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Bills would bring sweeping changes to workers’ comp system

By SYLVIA ADCOCK, Staff Writer

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North Carolina’s workers’ compensation system has been around since the late 1920s. Every few decades it gets a bit of an overhaul, with the last one coming 15 years ago.

But the renovations anticipated in a Republican-backed bill under consideration in the General Assembly could lead to seismic changes in the system, which is designed to make injured workers whole and prevent lawsuits against employers.

Critics of the current system say it can reward people for staying out of work and provides the potential for abuse. But those who support the status quo say the changes being proposed are draconian and would unfairly limit the rights of injured workers.

Among the aspects of the 10-page measure (H. 709 and S. 544) that are most troubling to attorneys who represent workers is a 500-week cap on total temporary disability benefits. Others are a provision that would allow employers to communicate directly with an employee’s doctor and a new definition of “suitable employment.”

The identical bills are backed by the powerful N.C. Chamber of Commerce, which says it supports reforming the system “to return it to its original intent: meet the health care needs of injured workers, provide those workers with reasonable compensation for lost wages while injured and return them back to work as soon as possible.”

The chamber notes that surrounding states have imposed caps on the benefits. South Carolina, Virginia and Tennessee all have caps ranging from 400 to 500 weeks.

But attorneys who represent injured workers say that imposing such a cap – which amounts to a little over 9½ years – would end up shifting the cost burden to other government entities if injured people have to go on social security disability or other forms of government support.

“There are a number of cases that will resolve within that time. But a large number of cases won’t be,” said Apex attorney Jesse Shapiro.

The bill does allow for exceptions to the cap in severe cases, such as when a worker loses both hands or both feet.

The battle over workers’ comp benefits has been brewing for some time. On one side are the N.C. Advocates for Justice, labor unions and the AARP. On the other are the chamber and a number of other influential business groups. On April 5, the day before the bills were introduced, hundreds of injured workers showed up at the Legislative Building in Raleigh to oppose the changes.

“The intent of the proposed legislation was not to try to propose something one-sided, but to identify certain areas where we thought modifications could be made and make those modifications,” said Jeffrey Misenheimer, chair of the workers’ compensation section of the N.C. Association of Defense Attorneys.

Misenheimer noted that while the proposal caps benefits for temporary total disability, it actually extends the period for temporary partial disability from 300 weeks to 500 weeks. Temporary partial disability is when a worker is able to return to work, but not to the previous job, and in that case is likely to be earning only two-thirds of his former salary.

Under the workers’ compensation system, an employer or its insurer is supposed to be able to rehabilitate the injured worker to the point where he or she can perform a similar job. Under the current system, that has meant a job similar in terms of pay, benefits and working hours.

But the bill would add a definition of “suitable employment” that would encompass any employment the employee was capable of performing.

Shapiro doesn’t like that.

“Under the new definitions, it’s going to be, ‘We got a job as a Wal-Mart greeter at $7.50 an hour,'” said Shapiro.

The bill’s supporters say it’s not their intention to deprive workers of wages.

“One of the overriding themes of that part of the legislation is to get injured workers back to work and thereby reduce the cost per claim,” Misenheimer said. He said the cost of claims in North Carolina is higher than in other states. 

Greensboro attorney Jay Gervasi, who represents workers, said one of the most troubling aspects of the legislation is a provision that prevents workers who want a change in treatment from presenting evidence from anyone other than the current treating physician.

“Here you’ve got a litigation issue, and one side gets to present evidence, and the other doesn’t. For those of us who do this law thing for a living, that’s insanity,” said Gervasi.

One section of the bill also allows employers to refuse to pay compensation if they can prove that the worker made misrepresentations as to his physical condition at the time of the hiring, that the employer relied upon the misrepresentations and that there was a causal connection between the misrepresentation and the accident or disease. Gervasi said he’s concerned that if employers are allowed to use more defenses, it could lead to more costly litigation.

“Workers’ compensation is carefully balanced,” he said. “You don’t want to mess with that balance.”

The legislation would also change the structure of the Industrial Commission, reducing the number of commissioners from seven to five. Appointments of commissioners would be subject to confirmation by the General Assembly, and the standards of judicial conduct in Chapter 7A of the statutes would apply to commissioners and deputy commissioners.

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