Employer Law Report

Archives: Workers’ Compensation

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Workers’ Compensation Considerations When Purchasing a Company

When a purchase of a business takes place in Ohio, the purchaser often overlooks the fact that it will assume the sellers’ workers’ compensation claims experience either in part or in whole. The Bureau of Workers’ Compensation ("BWC") has taken a fairly strict line in combining and transferring coverage to purchasers.

When a new owner wholly assumes the former employer’s business, the BWC transfers all of the employer’s claims experience to the purchaser. If the new owner purchases a portion of the business, only a part of the former employer’s experience will be transferred. Even if the parties enter into …

Scalia v. Aldi–A Mixed Bag for Employers

The Ohio Court of Appeals for the Ninth Appellate District recently issued a decision that has potential to create more questions than answers when it comes to workers’ compensation retaliation and disability discrimination law in Ohio.

While employed at Aldi, Maria Scalia injured her elbow. Her claim for workers’ compensation was granted, and she was off work receiving workers’ compensation benefits while her restrictions impaired her ability to perform her job. A year later, Aldi ordered an independent medical examination which found Ms. Scalia had reached maximum medical improvement, which resulted in the termination of Ms. Scalia’s workers’ compensation benefits. …

BWC Implements Workplace Wellness Grant Program for Employers

Effective January 10, 2012, the BWC has implemented a new program providing grants up to $15,000 over 4 years to state-fund employers to create workplace wellness programs for the prevention of occupational injuries and illnesses and to address health risk factors to reduce the number and severity of workplace injuries and illnesses.

State fund employers without an existing wellness program who are current on all premiums and other costs are eligible to apply for a grant. In addition, employers shall agree not to eliminate any jobs or reduce employment due to the implementation of the workplace wellness program. The BWC …

Ohio BWC Offers a One-Time Waiver of Penalties to Employers Who Fail to Timely Pay Premiums

The Ohio Bureau of Workers’ Compensation has implemented a new policy for employers who fail to pay premiums timely.

Pursuant to Governor Kasich’s Common Sense Initiative, in an effort to attract and retain business in Ohio, the Bureau of Workers’ Compensation will permit an employer one violation of the reporting deadline for payroll and waive any associated penalties with the violation.

If an employer fails to pay premiums timely and the employer’s coverage lapses, the employer becomes liable for late payments, interest and claim costs on claims that occur during the lapse. Previously, the only way an employer could be …

Ohio BWC Board Approves New Grow Ohio Incentive Program

The Ohio Bureau of Workers’ Compensation Board of Directors has approved a new Grow Ohio Incentive Program (Grow Ohio) in an effort to encourage economic development and job creation in Ohio.

Grow Ohio offers eligible new employers a 25% discount on their workers’ compensation premium for two years, or immediate access to participation in the group rating program, which was normally not accessible to new employers until the first policy year following the date of obtaining workers’ compensation coverage.

A new employer to Ohio is defined as any new business entity in the State of Ohio, or an out of state …

Clearing the Backlog – September

More and more these days it seems like the obligations of being a lawyer, husband, father, son, sports fan, etc, get in the way of blogging. As a result, I end up accumulating a number of worthwhile topics for blog posts that end up in the discard pile. Twitter helps keep the backlog to a minimum, but I really don’t know how many of you actually follow me @briandhallesq (hint, hint). So, while I am by no means committing to make this a regular feature of Employer Law Report, I will now clear – in no particular order — my …

Supreme Court Says No Duty To Defend Employer Intentional Tort Claims Under Stop Gap Insurance Endorsements

Under Ohio law, employees may sue their employer to recover damages for an employer intentional tort – even when the injuries are otherwise covered by workers’ compensation.  Because these cases can be costly to defend, employers historically have purchased commercial general liability policies with “stop-gap” insurance endorsements for years, believing these provisions imposed a duty to defend the employer against an employer intentional tort lawsuit.

On July 6, however, the Ohio Supreme Court decided Ward v. United Foundries, Inc., determining that Gulf Underwriters Insurance Company did not have a duty to defend United Foundries, Inc. under such a stop-gap …

Sutton v. Tomco Machining, Inc.: Ohio Supreme Court Expands Workers’ Compensation Retaliation Protection

On June 9, 2011, the Ohio Supreme Court issued its long awaited decision in Sutton v. Tomco Machining, Inc., in which the Court expanded the scope of workers’ compensation retaliation protection to include employees who are injured on the job but have not yet filed an actual workers’ compensation claim.

On April 14, 2008, DeWayne Sutton injured his back while working at Tomco Machining, Inc. ("Tomco”). He allegedly reported the injury to Tomco’s president and within one hour of reporting the injury, Sutton was fired. According to Sutton’s complaint, the president did not give him a reason for the …

Will GINA Impact Ohio Employers’ Ability to Conduct Medical Investigations In Workers’ Compensation Claims?

