Minnesota Workers Compensation Primer Prepared by Thomas P. Kieselbach, Esq. While the answers to questions about workers compensation can be complicated, we offer the following question and answer format which resulted from our years of experience dealing exclusively with workers compensation litigation in Minnesota. Q: What is the citation for the state s workers compensation statute? A: Minn. Stat. 176.011 through 176.862. SCOPE OF COMPENSABILITY Q: Who are covered employees for purposes of workers compensation? A: All employers in the State of Minnesota are required to carry workers compensation coverage unless said employment is excluded (Minn. Stat. 176.041). For there to be workers compensation coverage for an injury sustained, there must be an employer/employee relationship existence. The term employee is defined in Minn. Stat. 176.011, subd. 9, as an individual who performs services for another for hire. The contract for hire can be an express contract or a contract implied by the conduct of the parties. If the services are provided gratuitously or charitably without an expectation of consideration or remuneration, then there is no employer/employee relationship. Minn. Stat. 176.041, subd. 1(1), references 34 specific occupations which are excluded from coverage. Otherwise, all employers are subject to Chapter 176 of Minnesota Statutes Annotated. See also, Minn. Stat. 176.021, subd. 1. Q: Identify and describe any statutory employer provision. A: Minn. Stat. 176.011, subd. 10, defines employer as any person who employs another to perform a service for hire. This includes corporations, partnerships, limited liability companies, associations, groups of persons, states, counties, towns, cities, school districts or governmental subdivisions. Minn. Stat. 176.011, subd. 11 and subd. 11a, define with particularity an executive officer of a corporation and family farm.
Q: What types of injuries are covered and what is the standard of proof for each: A. Traumatic or single occurrence claims. B. Occupational disease (including respiratory and repetitive use). A: A. A specific traumatic injury is compensable if the injury arises out of and in the course of employment. The injured worker must be an employee of the employer. The injury must be a substantial contributing, substantial causal, substantial aggravating or substantial accelerating event. Minn. Stat. 176.011, subd. 16, defines personal injury as an injury arising out of and in the course of employment and includes personal injury caused by occupational disease. B. Minnesota differentiates between occupational disease and repetitive physical trauma. Repetitive physical trauma can be compensable if the repetitive trauma is a substantial contributing, substantial causal, substantial aggravating or substantial accelerating factor in the development and/or progression of the condition. The definitive case in this area is Gillette v. Harold, Inc., 101 N.W.2d 200 (Minn. 1960). Occupational disease is specifically defined in Minn. Stat. 176.011, subd. 15, as a disease arising out of and in the course of employment peculiar to the occupation in which the employee is engaged and due to causes in excess of hazards ordinary of employment and shall include undulant fever. Ordinary diseases of life to which the general public is equally exposed outside of employment are not compensable, except where the diseases follow as an incident of an occupational disease, or where the exposure peculiar to the occupation makes the disease an occupational disease hazard. A disease arises out of the employment only if there is a direct causal connection between the conditions under which the work is performed and if the occupational disease follows as a natural incident of the work as a result of the exposure occasioned by the nature of the employment. An employer is not liable for compensation for any occupational disease which cannot be traced to the employment as a direct and proximate cause and is not recognized as a hazard characteristic of and peculiar to the trade, occupation, process, or employment or which results from a hazard to which the worker would have been equally exposed outside of the employment. Q: What, if any, injuries or claims are excluded? A: Certain psychiatric and drug and alcohol claims are excluded. See, Lockwood v. Indep. Sch. Dist. No. 877, N.W.2d 506 (Minn. 1987), Minn. Stat. 176.021, subd. 1.
