1. His or her employment is principally localized in the state.
2. He or she is working under a contract of hire made in this state and employment not principally localized in any state.
3. He or she is working under a contract made in this state and employment principally localized in another state whose workers' compensation law is not applicable to that person’s employer.
4. He or she is working under a contract of hire made in this state for employment outside the United States.
5. He or she is a Wisconsin law enforcement officer acting under an agreement authorized under Wis. Stat. § 175.46.
There are many Native American tribes and reservation lands within the Wisconsin borders. Native American tribes and controlled workplaces may opt in or out of the Wisconsin Workers' Compensation Act.
Regardless of whether or not notice is received, if no payment of benefits has been made under the Wisconsin Workers' Compensation Act other than medical treatment or burial expenses and no application is filed with the Department of Workforce Development within two years from the date of injury or death, or from the date the employee or his or her dependent knew or ought to have known the nature of the disability and the relationship to employment the right to compensation is barred except if the employer knew or should have known within the two year period that the employee had sustained injury. Wis. Stat. § 102.12.
Notice of Injury
An employee must give notice to the employer or an officer, manager or designated representative of an employer within thirty days after the occurrence of the injury, or within thirty days after the employee knew or ought to have known the nature of his or her disability and its relation to the employment. Wis. Stat. § 102.12. If no representative has been identified by the employer, then notice received by any superior is sufficient. Absence of notice does not bar recovery if it is found that the employer was not mislead by the failure to be notified.
Statute of Limitations
Special Rules for Death Claims
There are no special statute of limitation rules for death claims under the Wisconsin Workers’ Compensation Act The employee’s dependents have 12 years from the date of death to file an Application for Hearing seeking payment of benefits. Wis. Stat. § 102.17(4).
Occupational Disease Death Claims
There is no special rule under the Wisconsin Workers’ Compensation Act regarding the statute of limitations for occupational disease death claims. The employee’s dependents have 12 years from the date of knowledge the occupational disease condition is related to work to file an Application for Hearing. Wis. Stat. § 102.17(4).
Occupational Disease Claims
The statute of limitations for occupational disease claims is 12 years under the Wisconsin Workers’ Compensation Act Wis. Stat. § 102.17(4). The Work Injury Supplemental Benefit Fund is responsible for a claim that is barred by the 12 year statute of limitations and pays compensation to the injured worker. Wis. Stat. § 102.66(1).
Extension of Limitation Period
The only way for an injured employee to extend the 12 year statute of limitations is to file an Application for Hearing prior to the statute of limitations tolling. The 12 year statute of limitations runs on an admitted injury from the last date of indemnity payment, whether that be temporary total, temporary partial, or permanent partial disability. Wis. Stat. § 102.17(4). An employer’s obligation to provide medical treatment for an employee’s admitted injury is also limited by the statute of limitations.
The reader should be aware there is a proposal to amend the Wisconsin Workers’ Compensation Act for injuries in 2014 to be nine years for traumatic injuries and twelve years for occupational injuries.
The Wisconsin Workers’ Compensation Act applies when:
1. The employee sustained an injury;
2. Where at the time of the injury, both the employer and employee are subject to the provisions of the Act; and
3. Where at the time of injury the employee is performing services growing out of and incidental to his or her employment.
Under the Wisconsin Workers’ Compensation Act injury is defined as follows:
Mental or physical harm to an employee caused by accident or disease, and also means damage to or destruction of artificial members, dental appliances, teeth, hearing aids and eyeglasses, but in the case of hearing aids or eyeglasses, only if such damage or destruction resulted from accident which also caused personal injury entitling the employee to compensation therefor either for disability or treatment. Wis. Stat. § 102.01(1)(c).
Types of Injuries
Accident Not Required
The Wisconsin Workers’ Compensation Act recognizes injuries caused by a specific traumatic event, but also injuries defined as an occupational disease. The definition of injury noted above does not differentiate between an accidental injury versus an occupational disease. Case law in Wisconsin has defined an occupational disease. An employee must establish he or she suffers from a condition caused by an appreciable period of workplace exposure and that exposure was either the sole cause of the condition or at least a material contributory causative factor in the condition’s onset or progression.Shelby Mut. Ins. Co. v. Dept. of Industry, Labor and Human Relations of State, 109 Wis. 2d 655, 327 N.W.2d 178 (Ct. App. 1982).
The date of injury for an occupational disease is a hotly litigated issue. The Wisconsin courts have determined that the “date of disability” in occupational disease claims is the date of injury. This has been defined as the first date of wage loss through lost work time attributable to the effects of the occupational disease. General Cas. Co. of Wisconsin v. Labor and Industry Review Com’n, 165 Wis. 2d 174, 477 N.W.2d 322 (Ct. App. 1991). A worker can sustain an occupational injury even if their employment is very brief. The provisions of the Wisconsin Workers’ Compensation Act provide for litigation when there are successive employers during the employee’s treatment for an occupational disease or a change in insurance carriers for a single employer.
Infectious diseases are recognized as occupational workers’ compensation claims in Wisconsin as long as the standard is met establishing the work exposure was either the sole cause of the condition or at least a material contributory causative factor in the condition’s onset or progression.
Heart attacks can be recognized as a compensable occupational workers’ compensation claim as long as the employee meets the required occupational injury legal standard. The Supreme Court has held that “myocardial degeneration and arteriosclerosis, of course, are not occupational diseases and are not compensable as such since there is no relation between the employment and the disorder.” Tews Lime & Cement Co. v. Department of Industry, Labor and Human Relations, 38 Wis. 2d 665, 158 N.W.2d 377 (1968).
As to other heart conditions, there is an employment related presumption for fire fighters who have a disability or death stemming from a heart condition. Wis. Stat. § 891.45 . The prerequisite triggers the presumption for fire fighters as long as there is no evidence of heart or respiratory impairment when hired and the fire fighter has been in service for a total of five years.
The Wisconsin Workers’ Compensation Act recognizes all forms of mental injury as the definition of injury includes mental injury. Wis. Stat. § 102.01(1)(c) . In general terms, a physical injury causing mental injury, a non-traumatic mental injury causing mental injury, and a mental injury causing physical injury, are all compensable. This is commonly referred to a physical/mental, mental/mental, and mental/physical claims. However, the Supreme Court has cautioned that “claims for mental injury under the Workman’s Compensation Act should be examined with caution and carefulness because of the danger inherent of malingering in such cases”. Johnson v. Industrial Commission of Wis., 5 Wis. 2d 584, 93 N.W.2d 439 (1958).
There has been significant disputes over what types of mental/mental injuries are compensable. The current status of the law appears to be an employee must establish “extra ordinary stress.” School Dist. No. 1, Village of Brown Deer v. Department of Industry, Labor and Human Relations, 62 Wis. 2d 370, 215 N.W.2d 373 (1974). What is extra ordinary stress is compared to what an employee should expect in their employment situation. For example, in the case of a law enforcement officer, shooting and wounding a suspect in the line of duty is not extra ordinary stress as that is what is expected of a police officer. Bretl v. Labor and Industry Review Com’n, 204 Wis. 2d 93, 553 N.W.2d 550 (Ct. App. 1996). However, a cashier who was threatened with a gun by a customer suggested extra ordinary stress as an employee would not be expected to encounter that situation. Tucker v. McDonald’s, WC Claim No.: 2008-010720 (LIRC May 28, 2009).
