Weld Riley, S.C. to host Labor Law CLE Luncheon
Weld Riley, S.C. to host February 18 Labor Law CLE Luncheon regarding Impact of Proposed Worker’s Compensation Act Changes.
For more information or to sign up email [email protected]
Impact of Proposed Worker’s Compensation Act Changes on Employment Law Practice
By William R. Sachse, Jr.
Peterson, Johnson & Murray, S.C.
In February 2015, Wisconsin Gov. Scott Walker proposed to spin off the Worker’s
Compensation Division from the Dept. of Workforce Development (DWD) to two different state
agencies. The judicial functions would be conducted by the Division of Hearings and Appeals
(DHA) in the state Dept. of Administration and all other functions, including claims management
and insurance regulation, would be conducted by the Office ofthe Commissioner of Insurance
(OCl). In late May 2015, the Joint Finance Committee of the Wisconsin Legislature voted to
approve the governor’s request to remove the judicial functions from the DWD and reassign the
administrative law judges to the DHA. The committee rejected the governor’s request to spin off
the other functions and instead kept them in the DWD.
In early July 2015, the Legislature passed the Joint Finance Committee’s amendments to
the budget bill, including the provisions affecting worker’s compensation. On July 12, 2015,
Gov. Walker vetoed the legislation in part. He removed language that required the
administrative law judges who were transferred to the DHA to devote at least 80% of their work
time to worker’s compensation cases. The governor argued that his administration should be
free to assign the administrative law judges to whatever duties it saw fit. Gov. Walker objected
to being limited by the Legislature. The Legislature did not override the governor’s veto. The
amended version of the budget bill is 2015 Wisconsin Act 55. The changes in the worker’s
compensation system go into effect on January 1, 2016.
As of January 1, 2016, worker’s compensation matters will be handled by two separate
state agencies. Litigated claims will be resolved by the DHA. All other worker’s compensation
matters, including claims management and insurance policy regulation, will be administered by
the DWD, Worker’s Compensation Division. DHA created a separate subagency to handle
worker’s compensation hearings. It is called the Office of Worker’s Compensation Hearings
(OWCH, no kidding). The following DWD hearing judges will move to the OWCH: Donald
Doody, Roberta Arnold, Janine Smiley, Andy Roberts, Mark Shore, Nia Enemouh-Trammel,
Stanley Michelstetter, John Minix, Roy Sass, Ryan O’Connor, Cathy Lake, Hamdy Ezalarab,
Sherman Mitchell, William Phillips, Jr., Nancy Schneiders, Leonard Martin, Angela McKenzie,
Aaron Konkol, Edward W.J. Falkner, andThomas Landowski. These AUs will stay with the
DWD: James O’Malley, Mary Lynn Endter, Joseph Schaeve and Walter Thurow. The DHA
judges will have a new supervisor, Brian Hayes, Administrator of the DHA.
As of this writing, the DHAjudges may be contacted with their DWD email addresses
and phone numbers. Mail, including hearing applications, is to go to the current DWD address.
Once a hearing application is filed, then mail, including the answer and all evidentiary
submissions, go to a new OWCH mailing address: Office of Worker’s Compensation Hearings,
PO Box 7922, Madison, WI 53707-7922. OWCH’s fax number is 608-266-0018. Its general
email address D[email protected]. Avoid using the general OWCH mailbox for
specific cases or ALJ contacts.
OWCH is changing the manner in which settlement conferences are conducted. Under
DWD policy, it held three types of hearings: prehearings, formal hearings and settlement
conferences. The latter was like a mediation session. The parties appeared before an ALJ,
usually Walter Thurow or Mark Shore, and the ALJ mediated the dispute, often separating the
parties and conducting a series of ex parte communications. OWCH will apparently now call
those types of hearings “mediations.” They must be requested before the applicant files the
certification of readiness for hearing. ALJ Thurow will preside over them and they will be
conducted in the same manner as he conducted settlement conferences. There will not be any
more official settlement conferences. Parties may try to settle cases at hearings and with the
assistance of the presiding ALJ, but no ex parte communication will be allowed. If the case does
not settle, then the hearing will immediately follow.
Compromise agreements should be sent to the DWD prior to the filing of a hearing
application. After filing of the application, the agreement goes to the OWCH.