Q: What psychiatric claims or treatments are compensable? A: A physical injury which causes mental illness can be compensable (physicalmental). Mental stress which causes a physical injury can be compensable (mental-physical). Mental stress which results in mental injury is not compensable pursuant to Lockwood v. Indep. Sch. Dist. No. 877, N.W.2d 506 (Minn. 1987) (mental-mental). Q: What are the applicable statutes of limitations? A: Minn. Stat. 176.151(1) provides in pertinent part that actions or proceedings by an injured employee to determine or recover compensation must file the claim within three years after the employer has made written report of the injury to the Commissioner of the Department of Labor and Industry but not to exceed six years from the date of the accident. If any benefits are paid, there will never be a statute of limitations defense. With respect to death or dependency claims, the dependents are subject to a three-year statute of limitations if the employer has given the Commissioner of the Department of Labor and Industry written notice of death; otherwise, the statute of limitations is six years from the date of death. In the case of injury caused by occupational disease, the employee shall give notice to the employer and commence an action within three years after the employee has knowledge of the cause of such injury and the injury has resulted in disability. Minn. Stat. 176.151(4). Q: What are the reporting and notice requirements for those alleging an injury? A: Minn. Stat. 176.141 provides in pertinent part that an employee has 180 days to give notice or the claim will be barred. Q: Describe available defenses based on employee s conduct: A. Self-inflicted injury. B. Willful misconduct, horseplay, etc. C. Injuries involving drugs and/or alcohol. A: A. If the injury was intentionally self-inflicted, then the claim will be barred. Minn. Stat. 176.021, subd. 1.
B. If the employee is involved in horseplay and sustains injuries due to these activities, the claims will be covered if the work played a significant role or part in bringing about the horseplay or fighting. See, Cunning v. City of Hopkins, 258 Minn. 306, 103 N.W.2d 876 (1960). Even if the injured employee initiates the misconduct or the assault, if there is causation between the assault and the job and the assault were not for purely personal reasons, then the injury will be compensable. See, Pedro v. Martin Baking Company, 58 N.W.2d 731 (Minn. 1953). C. Minn. Stat. 176.021, subd. 1, provides in pertinent part that if intoxication is the proximate cause of the injury, then the employer is not liable for compensation. Q: What, if any, penalties or remedies are available in claims involving fraud? A: The Minnesota Department of Labor and Industry has a Fraud Unit. If fraud exists on the part of any party, the Department will investigate and refer the matter for criminal prosecution. Q: Is there a defense for falsification of employment records regarding medical history? A: Yes, pursuant to Jewison v. Frerichs Construction, 41 WCD 541, 434 N.W.2d 259 (1989), the claim can be barred if the employer can prove the following: A. The employee knowingly and willfully made false representation as to his or her physical condition at the time of hire; B. The employer substantially and justifiably relied on the false representation in hiring the employee; and C. A causal connection existed between the false representation and the subsequent injury. Q: Are injuries during recreational and other non-work activities paid for or supported by the employer compensable? A: Injuries incurred while participating in voluntary recreational programs sponsored by the employer, including health promotion programs, athletic events, parties and picnics do not arise out of and in the course of the employment even though the employer pays some or all of the costs of the program. This exclusion does not apply in the event that the injured employee was ordered or assigned by the employer to participate in the program. Minn. Stat. 176.021, subd. 9. Q: Are injuries by co-employees compensable?
A: Yes. Q: Are acts by third parties unrelated to work, but committed on the premises, compensable (e.g. irate paramour claims)? A: When an employee suffers an injury due to a personal assault, the injury will not be compensable even if it occurred during the time, place and circumstances of employment if the following elements are met: BENEFITS A. The assailant intended to injure the victim; B. The reasons for the assault were personal to the victim; C. The assault was not directed against the victim as an employee of the employer; and D. The assault was not directed against the victim because of the victim s employment. Q: What criterion is used for calculating the average weekly wage? A: In situations where the employment is regular in terms of number of days normally worked and number of hours per week worked, then the wage is calculated by multiplying the daily wage by the number of days and fractional days normally worked in the business of the employer. Minn. Stat. 176.011, subd. 3 and subd. 18. If the daily wage is irregular or difficult to determine or if the employment is part time or the hours are irregular, then the employee s date of injury and average weekly wage will be calculated as follows: A. Gross wages, vacation pay and holiday pay actually earned in the 26 weeks preceding the injury will be divided by the total number of days in which such wages, vacation pay and holiday pay were earned. In calculating this, we arrive at the daily wage. B. The days actually worked per week will then be calculated by totaling the number of days worked during the 26 weeks preceding the injury divided by the number of weeks in which the employee actually performed duties. C. The daily wage is then multiplied by the number of days actually worked to arrive at the average weekly wage.