Occupational diseases take on many forms under the Wisconsin Workers’ Compensation Act. The employee must still establish the legal standard that they suffer from a condition caused by an appreciable period of work place exposure and that exposure was either the sole cause of the condition or at least a material contributory causative factor in the condition’s onset or progression. Types of occupational disease claims that have been recognized include: dermatological disability due to exposure to various toxins, cancer, pulmonary disability, exposure to asbestos, latex related disease and hearing loss.
EXCLUSIONS AND DEFENSES
Course of Employment
An injury is compensable under the Wisconsin Workers’ Compensation Act if, at the time of injury, the employee is performing service growing out of an incidental to his or her employment. Wis. Stat. § 102.03(1)(c).
Engaged in the Furtherance of Employer’s Business
The Wisconsin Courts have liberally construed the “in the course of employment” doctrine. This liberal construction is to benefit injured workers. Therefore, any act of an employee in furtherance of employer’s business is compensable as long as it meets all other requirements of the Wisconsin Workers’ Compensation Act. The Supreme Court has found that when an employee has entered upon the performance of their duties and are found at a place where they might properly be in discharge of those duties, nothing appearing to the contrary, the presumption of continuity of employment is established. Tewes v. Industrial Commission, 194 Wis. 489, 215 N.W.898 (1927). In Tewes, employees were found drowned and presumed to be in the course of employment when there was no evidence to the contrary.
Not in Furtherance of Employer’s Business
In absent of evidence of abandonment of employment, it is presumed that employment continues. Hansen v. Industrial Commission, 258 Wis. 623, 46 N.W.2d 754 (1951). The employer has the burden of providing evidence to the contrary, which shifts the burden of proof then to the employee to prove the injury was in the course of employment. Goranson v. Department of Industry, Labor and Human Relations, 94 Wis. 2d 537, 289 N.W.2d 270 (1980).
Every employee whose employment requires the employee to travel is deemed to be performing services growing out of and incidental to employment at all times while on the trip, except when engaged in a deviation for a private or personal purpose. Wis. Stat. § 102.03(1)(f). Any accident or disease arising out of a hazard of any acts necessary for living or incidental thereto shall be deemed to arise out of the employee’s employment.Wis. Stat. § 102.03 (1)(f).
Basically, employees falling under the traveling employee standard set forth in Wis. Stat. § 102.03 are covered portal to portal. The only way for an employer to rebut this presumption is to establish the intent to abandon employment. Dibble v. Industrial Commission (Dept. of I.L.H.R.), 40 Wis. 2d 341, 161 N.W.2d 913 (1968).
Injuries sustained by a traveling employee engaged in reasonable recreational activities are covered. For example, an employee was involved in a skiing accident while working for CBS and covering an event and sustained injury. CBS, Inc. v. Labor and Industry Review Com’n, 219 Wis. 2d 564, 579 N.W.2d 668 (1998).
In general, an employee is not in the course of employment while traveling to and from work. However, there are several exceptions to the general rule.
No Fixed Place Of Work Exception
The Wisconsin Workers' Compensation Act does not provide a specific exception to injuries occurring to employees who have no fixed place of work exception. The general standard as to whether or not the employee substantially deviated from their employment while traveling would likely apply.
Transportation Included In Employment Exception
An employee is not in the course of employment while going to or from employment in a private or group or employer sponsored car pool, van pool, commuter bus service, or other ride sharing program in which the employee participates voluntarily and for the sole purpose of mass transportation to and from work. Wis. Stat. § 102.03(1)(c)3.
Special Missions, Assignments, or Circumstances Exception
Another exception recognized in Wisconsin is an employee who voluntarily participates in a program, event, or activity which is designed to improve the physical wellbeing of the employee whether or not it is on the employer’s premises. The employee must not be paid compensation for participating in the activity. Wis. Stat. § 102.03(1)(c)3.
Premises and Parking Lot Cases
An employee is in the course of his or her employment while on the employer’s premises or while in the immediate vicinity of the employer’s premises while going to and from employment in the ordinary and usual way. Any employee going between an employer’s designated parking lot and the employer’s work premises while on a direct route and in an ordinary and usual way, is deemed in the course of employment if injured Wis. Stat. § 102.03(1)(c)2.
Related to Employment
A private errand can be compensable if the private errand was performed on the employer’s premises, during work hours, and at the employer’s request. Continental Cas. Co. v. Industrial Commission, 28 Wis. 2d. 89, 135 N.W.2d 803 (1965).
Intentionally Self-Inflicted Injury or Death
Self-inflicted injuries and suicide are incidents generally considered not in the course of employment. Wis. Stat. § 102.03(1)(d). However, suicide can be a compensable injury if there is a “chain of causation” between the injury and the suicide. Brenne v. Department of Industry, Labor and Human Relations, 38 Wis. 2d 84, 156 N.W.2d 497 (1968). To be compensable, the work injury must have dominated the mind as to make it devoid of normal judgment and cause the act of suicide.
Employee’s Violation of the Law, Intoxication, and Illegal Use of Drugs
An employee’s claim for injury can not be denied based on violation of a law, intoxication, or use of illegal drugs under the Wisconsin Workers' Compensation Act. However, if the employer can establish a causal connection between the injury or accident and the employee’s intoxication benefits can be reduced by 15 percent up to a maximum reduction of $15,000.00. Wis. Stat. § 102.58. The burden of proof is on the employer to establish the employee was intoxicated and also the causal connection between the condition and the injury or accident. Haller Beverage Corp. v. Department of Industry, Labor and Human Relations, 49 Wis. 2d 233, 181 N.W.2d 418 (1970).
If an employee sustains a compensable injury and subsequently returns to work for the employer, temporary total disability benefits cease. If the employee remains in a healing period and is performing restricted type work, benefits can be denied if the employer can establish:
•The employee’s employment with the employer has been suspended or terminated due to the employee’s alleged commission of a crime, the circumstances of which are substantially related to that employment, and the employee has been charged with the commission of that crime. Wis. Stat. § 102.43(9)(b).
•The employee’s employment with the employer has been suspended or terminated due to the employee’s violation of the employer’s policy concerning employee drug use during the period when the employee could return to a restricted type of work during the healing period. Wis. Stat. § 102.43(9)(c).
•The employee has been convicted of a crime, is incarcerated, and is not available to return to a restricted type of work during the healing period. Wis. Stat. § 102.43(9)(d).
Employee’s Violation of Positive Orders of Employer
If an employee is injured while violating an order of the employer solely for the employee’s own benefits, the employee’s claim can be denied. Radtke Bros. v. Industrial Commission of Wisconsin, 174 Wis. 212, 183 N.W. 168 (1921). However, if the employee’s disobedient activities are in furtherance of the employer’s interest rather than solely personal to the employee, the claim can be compensable. Grant County Service Bureau, Inc. v. Industrial Commission, 25 Wis. 2d. 579, 131 N.W2d 293 (1964).
In general personal assaults on an employee do not arise out of and in the course of employment unless the condition of employment facilitates the injury.
The same theory applies for hostile attacks as it does for personal animosity. If the employment facilitates the injury, then the positional risk doctrine will apply. For example, the abduction and murder of a company president by an employee was considered to arise out of the president’s employment under the positional risk doctrine. Applied Plastics, Inc. v. Labor and Industry Review Com’n, 121 Wis. 2d 271, 359 N.W.2d 168 (Ct. App. 1984).