Hayes has told some practitioners that he will not assign OWCH judges to other matters
that are adjudicated by the DHA judges. DHA judges who are not OWCH judges will not
adjudicate worker’s compensation disputes. That means the “cross training” ofjudges that was
touted as an efficiency by the proponents of the worker’s compensation reorganization will not
The Worker’s Compensation Division of the DWD also has a new administrator. Earlier
this fall, the DWD Secretary Reggie Newson recently appointed Delora Newton as the Worker’s
Compensation Division Administrator. Newton resigned the position in Oct. 2015, only to be
appointed by Sec. Newson to administrator of the Division of Vocational Rehabilitation. On
Nov. 2, 2015, Sec. Newson appointed BJ Dembach, a long-time aide to Republicans in the state
Legislature, as the new administrator of the Worker’s Compensation Division. Here is his
biography from the secretary’s announcement: “Before joining DWD, BJ worked in the
Legislature for nearly eight years, including for State Rep. Dan Knodl, where he worked closely
on a host of workforce development and labor issues, including worker’s compensation. BJ also
was an aide to fonner state Rep. J.A. ‘Doc’ Hines from 2006-2010. BJ earned his Bachelor of
Arts in Politics and Government with a minor in Communication from Ripon College and holds
a Masters of Public Affairs degree from the UW-Madison La Follette School of Public Affairs.”
The act of the Legislature that changed the law is 2015 Wis. Act 55. It is more than 600
pages long. Here is a link to the Act:
Analysis of20l5 Assembly Bill 501 to Amend the Worker’s Compensation Act of
William R. Sachse, Jr.
On Nov. 10,2015, several state legislators, all Republicans, sponsored a bill to amend the
Wisconsin Worker’s Compensation Act. It was subsequently amended on Dec. 18,2015.
The bill, which is called 2015 Assembly Bill 501 (AB 501), is pending before the
Assembly’s committee on insurance. Among other things, it would change longstanding
worker’s compensation law in Wisconsin by:
- Allowing employers to deny compensation (not medical expenses) by asserting
that an employee’s violation of its alcohol or drug policy caused the injury.
- Allowing employers to select the medical practitioners who treat an injured
worker and, in cases where the employer had a directed-care health insurance
plan, the employer is allowed to direct the treatment received by the employee.
- Allowing employers to deny claims where the employee willfully concealed
preinjury physical conditions.
- Shortens the statute of limitations for traumatic injuries from 12 to two years.
- Ending the increases in temporary disability compensation payment rates for
disability occurring more than two years after the injury date.
- Creates a procedure that may lead to the reduction in minimum permanent
disability awards in cases involving joint and back surgery under Wis. Adm. Code
Sec. DWD 80.32.
Unlike prior substantive changes to the WC Act, this proposal did not originate in the
Worker’s Compensation Advisory Council (WCAC). Knodl, Spiros and Stroebel are
Republican legislators and they drafted the proposal. If enacted without WCAC support,
the political comity that exists between Republicans and Democrats over amending the
WC Act may end. In the past, neither party has pressed a partisan advantage to amend
the WC Act to favor its constituents.
Below is a summary of the key changes proposed in AB 501. The references are to the
statute numbers of the affected sections. In some cases, new sections are created. They
are listed nearest to the existing sections. Any comments are from the perspective of an
attorney who represents employers and insurers and who assumes that the framers of this
proposal intended it to favor the interests of employers and insurers. My personal bias is
to oppose this proposal because it did not start in and is not supported by the WCAC. I
believe that the interests of employers, insurers, employees and the citizens of Wisconsin
are best served when worker’s compensation legislation is supported by the WCAC.
Wis. Stat. Sec. 102.03(I)(c)3: Adds “… and the program, event, or activity is outside
the scope of the employee’s employment” to the tests that must be met for a “wellness
activity” not to be considered services growing out of and incidental to employment.
Currently to avoid liability for an injury to an employee engaged in an activity designed
to improve the employee’s physical well-being, the employer must prove that the
employee is doing so voluntarily and without “compensation for participation.” The
proposed amendment likely makes it more difficult to defend claims because the
employer has to meet three tests, not two. Plus, the new provision is confusing and could
potentially lead to interpretation not intended by its framers. “Scope of employment” is
often used as a shorthand phrase for “performing services growing out of and incidental
to employment,” the official Wisconsin term for being at work when injured. Judges and
commissioners who have to interpret the meaning of this new phrase may consider it
confusing as the first clause of the section starts, “An employee is not performing service
growing out of and incidental to employment …” If the activity is “outside the scope of
employment,” then one is not performing services growing out of and incidental to
employment under Wisconsin law. If the desire is to reduce wellness-related injuries,
then the most effective amendment would be to rewrite the clause “receives no
compensation for participation” with “receives no compensation specifically attributable
to participation.” That would signal intent to depart from the judicial rule that a person is
being paid to participate in the wellness activity if earning a normal salary or wage at the
time the event takes place. See, City ofKenosha v. LIRC, 2011 WI App 51,332 Wis. 2d
448,797 N.W.2d 885.
