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man is still totally disbaled, that the insurance carrier will have to pay a running award of compensation for this loss of wage earning capacity or for his total disability. For example, if a man has a 25% permanent partial disability rating to his arm as a result of an injury, after the temporary total disability and the 25% permanent partial disability rating have been paid, if this amendment is enacted, the longshoreman would be entitled to additional compensation if he can demonstrate that the 25% permanent partial disability in his arm is producing a loss of wage earning capacity. This would mean that after having paid for the 25% permanent disability that a running award for the balance of his life could be entered requiring the weekly payments on the basis of a loss of wage earning capacity. If the maximum limitation which is now $24,000 in the Act is repealed as section 3 of the Bill proposes, these payments would go on indefinitey. While this amendment has large financial potentials if the monetary limitation is removed, even with the monetary limitation of $24,000 or such figure as it might be increased to is maintained, we believe that as a practical matter in most instances that the deputy commissioners would make awards for loss of wage earning capacity so that the statutory maximum would have to be paid in nearly all cases. This is particularly true since deputy commissioners do not always accept a man's actual earnings as his wage earning capacity after an injury and frequently hold his wage earning capacity to be less than what he actually earns as a longshoreman. While a 1966 amendment to the Federal Employee's Compensation Act contains such a provision, it stands substantially alone in this respect. It would actually be detrimental to injured workers in that it would virtually eliminate any incentive for them to return to work, for they would know that as long as they didn't work, they could expect the deputy commissioners to award them compensation for the rest of their lives. This is particularly true since it is seldom that a deputy commissioner will deny compensation in full unless the man has some earnings record. If he knows that more compensation will be paid to him after he has received all his compensation for the permanent disability in his arm, leg, etc., why make any effort to go back to work? The present schedules adequately compensate for the permanent disabilities to specific members and there is no reasonable justification for this amendment which would very substantially increase the benefits in these cases.
Additionally, other subparagraphs of Section 8 of the Act have to be amended if this new subsection is going to be added on to Section 8(c). The others that would have to be amended are:
1. Section 8(d) would have to be amended to show that loss of wage earning capacity would not be payable to survivors. If the amendment is made as now included in the Bill it would mean that if a man had permanent partial disability to a specific member and the deputy commissioner concluded that although he died before this was paid out that this permanent partial disability would have resulted in a loss of wage earning capacity to him that he could make an award to his surviving beneficiaries on the basis not only of the scheduled number of weeks in the Act but also on the basis of a loss of wage earning capacity projected over what would have been his life expectancy if he had not died from some causes outside his employment. This could be accomplished by amending Section 8(d) by inserting subdivision C-23 at the same place subdivision C-21 is referred to.
2. Section 8(h) would also have to be amended to refer to subdivision C-23 at the same place that it refers to subdivision C-21.
3. Section 8(i) would also have to be amended to include cases arising under subdivision C-23 if it is passed in the same way that subdivision C-21
is included in that portion of section (h). While we feel very strongly that the amendment proposed by adding this new subsection is unsound and would create so many administrative difficulties as well as make it virtually impossible to fairly compute insurance rates that it should not be passed, clearly if it is passed, these additional amendments to Section 8 are mandatory to make the other sections within Section 8 work as ther should.
Section 7: Injury Following Previous Impairment-(a) Amends section 8(f) (1) to limit to 104 weeks or to the number of weeks provided for schedule awards in section 8(c)(1)-(20), whichever is the greater, the employer's liability for an injury to an employee with a previous permanent physical impairment, when the injury results in permanent total disability not found to be due solely to the injury. Continuing benefits will be paid, as presently, out of the special fund established in section 44 of the Act.
(b) Further amends Section 8(f) by striking paragraph (2) relating to previous disabilities now inapplicable.
Comment: The proposed amendment, insofar as it relates to compensation for permanent partial disability to specific members of the body such as an arm, leg, etc. is relatively clear. The only change being apparently that it requires payment of compensation either for the stated period of weeks relating to the specific member or for 104 weeks, whichever is the greater. This is in effect to put a requirement that the insurance carrier must pay for a minimum of 104 weeks of permanent disability attributed to a specific member, but he pays only for the disability caused by the second injury. Since this relates only to total and permanent disability cases, we doubt that the 104 week minimum period inserted by this amendment is of much significance. It is in the second part of the proposed amendment contained in the third and fourth sentences which are not understandable. These apparently relate to all other cases of total permanent disability in which the second injury does not involve a specific member of the body. I am unable to visualize in operation the requirement that the employer pay under paragraph (b) of section 8 of the Act for temporary total disability and then pay under paragraph (c) of section 8 of the Act for a loss of wage earning capacity and then in addition pay compensation for 104 weeks. If the $24,000 maximum limitation is eliminated from the Act under paragraph (C) of section 8 of the Act as proposed in Section 3 of S. 2485, compensation for permanent partial disability would have to be paid for the balance of the man's life.