In general, an employee’s retirement following a work injury does not preclude the employee from receiving benefits under the Wisconsin Workers' Compensation Act. If the employee claims to have retired because of permanent restrictions related to his or her injury, he or she can still make a claim for loss of earning capacity benefits. However, if the employer makes a good faith job offer within the employee’s restrictions, that pays at least 85 percent of the employee’s pre-injury wage, which the employee refuses without good cause, there is a bar to a claim for loss of earning capacity. Wis. Stat. § 102.44(6).
Proof of Voluntary Retirement
There is no bright line rule to determine whether or not an employee has voluntarily retired in order to preclude the employee from receiving loss of earning capacity benefits under the Wisconsin Workers' Compensation Act. The case law on the issue seems to be very factually based. The Court will address whether or not the employer made a good faith offer of work within the employee’s restrictions following a work injury. They will also look at factors such as whether or not the employee has quit during the healing period and moved out of state. Anderson v. GMC, WC Claim No.: 92068305 (LIRC Nov. 29, 1993). The primary case addressing the retirement factors is Kohler Co. v. Department of Industry, Labor and Human Relations, 42 Wis. 2d. 396, 167 N.W2d. 431 (1969).
Calculation of Average Weekly Wage
An accurate calculation of the Employee’s average weekly wage is important as the wage determines the level of temporary and permanent benefits paid to the Employee. Average weekly wage is calculated pursuant to Wis. Stat. §102.11. Note that wage information is required to be provided to the Department of Workforce Development on a WKC-13-A Wage Information Supplement form. This form is filed with the First Report of Injury.
• Full-time Employment
This calculation is done in two different ways. The higher calculation is the one that is used.
1) Hourly earnings $ 9.50 2) Actual gross earnings
Average hours/day x 8 in past 52 weeks $22,250
Average days/week x 5 Divided by no. of weeks
$380.00 worked in past 52 weeks )52
AWW = $427.88
(averaging method is higher than straight time calculation)
1) Assume scenario in Example #1 above
2) Actual gross earnings
in past 52 weeks $15,520
Divided by no. of weeks
worked in past 52 weeks )31
AWW = $500.65
Where the employee is paid a monthly salary, the average weekly wage is calculated by multiplying the monthly salary by 3/13:
$2500 x 3 )13 = AWW = $576.92
A. General rule
The general rule provides that part-time earnings are expanded to full-time for the calculation of average weekly wage. Full-time is generally presumed to be 40 hours per week. There are two exceptions to this general rule. These will be described below.
For example, assume you have a claim for a waitress who earns $6.00 per hour plus tips of $2.00 per hour resulting in an hourly wage of $8.00. She typically works 12 hours per week. Her actual weekly wage is $96.00.
When this employee’s wage is expanded to full-time (40 hours) the calculation is as follows:
$8.00/hour x 40 hours/week = AWW $320.00
Compensation rate for temporary disability is $213.33
Note: The expanded AWW is used to calculate permanent disability benefits and temporary total disability benefits.
The cap for temporary partial disability benefits is the actual AWW.
B. Exception for regularly scheduled class of part-time employees
Exception #1: If the employee is part of a ‘regularly scheduled class of part-time employees’ as defined in Wis. Stat. §102.11 the part-time actual wage is expanded to 24 hours per week. If the waitress falls within this provision the calculation of her average weekly wage is as follows:
$8.00/hour x 24 hours/week = AWW $192.00
Compensation rate for temporary disability is $128.00
A regularly scheduled class of part-time employees is defined as…
•A group of employees who do the same type of work at the same location;
•The minimum and maximum weekly hours regularly scheduled by the employer for the member of the class during the 13 weeks immediately preceding the date of the injury vary by no more than 5 hours;
•At least 10 percent of the employer’s workforce doing the same type of work are members of the class; and
•The class has more than one employee.
C. Exception for employees who are not part of a class but who restrict their availability to part-time employment and who are not employed elsewhere.
Exception #2: Where an employee, who is not part of a class, limits his or her availability for employment and who is not employed elsewhere the average weekly wage is expanded to full-time as follows, but the compensation rate for temporary disability is limited to the employee’s actual wage. The result for our waitress example is:
$8.00/hour x 40 hours/week = AWW $320.00
Compensation rate for temporary disability $96.00
*Note the exception on the WKC-13-A when you pay the employee at 100 percent of their average weekly wage.
D. Variations on a theme
Where an employee is part of a regularly scheduled class of part-time employees and also limits his or her availability to part-time hours the wage is expanded to 24 hours per week and the compensation rate for temporary disability is limited to actual wage.
E. Miscellaneous rules to keep in mind
•Daily benefits are computed using 1/6 of the weekly benefit.
•Hourly earnings include non-cash payments such as meals, lodging, and utilities.
•Hourly earnings do not include fringe benefits such as health insurance.
•An employee under the age of 27 is raised to the maximum wage for calculation of permanent disability and death benefits. This is a strong presumption that can be rebutted by evidence that the employee would not have been earning a wage entitling him or her to the maximum compensation rate at age 27.
•When using an expanded AWW, calculation of TPD uses a formula outlined in form WKC-7359 Temporary Partial Disability. This form is filed with the DWD and they will check the accuracy of your calculations.
•Special rules apply where there is no hourly rate. The average gross rate over the 6 weeks before the injury is used.
•Special rules apply for piece work, truck drivers, sheltered workshop employees, volunteer firefighters, husband/wife teams, etc. When in doubt, check with the DWD or seek legal opinion.
•If the employer is paying less than the legal minimum wage the legal minimum wage is used. Exception to this rule is a self-employed person.
•Secondary employment earnings are not used in calculation of the average weekly wage.
F. Seasonal Employment
Seasonal employment is employment that can be conducted only during certain times of the year and only for up to 14 weeks within a calendar year. It is not the same as summer employment. It is typically associated with the canning industry and occupations such as Christmas tree harvesters. A normal work week is difficult to establish so a 44 hour week is used as a reasonable average.
Current maximum compensation rate:
The maximum compensation rate changes on January 1 of each calendar year and more often during some years. The general temporary total disability rate is two-thirds of the employee’s average weekly wage. Please see Wisconsin Wage and Rate Chart for each year which can be found on the DWD website at www.dwd.state.wi.us.
Factors affecting entitlement to temporary total disability:
•Temporary total disability benefits are payable until the Employee reaches an end of healing unless the Employee unreasonably refuses a good faith offer of employment from any employer.
•There is no cap on the length of time an Employee can be paid temporary total disability benefits.
•The Employee does not need to participate in any type of job search in order to be entitled to temporary total disability benefits; however, the Employee is required to provide his employer with his restrictions.
•Effective May 1, 2010 temporary total disability benefits are not payable during a period of incarceration.
Temporary partial disability benefits are payable during the employee’s healing period. Once the employee reaches an end of healing, the employee is no longer entitled to temporary partial disability benefits.