With respect to calculating the average weekly wage, there are exceptions relating to construction worker, seasonal worker and apprentices. Tips and gratuities, room and board, allowances and per diems, barter, goods and accommodations, attendance bonuses, incentive bonus, performance bonus, vacation and holiday pay, retroactive pay and overtime, if the overtime is regular or frequent, are all included in the gross wage. If an employee works two or more jobs at the date of injury, combined wages of all employment will be used to calculate the average weekly wage. Q: How is the rate for temporary/lost time benefits calculated, including minimum and maximum rates? A: Temporary total disability benefits are calculated by multiplying the average weekly wage by two-thirds. Temporary total disability benefits are subject to minimums and maximums. See, Minn. Stat. 176.101, subd. 1. Temporary partial disability benefits are calculated by subtracting the wage that the employee is able to earn in his partially disabled condition from his average weekly wage. This number is then multiplied by two-thirds. Temporary partial disability is subject to a dollar cap. See, Minn. Stat. 176.101, subd. 2. Q: How long does the employer/insurer have to begin temporary benefits from the date disability begins? A: The employer has 14 days from the date of notice of the injury to admit or deny the claim. It also must begin paying benefits within this 14-day window or there will be a penalty. Q: What is the waiting or retroactive period for temporary benefits? A: In cases of temporary total or temporary partial disability, no compensation is allowed for the three calendar days after the disability commences. If the disability continues for 10 calendar days or longer, the compensation is computed from the commencement of disability. The initial three days of the waiting period will then be paid. Q: What is the standard/procedure for terminating temporary benefits? A: The insurer must file a Notice of Intention to Discontinue Benefits (NOID) to terminate temporary total and temporary partial disability benefits if the claim is beyond 60 days from the date of injury. All proper documents must be attached. If the termination is for reasons other than return to work, there must be a complete and thorough description of the basis for the termination. Service must be made on the employee, employee s counsel and the State. The employee
has an opportunity to contest the termination and request an expedited conference and, eventually, an expedited hearing. Q: Is the amount of temporary total disability paid credited toward the amount entitled for permanent total disability? A: Yes. Q: What disfigurement benefits are available and how are they calculated? A: Minnesota does not recognize or pay disfigurement benefits. Q: How are permanent partial disability benefits calculated, including the minimum and maximum rates: A. How many weeks are available for scheduled members/parts, and the standard for recovery? B. Number of weeks for whole person and standard of recovery. A: Permanent partial disability is paid for loss of function or loss of use of a body part. Since January 1, 1984, physicians and chiropractors have been guided by the Minnesota Workers Compensation Permanent Partial Disability Schedule. See, Minn. Rule 5223.0300 through.0650. The permanent partial disability rules are designed to effectuate the legislative intent to promote objectivity and consistency in the valuation of permanent functional impairment due to a personal injury. The disability ratings must be based upon objective medical evidence such as consistent and reproducible clinical findings objectively verifiable spasm or diminished range of motion or specific surgical procedures. For injuries subsequent to October 1, 1995, permanent partial disability is based upon the impairment compensation statute, Minn. Stat. 176.101, subd. 3. The permanent partial disability rating is multiplied against a designated amount of money to determine compensation to be paid to the employee. Q: Are there any requirements/benefits for vocational rehabilitation and what is the standard for recovery? A: Minnesota has mandatory rehabilitation pursuant to Minn. Stat. 176.102. Rehabilitation is intended to restore the injured employee so the employee may return to a job related to the employee s former employment or to another job in another work area which produces an economic status as close as possible to that the employee would have enjoyed without disability. Rehabilitation to a job with a higher economic status than would have occurred without disability is permitted if it can be demonstrated that this rehabilitation is necessary to increase the likelihood of re-employment. Minnesota has qualified rehabilitation