Wis. Stat. Sec. 102.03(6): A new provision: Where an employee’s worker’s
compensation claim was denied “under the laws of another jurisdiction” that bars any
claim in Wisconsin “for the same injury.” Current law allows such a claim to be made,
even if dismissed in another state. If payments are made in another state, those payments
are a credit against any Wisconsin compensation award. There is no requirement in this
proposal that the law in the other jurisdiction be similar to Wisconsin law. (See
discussion of Wis. Stat. Sec. 102.44(5m)(a) below.)
Wis. Stat. Sec. 102.12: Adds “whichever is later” to the 30-day notice rule, requiring an
employee to notify the person designated by the employer within 30 days after an injury’s
occurrence or after the employee knew or should have known of a connection between
the employment and the disability. Shortens the two-year “laches” provision of the
statute to one year. Under the proposal, an employee could not file a hearing application
more than one year after the injury date, if no compensation was paid by the employer.
The huge exceptions for notices to lower-level supervisors, actual or “should have
known” notice from non-employee sources, and the employer not being misled by lack of
notice remain. Because of those exceptions, this amendment will not affect the way
claims are defended or denied, nor will it provide employers with a significant new
defense on notice grounds.
Wis. Stat. Sec. 102.125(3): Instructs the Dept. of Workforce Development to refer some
fraud cases to the Dept. of Justice for prosecution. The specific criminal statutes added
are for theft, forgery, fraudulent writings, fraudulent data writing, fraudulent insurance
claims and fraudulent destruction of certain writings. Plus, it adds “any other criminal
law” violation to the list. The current version refers just to fraudulent insurance claims.
The proposals broader language means that employees, employers, insurers and their
agents could be prosecuted. Another provision creates and funds a position in the Dept.
of Justice for prosecuting worker’s compensation fraud by any party.
Wis. Stat. Sec. 102.127: Creates a complete defense to an injury claim where an
employee “knowingly and willfully” falsely represents his or her “physical condition” to
an employer prior to the commencement of employment. The employer’s reliance on the
false representation must have been a “substantial factor” in hiring the employee. There
must also be a “causal connection” between the false representation and the injury.
Finally, the condition about which the employee lied must be “reasonably related to the
employee’s ability to adequately undertake the job-related responsibilities of the
employee’s employment.” There are several “escape hatches” for employees in the
language. First, limiting it to misrepresentations on “physical condition” means that any
lies about pre-hire mental problems will not bar a claim. Second, is an employee’s
medical condition ever a substantial factor in a hiring decision? The “substantial factors”
in the hiring decision usually tum on economic factors, such as whether the employer
needs more workers and whether the job candidate has the skills to fit the job description.
Third, causal connection to the injury is an awkward phrase. Does it mean that the prehire
condition has to be a cause of the injury itself, or simply render the employee more
susceptible to a disability because he or she was allowed to work a job that they had been
previously prohibited from performing? Employee-oriented judges are likely to adopt the
former interpretation and greatly limit the application of this provision. Same goes for
the fourth requirement that the “falsely represented condition” must be reasonably related
to the proposed job duties. All four of these requirements have to be met before the
section bars a claim. The intent seems to be to bar claims when the employee fails to
disclose a known physical condition that, if disclosed, would have caused an employer
not to hire the employee and expose him or her to injury risk, or to assign the employee
to a position that is unlikely to expose the employee to injury risk. But the four qualifiers
go beyond that to be more like a fair employment discrimination statute. Proving a fourpronged
test is tough in any situation. This statute is not likely to have a major impact on
Wis. Stat. Sec. 102.13(2)(b): Allows medical providers to provide records in digital
format for $26 per request.
Wis. Stat. Sec. 102.13(2)(c): Adds “in its entirety” as a modifier to “claim denial” in the
rule requiring final medical reports in all cases involving surgery (other than hernias) or
disability of more than three weeks. The new phrase means that final treating doctor
reports will be required in all applicable cases, except where the entire claim was denied.
Apparently, some employers or insurers refused to provide the reports when only certain
elements of a claim were denied. This was probably inserted at the Worker’s
Compensation Division’s request. The Legislature did not propose to further limit the
amount that a provider can charge for the final medical report. The current limit is “a
Wis. Stat. Sec. 102.16(2)(dm): This new section appears intended to allow employers
and insurers to negotiate fees for medical treatment expense with health-care providers
and mandates that the government enforce that agreement by declaring any charges above
the negotiated amount to be “unreasonable.” Such a provision seems unnecessary unless
one of the parties to the contract violates it, in which case one would think that the
contract could be enforced in another forum. (See also the discussion of Wis. Stat. Sec.
