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<a class=”embedly-card” data-card-controls=”0″ href=”https://youtu.be/EZXi_H86Few”>Third Party vs Workers Comp (August 9, 2017)</a>
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Video TranscriptionHi, Matt Quinlan here. Welcome to this week’s edition of #WhiteboardWednesday, where we tackle real-life issues that are our clients face and answer questions that we get from people that call our office. This week we’re gonna be talking about misconceptions that people have about worker’s compensation. Everybody has a general idea of what worker’s comp is, and I would venture to say that most people would define it as anytime you are hurt on the job or at work, it is your route to recover for your injuries.
There is an idea, though, that it is the only route to recover. And in some respects that’s correct, but in very important ones it is incorrect. And so I’m creating this week’s Whiteboard Wednesday to educate people about the opportunities that are out there for them if you’re injured at work, because frankly, the worker’s compensation program is not the best thing for injured workers. So, let’s get into it.
What is Worker’s Comp?
First things first. What is worker’s compensation? Well, as I mentioned, worker’s compensation has been put in place by the state of California to protect employers from lawsuits from injured employees, okay? And so your employer will pay into the worker’s comp program as if it’s some sort of an insurance premium. And any time an injured worker is presented to the employer, they send them along to this worker’s compensation program. There, they recieve medical care. They go into a particular system that determines what their damages are, and ultimately compensates the injured worker for any permanent disabilities, as well as any lost wages that they have.
So, worker’s comp, to be sure, is not there to protect injured employees so much as it is to keep the risk of employers’ down. And so if you in fact are injured at work, you may think that you are then bound be the worker’s comp program and system, because you’ve seen lots about it, your employer will be on you immediately about filing worker’s comp claim and those types of things. And people…And I’ve seen it over many years. People just feel like that’s the way they recover. And they don’t have any other options, because nobody’s there to educate them.
So, the main thing that somebody wants to…that needs to understand here, is that just because you have a worker’s comp case, doesn’t mean you don’t also have a third party case, okay? So, let me get refocused on worker’s comp. It is, in fact, an exclusive remedy for lawsuits against your employer. Specifically your employer. It does not mean that it’s your exclusive remedy if you’re injured at work. It just means you can not sue your actual employer for anything whatsoever related to any injuries.
Now, worker’s compensation is nice in that it’s no fault. You don’t have to establish that anyone was negligent, or that your employer did something to cause you to be injured. All you have to show is that you were in the course and scope of your employment, or that you were at work, and that you were injured. And worker’s comp will pick up and cover you for your losses.
Now, there are two types of worker’s compensation. There is a temporary and permanent disability as it relates to your injury. Now, of course, when someone’s injured initially, whether it be through repetition, over time, being exposed to loud noises at work, and their hearing goes. Or some sort of carpal tunnel syndrome or something through repetitive nature. Or it’s some big event that happens, you know, where fall and you hurt your back, or something worse happens.
You’re gonna be temporarily disabled. And so you should immediately go to your employer. You file the necessary paperwork. And you immediately get placed into medical care, okay? This is worker’s compensation medical care, medical doctors through your worker’s comp program. You do not need to use your own private health insurance, if you have it. You will be required to be treated by their doctors. You know, the care that, you know, that’s been…kinda the reputation, rather, of those doctors, they’re still pretty good. It is relatively cheap and inexpensive, though, and I’ll get into how that could affect your third party case here in a bit.
But you were monitored, and you are watched throughout, and you go to all of their doctors, okay? They will compensate you for any lost wages that you are incurring if you can’t work. There are limitations to this. You get roughly two-thirds of your rate at the time you were injured, okay? There’s a minimum and a maximum, also. The maximum amount you can recover per week is something like $1,100 or $1,200, and then the minimum is something like $150 or $200. And so if you’re a high wage earner at work, obviously you’re gonna be missing out on quite a bit of your wages through the worker’s comp program. But if you’re not one of those high wage earners, you can in fact recover up to $1,100 or $1,200 per week. And again, that is only two-thirds of your total lost wages.