The Wisconsin workers' compensation statute identifies two types of permanent partial disability. The first is for a scheduled injury and the second is for an unscheduled injury. The scheduled injuries are identified as follows:
Loss of Body Part – UpperWeeks of compensation
Arm at the shoulder 500 weeks
Arm at the elbow 450 week
Hand / at wrist 400 weeks
Palm where thumb remains 325 weeks
Of all fingers on one hand at their proximal joints 225 weeks
Loss of Body Part – LowerWeeks of compensation
Leg at the hip joint 500 weeks
Leg at the knee 425 weeks
Foot at the ankle 250 weeks
Loss of Body Part – HeadWeeks of compensation
One eye, by enucleation or evisceration 275 weeks
One eye for industrial use 250 weeks
Total deafness by accident or sudden trauma 330 weeks
Total deafness, one ear, from accident or sudden trauma 55 weeks
Loss of Body Part – FingerWeeks of compensation
Finger Distal 2nd Joint Proximal Metacarpal & Metacarpal bone
Thumb 50 weeks 0 weeks 120 weeks 160 weeks
Index 12 weeks 30 weeks 50 weeks 60 weeks
Middle 8 weeks 20 weeks 35 weeks 45 weeks
Ring 6 weeks 15 weeks 20 weeks 26 weeks
Little 6 weeks 16 weeks 22 weeks 28 weeks
Loss of Body Part – ToeWeeks of compensation
Toes Distal 2nd Joint Proximal Metacarpal & Metacarpal bone
Great 12 weeks 0 weeks 25 weeks 83 1/3 weeks
Second 4 weeks 6 weeks 8 weeks 25 weeks
Third 4 weeks 4 weeks 6 weeks 20 weeks
Fourth 4 weeks 4 weeks 6 weeks 20 weeks
Little 4 weeks 4 weeks 6 weeks 20 weeks
The second type of permanent partial disability is for unscheduled injuries which are any and all claims for injury to the employee’s spine, internal organs, or brain. The permanent partial disability is calculated based on a percentage of 1000 weeks.
The permanent partial disability rate for all benefits changes on a yearly basis. Please see Wisconsin Wage and Rate Chart identifies the maximum permanent partial disability rate for each year of injury which can be found on the DWD website at www.dwd.state.wi.us.
Permanent partial disability is payable upon cessation of temporary total or temporary partial disability benefits.
There are minimum ratings set out in Wis. Adm. Code § DWD 80.32 . For example, surgery for a medial meniscus is an automatic 5 percent of the knee and a one level lumbar fusion is 10 percent to the body as a whole.
An employee can make a claim for permanent total disability if they have an unscheduled injury. There is no claim for permanent total disability if an employee has a scheduled injury other than specified injuries including the loss of a limb. Permanent total disability benefits are payable for life. If an employee, who is determined to be permanently and totally disabled dies there is also payment of burial expenses and payments into the State Fund
Permanent total disability represents 100 percent loss of earning capacity. The Administrative Law Judge will consider the Employee’s education, work history, training, and whether the Employee can be vocationally rehabilitated. An employee will be found to be permanently and totally disabled if he or she can perform no services other than those so limited in quality, dependability, or quantity that a reasonably stable market does not exist. These cases, when contested, always involve vocational experts.
If an employee has permanent restrictions related to a compensable work injury and the employer does not make a job offer the employee can make a claim for retraining. There are two avenues of retraining in Wisconsin. The first is Department of Vocational Rehabilitation (DVR) retraining and the second is retraining through the private vocational counselor . Wis. Stat. § 102.61 .
If the DVR approves the employee for retraining the employer and insurer are liable for payment of temporary total disability benefits during the retraining period. The employer and insurer are also responsible for expenses such as tuition, mileage and meals.
If DVR approves the employee for retraining, but does not have funding there is a separate process for the employee to make a claim for retraining benefits. The employee may be entitled to a private vocational counselor to determine if retraining is appropriate. If the private vocational counselor determines retraining is appropriate and the employer does not make a job offer at 90 percent of the employee’s pre-injury average weekly wage, the employee can be retrained at the expense of the employer and insurer. Wis. Stat. § 102.61(1g)(a).
A rehabilitative training program that lasts less than 80 weeks is presumed to be reasonable. In order for the employee to establish entitlement to retraining benefits beyond 80 weeks they must prove the additional training is needed to restore their earning capacity. Wis. Stat. § 102.61(1m)(a,b,c).
Return to Work with Loss of Earnings
A loss of earning capacity claim can only be made when the employee sustains an unscheduled injury. Loss of earning capacity benefits are calculated based upon a 1000 week schedule and applying the appropriate rate for permanent partial disability. For example, an employee injured on January 2, 2011 who sustains an 25 percent loss of earning capacity will be awarded 250 weeks of benefits at the maximum rate of $302.00, $75,500.00. (Note: if this employee had a 10 percent functional permanent partial disability rating, this is included in the loss of earning capacity benefit.) Wis. Stat. § 102.44(2)(3). The Administrative Law Judge must take into account the effect of the injured employee’s permanent physical and mental limitations resulting from the injury. The factors to address are set forth in Wis. Adm. Code § DWD Rule 80.34 and are age, education, training, previous work experience, previous earnings, present occupation and earnings, likelihood of future suitable occupational change, efforts to obtain suitable employment, willingness to make reasonable change in a residence to secure suitable employment, success of and willingness to participate in a reasonable physical and vocational rehabilitation program, and other pertinent evidence.
Earning Power Assessment
To determine the employee’s loss of earning capacity, the employee must obtain a vocational evaluation with a vocational expert. Traditionally, loss of earning capacity benefits are not voluntarily conceded by an employer and insurer until the employee obtains their own vocational report. Once the employee obtains their own expert vocational report, the employer and insurer generally obtain their own vocational report to address the employee’s loss of earning capacity.
Employer Job Offer
Under Wis. Stat. § 102.44(6)(a) when an injured employee returns to work for the employer for whom he or she worked at the time of injury, the loss of earning capacity shall be based upon the physical limitations resulting from the injury unless the actual wage loss, in comparison with earnings, at the time of injury equals or exceeds 15 percent. A good faith offer of employment refused by the employee without reasonable basis has the same effect as actual re-employment. Wis. Stat. § 102.44(6)(g).
Vocational experts are used in Wisconsin to provide opinions on loss of earning capacity and vocational retraining programs. The State of Wisconsin, Department of Workforce Development certifies vocational specialists who provide opinions on vocational retraining. Wis. Adm. Code § DWD Rule 80.49(6).
At the end of a medical healing period the employer and insurer are required to notify the employee of the employee’s potential to receive rehabilitation services. If the employer does not have a job offer to make to the employee and the Department of Vocational Rehabilitation can not serve the eligible employee, the employee can choose their own vocational expert from a list provided by the State of Wisconsin, Department of Workforce Development. Wis. Adm. Code § DWD Rule 80.49(7)(c).
The employer and insurer are liable for payment to the private rehabilitation counselor for services they provide up to a maximum limit. The maximum limit changes every year. In 2014, the maximum limit for private rehabilitation counselor fees is $1,585.00
Amputation or Loss of Use
The Wisconsin Workers' Compensation Act compensates employees for loss of use or amputation under their payment of permanent disability benefits as set forth in Wis. Stat. § 102.52. If an employee sustains an injury resulting in amputation of a body part, the permanent partial disability schedule under Wis. Stat. § 102.52 outlines the number of weeks of compensation to be paid. The compensation rate is the permanent partial disability rate set forth by the State of Wisconsin, Department of Workforce Development. This rate changes every year and the date of injury controls.
There are special rules for injuries sustained to multiple body parts under the schedule of permanent partial disability ratings. They are identified in Wis. Stat. § 102.53. In addition, if an employee injuries their dominant hand that causes an amputation of more than two-thirds of the distal joint of the finger, the period for which indemnity is payable for that disability or amputation is increased by 25 percent. Wis. Stat. § 102.54.
Disfigurement benefits are awarded by workers’ compensation judges in Wisconsin based on Wis. Stat. § 102.56. The determination of the amount of disfigurement is solely at the discretion of the Administrative Law Judge. The maximum benefit awarded is the employee’s average annual earnings, which is 50 times the employee’s average weekly wage.