102.42 changes below.)
Wis. Stat. Sec. 102.17(4): Shortens the statute of limitations (SOL) for certain traumatic
injuries to two years, from the current 12. All other exceptions are not changed. What
will happen is that a large number of hearing applications will be filed the minute this
statute is enacted to toll the running of the limitation period in all affected cases. The
Worker’s Compensation Division’s current policy is to hold those applications
indefinitely in order to prevent the SOL from barring claims. Thus, this provision will
not have its intended effect, unless the Division changes its policy or other statutory
language makes it clear that hearing applications filed solely to toll the running of the
limitation period are to be rejected, in the absence of an actual dispute between the
Wis. Stat. Sec. 102.18(1)(b)2: Allows for ALJs to order the payment of vocational
retraining compensation before the employee actually commences a course of instruction.
This pro-employee provision will likely lead to increased litigation because workers will
want to use the threat of impending retraining to obtain settlement money from
employers and insurers. Currently, these cases are litigated after the worker actually
starts school, so there is some proof that the worker intends to be retrained. There is also
some evidence that the worker can actually manage school and complete classes. This
provision could result in workers starting school but later quitting, thereby requiring the
respondent to pay start-up costs like tuition, books, fees and some temporary disability
compensation. It has no provision for the worker to repay the respondent if he or she
quits school and does not obtain successful retraining, nor does it give the respondent any
credit against a subsequent lost earning capacity claim that can be made for those workers
who failed to complete school. This provision was in the most recent “agreed bills” from
the Worker’s Compensation Advisory Council.
Wis. Stat. Sec. 102.18(3): Requires petitions for review to be filed at the Labor and
Industry Review Comm., not the Worker’s Compensation Division. No changes in time
Wis. Stat. Sec. 102.18(7): New provision that allows a respondent to request that the
worker submit to a respondent medical exam every three years after “a final award of
compensation” for “permanent partial disability” and a redetermination of disability after
a subsequent hearing. What is a “final award”? Seems to omit interlocutory orders,
which are almost all permanent disability orders. It is also limited to PPD, so permanent
total disability decisions, which are for life, are not affected, yet that is where the money
Wis. Stat. Sec. 102.42: Major change in how medical treatment is provided to injured
workers. The employee no longer chooses the treating medical provider, the employer
does. The proposal sets up two ways that this is done. The first way, which is primary,
applies when the employer has a defined benefit health plan under Wis. Stat. Sec.
609.01(lg). In that case, the worker has to see a medical provider available under the
health plan and have treatment “as provided under the health care plan.” That appears to
be authority for the employer to control the provider and the treatment. Emergencies are
excluded, but once ended, the treatment is with the defined-benefit plan’s provider. If
there is no such plan, then the second option applies. In that scenario, the employer picks
the provider, but cannot direct the treatment. An employer that fails to “tender treatment”
loses the right to select the provider. Moreover, the employee’s practitioner choice in
that scenario is “without restriction,” which appears to eliminate the two-practitioner
choice in current law.
Large employers will benefit most from this provision because they have directed-care
health plans. Smaller employers may not have those types of plans and many are
exempted from having to provide health insurance under the federal Affordable Care Act.
Injured employees of small employers are more likely to have unlimited physician choice
than those of large employers. Thus, small business costs will increase at a higher rate
relative to large employers doing the same type of work.
This should be good news for nurse case managers, but perhaps not for the independent
companies that currently provide those services to employers. The section seems to put
responsibility for treatment decisions in the hands of the health plan’s preferred medical
providers. Thus, nurses with expertise in managing worker’s compensation treatment
may become employees of large health-care provider organizations. The independent
case management providers will be relegated to a smaller unrestricted practitioner choice
Wis. Stat. Sec. 102.43(S)(c): Extends the “sunset” on the provision that requires an
employee work more than 24 hours in a week for a respondent to credit wages earned
against vocational retraining temporary total disability compensation. The new sunset
date is April 30, 2018. After several of these extensions, the provision usually is made
pennanent. This one has been extended at least twice. It is currently not the law.