I therefore do not see how compensation could then be paid for an additional 104 weeks unless the section is intended to mean that the compensation carrier must pay for temporary total disability under paragraph (b) then pay 104 weeks of total permanent disability under this section, and after paying the 104 weeks of total permanent pay for a permanent partial loss of wage earning capacity under paragraph (c) of section 8 with the special injury fund paying the difference between the amount being paid by the carrier under paragraph (c) for permanent partial loss of wage earning capacity and the compensation due for total permanent disability benefits. As you can see from the foregoing attempted explanation we believe this section of the bill is ambiguous. What we are concerned about the fact that we know in the past the Bureau of Employee's Compensation has contended that this section of the statute does not apply to any total permanent cases except those involving specific member injuries of the body. The language as phrased in the present amendment is ambiguous so we cannot tell whether it is designed to try to do away with the special fund having to pay any total permanent cases where a general injury to the body is involved. It of course is even more difficult to comprehend if the $24,000 maximum limitation is taken out of the Act as proposed by section 3 of the Bill discussed above, since this would mean that compensation for the permanent disability to a man's general efficiency would be paid for the balance of his life and if his wages at the time of the second injury were high enough for him to be paid the maximum weekly compensation, the insurance carrier on the second injury would in effect pay total permanent disability benefits even though his second injury may have contributed only a small percentage to his total permanent disability.
Additionally, since we are dealing with an injury following a physical impairment, and in many cases this would be a prior injury we believe the compensation for the second injury should be based on the wage earning capacity of the employee at the time of the injury and not his average weekly wage. This for the reason that in some cases Deputy Commissioners have found that a man's wage earning capacity following an injury is less than his average weekly wages. Thus if they have found his wage earning capacity following one injury to be $80 a week even though he is earning wages of $100 a week, and he has a second injury, it seems inequitable to us to require the employer to pay compensation on the basis of $100 per week when the man's wage earning capacity found by the deputy commissioner is only $80 per week. This means that the first injury employer is paying him compensation for the difference between $80 and $100) per week and if he gets his compensation on the basis of $100 per week from the second injury he is in fact being paid compensation twice for the same loss of vage earning capacity. If it has been judicially determined that his wage earning capacity is only $80 per week and compensation is being paid to him because it is at that figure, then I do not think it is either fair or equitable or reasonable to require the second injury employer to pay on the basis of average weekly wages which may be higher than his wage earning capacity, as judicially determined by the deputy commissioner. The purpose and intent of this proposed amendment needs to be more clearly stated in the Bill or it will lead to much needless litigation which can be avoided if proper clarity of language is used.
Section 8: Augmented Compensation—Student Benefits-(a) Adds a new subsection (j) to section 8 to augment compensation benefits by 843 per centum when a disabled employee has one or more dependents.
(b) Amends section 2 by redesignating paragraph (19) as paragraph (20) and adding a new paragraph (19) to define “student" for the purpose of continuing benefits related to dependents of 18 to 23 years when in school.
(c) Amends section 2(14) to define "child," "grandchild," "brother," and "sister" in order to permit benefits resulting from student status.
(d) Amends section 8(d) to extend compensation benefits to persons in student status beyond the present expiration age of 18 years.
Comment: The effect of this amendment in our opinion is to increase the compensation benefits payable to 75% of a man's average weekly wages not to exceed the maximum weekly compensation in at least 90% to 95% of the claims. This proposed amendment adds 813% of the man's average weekly wage to the 66%% contained basically in the Act if he has one or more dependents. Dependents are then defined as a wife or husband or child or parents with the broad definition of child, grandchild, brother and sister to include students who are pursuing a full time course of education in an accredited college up to their twentythird birthday or until they complete four years of college. It is our view that the 6623% figure should be maintained and this supplemental increase in compensation is not needed. With 4.4% of a person's income going to Social Security and approximately 13% as a minimum into income taxes, a 75% weekly compensation award would put the claimants in the position of coming within about 7% or 8% of their take home pay while they were working. This leaves little margin or inducement for them to return to work simply to make possibly another $7 or $8 per week when they can be drawing compensation within such a close range to their take home pay when they are having to work. Congress has not made any such concessions for students, etc. in the income tax laws and no reason for it here is apparent.
