The Pitfalls and Risks of Modified Duty

May 11, 2019

What Is “Modified Work” Under California's Workers’ Compensation Law?

 

The definition of “Modified Work” is set out in CA Code of Regulations, Title 8 Ch. 4.5 Division of Workers Compensation Section 10116.9 as follows: 

 

(h) "Modified work" means regular work modified so that the employee has the ability to perform all the functions of the job and that offers wages and compensation that are at least 85 percent of those paid to the employee at the time of injury, and located within a reasonable commuting distance of the employee's residence at the time of injury.

 

The Pros of Modified Duty

  1. Injured worker can get full pay and benefits for doing modified work within their work restrictions (this includes full pay, benefits, and overtime rules that apply to all workers per the Labor Code).

  2. The employer of the injured worker does not want their insurance rate to go up so they:

    • Give Modified Work to the employee 

    • So the employer does not get a negative MOD rate change and 

    • Employee gets full pay and benefits

    • Thus both the employee and employer  are benefited until the injured worker can go back to full duty (this sounds good, but  fraud is rampant) 

 

The Cons of Modified Duty

 

The Arns Law Firm has to counsel a large percentage of injured workers about the pitfalls of Modified Work, including how to stay with the program even though the modified work situation is unreasonable and may result in greater injury and harm to the worker. Often employers want nothing more than to get rid of any responsibility for a worker injured on their job site. 

 

Modified duty can be used as a tool to set a worker up to lose their job and their right to workers’ compensation benefits.  When a worker is brought back on modified duty the employer is looking for the slightest violations of company policy to fire the employee and get out of paying temporary disability.

 

Further, the injured worker incorrectly believes that they cannot lose temporary disability if they get fired from the employer while on modified duty. The employee loses their right for temporary disability payments - up to $4,656 per month tax free - if the injured worker does not show up for work every day or violates any company rules.  

 

Because of this, employers commit the following abuses:

  1. Employers create an embarrassing and demeaning work situation. For example:

    • Employers create such horrible work environment that the worker does not go to work and loses his right to temporary disability.

    • Having to drive to a location during rush hour in the Bay Area when traffic is terrible.

    • When the work has to do demeaning work like washing the superintendent’s cars even when he just washed them.

    • When the worker has to report to the employer’s office where management is constantly belittling the worker for not really being injured.

    • In other words, the employer intentionally makes the work place so horrible that the worker gives up and loses temporary disability.

  2. Employers often increase the job duties or intentionally order the injured employ to perform work beyond their work restrictions – the employee is intimidated and works hurt or is further injured.

  3. Employers make unreasonable demands to report to work immediately.

Fraud Using Modified Work

 

Workers injured on the job are limited in their choice of treating doctors to a list provided by the insurance carrier (The “Medical Provider Network” or “MPN”).  Many of these doctors and clinics are very business oriented and rely on the insurance companies for their patients.  As a result, those clinics and doctors, to please the insurance carriers, often under report the extent of the injury and state the injured worker has less work restrictions which allows the employer to offer modified work that is actually beyond what the worker can perform due to their injury.  This sets in motion a very difficult situation for the worker who must report to work but then labor under conditions that may put their health, their job and livelihood at risk. 

 

If the employer (a subcontractor) has an indemnity agreement with the general contractor, then the employers 3rd party liability insurance would pay for the recovery in a 3rd party case because of an “additional insured” agreement or “indemnity” agreement.  Because the employer has his additional 3rdparty liability, the employer wants to defeat the 3rdparty claim.  Many times modified duty used to kill the 3rdparty case and comp case all at once.

 

On large projects, if the employer is involved in an OCIP (Owner Controlled Insurance Policy) or a GCIP (General Contractor Controlled Insurance Policy) then that Insurance Company also controls the Workers’ Comp case.   The attorneys try to defeat the case by setting up an unworkable Modified work for the employee. 

 

In summary, any failure to respond to an employer’s offer allows the employer to terminate the injured worker for job abandonment. If this happens, the workers’ compensation insurance company will also likely deny paying any benefits by claiming the worker was terminated “for cause.”  Under reporting injuries by doctors or workers pressured by “risk managers” in the modified duty system can also lead to the denial of medical care and treatment.  

 

An injured worker on modified duty must be very careful to not give an employer any reason to terminate him “for cause” while at the same time not perform work that is beyond their restrictions or capacity due to injury.  Because of these dynamics and pressures modified duty issues can be very confusing, so injured workers should always consult a competent workers’ compensation attorney to fully understand their rights and obligations when offered modified duty. 

 

For the Practitioner, Case Law to Know

  • Wage loss is a prerequisite to entitlement to temporary disability. Herrera v. WCAB 71 CA.2d 254.

  • Temporary Disability rate is determined by “Average Weekly Wage,” typically the amount of money you either made for the company during the time you worked there divided by number of weeks worked, or amount you earned in 52-weeks prior to date of injury.   Labor Code §4453.

  • If a worker is off work only because s/he is refusing to accept a modified duty offer, temporary disability will not be owed. Seale v. WCAB 39 CCC 676.

  • If the worker is unable to perform the modified duty, temporary disability benefits may be sought. Garrett Corp. v. WCAB (Heard) 42 CCC 840.

  • An employer’s officer of modified duty must be in good-faith. Bratt v. May Dept. Stores 27 CWCR 320.

  • No temporary disability is owed to an employee on modified duty that is terminated due to the employee’s own misconduct. Butterball Turkey Co. v WCAB (Esquivel) 65 CCC 61.

  • Temporary disability benefits are to be reduced by any net income earned while on temporary disability, meaning an employee on modified duty working part-time hours is entitled to receive temporary disability payments minus weekly net income. Labor Code 4909, Hupp v. WCAB 39 CA4th 84.

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The Arns Law Firm can be reached at 415-495-7800

CALIFORNIA OFFICE: 515 Folsom St., 3rd Floor, San Francisco, CA, 94105

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