Now, as you go through the process, you’re getting the medical care from their doctors. You get better. You get to a point in worker’s comp called Permanent and Stationary. And that means that you have recovered to the extent that the doctor anticipates that you will, and you are now in position where you can assess the harm that’s been done to you, okay? And once that happens, you have an examination with a doctor. And that doctor will rate your permanent disability if there is any, all right? If you recover fully, you’re never gonna be permanently disabled and you go back to work. You’ve had the benefit of the medical care, you got your lost wages covered.
But if you don’t recover all the way, and you find yourself into a permanent stationary position according to the doctors, you get a disability rating, okay? How disabled have you now become? And that’s on a one or zero to 100th scale. And this is pretty subjective, okay? There’s a worker’s compensation board. You have a qualified medical examiner who meets with you, who does a report about what their position is on your injury. And then you also have to fill out your own questionnaire. And you submit it to the worker’s compensation board, and then they give you a rating. And then depending on what your rating is, you are compensated based on some charts, all right?
Some amount of money. A settlement, right? Even if you can go back to work, you still receive a lump sum. But it’s always relatively inadequate as it compares to kind of the open market in a third party case. But nonetheless, based on your disability rating, you will, in fact, receive some sort of cash settlement for what’s happened to you.
And that leads me into the next section, which is what are the limitations of worker’s compensation? Well, the main thing is this inadequate recovery here that I’ve mentioned, okay? The biggest… Let’s say you have the worst possible scenario at work. And you’re the worker, and you die. And you have a family at home, and people that count on you. The most you can ever get under those circumstances I’ve just described is $320,000. Now, obviously, that is not gonna compensate your family and your spouse for your early death. You know, they were counting on you for much more than that. And that’s just a great, obvious example of the limitations, and how inadequately injured workers are compensated through the worker’s compensation program.
I mean, $320,000 in a circumstance where you’ve got multiple children and a spouse, I mean, is so light. You know, in the third party world, I mean, your case is worth probably worth 10 times that, or more. So that’s, I mean, obviously an example that I wanted to share with you to kinda like show you how inadequate the recovery you might get here is. And it gives you all the motivation in the world to try to get a third party case if it’s possible, because that’s where you’re really gonna receive fair compensation.
And then also, there’s a one year statute of limitations with worker’s comp. You’re probably not gonna miss this, your employer’s gonna be pretty good about keeping you on track, and making sure you get the medical care. So that probably won’t be a big issue, as there’s a two year statute of limitations over here on third party cases.
What is a Third Party Case?
Now, what is a third party case? Well, a third party case is anybody other than your employer, okay? So, any other defendant. People think like, “Well, what do you mean? I was at work, I mean how could there be another defendant?” Well, can be surprised, if you kind of really sat down and broke it down, how many other business entities can be found within your workplace.
And oftentimes, those are the entities that are ultimately responsible for your injuries, not your actual employer. So, let me share three examples of cases that I’ve recently handled for people that were under the impression, when I first met them, that they had a worker’s comp case only, when in fact they also had a third party case. And hopefully, it’ll help kind of jog your memory and your mind, and allow you to see things a little bit differently.
A construction site. Okay, so construction sites have lots of contractors. There’s a general, there’s a bunch of subs, everybody’s working together. Everyone’s working around one another. People are leaving things here and there, and you’re encountering other people’s work all the time. And working side by side with other subcontractors, with the general, if you’re a sub, for example.
So, I had a case where my client worked for a company that graded a piece of property, the land. And there was some scaffolding that was left up by a painting company on the property. It had to be moved because it had been left there for several weeks and it needed to be moved so that they could do their work, so they could also work the drainage underneath where the scaffolding was. So, he was ordered by the general contractor to take down the scaffolding. My client.
Now, he had never done this before. He didn’t know what he was doing. He was there to grade and to kind of do handiwork on the ground. He had never had any training with scaffolding. The general contractor asked my client, who worked for a particular sub, to take down the scaffolding of another subcontractor. And of course, it went terribly bad for him. The scaffolding collapsed, he was injured horribly. And he had a worker’s comp case. And he never recovered fully from his injuries as a result of that. But he came to me, and we ended up suing both the general contractor and the other subcontractor that put the scaffolding up and had left it there, okay?