Employees can recover benefits under the disfigurement statute based on a limp as nothing in the statute limits disfigurement to ampuations, scars, and burns. Wis. Stat. § 102.56 and Dane, County of v. Labor and Industry Review Com’n, 315 Wis. 2d. 293, 759 N.W.2d. 571 (2009).
Wis. Stat. § 102.56 distinguishes disfigurement claims that can be presented if an employee returns to work for the employer versus an employee who has not returned to work. If an employee has not returned to work for the employer and has the occasion for potential wage loss, the judge shall take into account the employee’s age, education, training, and previous experience and earnings of the employee, the employee’s present occupation and earnings, and likelihood of future suitable occupational change. Consideration for the disfigurement is confined to those body parts that are exposed in the normal course of employment. The judge shall also take into account the appearance of the disfigurement, its location, and the likelihood its exposure and occupation for which the employee is suited. Wis. Stat. § 102.56(1).
If an employee has returned to work for the employer, who employed him or her at the time of the injury at the same or higher wage, the employee may not be compensated unless the employee shows that he or she probably has lost or will lose wages due to the disfigurement. Wis. Stat. § 102.56(2).
Loss of Sight
The Wisconsin statute outlines permanent partial disability, which can be awarded an employee for loss of vision. Wis. Stat. § 102.52(15)(16) . A medical practitioner must provide a report identifying the extent of any loss of vision due to an injury. The Wis. Adm. Code § DWD 80.26 requires delay in assessment of permanent partial disability for 12 months for any disturbance of extrinsic ocular muscles, optic nerve atrophy, ocular muscles, retina injuries sympathetic opthalmia or traumatic cataract.
Loss of Hearing
The Wisconsin Worker’s Compensation Act allows for claims related to occupational deafness. Occupational deafness is defined as: “permanent partial or permanent total loss of hearing of one or both ears due to prolonged exposure to noise in employment” Wis. Stat. § 102.555(1). “Noise” is defined as: “sound capable of producing occupational deafness” Wis. Stat. § 102.555(1). “Noisy Environment” is defined as: “employment in the performance of which an employee is subjected to noise” Wis. Stat. § 102.555(1).
No temporary total or temporary partial disability benefits are due for loss of hearing due to prolonged exposure to noise unless the employee is transferred from one department to the other and sustains a wage loss due to the transfer.
The date of injury is usually a subject of contention in hearing loss claims. The date of injury can be at the option of the employee for one of four events. They are as follows:
(1) Transfer to non-noisy employment by an employer whose employment has caused occupational deafness;
(2) The last date actually worked before retiring, regardless of vacation pay or time, sick leave, or any other benefit to which the employee is entitled;
(3) Termination of the employer/employee relationship; or
(4) Layoff, provided the layoff is complete and continuous for 6 months. Wis. Stat. § 102.555(4).
Wis. Stat. § 102.555(8) goes on to indicate: “an employer is liable for the entire occupational deafness to which his or her employment has contributed; but if previous deafness is established by a hearing test or other competent evidence, whether or not the employee was exposed to noise within the 2 months preceding such tests, the employer is not liable for previous loss so established nor is the employer liable for any loss for which compensation has previously been paid or awarded.”
The Department of Workforce Development has further established rules to determine whether there has been harmful noise. Wis. Adm. Code § DWD 80.25(1)defines “harmful noise” as follows: “hearing loss resulting from hazardous noise exposure depends upon several factors, namely, the overall intensity (sound pressure level), the daily exposure, the frequency characteristic of the noise spectrum, and the total lifetime exposure. Noise exposure level of 90 decibels or more as measured on the A scale of a sound level meter for 8 hours a day is considered to be harmful.”
Wis. Adm. Code § DWD 80.25 goes on to further identify how harmful noise levels and hearing acuity should be measured.
Penalties can be awarded against an employer and/or an insurer for bad faith or delay in payment of benefits. The penalty for bad faith is found in Wis. Stat. § 102.18(1)(bp) and Wis. Adm. Code § DWD 80.72(2) . An employee can be awarded 20 percent of the total compensation due or $30,000.00 for each event or occurrence of malice or bad faith. The 2-part test to demonstrate bad faith is:
•That the employer and/or insurer had no reasonable basis for denying benefits;
•That the insurer knew or recklessly disregarded that there was no reasonable basis for denying benefits. Anderson v. Continental Ins. Co., 85 Wis. 2d. 675, 271 N.W.2d. 368 (1978).
Furthermore, the Administrative Law Judge must find that it is clear that the employer or insurer has acted with an absence of honest, intelligent action or consideration based upon a knowledge of the facts and circumstances. Kimberly-Clark Corp. v. Labor and Industry Review Com’n. 138 Wis. 2d. 58, 405 N.W.2d 684 (Ct. App. 1987). By definition, bad faith can not be unintentional.
In Brown, the court further explained when a claim is “fairly debatable”. Brown v. Labor and Industry Review Com’n, 267 Wis. 2d. 31, 671 N.W.2d. 279 (2003). According to the Supreme Court, the test for determining whether an employer or insurer has a reasonable basis to suspend benefits is whether or not the employer and insurer properly investigated the claim and whether the results of the investigation were subject to reasonable evaluation and review.
The delay in payment penalty is ten percent of compensation due. The delay in payment statute, Wis. Stat. § 102.22(1) contains two sections identifying one discretionary and one mandatory penalty.
The discretionary penalty is allowed if the employer or insurer inexcusably delays making payment that is due to an injured employee more than 14 days after the day the employee leaves work as a result of the injury. Wis. Stat. § 102.22(1) 2.
The mandatory penalty is awarded if an employer or insurer inexcusably delays making the first payment due an injured employee for more than 30 days after the day on which the employee leaves work and the payment due is $500.00 or more. Once the dollar amount exceeds $500.00 the Department must assess a penalty. Wis. Stat. § 102.22(1).
Interest is awarded when an order from the Labor and Industry Review Commission affirms an underlying Administrative Law Judge’s order. The interest is due on all appeals. The amount of the interest is seven percent and is based on the period from 21 days after the date of the Administrative Law Judge order through the date of the Labor and Industry Review decision. Wis. Stat. § 102.22(3).
An employee’s attorney must request the reasonable costs of collection be awarded prior to the issuance of an order. Wis. Stat. § 102.26(3)(b)2. Costs that are generally reimbursed in an order include those costs incurred in developing the employee’s claim. Costs include charges for obtaining medical reports and opinions, vocational evaluations and opinions, and witness fees. Costs that are generally not reimbursed include long distance telephone calls, photocopies, facsimiles, and postage.
An employee’s attorney can be awarded 20 percent of the amount of benefits obtained on behalf of the employee. Wis. Stat. § 102.26(2). Only contingency fees are allowed. Hourly fees are not allowed. Wis. Stat. § 102.26(2)(4).
When there is no dispute over the amount of compensation due and no hearing or appeal is filed, fees are limited to $250.00. Wis. Stat. § 102.26(2).
In general, attorney fees are not allowed on payment of medical expenses. Wis. Stat. § 102.30(7)(a). This statute applies when the employee’s medical expenses have been paid by a non-industrial insurance policy or the employee’s health insurer. However, the issue becomes more controversial
when the medical expenses remain unpaid. In the situation where there is a substantial amount of medical expenses and the employee’s attorney can establish he or she spent a considerable amount of time pursuing payment of the medical expenses an Administrative Law Judge may award attorney fees of 20 percent of the total settlement or award. Williams v. Waupaca Foundry, Inc., WC Claim No.: 85-42758 (LIRC Jan. 23, 1989).
