4.3 Coverage for Incapacity

• Library: Workers' Compensation Practice in Virginia (Virginia CLE) (2020 Ed.)

4.3 COVERAGE FOR INCAPACITY

4.301 Temporary Total Incapacity

A. Entitlement. Compensation for both temporary total incapacity and total incapacity, whether permanent or temporary, to work is governed by section 65.2-500 of the Virginia Code. An employee suffers total incapacity to work due to disability from the effects of an accident when injured to such a degree that the employee is unable to perform work that

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might otherwise be available. The test for total incapacity is whether the employee reasonably may be expected to secure employment. ⁵¹

Total disability benefits are designed to compensate a claimant for injury to earning capacity. ⁵² A total loss of wages caused by a partial physical

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disability is considered a total incapacity, compensable under section 65.2-500 of the Virginia Code, if the partially disabled employee proves that the partial disability renders the employee unable to market any residual work capacity. ⁵³ If an injured employee is unable to obtain any gainful employment, the employee is entitled to temporary total disability benefits, provided a reasonable effort is made to market the residual work capacity. ⁵⁴

Loss of earning power is not necessarily directly proportional to bodily functional disability. ⁵⁵ The Commission considers all evidence related to the employee's ability to secure meaningful employment. ⁵⁶ For instance, where a manual laborer who was unqualified for any other type of work lost the effective use of both hands, a finding of total incapacity was considered appropriate. ⁵⁷ Undertaking a few "odd jobs" or casual employment that does not require capabilities that an employer would normally require does not alter the employee's total incapacity status. ⁵⁸

The burden of proving that the incapacity is total is on the claimant. The claimant must prove that he or she "made a reasonable effort to procure suitable work, but [was] unable to market his remaining work capacity." ⁵⁹

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The claimant must demonstrate that the injury or disease has effectively closed the labor market and that a reasonable effort was made to secure employment. ⁶⁰

If an employee has a partial disability but has been terminated by the employer for economic reasons, the claimant has the burden of proving that despite making a reasonable effort to procure suitable work the employee was unable to market any remaining work capacity. ⁶¹ Questions arise concerning what benefits, if any, a partially disabled worker is entitled to when he or she is no longer able to work overtime because of the continuing disability, or when economic conditions have eliminated or decreased overtime for everyone. ⁶² Similarly, there are questions as to what benefits, if any, a partially disabled worker is entitled to when all employees are furloughed because of scheduled maintenance or for economic reasons. In Utility

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Trailer Manufacturing Co. v. Testerman, ⁶³ the court determined that an injured worker on light duty was not entitled to wage loss benefits when he, along with all other employees, was furloughed for one week during a plant shutdown for inventory. The court, in finding that any wage loss was not due to the work injury, discussed other cases where the wage loss was because of "same economic conditions." The following guidelines were offered for analyzing whether a wage loss is causally related to the work injury: (i) the length of any furlough from work; (ii) whether that furlough included all employees, restricted or not, of the same class; (iii) the reason for the furlough; (iv) whether the term of the furlough was predetermined by the employer; and (v) whether employees were offered employment at the termination of the furlough. ⁶⁴

In Carr v. Atkinson/Clark/Shea, A Joint Venture, ⁶⁵ the Commission applied Utility Trailer Manufacturing Co. in denying benefits. In reversing and remanding, the court distinguished the current case (where the injured worker, along with non-injured employees, was subject to unscheduled periodic furloughs for undefined periods because of economic issues) from Utility Trailer Manufacturing Co. (where the injured worker was part of a company-wide one-week scheduled maintenance furlough). The court concluded that because of the uncertainty of furloughs, workers would be more likely to seek more steady employment elsewhere. The injured worker, as a result of his physical limitations and possible need to return to the pre-injury employer if and when work became available in order to comply with Virginia Code section 65.2-510, would be at a disadvantage against other able-bodied job seekers. Therefore the court held that the injured worker's wage loss was a result of the work injury. However, the court, in a footnote, found that in order to comply with Ford Motor Co. v. Favinger, ⁶⁶ the injured worker would be required to make a reasonable effort to market his remaining work capacity.