Section 9: Death Benefits---(a) Amends section 9(b) to increase the ceiling of death benefits to survivors from 66% to 75 per centum of the average wages of the deceased employee, payable as follows: Surviving wife or dependent husband-increases payments from 35 to 45 per centum of deceased's average wage. If surviving child or children, 40 per centum to surviving or dependent husband and 15 per centum for each child; in the case of death or remarriage of eligible spouse, increases the benefits payable to one surviving child to 35 per centum and for each additional child 15 per centum.
Strikes last sentence of section 9(b) pertaining to appointment of a guardian because redundant.
(b) Amends section 9(c) to increase the benefit ceiling for orphan children from 66% to 75 per centum. The section now provides that when there is no surviving eligible spouse one surviving child will receive 35 per centum of the wages of the deceased, and each additional child 15 per centum up to 66% per centum.
(c) Amends section 9(d) to increase the ceiling on total payments to collateral dependents from 6623 to 75 per centum, and to increase individual payments from 15 to 20 per centum. No change is made in the amount paid to each parent or grandpa rent.
(d) Amends section 9(e) to increase the maximum weekly wages of the deceased in computing death benefits from $105 to $140 and the minimum from $27 to $47.
(e) Amends section 9(g) which provides for the payment of compensation benefits to aliens who are not residents of the United States or Canada. The section limits payment of death benefits to the surviving wife and children, or if none, to the surviving mother or father supported by the employee in whole or in part, for one year prior to the date of the injury. The section now requires the Secretary upon application of the insurance company, to commute future installments of compensation to such aliens by paying one-half of the commuted amount of future compensation. The amendment removes the requirement to commute pa yments upon the application of the insurance company and the limitation to onehalf the commuted amount, and permits the Secretary to commute in his discretion.
Comment: These amendments basically increase the death benefits from ards of an employee's average weekly wage to 75%, with most of this increase going to the surviving wife or dependent husband. The present 35% to the surviving wife is increased to 45% unless there are surviving children in which event her share is increased to only 40% and the other 312% increase is spread out among the children. It also involves some increases from 15% to 20% in the compensation payable to grandchildren or brothers or sisters, if dependent, which would be payable, of course, only if the compensation due to the surviving wife and children does not equal the statutory maximum of 75%. Of course, the amendment to the definition relating to children and other beneficiaries insofar as the injury section is concerned to make compensation payable so long as they are full time students to age 23 would also apply in this death benefit situation. It simply another means of increasing the benefits due in death cases.
The advisability of these increased payments of compensation is questionable for in many instances, particularly where a longshoreman leaves a wife and child dren surviving him, the wife and the children have a greater tax free take home pay than they had while the longshoreman was alive. This is brought about by the weekly compensation payments and monthly Social Security payments. We have seen actual cases in which take home pay of the widow and minor children has been nearly $2,000 higher than it was while the longshoreman was providing their livelihood. When payments for compensation are considered with Social Security benefits, there appears to be no justification for this increase.
Of course, when it is determined what the maximum weekly compensation rate shall be, subparagraph (d) of this Section of the Bill will have to be changed to conform.
The last section applies to payment of benefits to aliens who are non-residents of the United States or Canada and does away with the right of the insurance company to require the Bureau to commute death benefits and to pay one-half of them in a lump sum in discharge of their obligations under the Act. This leaves the commutation to the discretion of the Bureau and removes the limitation of one-half placed on the amount to be paid. The purpose of this is obviously to permit the Bureau to commute death benefits insofar as aliens are concerned and then to require the insurance carrier to pay them in full in the commuted amount. We doubt seriously that the Bureau would give the employer the benefit of any further commutation other than that allowed on a 4% basis by the Act, unless required to do so as it is now in the Act itself. This would seem to double the cost of benefits payable under this section of the Act unless we are in error in the approach which the Bureau would probably take to the Act if it were amended in this way.
Section 10: Defense Base Act— Benefits to Alien Survivors—The Defense Base Act extends the benefits of the Longshoremen's and Harbor Workers' Compensation Act to employees of contractors at United States bases or on public works where such contracts are performed outside the continental United States. Section 2(b) of that Act limits payments of death benefits to aliens who are not residents of the United States in the same manner as section 9(g) of the Longshoremen's Act, with the same requirement for commutation of future installments of compensation payments. This bill amends section 2(b) of the Defense Base Act to remove the requirement to commute such payments upon the application of the insurance company and the limitation upon the commuted amount, and permits the Secretary to commute in his discretion.