And so he could not, obviously, sue his own employer. That was the purpose of the worker’s comp case. But he did have a claim against the scaffolding company, a third party, and the general contractor, a third party, because neither one of them was his employer. And as a result of doing that, he recovered a lot more money than he ever would have if he would have been stuck with just worker’s comp.
Another example is a hotel employee that I represented, that was working. She was actually a housekeeper there. And she was working in San Francisco at a hotel. And there was an ice machine that had leaked. It had malfunctioned in some kinda way, and had leaked out into a slippery part of kind of the near the room where they stored all the housekeeping goods. And she fell. And she was injured quite badly, and she had a worker’s comp case, and she thought that she slipped and fell at work, and that was the end of that. She had worker’s comp. And she did, but she also had a third party case against the company that maintained and serviced the ice machine, okay?
So, I represented her successfully. She ended up being compensated quite well. She would’ve never been able to get that kind of money in the worker’s comp program. Because we blamed the company that serviced the ice machine as to why she fell, not her employer. And she did quite well as a result of kind of realizing that she wasn’t bound by the worker’s comp system.
And then lastly, I represented a lady who was working, and was going up and down the elevator at her place of employment, and the elevator malfunctioned and dropped a bit. Not… It didn’t kinda free fall, but it dropped quite a bit, and people in it fell around and fell on each other. And she ended up hurting her shoulder, primarily. And she had a worker’s comp case, obviously. She was working at the time, she was within her building. And she somehow came to me, and asked me questions if she had any other legal rights. And I explained to her that she would have a case against the elevator maintenance company, if there was one.
And so, I did, in fact, represent her, and we got the documentation that established that the elevator company was responsible for maintaining this elevator, and they hadn’t done so. So she was able to successfully pursue a third party case as well. And she also did quite well, much better than she would have in the worker’s comp.
The theme here with all these people is that each one of them was in position where it was very possible that they would have been only pursuing a worker’s comp case. Never thinking, never being aware that there was another option available to them. And part of that is because they didn’t have a clean understanding of how the third party system works, and what really worker’s comp does for injured workers.
And as a result of them knowing and figuring that out, they were able to receive so much more money for their injuries, and they deserved it. And so, this was obviously, you know, kind of a life changing deal for these people.
Now, you can have a worker’s comp case going and a third party case going at the same time, like I’ve mentioned, all right? So it’s very common that you’re hurt at work, you bring a worker’s comp case, you open it and you begin to pursue it. And then you realize, hopefully, that you have a third party case. And you get a lawyer. And we pursue them both at the same time, all right? And so, if we do, in fact, recover in the third party case, the worker’s compensation program is entitled to be reimbursed for anything that they have paid out on your behalf, assuming the employer is not ultimately at fault, also.
So, if the employer contributed to the accident in some kinda way, well, then they can’t fully recover for everything that they have paid out. But if it was a real clean deal where the employer had really nothing to do with it, it just so happened that it occurred while you were at work, or it just so happened that it was in you workplace where it happened, then they are entitled to be reimbursed for anything they paid out for your medical care, and anything they paid out for wages loss as well. And then obviously, if they give you a settlement for a permanent disability, they’re also entitled to be reimbursed for that as well.
But that’s really not an issue. It’s secondary. You still end up netting way more and you’re way ahead here by doing both at the same time and then allowing them to be reimbursed, as opposed to just pursuing the worker’s comp and not having to reimburse them.
So, anyway, that’s what I really wanted to talk about here today. I just wanted to open your mind up to the idea that just because you’re injured at work, doesn’t necessarily mean you can only pursue worker’s comp. There’s lots of limitations to worker’s comp, and most importantly, you can’t recover fully in the worker’s compensation program. So, if it’s possible that you can get outside of the worker’s comp system through the ways I’ve talked about, by finding another responsible entity that is not your employer, it would behoove you to do that. You will end up with a whole lot more money, and you will be compensated fairly, ultimately, where you wouldn’t be in the worker’s compensation program.
So, anyway, I hope you learned something. I hope you will keep that in mind when you’re working, especially if you work in a dangerous environment. I appreciate you watching, and I look forward to seeing you next week on Whiteboard Wednesday.