By Ali N. Marchant
On May 15, 2011, the Kansas Workers Compensation Reform Act took effect, putting in place the first significant reform in Kansas workers compensation laws since 1993. The new Act is the result of negotiations between business and labor interests, and it was passed unanimously by both the Kansas House of Representatives and Senate. Governor Sam Brownback has stated that the purpose of the new law is to "ensure certainty of benefits for legitimately injured workers while also offering protection from litigation for employers."
One of the most significant changes to the workers compensation law is the addition of a "prevailing factor" requirement for work-related injuries. Injured workers now have the burden of proving that a work-related accident or repetitive trauma was the prevailing factor in causing their injury. The Act defines "prevailing factor" as "the primary factor, in relation to any other factor." The administrative law judge will determine what constitutes the prevailing factor in a case based on all relevant evidence submitted by the parties. The prevailing factor requirement also applies in the post-award setting if a claimant seeks additional medical treatment.
The new Act also provides that certain medical conditions and injuries are not compensable under the workers compensation laws. These include conditions occurring as a result of the natural aging process or normal activities of daily living, injuries that arise out of a neutral or personal risk with no particular employment character, or injuries that arise either directly or indirectly from idiopathic (unknown) causes.
Another significant change in the new law involves the computation of the percentage of "work disability" that an injured employee has sustained as the result of an injury to the body as a whole. The Act still calls for the averaging of an employee’s task loss and wage loss, but now defines wage loss as "the difference between the average weekly wage the employee was earning at the time of the injury and the average weekly wage the employee is capable of earning after the injury." (emphasis added). This constitutes a major change from the old Act, which did not explicitly require any nexus between the injury and the wage loss. Under the old law, an employee who was no longer employed after their injury was considered to have a 100% wage loss, regardless of the reason they were not working. In some cases this would create an incentive for workers compensation claimants to not seek post-injury employment, even if they were physically capable of working. By contrast, the administrative law judge can now impute an appropriate post-injury average weekly wage based on the claimant’s age, physical capabilities, education and training, prior experience, and availability of jobs in the open labor market.
The new Act requires that the injured worker make a good faith effort to maintain or seek employment in order to establish any percentage of wage loss. Wage loss that is caused by a claimant’s voluntary resignation of employment or termination for cause is not considered to be caused by the injury. Likewise, a claimant’s refusal of accommodated employment within his or her medical restrictions at a wage equal to 90% or more of the pre-injury wage creates a rebuttable presumption of no wage loss. In order to establish wage loss, the injured worker must also have legal capacity to enter into a valid contract of employment, which prevents illegal workers from being eligible for work disability awards.
In order to be eligible for an award based on work disability, the claimant must now either have a minimum permanent partial impairment of 7.5% to the body as a whole caused solely by the injury or a minimum overall 10% functional impairment to the body as a whole where there is preexisting functional impairment. The new Act also makes any claimant who has sustained the combined loss of use of both upper extremities, both lower extremities, or both eyes eligible for work disability. However, work disability is only available when the injured worker has sustained at least a 10% wage loss on account of the injury.
On the task loss side of the work disability equation, the time period for calculating the percentage of task loss has been shortened to include only the claimant’s five-year work history prior to the injury, as opposed to the prior fifteen-year period.
The new Act also makes changes to an injured worker’s right to temporary total disability benefits. If the worker refuses work that accommodates temporary restrictions imposed by the authorized treating physician, there is a rebuttable presumption that the worker is not entitled to receive temporary total disability benefits. Additionally, if the employee is terminated for cause or voluntarily resigns from their employment, the employer is not liable for payment of temporary total disability benefits if it can demonstrate that it could have accommodated worker’s restrictions.
The legislature also put in place a presumption that an injured worker is no longer entitled to medical treatment once the treating physician believes they are at maximum medical improvement. This presumption can be rebutted with medical evidence demonstrating the employee’s continued need for medical treatment.
Similarly, if an injured worker has not received any medical treatment for their injury from an authorized medical provider within two years from the date of the award, or from the date when the employee last received authorized medical treatment, there is a presumption that no further medical care is necessary. In this case, the employer can make an application with the Division of Workers Compensation for permanent termination of future medical benefits.
The calculation of an employee’s average weekly wage is simplified under the new Act. The law no longer presumes a 40-hour work week for full-time hourly employees. Instead, the claimant’s total gross wages for the 26-week period preceding the date of accident are divided by 26 to determine the average weekly wage.
The time within which an injured worker must provide the employer notice of the injury has been expanded to 30 calendar days from the prior 10-day notice requirement. The new Act also eliminates the additional requirement that the injured worker provide a formal written claim for compensation to the employer within a specific period of time.
Finally, the Act increases the maximum amount of compensation benefits an injured worker may receive as follows:
• For the death of the injured worker: $300,000
• For permanent and total disability: $155,000
• For permanent partial disability: $130,000
• For permanent partial disability, where only functional impairment is awarded: $75,000
Notwithstanding the legislature’s attempts to clarify and simplify the law of workers compensation, it remains to be seen how many of the provisions in the new Act will be interpreted by the administrative law judges and appellate courts. Both employers and injured workers would be well-served to consult an attorney who works regularly in the area of workers compensation to assist with questions that may arise. Fleeson Gooing attorneys Bill Townsley, Ali Marchant, Sylvia Penner and Lyndon Vix work in this area.