In the day-to-day administration of their Ohio workers’ compensation programs, self-insured employers (or a TPA or law firm on their behalf) often will obtain a medical authorization from the injured worker and then obtain medical records as part of the employers’ medical investigation. Though the authorization is often limited to specific injuries or body parts, they are just as likely not to be so limited. In addition, despite HIPAA requirements, healthcare providers often produce records in excess of what has been authorized (presumably because they don’t want to take the time or effort to cull through the records and produce only …

Ohio BWC Creates New Rule Circumventing the Ohio Supreme Court’s Decision

In June 2009, we reported on the Ohio Supreme Court’s decision to create a narrow exception to the broad BWC successor rules. The Ohio Supreme Court’s decision in State ex rel. Valley Roofing, LLC v. Ohio Bureau of Workers’ Compensation created a small exception to the BWC’s broad authority to impose successorship liability when it held that a business that acquired another business’s assets via a bank foreclosure was not a successor to the previous business.

Ohio’s courts have long held that the workers’ compensation statute authorizes the BWC to find successorship whenever “any employer transfers a business in whole or …

Ohio H.B. 523 Would Unify Definition of Employee, Make it Easier to Find Misclassification

On Tuesday, May 25, 2010, Representatives Phillips and Driehaus introduced in the Ohio General Assembly a bill that effectively would create a single definition of “employee” for purposes of Ohio workers’ compensation, unemployment compensation, payroll taxes, minimum wage and other purposes. Presently, each statute contains its own test for determining whether an individual is an employee or an independent contractor, often resulting in conflicting results.

If passed, this legislation would create a single seven-factor test for evaluation whether an individual truly is an independent contractor.

For an individual to be an independent contractor under H.B. 523, all of the following …

Ohio BWC Approves New Drug-Free Safety Program

On March 29, 2010, the Ohio Bureau of Workers’ Compensation voted to adopt its new Drug-Free Safety Program (DFSP) in an attempt to prevent workplace injuries attributed to the use or abuse of drugs and alcohol. The new program will replace the current Drug-Free Workplace Program and the Drug-Free EZ Program as of July 1, 2010.

The DFSP extends eligibility to more employers and eliminates the current program’s participation limit of five years. Other features of the new program include:

  • Two levels of participation – basic and advanced – which offers premium discounts ranging from 4% to 7% (the advanced level will

Ohio Employer Intentional Tort Statute Survives Challenge

On Tuesday, in two separate decisions, the Ohio Supreme Court finally resolved the lingering question as to the constitutionality of a state law that limits the ability of workers who are injured on the job to sue their employers for a “workplace intentional tort” in addition to receiving workers’ compensation benefits. The challenged statute – RC § 2745.01 – requires that an injured worker bringing an intentional tort action against his employer must prove that the employer acted with a “deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death.” 

In Kaminski v. Metal

Bill Limiting Immigrant Workers’ Compensation Benefits

On Tuesday, March 16, 2010, Senator Bill Seitz introduced Senate Bill 238 to the Ohio General Assembly. If passed, this bill would amend Ohio’s Revised Code to prohibit illegal and unauthorized aliens from receiving compensation and benefits under Ohio’s Workers’ Compensation Law.

Currently, illegal and unauthorized aliens are afforded the same benefits under Ohio Workers’ Compensation Law that other workers are. In other words, illegal and unauthorized workers who are injured in the course of and arising out of their employment are allowed to file workers’ compensation claims and receive benefits and treatment for their injuries.

 

Since this bill was just …

Death Benefits Denied for an Accidental Death Caused by Overdose of OxyContin

Ohio’s Third District Court of Appeals recently held that the family of an injured worker whose accidental death was caused by a lethal concentration of OxyContin is not entitled to death benefits under Ohio Workers’ Compensation Act.

In Parker v. Honda of America Mfg., the decedent suffered a severe back injury in 1988. Mr. Parker underwent several surgical procedures in an unsuccessful attempt to alleviate his back pain. Eventually, Mr. Parker was prescribed and began using OxyContin in 1999 and subsequently became addicted. He sought treatment for his addiction in August 2004 and again in March 2005. In March 2006, he was discovered …

Facebook Photos Prompt Termination of Long Term Disability Benefits

CBC News in Canada is reporting that a Canadian long-term disability insurance carrier recently terminated the long-term disability benefits a Quebec woman was receiving for "major depression" after photos she posted on her Facebook page showed her "having a good time at a Chippendales bar show, at her birthday party and on a sun holiday." According to the CBC, the woman, 29-year-old Nathalie Blanchard, contends that her doctor recommended that she try "to have fun, including nights out at her local bar with friends and short getaways to sun destinations, as a way to forget her problems." Nevertheless, Manulife, the …

How Should the Ohio BWC and Industrial Commission Treat Claims for H1N1?