consultants (QRCs) who quarterback the rehabilitation plan on behalf of the employee. We also have vendors who provide placement assistance. In certain situations, retraining is possible. There is a cap of 156 weeks for retraining. Q: How are permanent total disability benefits calculated, including the minimum and maximum rates? A: Permanent total disability is defined in Minn. Stat. 176.101, subd. 5. If an individual is found to be permanently and totally disabled, the permanent total disability rate is calculated by multiplying the average weekly wage by two-thirds. Permanent total disability is subject to a minimum compensation equal to 65 percent of the statewide average weekly wage. Minnesota has a reverse offset with respect to Social Security disability insurance benefits. Once an individual has been paid $25,000.00 in weekly permanent total disability benefits, the permanent total disability benefits may be reduced dollar-for-dollar by the amount of any disability benefit being paid by any government disability program if the disability benefits are occasioned by the same injury or injuries which give rise to payments. Q: How are death benefits calculated, including the minimum and maximum rates: A. Funeral expenses. B. Dependency claims. A: A. Funeral expenses are capped at $15,000.00. Minn. Stat. 176.111, subd. 18. B. Minnesota s dependency laws are exceptionally complicated. For a full explanation of the dependency laws, please contact a Cousineau McGuire workers compensation attorney. Q: What is the criteria for establishing a second injury fund recovery? A: The second injury fund was abolished for claims after July 1, 1992. Please refer to Minn. Stat. 176.131. Q: What are the provisions for re-opening a claim for worsening of condition, including applicable limitations periods. A: Minn. Stat. 176.461 provides in pertinent part that an Order or Award on Stipulation may be reopened for cause:
A. A mutual mistake of fact; B. Newly discovered evidence; C. Fraud; or D. A substantial change in medical condition since the time of the Award that was clearly not anticipated and could not reasonably have been anticipated at the time of the Award. Q: What situation would place responsibility on the employer/insurer to pay an employee s attorney fees? A: Insurers can be held responsible for attorney s fees in the event that the insurer loses on issues involving rehabilitation and/or medical. See, Minn. Stat. 176.081. EXCLUSIVITY/TORT IMMUNITY Q: Is the compensation remedy exclusive? A. Scope of immunity. B. Exceptions (intentional acts, contractual waiver, dual capacity, etc.). A: Yes, but there are exceptions. See Minn. Stat. 176.061. Q: Are there any penalties against the employer for unsafe working conditions: A: No. Q: What is the penalty, if any, for an injured minor? A: There is no true penalty for an injured minor. However, if the minor sustains a personal injury which results in permanent total disability, the compensation rate for permanent partial disability shall be the maximum rate for temporary total disability. Q: What is the potential exposure for bad faith claims handling? A: The employer/insurer can be held liable through the administrative system for penalties pursuant to Minn. Stat. 176.225. A penalty up to 30 percent of the total amount may be awarded where the employer/insurer has:
A. Instituted a proceeding or interposed a defense which does not present a real controversy but which is frivolous or for the purposes of delay; or B. Unreasonably or vexatiously delays payment; or C. Neglects or refuses to pay compensation; or D. Intentionally underpays compensation; or E. Frivolously denies a claim; or F. Unreasonably or vexatiously discontinues compensation in violation of Minn. Stat. 176.238 and 176.239. See, Minn. Stat. 176.225, subd. 1. If an employer is guilty of inexcusable delay in making payments, the payments which are found to be delayed shall be increased by 25 percent. See, Minn. Stat. 176.225, subd. 5. Penalties pursuant to Minn. Stat. 176.225, subd. 1 and subd. 5 may be combined. The employer/insurer may also be subject to civil liability penalties pursuant to Minn. Stat. 176.82. Any person discharging or threatening to discharge an employee for seeking workers compensation benefits or in any way intentionally obstructing an employee seeking workers compensation benefits is liable in a civil action for damages incurred by the employee, including any diminution in workers compensation benefits caused by a violation of this section, including costs and reasonable attorney fees and for punitive damages not to exceed three times the amount of any compensation benefit to which the employee is entitled. Q: What is the exposure for terminating an employee who has been injured? A: If an employer without reasonable cause refuses to offer continued employment to its employee, the employer may be subject to a penalty up to $15,000.00. See, Minn. Stat. 176.82, subd. 2. The employer/insurer may be responsible for additional rehabilitation, temporary partial disability or temporary total disability exposure following the termination. THIRD-PARTY ACTIONS Q: Can third parties be sued by the employee? A: Yes.