Death benefits are payable to dependents in Wisconsin when one of three cases are met:
•When an employee dies from a work injury;
•When an employee who has been deemed permanently and totally disabled due to a work injury dies from any cause, whether or not due to the injury; or
•When an employee with permanent disability dies before all the permanent benefits are due and death is not related to the injury.
Dependents are defined as an employee’s wife, husband, child, parent, or other close relative.Wis. Stat. § 102.48 and 102.51(1). The wife/husband must be living with the employee at the time of his or her death. Wis. Stat. § 102.51(1)(a)1&2. A domestic partner identified under Wis. Stat. § 770 upon the death of his or her partner/employee with whom he or she is living at the time of the partners/employee’s death is considered a dependent. Wis. Stat. § 102.51(a)2m .
A child is defined as a person under the age of 18 who is living with the injured employee at the time of the death and there being no surviving dependent parent. Wis. Stat. § 102.51(1)(a)3. A child over the age of 18, but physically or mentally incapacitated from earning upon the death of the injured employee with whom he or she is living at the time of death and there is no surviving dependent parent is also identified as a dependent and entitled to death benefits. Wis. Stat. § 102.51(1)(a)4.
No person is considered a dependent unless that person is a spouse, a domestic partner defined under Wis. Stat. § 770, a divorced spouse who has not remarried, or a lineal descendant, lineal ancestor, brother, sister, or other member of the family, whether by blood or by adoption of the deceased employee. Wis. Stat.e § 102.51(2)(a).
Death Benefits/Parents and Siblings
If no person who is defined as a wholly dependent individual survives the deceased employee upon the deceased employee’s death the unestranged surviving parent or parents can be awarded death benefits. Wis. Stat. § 102.48(1). The unestranged surviving parent or parents to who the deceased employee has contributed less than $500.00 in the 52-weeks preceding the injury causing death receive a death benefit of $6,500.00. Wis. Stat. § 102.48(1). If the parents are not living together, the Department of Workforce Development divides the sum into such proportion as it deems just.
Siblings may be entitled to death benefits if the Department of Workforce Development determines that the deceased employee may have provided aid to support the dependent but for the injury.Wis. Stat. § 102.48(2).
Death Benefits/Amounts of Benefits
The date of death determines the amount of death benefits due. Wis. Stat. § 102.51(4). The maximum death benefit is four times the deceased employee’s average annual earnings, but when added to the disability indemnity paid and due at the time of death, shall not exceed two-thirds of the weekly wage for the number of weeks set forth in Wis. Stat. § 102.44(3). Wis. Stat. § 102.46. This provision of the Wisconsin Workers' Compensation Act when read in conjunction with Wis. Stat. § 102.44(3) provides for compensation of permanent total disability during the life of the employee instead of for a specific given number of weeks.
In addition to the death benefits, the employee’s burial expenses must be paid with a specific cap on the expense of $10,000.00. Wis. Stat. § 102.50. The maximum limit of burial expenses was increased to $10,000.00 effective May 1, 2010 and the interested reader should always check the burial expense maximum at the time of the death of the employee.
When an employee is injured and subsequently dies due to the injury, any unaccrued permanent partial disability is first applied towards the burial expense. Any remaining sum is next paid to the dependents and there is no liability for payment of other benefits. Wis. Stat. § 102.47(2).
If an injured employee dies and there are no dependents, all death benefits are paid into the Work Injury Supplemental Benefit Fund. Wis. Stat. § 102.49(5)(b) and 102.65 .
The employer and insurer are liable for medical expenses that are reasonably required to cure and relieve from the effects of the injury. Wis. Stat. § 102.42(1). The employer and insurer must supply medical, surgical, chiropractic, psychological, podiatric, dental, and hospital treatment, medicines, medical and surgical supplies, crutches, artificial members, appliances, and training and use of the artificial members and appliances, or, at the option of the employee, Christian Science treatment in lieu of the medical treatment. Wis. Stat. § 102.42(1). The obligation to provide medical treatment continued to prevent further deterioration of the employee’s condition or to maintain the existing status of such condition, whether or not healing is completed. Therefore, if an employee reaches an end of healing under the Wisconsin Workers' Compensation Act they still are entitlement to ongoing medical treatment as long as it is reasonably required to cure and relieve from the effects of the injury.
Employers and insurers need to be aware that if an employee is requesting invasive treatment, the Wisconsin Workers' Compensation Act requires the employer to pay disability indemnity benefits for all medical treatment undertaken by the employee in good faith. An employer or insurer is not liable for disability indemnity benefits for any disability incurred as a result of any unnecessary treatment undertaken in good faith that is non-invasive or not medically acceptable. Wis. Stat. § 102.42(1m). In other words, if an employee is requesting a surgical procedure and an employer and insurer have a medical opinion indicating that surgical procedure is not reasonable and necessary, they can not deny payment for the disability if the employee undertakes the treatment in good faith and the treatment is generally medically acceptable.
The employee has two choices of treating physician. Wis. Stat. § 102.42(2). The employer and insurer can not direct care. By mutual agreement of the employee, employer, and/or insurer, the employee may choose a third treating practitioner. Referrals do not count as a choice. Wis. Stat. § 102.42(2). If the employee has an emergency, the employer and insurer can arrange for treatment for the injured employee. The treatment at that emergency facility is not considered a choice of the employee. Wis. Stat. § 102.42(2)(a).
An employee may choose a medical practitioner who is an out-of-state practitioner if the employer and insurer agree. However, if an employee is referred by an in-state practitioner to an out-of-state practitioner, that is not considered a choice and the out-of-state treatment is allowed. Wis. Stat. § 102.42(2)(a).
The employer and insurer are liable for reasonable travel expenses for the employee to seek medical treatment. The mileage rate is set by the State of Wisconsin, Department of Workforce Development and as of 2013 is 51 cents per mile. If an employee requires a hotel stay or meal expense, that can be compensable depending on the reasonableness of the expense.
Refusal of Medical Treatment
No compensation is payable for death or disability caused by an employee’s unreasonable refusal or neglect to submit to or follow competent and reasonable medical or surgical treatment. Wis. Stat. § 102.42(6). The Department of Workforce Development, as a matter of policy, does not consider refusal to submit to surgery as an unreasonable refusal
SUBROGATION OR CREDIT
The employee, employer, or insurer have equal rights to maintain an action in tort against the party who caused the employee’s injury. Wis. Stat. § 102.29. The liability of the tortfeasor is divided under a specific formula. The employee’s attorney first receives his or her costs and fees. One-third of the remainder is paid to the injured employee. Out of the remaining balance, the employer or insurance carrier are reimbursed for all payments made by it, or which it may be obligated to make in the future. However, they can only receive out of the remaining balance the amount they have paid. Any additional money is identified as a cushion against future payments due the employee. Wis. Stat. § 102.29.
Recovery of uninsured motorist benefits is not subject to this formula. A spouse’s action for loss of consortium is also not subject to the distribution of benefits.
Attorney fees are dealt with as noted above. The attorney fees are paid out of the settlement proceeds. Wis. Stat. § 102.29(1) .
Motor Vehicle Accidents
Motor vehicle accidents are treated just like any other claim for recovery and subrogation. The employer and insurer have a statutory right to reimbursement under the formula set forth in Wis. Stat. § 102.29 for all benefits recovered as the result of the motor vehicle accident with the exception of benefits recovered from uninsured motorist benefits.
