Can an Employer offer part-time modified duty?

Workers’ Comp claims can best be managed by keeping employees at work following injury. Claim costs are reduced because no Temporary Disability is paid on the file. Keeping the employee at work and active within the doctor’s restrictions, is also good for the employee’s physical and mental healing. The potential for exaggeration of symptoms or potential fraud is reduced when the employee is at work every day.

If the doctor has given work restrictions that exceed the employee’s normal duties, modified or alternative duties can keep the employee working.  But often an employer is unable to provide Temporary Alternative Duties that would fill a 40-hour work week.

Providing part time modified or alternative work hours is better than none.

If the employee earns less that his pre-injury gross weekly wage, he will be entitled to Temporary Partial Disability (TPD) payments from the carrier. This is also called “wage loss” benefits.

The employee’s current weekly wage is deducted from his pre-injury weekly wage. Then 2/3’s of the difference is used for the calculation for TPD. As the number of hours actually worked might vary from week to week during the recovery period, the employer would provide weekly (or every 2 weeks) earnings to the insurance adjuster who then calculates and pays the weekly wage loss amount to the employee.

Example:

$600   Pre-injury gross weekly wage ($15/hr. x 40/hrs.)

-$200  Partial weekly wage paid by the employer

$400 difference x 2/3 = $266.67 (TPD weekly rate)

• The carrier would pay the $266.67 (tax free) to the employee

• The employer would pay $200 (taxed) to the employee.

Total payment to the employee is $466.67/ week. If the employee is completely off work, the Temporary Disability rate would be $400/week ($600 gross weekly wage x 2/3). The employee is not penalized for working part time and the employer reduces the disability payments on the claim. It’s a win for both.

Therefore, part time work for an employee during recovery is a better alternative than no work.  While it does require more diligence on the employer’s part to ensure that the weekly wage is submitted to the carrier for the wage-loss calculation, the goal is the best outcome for both the employer and the employee during recovery from injury. 

Reminder: there is a 3-day waiting period before Temporary Disability benefits are due (exceptions: waiting period is waived if hospitalized overnight and is retro-actively picked up if the employee is completely off work for 2 weeks.)

Work with your employee and the claims adjuster to ensure that everyone understands the payment of wage or wage-loss benefits during recovery.

Give your ESM Claims Advocate a call to discuss if you have further questions.