Q: Can co-employees be sued for work-related injuries? A: Yes, in limited instances. Q: Is subrogation available? A: Yes. MEDICALS Q: Is there a time limit for medical bills to be paid, and are penalties available for late payment? A: Medical bills should be paid within 30 days of receipt of the bill providing the insurer has proper documentation to establish that the bills are in fact causally related to the work injury. If payment is late, there may be penalties pursuant to Minn. Stat. 176.225. Q: What, if any, mechanisms are available to compel the production of medical information (reports and/or an authorization) at the administrative level? A: Minnesota has a discovery procedure which mandates that employee s counsel provide authorizations so that the defense can obtain all reasonable and necessary medical. The defense may file motions to compel in order to secure answers to interrogatories and appropriate authorizations. Q: What is the rule on choice of physician? A: The employee has the right to choose his or her physician unless the employee is subject to a managed care program. Once treatment has commenced and 60 days have elapsed, the employee cannot automatically change physicians. Q: What is the standard for covered treatment (e.g. chiropractic care, physical therapy, etc.)? A: Minnesota has treatment parameters which limit passive care to 12 weeks. There can be an extension for continuing treatment of passive care. All medical care and treatment for various body parts, i.e., neck, back and arms are subject to the treatment parameters. Q: Which prosthetic devices are covered, and for how long?
A: All reasonable and necessary prosthetic devices are covered. There is no statute of limitations for prosthetic devices. Q: Are vehicle and/or home modifications covered as medical expenses? A: Yes. Vehicle modifications are allowed if the modifications are reasonable and necessary. See Minn. Stat. 176.135. Remodeling or purchasing of a home is similarly allowed with a cap of $60,000.00. See, Minn. Stat. 176.137. Q: Is there a medical fee guide or schedule, or other provisions for cost containment? A: Yes. Minnesota has had a medical fee schedule for many years. It also has medical treatment parameters to determine and gauge reasonable and appropriate care. PRACTICE/PROCEDURE Q: What is the procedure for contesting all or part of a claim? A: The employer must file a timely denial of the claim. The document is entitled Notice of Insurer s Primary Liability Determination (NOIPLD). Q: Method of adjudication: A. Administrative level. B. Trial court. C. Appellate. A: A. The employee files a Claim Petition to commence litigation. The defense files an Answer. We have extensive discovery in Minnesota which allows for interrogatories and depositions. Eventually, the case is scheduled for a mandatory settlement conference (mediation). If the case is not settled, then it proceeds to a pretrial conference where the issues are fully laid out. In many instances, a pretrial statement is required by the judge. Thereafter, a hearing is held before an administrative law judge. B. All cases are tried before workers compensation judges.
C. Minnesota has an intermediate court of appeals entitled Workers Compensation Court of Appeals. Thereafter, a case may be taken to the Minnesota Supreme Court. Q: What are the requirements for stipulations or settlements? A: If the parties are represented by counsel and medical is not closed out, the compensation judge must approve the stipulation for settlement. If medical is closed out and the terms are in conformity with the statute, the judge will approve the stipulation for settlement. Q: Are full and final settlements with closed medicals available? A: In some situations, medical can be closed out. If there is a dispute which goes to the heart of the claim, medical can be closed out. Otherwise, the compensation judges will probably refuse to close out medical. Q: Must stipulations and/or settlements be approved by the state administrative body? A: Yes. RISK FINANCE FOR WORKERS COMPENSATION Q: What insurance is required? What is available (e.g. private carriers, state fund, assigned risk pool, etc.)? A: An employer can obtain insurance through the open market. If it is unable to obtain insurance through the open market, Minnesota has an Assigned Risk Plan. Some employers are self-insured. Q: What are the provisions/requirements for self-insurance? A. For individual entities? B. For groups or pools of private entities? A: For information on self-insurance, please contact a Cousineau McGuire workers compensation attorney. 1186873