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In King William County v. Jones, ⁶⁷ the employer decided to outsource its custodial services. After this decision was made, the claimant suffered a compensable injury. She continued to work in a light-duty capacity until the new custodial company took over and she and her fellow uninjured co-workers were terminated. The claimant then sought temporary total compensation benefits. In analyzing the case, the Court of Appeals declined to apply the "loss of earnings" test, which requires a partially disabled worker who, with fellow employees, is laid off or furloughed only to show continuing partial disability and the loss of employment in order to receive additional compensation benefits. Relying on McKellar v. Northrop Grumman Shipbuilding, Inc., ⁶⁸ the court held that in such cases the "loss of earnings" test is inappropriate and specifically overturned the decisions in Metro Machine Corp. v. Lamb, ⁶⁹ Metro Machine Corp. v. Sowers, ⁷⁰ and Consolidated Stores Corp. v. Graham. ⁷¹ The court determined that the appropriate test for Jones's claim was the "economic loss" test as applied in Utility Trailer Manufacturing Co. v. Testerman ⁷² and Carr v. Atkinson/Clark/Shea, A Joint Venture. ⁷³ The "economic loss" test requires that the partially injured worker, when laid off or furloughed along with able-bodied colleagues, must provide evidence that because of the work disability he or she was placed in a disadvantaged position compared to non-medically restricted workers and show a "causal connection between the wage loss and the injury." ⁷⁴ Applying the "economic loss" test, the court found an absence of evidence that (i) the claimant's partial disability prevented her from performing potential jobs, (ii) the positions for which she applied were not offered because of her disability, or (iii) the potential employers were even aware of any medical conditions, and, therefore, the claimant was denied benefits because she failed to carry her burden of proof.

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Issues also often develop over whether an employee is entitled to compensation after an unjustified refusal of the employer's offer of selective employment has been "cured" by the employee's subsequent and belated acceptance of the offer. ⁷⁵

B. Amount of Compensation. Upon a finding of total incapacity, the employer is required to compensate the employee at the rate of 662/3 percent of the employee's average weekly wage. ⁷⁶ The maximum weekly payment available is 100 percent of the average weekly wage of the Commonwealth. The minimum payment is 25 percent of the average weekly wage of the Commonwealth. Under no circumstances may the weekly compensation payment, excluding cost-of-living supplements, exceed the actual earnings of the injured worker, even if the worker's earnings are less than the minimum payment allowed by the Act. Compensation is available to the employee for a maximum of 500 weeks, although in the case of total incapacity (as opposed to partial incapacity) not necessarily 500 weeks from the date of the injury. ⁷⁷

C. Cost-of-Living Supplements. Cost-of-living supplements are applicable to temporary total benefits. ⁷⁸

D. Illegal Aliens. An undocumented worker who suffers a compensable injury or occupational disease is eligible for temporary total wage

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loss benefits during a period of total work incapacity. However, once the injured worker is released to light duty, benefits cease because the individual is not legally eligible for work. ⁷⁹

E. AmeriCorps Members, Certain Food Stamp Recipients. The Act precludes an award of temporary total disability benefits to injured AmeriCorps members, Food Stamp recipients participating in the work experience component of the Food Stamp Employment and Training program, and Temporary Assistance of Needy Families recipients participating in the work experience component of the Virginia Initiative for Education and Work program. ⁸⁰

F. Incarceration. A totally disabled worker who is incarcerated for a criminal offense remains eligible for temporary total benefits. However, once the incarcerated worker is medically released for light-duty work, an application pursuant to section 65.2-708 of the Virginia Code may be filed to suspend compensation benefits. ⁸¹ Before benefits are suspended, a conviction of a criminal offense and sentencing by the court must occur.

G. Duty to Report Incarceration, Return to Work, Change in Earnings, Remarriage, or Change in Status as a Full-Time Student. The Act requires an injured worker who is receiving compensation payments to immediately report incarceration, return to work, change in earnings, remarriage, or change in status as a full-time student to the insurance carrier or self-insured employer. If it is determined that payment was procured by fraud, misrepresentation, or failure to report, the insurer or self-insured employer may seek recovery either by a credit against future compensation payments or by action at law. ⁸²

4.302 Temporary Partial Incapacity.

A. Entitlement. section 65.2-502 of...