Wis. Stat. Sec. 102.43(7)(c): Ends the escalation of temporary disability compensation
rates for workers in healing periods or in vocational rehabilitation retraining programs
that start more than two years after the injury. Current law escalates the weekly
temporary disability rate by multiplying the proportion that the time-of-injury average
weekly wage relates to the maximum average weekly wage on the injury date by the
maximum temporary total disability rate in effect at the commencement of the renewed
healing period or course of instruction. For instance, if the worker earned 90% of the
maximum wage on the injury date, the escalated temporary disability compensation was
90% of the maximum TID rate in effect at the start of renewed healing or school classes,
provided that was more than two years after the injury date. Under this proposal, there is
no escalation. In the example, the employee’s TID for all time would be 90% ofthe
maximum TID rate on the injury date. This seems like an awkward way of eliminating
this worker benefit. It might be simpler to repeal sec. 102.43(7) in its entirety. A nonstatutory
provision at the end of the bill indicates that this applies to “a week of disability
[compensation] beginning after the effective date of this subsection.” It is to be applied
retroactively to injuries occurring prior to the effective date of the subsection.
Wis. Stat. Sec. 102.44(I)(ag): Extends eligibility injury date for supplemental
permanent total disability compensation from Jan. 1,2001, to Jan. 1,2003. A companion
provision, Wis. Stat. Sec. 102.44(1 )(b), increases the maximum weekly payment from
$582 to $669.
Wis. Stat. Sec. 102.44(4m): Requires the Dept. of Workforce Development to write
rules for minimum permanent disability ratings in cases of “amputation levels, losses of
motion, sensory losses, and surgical procedures … Those rules shall provide that those
minimum ratings for a surgical procedure … do not apply ifit is shown that after the
procedure the injured employee suffers form no actual impairment as a result of the
employee’s injury.” This is designed to avoid payment of permanent disability
compensation under Wis. Adm. Code Sec. DWD 80.32 where an employee has surgery
that mandates a minimum permanent disability but seems to be “better” physically than
before the surgery. For instance, the minimum permanent disability for a successful total
knee replacement is 50% loss of use of the leg at the knee. This provision seems to say
that the 50% would not be awarded if, for instance, the employee were allowed to return
to work without physical limitation. But is someone who has a prosthetic knee joint
unimpaired as compared to a person with a healthy knee joint? This provision may not
save employers that much money because “unimpaired” was not defined.
Wis. Stat. Sec. 102.44(5): Extends the reverse social security offset rate recalculation to
“old age” social security benefit payments. Under current law, the offset applies only to
social security disability payments, which expire when the beneficiary reaches the age at
which he or she is entitled to old-age social security. The old-age reduction does not
apply if the “employee is available for work.” Does that mean that the employee has to
have been injured while eligible for old-age social security, or simply declare that he or
she is interested in working? The same formula applies to each benefit. It says that
reductions in rates apply only to payments after Jan. 1,2016.
Wis. Stat. Sec. 102.44(5m)(a): Allows respondents to require an employee to disclose
worker’s compensation payments, including compromise payments, under the worker’s
compensation law of another state for the same injury. Any such payments are a credit
against Wisconsin worker’s compensation. The statute specifically excludes from the
credit vocational retraining benefits and payments to dependents. The proposal requires
reductions to be reported to the WC Division. The statute is not retroactive to injuries
prior to its effective date. The proposal says that Wisconsin compromise payments may
be credited, but how that would happen is unclear. There is no provision for repayment
orders in our law. And what if some of the Wisconsin settlement funds were for a
vocational retraining claim? How would they be segregated from the other payments?
Wis. Stat. Sec. 102.58: Preserves the current rule for injuries caused by the employee’s
failure to use safety devices or follow employer safety rules. In those cases, with certain
qualifiers, compensation (not medical expenses) can be reduced by 15% to a maximum of
$15,000 per injury date. Expands the statute to a total compensation bar where the injury
is caused by the employee’s violation of”the employer’s policy concerning drug or
alcohol use.” It does not say that the policy has to exist prior to the injury, that it has to
be written, or that it has to be “reasonably enforced,” as is set forth in the 15% part of the
statute. It does not bar the payment of medical expenses. This provision will cause
litigation to increase because it is broader than the previous version. The earlier version
essentially required proof of legal intoxication. Under the proposal, if an employer
prohibits any alcohol use, it would apply because the employer’s policy defines the level
of prohibited intoxication. More cases will potentially apply. However, the causation
requirement will limit the increase. Litigation costs may also increase, however, as
parties seek expert opinions to prove that a certain level of intoxication caused the injury.
Here is a link to the original version ofAS 501:
It was then amended by its sponsor, Rep. Spiros, and here is a link to the amendments:
http://docs.legis.wisconsin.govf20 15frelatedlamendmentsfab50 lfaa I ab501
William R. Sachse, Jr.
Analysis of the “Agreed Bill” (2015 Senate Bill 536) to Amend the Worker’s
Compensation Act of Wisconsin
William R. Sachse, Jr.
In Dec. 2015, the Wisconsin Worker’s Compensation Advisory Council (WCAC)
released its “agreed bill” to amend the Wisconsin Worker’s Compensation Act. On Jan.
