TPD & Concurrent Illnesses: Not Just a COVID Question – a South Carolina Perspective
Written by: Margaret “Meg” H. Donahue, Esq.
At the one-year anniversary of COVID-19 in America, you’d probably think all the questions had been asked. But only recently, one came up that I was surprised hadn’t surfaced sooner. The question was, if a worker is on light duty for a work injury and receiving temporary partial disability (TPD) benefits, what happens if the person then goes out of work with COVID? What benefits are owed, if any? This question isn’t exclusive to COVID and can come up in the context of any unrelated term of absence running concurrent with a work injury. However, with a pandemic and strict two-week quarantines, the likelihood of such a situation occurring increases.
While intervening illnesses or injuries often trigger a complete cessation or suspension of temporary disability benefits, precedent in South Carolina dictates that fully cutting off temporary disability benefits would not be appropriate when TPD is involved. The South Carolina Workers’ Compensation Commission, and the higher courts in the state, have ruled that sources or reasons for a worker’s inability to earn wages can be categorized and separated in certain circumstances. In the case of temporary partial disability in particular, the law allows the worker to still be compensated for the portion of their lost earnings directly related to the work injury when some other circumstance has him or her entirely out of work.
In answering the initial question, the primary guidance comes from the case of Pollack v. Southern Wine & Spirits of America, 405 S.C. 9, 747 S.E.2d 430 (2013). While this case specifically deals with TTD, the analysis has been expanded to determine entitlement to TPD as well. Pollack addresses the situation where a claimant was terminated for cause during the course of a workers’ compensation claim. The employer was able to provide suitable modified duty which would have continued to be available for the claimant but for his termination. The South Carolina Supreme Court examined S.C. Code Ann. §42-9-260 and its opening sentence stating, “[w]hen an employee has been out of work due to a reported work-related injury . . . and employer may start temporary disability payments . . .”. The Court pulled further context from Regulation 67-502(B)(1), which defines disability as “incapacity because of an injury to earn wages . . .”. With these in mind, the Court explained that entitlement to temporary total disability (TTD) benefits is premised upon a nexus between the work related injury and the inability to earn wages. The Court ruled that the claimant in Pollack was not entitled to TTD because his inability was not due to his injury but to his violation of company policy that resulted in his termination. Pollack is also used as the operative case for situations of refusal of suitable modified duty.
The classic example is when the modified duty offered is going to pay wages equal to pre-injury wages. Easy. Refusal of suitable modified duty means no entitlement to temporary total benefits. The worker who refused suitable modified work at full pay is unable to earn full wages because of his or her own election, not because of the injury. Temporary partial disability would not come into play in that circumstance, it’s an all or nothing proposition. However, when the modified duty offered is at a lower rate of pay or reduced hours and would entitle the worker to TPD, South Carolina has used the Pollack analysis to a seemingly different result. South Carolina has taken the position that the worker would still be entitled to the TPD as if they would have accepted the modified work – just not TTD. This is because the worker’s ability/inability to earn wages can be put in two different categories when reduced wages/hours accompanying modified duty are involved.
The first category of ability to earn wages is based on the injury. The worker on modified duty restrictions, and therefore offered work at a lesser wage, has an inability to earn a portion of his or her wages that is directly related to the injury. Even if the worker accepts the modified work, the worker has some level of related partial disability because of the reduced pay corresponding with the modified work arrangement. This temporary partial disability will exist for as long as the medical restrictions are in place necessitating modified work. However, if the worker refuses suitable modified duty, the worker’s inability to earn the remainder of his or her normal wages is due to self-limitation or personal choice and is unrelated to the work injury. The courts in South Carolina have held that the most equitable result in such a situation is to apportion the worker’s potential wages and benefits based on what is and is not related to the work injury.
Based on how the courts have ruled in situations of refusal of modified duty, we believe they would take a similar apportionment approach to a concurrent absence due to COVID or other unrelated condition for workers who would otherwise be receiving TPD benefits. But for the illness-based absence, the person would still only be able to earn part of the usual income because the work injury has put limits on his or her earning capacity. Thus, the person would still be entitled to TPD for as long as the work-injury-related need for modified duty with reduced pay are in place.
Of course, this begs the question of: how do you know how much to pay in TPD if there are no wages from which to run the calculation? If the worker’s hours vary from week to week, estimates from the Employer of average hours offered to the worker can be used, or an average of what the worker has been earning while on modified duty, if available. Then use the same estimated rate for the entire period of absence. Benefits like sick days and PTO may be factored in, if used, but that would have to be addressed on a case-by-case basis.
Again, other states may handle this differently. To date, the South Carolina Workers’ Compensation Commission and the higher courts have not adjudicated this issue specifically in the context of COVID. But the Commission and the higher courts have been consistent in their interpretation of entitlement to temporary disability benefits in a number of different scenarios and we believe they would follow suit if the question where presented. Hopefully, in another year, we won’t see any more questions in the context of COVID, but Flu season is always just around the corner.