By Loren Gesinsky and Alex J. Reganata, Senior Fellow
Seyfarth synopsis: Employee sustained an injury in a work-related accident. Based on New York’s Workers’ Compensation Law he was classified as having a nonschedule permanent partial disability. He received an award of $500 per week, and pursuant to a statutory cap could not receive this amount past 350 weeks. Employee died from unrelated causes after 311.2 weeks, and employee’s minor son sought accrued unpaid amounts of father’s award, as well as amount that employee would have received if he reached the statutory cap. New York’s highest court held that unaccrued portions of nonschedule awards under WCL may not pass to beneficiaries of injured employees who die from causes unrelated to the work injury.
Eric Watson sustained an injury in a work-related accident. Pursuant to New York’s Workers’ Compensation Law (WCL), an employee who suffers an injury that results in a permanent partial disability can receive one of two categories of awards: a “schedule loss of use” award or a nonschedule award. New York courts have described a schedule loss of use award as being designed to compensate for loss of earning power, rather than the time that an employee actually loses from work of the injury itself. A nonschedule award aims to reimburse the injured employee for earnings lost due to injury.
According to the WCL, nonschedule awards are payable while the permanent partial disability exists, but the amount payable is subject to reconsideration as to the degree of the impairment. Nonschedule awards are measured at 66.67% of the difference between the average weekly wage of the employee and his or her wage-earning capacity in the same employment or otherwise afterward. It wasn’t until 2007 WCL amendments that a statutory cap was placed on unscheduled awards. Before the amendments, the payments were unlimited. Schedule awards, on the other hand, were set at 66.67% of the employees average weekly wages and were paid for a fixed period set by the statute.
Eric Watson received a nonschedule award. He passed away due to unrelated causes after 311.2 weeks. His minor son sought to recover unpaid amounts during the 311.2 weeks, and also an award for the remaining 38.8 weeks between Watson’s death and the maximum period allowed by statute of 350 weeks. A WCL Judge awarded Watson’s minor son only the unpaid amounts that accrued during the 311.2 weeks preceding Watson’s death. The Appellate Division modified the award, ruling that Watson’s minor son was also entitled to the 38.8 weeks left in the statutory maximum period. The Workers Compensation Board appealed.
The Appellate Division – Missing The Point
The Appellate Division found that a nonschedule award was “established, set and fixed at the time of classification.” It concluded that, because both nonschedule and schedule awards were contained in the same subdivision that allowed an award made to a claimant to pass to a minor child, the statute did not distinguish between the two and therefore both schedule and nonschedule awards had the ability to pass to a minor child.
The Appellate Division viewed the 2007 WCL amendments making nonschedule awards limited like schedule awards as indicative of a legislative intent to achieve “parity” between the two categories of awards, thus requiring that the awards be treated the same in the context of ability to pass to a minor child.
Where The Appellate Division Went Wrong – A History Lesson and the Finality of Death
The Court of Appeals took the Appellate Division to school in a sense. The Court of Appeals described how it “urged recognition” of the differences between the two awards over 100 years ago. It also recognized that courts have awarded posthumous benefits for schedule awards countless times.
The Court of Appeals also held that the Appellate Division misunderstood the legislative intent of the 2007 amendments. The Court of Appeals cited to legislative history stating that the amendments’ purpose was to eliminate the possibility of a set duration of benefits for some claimants and lifelong benefits for others. Thus, the intent was not to eliminate all distinctions between the two awards, but rather reduce the unfairness that resulted from a potentially unlimited nonschedule award in comparison to a limited schedule award. The Court of Appeals reinstated the original holding of the Workers Compensation Board, which held that, with the death of a claimant to an unscheduled award, there is no additional award payable because the nonschedule award compensates for time lost due to the permanent partial disability — and with death, there is no time left to lose.
For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Workplace Counseling & Solutions Team.