As concerns about the potential scope of the H1N1 flu continue to grow, one question we keep hearing from clients is whether employees who believe they have contracted H1N1 in the workplace may have compensable workers’ compensation claims. In the vast majority of cases, we believe the answer will be a resounding "No."

Ohio defines an occupational disease as:

"a disease contracted in the course of employment, which by its causes and the characteristics of its manifestation or the condition of the employment results in a hazard which distinguishes the employment in character from employment generally, and the employment creates a …

Ohio Supreme Court Reaffirms Narrow Exception to Broad BWC Successor Rules

The Ohio workers’ compensation successor-in-interest rules frequently catch even the most seasoned corporate M&A attorney off guard. Most M&A attorneys reasonably expect that a straight asset purchase will not result in the assumption of any workers’ compensation liability in Ohio. As it relates to companies that pay premiums directly into the Ohio state workers’ compensation fund, that expectation more often than not will turn out to be wrong. In short, Ohio’s courts have long held that the workers’ compensation statute authorizes the BWC to find successorship whenever "any employer transfers a business in whole or in part or otherwise reorganizes …

Ohio BWC Eliminates DFWP Discount for Group-Rated Employers

In a controversial decision issued yesterday, the Ohio Bureau of Workers’ Compensation Board of Directors voted to eliminate the Drug-Free Workplace Program (DFWP) discounts for group-rated employers. Instead, only non-group-rated employers will be eligible for the DFWP discount The elimination of the DFWP discount for group rated employers, combined with the reduction of the maximum available discount under the BWC’s group rating program from 85%-77% effective July 1, 2009, may deal a significant financial blow to many Ohio employers. These changes are consistent with the BWC’s previously stated belief that the group rating program was actuarially unsound and its intent to …

Ohio Focus on Worker Misclassification Warrants Second Look At Independent Contractor Relationships

Back in February, Ohio Attorney General Richard Cordray announced a collaboration between his office and the Ohio Department of Job and Family Services, Ohio Department of Taxation, and Ohio Bureau of Workers’ Compensation to release and exchange confidential information to reduce the number of employers that are misclassifying workers as independent contractors. A report issued at the same time by the Attorney General’s office estimated that the extent of annual costs to the state from worker misclassification totals $100 million in payments for unemployment compensation, more than $510 million in BWC premiums and almost $180 million in forgone state income tax …

Ohio Legislature Preserves BWC Group Rating Program For the Time Being

In response to the recent San Allen case in which the Cuyahoga County Common Pleas Court issued an order enjoining the Ohio BWC’s group rating program, the Ohio legislature has enacted House Bill 79, which became law on January 6, 2009. House Bill 79 allows the group rating program to continue by simply changing one word in Ohio Revised Code §4123.29, which creates and implements the program. By changing the word “retrospective” to “group,” the legislature avoids the problem identified by the court; that is, that the group rating program was actually a prospective program that permits employers to be dropped from …

Court Enjoins BWC Group Rating Program

On November 18th, the Cuyahoga County Common Pleas Court in San Allen v. Ohio BWC issued an injunction prohibiting the Ohio Bureau of Workers’ Compensation from enacting its current group rating plan and requiring it to enact a retrospective rating plan for the policy year starting July 1, 2009. At its core, the decision requires the BWC to set premiums retrospectively, as requested by the plaintiffs, who were a collection of employers that had seen their premiums increase as a result of having been excluded from a group based on claim experience. Historically, the rates have been set prospectively by …

Los Angeles Commuter Train Tragedy Suggests Employers Should Review Electronic Device Policies

News confirming that the engineer of the Los Angeles commuter train that crashed last week, killing more than 20 people, engaged in text messaging while on the job underscores the need for employers to consider policies banning employee use of cell phones while driving on company business. Though it remains to be seen whether the engineer was texting at the time of the crash, the proliferation of electronic devices, such as Blackberries, and their potentially addictive use is helping to make "distracted driving" an increasing problem on the road. Simply put, distracted drivers are becoming more dangerous to themselves, their passengers …

Ohio Workers’ Compensation Law Amended to Allow Coverage for Out-of-State Employees Injured in Ohio

Effective September 11, 2008, Ohio has amended its Workers’ Compensation Act to provide coverage for out-of-state employees who are injured while temporarily working in Ohio. The new law will allow an out-of-state employee to receive compensation and/or benefits under Ohio’s workers’ compensation laws if the employee is a resident of a state that does not preclude the employee from receiving Ohio workers’ compensation benefits.…

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