8,2016, it was introduced into the Legislature as 2015 Senate Bill 536. Its main
provisions are assessed below:
Wis. Stat. Sec. 102.11(1): Increases the maximum permanent partial disability
compensation weekly rate to $342 for injuries after its effective date in 2016 and to $362
for 2017 injuries. The current maximum is $322 per week and has been since Jan. I,
- Assuming this provision is passed, the 2017 rate will be $80 per week greater than
it was for 2007 injuries ($262 per week), a 30.5% increase. From 2007 to Oct. 2015, the
Consumer Price Index, a measure of price inflation used by the U.S. Dept. of Labor,
increased by 14.7%.
Wis. Stat. Sec. 102.125(3): Requires the Worker’s Compensation Division to notify the
state Dept. of Justice when its investigation shows a possible criminal law violation. This
is similar to the provision in 2015 Assembly Bill SOl (AB SOl). Both proposals expand
the types of “crimes” that can cause prosecution. The specific criminal statutes added are
for theft, forgery, fraudulent writings, fraudulent data writing, fraudulent insurance
claims and fraudulent destruction of certain writings. They also add an “any other
criminal law” violation to the list. The current statute is limited to fraudulent insurance
claims. The proposals’ broader language means that employees, employers, insurers and
their agents could be prosecuted. Another provision creates and funds a position in the
Dept. of Justice for prosecuting worker’s compensation fraud by any party.
Wis. Stat. Sec. 102.13(2)(b): Allows medical providers to send records electronically
for $26 per request. This same proposal is in AB SOl.
Wis. Stat. Sec. 102.13(2)(c): Caps the amount a medical practitioner can charge for a
“final medical report” at $100 per injury date. This is half-a-Ioaf for overburdened
worker’s compensation claims adjusters. Employers should not be legally required to
prove the employee’s claim for any compensation. The WCAC should end this mandate
Wis. Stat. Sec. 102.17(4): Shortens the statute oflimitations (SOL) for traumatic
injuries from 12 to six years. No change in existing law regarding the “clock” starting
after the final payment of compensation or exceptions for certain types of injuries,
including amputations, loss of vision, permanent brain injuries, and hip and knee
prostheses. What will happen is that a large number of hearing applications will be filed
the minute this statute is enacted to toll the running of the limitation period in all affected
cases. The Worker’s Compensation Division’s current policy is to hold those
applications indefinitely in order to prevent the SOL from barring claims. Thus, this
provision will not have its intended effect, unless the Division changes its policy or other
statutory language makes it clear that hearing applications filed solely to toll the running
of the limitation period are to be rejected, in the absence of an actual dispute between the
parties. AB 50 I shortens the limitation period for traumatic injuries to two years.
Wis. Stat. Sec. 102.175(3): Requires an injured worker who claims permanent disability
compensation for an injury to disclose “all previous findings of permanent disability or
other impainnents that are relevant to that injury.” Further provides for apportionment of
permanent disability between disability caused by a traumatic work injury and that
caused by “other factors, including occupational exposure with the same employer,
whether occurring before or after the time of injury.” The employer is liable only for
permanent disability caused by the work injury and also any permanent disability caused
by occupational disease. The evidence of the other disability can come from medical
reports, medical records or other competent evidence. Medical practitioners who rate
PPD “shall address in the report the issue of causation of the disability and shall include
in the report an opinion as to the percentage of permanent disability that was caused by
the injury and the percentage ofpermanent disability that was caused by other factors,
whether occurring before or after the injury.” It is unclear whether the preinjury
disability had to be established by the rating of a qualified medical expert prior to the
subject work injury. What if the worker had, prior to the work injury, a surgery for which
a minimum permanent disability is mandated by Wis. Adm. Code Sec. DWD 80.32?
Will an operative report be sufficient to prove pre-injury PPD? Or will a medical expert
have to apportion PPD between the pre-injury operation and any post-injury permanent
disability? It is also unclear what the “occupational disease” language will have on this
rule. An applicant might try to create a preinjury occupational disease-type injury to
explain away a preinjury disability, such as one arising out of what was originally
considered surgery for a personal medical condition. Will that result in additional
litigation against the employer or insurer that is liable for the pre-existing disability?
This will also likely compel the Worker’s Compensation Division to redo the WKC-16
and WKC-16-B medical practitioner reports to include specific questions about noninjury-
related permanent disability. It will not be a simple task.