Comment: This deals with the commutation of death benefits under the Defense Base Act and again leaves to the discretion of the Bureau the extent to which death benefits are to be commuted and removes the limitation of the insurance carrier under the Act at this time which requires it to pay no more than 50% of the commuted amounts. The same comments made with respect to commuted payments in Section 9 of the Bill also apply to this section.
Section 11: Time for Notice and Claim-(a) Amends section 12(a) to extend the time for giving notice of injury or death to the deputy commissioner and to the employer beyond the 30 days after the injury or death now required to include 30 days after the employee or the beneficiary is aware or in the exercise of reasonable diligence should have been aware of a relationship between the injury or death and the employment.
(b) Amends section 13(a) to extend the time for filing a claim for compensation for injury or death. The Act now provides that such claim must be filed within one year after the injury or death, or if payment of compensation has been made without an award a claim may be filed within one year after the date of the last payment. The amendment provides that the time for filing claim shall not begin to run until the employee or beneficiary is aware, or by the exercise of reasonable diligence should have been aware of the relationship between the injury or death and the employment.
Comment: The act as it has been interpreted by the Supreme Court of the United States now requires the notice of a claim within 30 days and the filing of a claim within one year of the injury or death. The purpose of the present amendment is to change this decision of the Supreme Court of the United States and to permit the giving of notice and the filing of claim within 30 days or one year respectively after the employee or the beneficiary is aware or by the exercise of reasonable diligence should have been aware of the relationship between the injury or death and his employment. This section is designed primarily to take care of those cases in which the physical disability does not manifest itself for some time after the date of the injury or when for some reason the casual relationship between the employment and the death is not known immediately. We do not believe that there is any basis on which to extend the limitations insofar as the filing of claim or giving notice of death is concerned. All this amendment is going to do in our opinion is open up the Act to an even more liberal interpretation of the time in which to give notice or to file a claim and what this will do basically is to permit the Bureau to make some compensation awards not just in meritorious cases but probably in large part in those cases in which there is little, if any, basis on which to contend that there is a casual relationship between a latent disability and the man's employment. For example, in a death case, if a man was exposed to some things on a vessel such as dust, etc., and died of lung cancer, and it was discovered several years later that this particular type of dust might aggravate cancer and cause it to become active, etc., limitations would not have run until one year after this later medical discovery that his employment may have had something to do with his death because of the pre-existing cancerous condition. This amendment is fraught with many problems and in our opinion will do much to do away with the one year limit of time in which to file claim. If the one year period of time is too short then perhaps it ought to be extended but we think all this amendment is likely to do is to cause employers and insurance carriers to have to defend against and probably have to pay many claims on which there is very little, if any, basis to claim a casual relationship between the injury or the death and the man's employment.
Section 12: Fees for Services--Amends section 28(a) to provide that claims approved by the deputy commissioner for legal and other services after resistance to awards or increased benefits shall be added to the amount of compensation payable and shall be a lien upon such compensation.
Comment: This is a particularly dangerous amendment for it will give substantial additional powers to the deputy commissioner to penalize or force employers and insurance carriers to pay compensation under the Act as wanted by the deputy commissioner under the threat that if they do not pay what he wants them to informally but insist upon their right to a full formal hearing that they will then have to pay the employee's attorneys' fees in addition to the compensation award. It will permit the deputy commissioner to assess substantially larger attorneys fees than they have in the past and they would probably do this if the money was coming out of the insurance carrier's or the employer's pocket. We think this amendment will make it extremely difficult and very costly for any employer or insurance carrier to decline to follow any informal recommendation made by a deputy commissioner in an individual case. They will have to be prepared to assume extra costs for the claimant's attorneys' fees in return for being accorded due process of law at a formal hearing. We believe this gives the deputy commissioner too much additional power to force acceptance of his recommendations which in most instances are very liberal in favor of the injured employee. He already has the power to in effect say if the employer doesn't accept this informal recommendation. I am going to make the award in this amount to him even after the formal hearing and the employer has little recourse, but to give him the additional power to force the employer to pay not only the same award he has recommended informally but to add on to that the cost of the attorneys both for the employee and for the employer at the formal hearing is in our view going much too far. It is directly contrary to all concepts of fairness and justice in America--making a party pay attorneys fees for his adversary in order to have an opportunity to be heard is a shocking and unbelievable concept if fairness and justice are the goal.
The proposed amendment if it is to pass needs to be changed to make it clear that it refers to an award in a compensation order filed hy the deputy commissioner. As now phrased it is ambiguous and subject to the interpretation that these allowances for attorneys fees can be made even though the award is made on an informal basis. Section 33 of the Art uses the phraseology "under an award