The employer and/or insurer are liable for payment of medical expenses under the Wisconsin Workers' Compensation Act and the workers’ compensation payment is considered primary.
If an employee’s workers’ compensation claim is denied and their medical benefits are paid by a Medicaid or public assistance program, the workers’ compensation carrier is liable for reimbursing the public assistance or Medicaid program for benefits paid if they are found liable for the employee’s injury. However, the governmental unit is required to give notice to the employer and insurer of their claim. Wis. Stat. § 102.27(2)(b).
Injured workers in Wisconsin can not receive both concurrent workers’ compensation benefits and Social Security Disability benefits if combined benefits are more than 80 percent of their average current earnings. Wis. Stat. § 102.44(5) . The employer and insurer decrease the benefits they pay based on a formula calculation on the employee’s Social Security Disability benefits received. Social Security Retirement benefits do not affect the receipt of workers’ compensation benefits in Wisconsin. There is no Social Security offset against vocational retraining benefits. Wis. Stat. § 102.44(5)(g).
The offset of Social Security Disability benefits against the workers’ compensation benefits received applies to the employee’s net combined benefit after attorney fees and costs. The Workers’ Compensation Advisory Counsel (WCAC) agreed in 2008 to change the manner in which attorney fees are calculated in cases where the employee is receiving Social Security Disability benefits and there is an offset. See Insurance Letter No.: 471 on the State of Wisconsin, Department of Workforce Development website at www.dwd.state.wi.us.
Child support or family support benefits can also reduce the payment of workers’ compensation to the employee. Wis. Stat. § 102.27(2).
In order to appear before the State of Wisconsin, Department of Workforce Development an attorney must be licensed in the State of Wisconsin. An attorney who is not licensed in the State of Wisconsin must obtain prior approval from the State of Wisconsin, Department of Workforce Development in order to appear. Wisconsin does not have any certifying organization in the area of workers’ compensation law. There are no “specialists” in the practice of workers’ compensation that are recognized by the State of Wisconsin or the State Bar Association.
Claims professionals are not required to be licensed in Wisconsin in order to manage and adjust workers’ compensation claim. There is no licensing or continuing education requirement.
Wis. Stat. § 102.17(1)(c) permits people other than attorneys to appear before the Department of Workforce Development on behalf of another person.
Permission to appear at a single hearing may be issued by the Department of Workforce Development upon application evidencing qualifications provided by the statute and the department rules. Permission may be given to appear in three cases before the issuing of a license. Wis. Adm. Code § DWD 80.20(1)(a) .
LITIGATION AND APPEAL
Workers’ Compensation Judge Proceedings
Office of Adjudication
The State of Wisconsin, Department of Workforce Development is the office of adjudication for Wisconsin workers’ compensation proceedings.
Appointment of Workers’ Compensation Judges
The Workers’ Compensation Division Bureau of Legal Services oversees the workers’ compensation hearing section of the Department of Workforce Development. Hearing judges are appointed and serve out of locations in Madison, Milwaukee, and Appleton, Wisconsin.
Qualifications of WCJ
The only requirement for appointment to the position of a workers’ compensation judge is the applicant must be an attorney in good standing before the State of Wisconsin Supreme Court.
If liability for workers’ compensation benefits is denied, the employee or the employee’s attorney can file a Hearing Application with the State of Wisconsin, Department of Workforce Development. The form, Hearing Application/WKC-7, sets forth a description of the injury, the disability being claimed, and the names of treating physicians. The Department of Workforce Development serves the employer and insurance carrier. Wis. Stat. § 102.17(1)(a) and Wis. Adm. Code § DWD 80.05.
The Department of Workforce Development does not require any type of alternative dispute resolution. Once a Hearing Application is filed and the employee’s attorney completes a form, Certificate of Readiness, the Department of Workforce Development causes the case to be set for hearing. Wis. Stat. § 102.17(1)(a)2.
The Hearing Application is like a Summons and Complaint in Circuit Court. The employer and insurer have 20 days from Notice of Application to file an Admission to Service and Answer to Application for Hearing/WKC-1A with the Department of Workforce Development and serve all parties of record. Wis. Adm. Code § DWD 80.07. As a practical matter, the Department of Workforce Development gives several notices to the employer and insurer to file an Answer and will not issue a default unless the Answer severely late.
A pre-hearing conference will be held if the employee is not represented by an attorney. Sometimes pre-hearing conferences are held when there are multiple employers and insurers involved in the case. Wis. Stat. § 102.17(1)(b).
At the hearing the employee, employer, and insurer are required to submit medical evidence to support their claim. The medical evidence should be accompanied by a WKC-16B. In addition, parties are advised to file all certified medical records with the Department of Workforce Development at least 15 days prior to a hearing. Wis. Stat. § 102.17(d)1. By signing the WKC-16B form the physician agrees to be subjected to cross examination, either by hearing or by deposition, should the opposing counsel request it. Wis. Stat. § 102.17(1)(d).
Hearings are scheduled for up to four hours depending on the issues in dispute and the Department’s estimate as to the length of time needed to conduct the hearing. All parties are afforded the opportunity for a full, fair, public hearing after reasonable notice. Wis. Stat. § 102.18(1)(a). Postponements are not favored or routinely granted. The decision to grant a postponement is at the discretion of the Administrative Law Judge. Wis. Adm. Code § DWD 80.49(2).
The Administrative Law Judge may question any witness during a hearing. The purpose of the Administrative Law Judge in questioning a witness may be to assist in the examination or obtain other useful information.
If testimony presented at a hearing indicates a dispute or creates a doubt as to the extent or cause of disability or death, the Department of Workforce Development may direct that the injured employee be examined or an autopsy be performed. Wis. Stat. § 102.17(1)(g). The expense of the examination, autopsy, or opinion is to be paid for by the employer.
An Administrative Law Judge may also cause testimony to be taken or an inspection of a premises made, or time books and payroll records of an employer to be examined. Wis. Stat. § 102.17(1)(e). All ex-parte testimony taken by the Department shall be reduced to writing and any party has the opportunity to rebut that testimony at the final hearing.
The Department of Workforce Development does not allow discovery depositions. Wis. Adm. Code § DWD 80.11. There are limited situations where a deposition may be taken and are identified as a witness who is:
•Beyond reach of the Subpoena of the Department;
•Who is about to go out of the state, not intending to return in time for the hearing;
•Who is so sick, infirm, or aged as to make it probable that the witness will not be able to attend the hearing;
•Who is a member of the legislature, if any committee of the same, or the house of which the witness is a member, is in session, provided the witness waives his or her privilege.Wis. Stat. § 102.17(1)(f).
The Administrative Law Judge who conducts the hearing and closes the record has 90 days after the final hearing to issue a written decision. Wis. Stat. § 102.18(1)(b). The Administrative Law Judge at his or her discretion may make an interlocutory finding, order, or award, or may issue a final award. Wis. Stat. § 102.18(1)(b).
Workers’ Compensation Appeal Board
The Labor and Industry Review Commission (LIRC) is the ultimate decision maker for the State of Wisconsin, Department of Workforce Development, Worker’s Compensation Division. LIRC is an independent fact finder and its primary responsibility is to review workers’ compensation decisions from the Administrative Law Judges and issue its own decisions and findings.
Any party in interest may petition LIRC for review of a decision of the Administrative Law Judge within 21 days of the order. Wis. Stat. § 102.18(3) and Wis. Adm. Code § LIRC 1.02. If no petition for review is filed within 21 days, the Administrative Law Judge’s order is considered a final order. Wis. Stat. § 102.18(3).