Wis. Stat. Sec. 102.18(1)(b)2: Allows administrative law judges to order the payment of
vocational retraining compensation before the employee actually commences a course of
instruction. This pro-employee provision will likely lead to increased litigation because
workers will want to use the threat of impending retraining to obtain settlement money
from employers and insurers. Currently, these cases are litigated after the worker
actually starts school, so there is some proof that the worker intends to be retrained.
There is also some evidence that the worker can actually manage school and complete
classes. This provision could result in workers starting school but later quitting, thereby
requiring the respondent to pay start-up costs like tuition, books, fees and some
temporary disability compensation. It has no provision for the worker to repay the
respondent ifhe or she quits school and does not obtain successful retraining, nor does it
give the respondent any credit against a subsequent lost earning capacity claim that can
be made for those workers who failed to complete school. This same provision is in AB
Wis. Stat. Sec. 102.23(1)(a): This provision should make it easier for parties to
determine who to name in circuit court complaints for review of decisions from the Labor
and Industry Review Commission. It is intended to avoid pleading problems that
occurred inXcel Energy Services, Inc. v. LIRe, 2013 WI 64, 349 Wis. 2d 234,833
N.W.2d 665 (2013). It requires the LlRC orders to identify the parties that must be
named in judicial review complaints. It mandates that complaints list as the plaintiff the
party commencing the action, the loser at the LIRe. All others named by the LIRC are
defendants. The circuit court is allowed to add a missing party, unless doing so will
unduly delay resolution. That should put to an end litigation over improper pleadings.
Wis. Stat. Sec. 102.43(S)(c): Makes permanent the provision that requires an employee
work more than 24 hours in a week for a respondent to credit wages earned against
vocational retraining temporary total disability compensation. It is currently not the law.
It had been the law until 2014, but was allowed to expire. There is a similar provision in
AB 501, but that bill preserves the “sunset” provision and makes the date April 30,2018.
Wis. Stat. Sec. 102.43(9)(e): Adds a defense to claims for temporary disability
compensation for employers that refuse to provide light work to a disabled employee
because of the employee’s misconduct. The definition of misconduct is imported from
the Unemployment Insurance Act, specifically, Wis. Stat. Sec. 108.04(5), which
“… For purposes of this subsection, ‘misconduct’ means one or more actions or
conduct evincing such willful or wanton disregard of an employer’s interests as is
found in deliberate violations or disregard of standards of behavior which an
employer has a right to expect of his or her employees, or in carelessness or
negligence of such degree or recurrence as to manifest culpability, wrongful
intent, or evil design of equal severity to such disregard, or to show an intentional
and substantial disregard of an employer’s interests, or of an employee’s duties
and obligations to his or her employer. In addition, ‘misconduct’ includes:
(a) A violation by an employee of an employer’s reasonable written policy
concerning the use of alcohol beverages, or use of a controlled substance or a
controlled substance analog, if the employee:
- Had knowledge of the alcohol beverage or controlled substance policy;
- Admitted to the use of alcohol beverages or a controlled substance or
controlled substance analog or refused to take a test or tested positive for
the use of alcohol beverages or a controlled substance or controlled
substance analog in a test used by the employer in accordance with a
testing methodology approved by the department.
(b) Theft of an employer’s property or services with intent to deprive the
employer of the property or services permanently, theft of currency of any value,
felonious conduct connected with an employee’s employment with his or her
employer, or intentional or negligent conduct by an employee that causes
substantial damage to his or her employer’s property.
(c) Conviction of an employee of a crime or other offense subject to civil
forfeiture, while on or off duty, if the conviction makes it impossible for the
employee to perform the duties that the employee performs for his or her
(d) One or more threats or acts of harassment, assault, or other physical
violence instigated by an employee at the workplace of his or her employer.
(e) Absenteeism by an employee on more than 2 occasions within the 120-day
period before the date of the employee’s termination, unless otherwise specified
by his or her employer in an employment manual of which the employee has
acknowledged receipt with his or her signature, or excessive tardiness by an
employee in violation of a policy of the employer that has been communicated to
the employee, if the employee does not provide to his or her employer both
notice and one or more valid reasons for the absenteeism or tardiness.
(f) Unless directed by an employee’s employer, falsifying business records of the
(g) Unless directed by the employer, a willful and deliberate violation of a written
and uniformly applied standard or regulation of the federal government or a state
or tribal government by an employee of an employer that is licensed or certified
by a governmental agency, which standard or regulation has been
communicated by the employer to the employee and which violation would cause
the employer to be sanctioned or to have its license or certification suspended by
This new section also refers to Wis. Stat. Sec. 108.04(Sg)(a) as an appropriate reason to
tenninate an employee and refuse payment of temporary disability compensation. That
section uses the tenn “substantial fault” as a legitimate basis for an employer to tenninate
an employee’s employment and deny the payment of unemployment insurance. Here is
the definition from that statute:
“… For purposes of this paragraph, ‘substantial fault’ includes those acts or
omissions of an employee over which the employee exercised reasonable control
and which violate reasonable requirements of the employee’s employer but does
not include any of the following:
- One or more minor infractions of rules unless an infraction is repeated after
the employer warns the employee about the infraction.
