Governor vetoes workers’ comp changes for partially disabled employees

Measure ‘would add additional costs’ to insurance system, he says

Gov. Chris Sununu vetoed Senate Bill Senate Bill 99 on Friday, saying his action would prevent upward pressure on workers’ compensation premiums but bill supporters said would not allow partially disabled employees to be made “whole.”

The veto and fight over it, which will play out on the Senate, and perhaps the House floor next week, hinges on the addition of two words in the definition of gainful employment: “similarly remunerative.” But the controversy dates to a state Supreme Court opinion in 2010.

Under the state’s workers’ compensation law, partially disabled workers can return to work with a position that would be “gainful employment,” a job that might have fewer hours or has some accommodation, – perhaps a desk job or a job with less stress, depending on the injury. If that position pays less than then previous job, then the workers’ compensation would pay 60% of lost income, the same amount paid to someone totally disabled.

The current definition of gainful employment doesn’t mention pay, but it does say “employment which reasonably conforms with the employee’s age, education, training, temperament and mental and physical capacity to adapt to other forms of labor than that to which the employee was accustomed.”

Workers’ compensation lawyers have said in the past that was interpreted as a job with roughly the same pay. But in a 2010 decision, the state Supreme Court ruled that “gainful employment does not require a finding that the claimant is able to earn as much as he or she earned at the time of injury.” And in this case, the worker would only be paid 60% of diminished earnings capacity, which was 60% of the minimum wage.

With the addition of “similarly remunerative” to the definition of gainful employment, SB 99 attempts to “clarify” the law to “clear up the confusion” caused by the Supreme Court decision, said Leslie Nixon, a workers’ comp attorney in Manchester.

“Workers’ compensation is supposed to try to make you whole, not to shuffle you off benefits because you can earn minimum wage as a Walmart greeter,” added Jared O’Connor, another Manchester workers comp attorney.

But business groups, including the Business and Industry Association, the New Hampshire Retail Merchants Association and the Association of General Contractors, all backed a veto.

The bill would expand benefits for partial disability to include workers who are able to work but not able to earn as much as they were before, said the BIA

“Now is not the time to be adding to employer costs in the form of higher workers’ compensation insurance premiums,” said BIA President Jim Roche.

George Russo, who lobbies for the insurance industry, said that with the bill an employee will “lose the incentive to go back to work. He’ll make the same amount as not working, and we have to pay them full compensation.”

Nixon disagreed, saying that if an employee refused to accept a job, he or she could be cut off from benefits. But the law would force employers to come up with an equivalent position, by offering vocational rehabilitation, job training and the like.

The insurers “want incentives to go back to work, but how about incentives to the insurance carriers to offer some training?” said Nixon.

Other vetoes

The Senate voted 14-10 to pass the bill along party lines, not a veto-proof majority. But at the time it included another change that drew much of the debate: removal of a 260-week cap on partial disability payments. But the House Labor, Industrial and Rehabilitative Services deleted that section, leaving in only definition of gainful employment change. House opponents of the bill focused on that provision and the bill passed, 204-152, not enough to clear a veto. The Senate approved the amended bill with the same party-line vote.

Sununu also backed businesses on this issue, “Research shows that transition from disability back to work provides significant benefits to employee outcomes,” he wrote in his veto message. By redefining employment to require similar pay, he wrote, “it would result in additional costs to the workers’ compensation system. These costs will be passed on to our business owners.”

Sununu has vetoed 55 bills this session, the most in recent history, including several other bills involving workers’ benefits:

  • SB 151, which would establish an administrative hearing procedure and penalty for an employer who fails to make payment of wages or who fails to secure workers’ compensation coverage
  • SB 146, which would eliminate the waiting period before eligibility to receive unemployment benefits
  • SB 2, which would increase the amount that can be spend for job training from the unemployment trust fund from $2 to $6 million. This could increase unemployment insurance premiums slightly in the last half of 2021.

Lawmakers are scheduled to vote on whether to override the vetoes on Sept. 18 and 19.

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