Scope of Review of LIRC
The Labor and Industry Review Commission must independently interpret the workers’ compensation statute and make factual findings when determining an employee’s entitlement to workers’ compensation benefits. Hagen v. Labor and Industry Review Com’n, 210 Wis. 2d. 12, 563 N.W.2d. 454 (1997). The Labor and Industry Review Commission conducts a de novo review. There are generally three commissioners who jointly issue a decision from LIRC. Their decision is based on their own findings of fact. United Wisconsin Ins. Co. v. Labor and Industry Review Com’n, 229 Wis. 2d. 416, 600 N.W.2d 186 (Ct. App. 1999).
LIRC can not substitute a basis for liability that was not tried before the underlying Administrative Law Judge. No additional testimony, witnesses, or evidence is provided to LIRC. The commissioners review the underlying evidence admitted by the Administrative Law Judge. As to witnesses credibility, the commissioners are vested with the responsibility to make credibility determinations. Hakes v. Labor and Industry Review Com’n, 187 Wis. 2d. 582, 523 N.W.2d. 155 (Ct. App. 1994). However, generally the commissioners will contact the Administrative Law Judge to discuss the issue of credibility. The Supreme Court has required the commissioners to consult with the Administrative Law Judge who actually observed the witnesses at the hearing to discuss credibility. Transamerica Ins. Co. v. Department of ILHR, 54 Wis. 2d. 272, 195 N.W.2d. 656 (1972).
The commissioners of LIRC apply the “burden of proof” instead of a “standard of review”. The commissioners independently review whether or not the employee sustained his or her burden of proof beyond a “legitimate doubt” as to the existence of facts essential to the employee’s workers’ compensation claim. Bumpas v. Department of Industry, Labor & Human Relations, 95 Wis. 2d. 334, 290 N.W.2d. 504 (1980).
LIRC may set aside its own final decision for any reason within 28 days of the decision. Wis. Stat. § 102.18(4)(b). LIRC also has authority to set aside any of its own final orders or the orders of an Administrative Law Judge within one year from the date of the order if there is mistake or newly discovered evidence. Wis. Stat. § 102.18(4)(c). The criteria for establishing newly discovered evidence is:
•The evidence must have come to the moving parties knowledge after trial;
•The moving party must not have been negligent in seeking to discover it;
•The evidence must be material to the issue;
•The testimony must not be nearly cumulative to the evidence which was introduced at trial
•It must be reasonably probable that a different result would be reached on a new trial.
Lock v. State, 31 Wis. 2d. 110, 142 N.W.2d. 183 (1966).
As noted above, the Labor and Industry Review Commission reviews all matters de novo. They are the ultimate finder of fact in all workers’ compensation matters. Wis. Stat. § 102.18(3).
Circuit Court, Wisconsin Court of Appeals, and Wisconsin Supreme Court
Circuit Court Review
Any party aggrieved by the Labor and Industry Review Commission decision may appeal by filing a Summons and Complaint in Circuit Court. Wis. Stat. § 102.23. The Circuit Court acts as an appellate court and not in any fact finding capacity. The Circuit Court only has statutory authority to either confirm or set aside an award or decision.Wis. Stat. § 102.23(e). The grounds upon which the LIRC decision can be set aside are:
•LIRC acted without or in excess of its powers;
•The order or award was procured by fraud;
•The findings of fact by LIRC do not support the order or award.
The general rules of appellate procedure following a Circuit Court decision apply. The appeal from the Circuit Court order must occur within 45 or 90 days depending on when notice of the entry of final judgment or order is entered. Wis. Stat. § 102.25(1) and 808.04.
The Court of Appeals reviews the LIRC decision with the same scope of review given by the Circuit Court with respect to the findings of fact and questions of law. The Court does not afford any special deference to the Circuit Court decision. Wis. Stat. § 808.10.
Appeal to supreme court
The final court of review is the Wisconsin Supreme Court. However, review of an adverse decision by the Wisconsin Supreme Court is not guaranteed. An aggrieved party must petition for review with the Supreme Court and the Court must grant the review. Generally, the Court will only review when there are special or important issues presented. Wis. Stat. § 809.62(1)(r).
The Wisconsin Workers’ Compensation Act and Administrative Code do not require mediation.
It is not the general practice to participate in mediation of Wisconsin workers’ compensation cases. The attorneys representing parties on workers’ compensation matters in the State are a relatively small number. Most of the attorneys know each other and communicate about settlement. However, parties can participate in voluntary mediation and request one of the Administrative Law Judges to conduct mediation. The parties also have the option of paying a mediator, but that is a very rare situation.
Informal Settlement Conferences
The Department of Workforce Development does not schedule settlement conferences. Parties participate in settlement negotiations voluntarily and informally.
Compromise and Release
There are three ways workers’ compensation claims can be resolved in Wisconsin:
1. By full and final compromise where there is a complete settlement of all claims including all future claims. Wis. Stat. § 102.16(1);
2. By a limited compromise where some issues are resolved and some issues are held open. Wis. Stat. § 102.16(1); and
3. By stipulation when compensation is conceded and parties stipulate to a resolution. Wis. Adm. Code § DWD 80.10.
A Full and Final Compromise Agreement is a final resolution of all claims. The Department of Workforce Development must approve all Compromise Agreements and they must be in writing. There is specific language required in a Compromise Agreement in order for it to be approved. The Department of Workforce Development will only approve a Compromise Agreement if there is a legitimate dispute over the benefits claimed by the employee.
A Limited Compromise Agreement also must be in writing and approved by the Department of Workforce Development. A limited compromise resolves a portion of benefits in dispute and leaves open other benefits.
Stipulations are rarely used. Generally they are entered into by the parties when there is no controversy on an issue and the facts may be stipulated to. A Stipulation has a different effect than a Compromise. A Compromise on a full and final basis closes out the employee’s claim. A Stipulation permits future claims for additional benefits during the 12-year statute of limitations.
Every employer liable for workers’ compensation in Wisconsin must obtain insurance or authorization to self-insure. Wis. Stat. § 102.28(2)(a) .
The insurance policy obtained by employers must cover every benefit available under the Act with no deductibles. The Workers’ Compensation Insurance Contract must grant full coverage of all liability unless the Department of Workforce Development specifically consents to the contrary. Wis. Stat. § 102.31(1)(b).
General Rule Where Employer is Uninsured
An employee who is employed by an employer not covered under a workers’ compensation policy will still receive workers’ compensation benefits. They are paid under the Uninsured Employers Fund. Wis. Stat. § 102.81.
Damages by Action at Law Where Employer is Uninsured
If an employer fails to obtain insurance coverage as required by the Wisconsin Workers’ Compensation Act, the employer is personally liable to reimburse the Uninsured Employer’s Fund for benefits paid to the injured employee. Wis. Stat. § 102.28(5). There is a penalty for an illegal lapse of workers’ compensation coverage which is twice the amount of premium not paid during the uninsured time period or $750.00 whichever is greater. An employer who has an illegal lapse in workers’ compensation coverage of seven consecutive days or less is subject to a $100.00 penalty for each uninsured day, up to seven days.
Uninsured Employers Guaranty Fund
An Application for Hearing can be filed against the Uninsured Employers Fund just like against the employer and their insurance carrier. The Uninsured Employers Fund will pay all benefits an employee may be entitled to except interest or penalties, bad faith claims, unreasonable refusal to rehire, safety violations, or illegally employed minors. Wis. Stat. § 102.81(1)(a).