- One or more inadvertent errors made by the employee.
- Any failure of the employee to perform work because of insufficient skill,
ability, or equipment.
The provisions of Wis. Stat. Secs. 108.04(5)(a) conflict with existing provisions of Wis.
Stat. Sec. 102.43(9)(c), which requires that an employee violate an existing drug or
alcohol policy and that the violation occur during the healing period. This current
provision frustrates employers because it requires a positive drug test occur “during the
period when the employee could return to a restricted type of work during the healing
period.” Most employers test for drugs and alcohol immediately after an injury occurs
and before, in most cases, the employee has not yet been allowed by a medical
practitioner to return to light work. Most employers’ drug policies mandate immediate
employment termination for drug violations, so employers are not able to run a second
drug test after the employee’s doctor allows light work. Thus, the defense is unavailable.
Under Wis. Stat. Sec. I08.04(5)(a), no such healing period or light work limitation exists.
Employers will be able to use this defense more often than under the current statute.
However, the conflict raises a question as to which provision will apply. There could be
litigation over that question. A better bill would repeal Wis. Stat. Sec. 102.43(9)(c) and
eliminate the conflict.
Wis. Stat. Secs. 108.04(5)(b) and 108.04(5)(c) conflict with existing sec. 102.43(9)(b).
The existing statute requires “commission of a crime, the circumstances of which are
substantially related to that employment, and the employee has been charged with the
commission of that crime.” It also reinstates temporary disability compensation if the
employee is acquitted. The unemployment statute does not require that the crime be
“substantially related to the employment.” Termination for “theft” is allowed without a
requirement that there be a conviction. It also seems to broaden the definition of”crime”
by including any offense that results in a civil forfeiture. Does that include a traffic
violation? Again, there is a conflict with the existing statute and failure to repeal or
rewrite the existing statute is going to cause litigation over which to apply.
Wis. Stat. Sec. 108.04(5)(e) allows termination for absenteeism. It does not say that
absences for work injuries are excluded from those that qualify an employee for
termination. It excludes absences where the employee shows “valid reasons” for missing
work. In Great Northern COfp. v. LIRC, 189 Wis. 2d 313, 525 N.W.2d 361 (et. App.
1994), the appeals court held that absences for a compensable work injury could not be
included in an employer’s no-fault attendance policy to justify as “reasonable cause” an
employment termination under Wis. Stat. Sec. 102.35(3). Perhaps that holding will be
extended to absences under this provision. But expect some litigation to resolve the
If enacted, this provision is the death knell for Brakebush Bros. v. LIRe, 210 Wis. 2d
623,563 N.W.2d 512 (1997).
Wis. Stat. Sec. 102.44(1)(ag): Extends eligibility injury date for supplemental
permanent total disability compensation from Jan. 1,2001, to Jan. 1,2003. A companion
provision, Wis. Stat. Sec. 102.44(1)(b), increases the maximum weekly payment from
$582 to $669. These provisions are also in AB SOl, but the maximum weekly rate is
Wis. Stat. Sec. 102.44(4m)(a): Creates a provision that requires the Dept. of Workforce
Development to write rules on minimum permanent disability ratings for amputations,
motion loss, reduced sensation and surgery. It directs the department to convene a
“medical advisory committee” to “review and recommend revision of those ratings to the
department and the council on worker’s compensation.” This relates to Wis. Adm. Code
Sec. DWD 80.32 and codifies the method by which the rule has previously been
amended. Much mischief is occurring these days over minimum ratings that apply to
motion loss. The Worker’s Compensation Division has quietly implemented a program
to raise permanent partial disability ratings through a dubious process of comparing
motion allegedly lost due to injury to alleged normal motion in a similar but uninjured
limb. The Division staffers who demand compliance with their “ratings” under penalty
of fine improperly assume that any apparent motion loss is due to the injury, without
relying on any expert medical proof. The WCAC could end this practice by removing
reference to motion loss from the statute. As for the medical advisory committee, that is
what gave us the nonsensical rule 80.32 that we have today, which grossly overstates
disability in cases ofsurgically-implanted prostheses. It would be better if the WCAC
simply negotiated the percentages.
Wis. Stat. Sec. 102.58: This identical provision is in AB SOl. Preserves the current rule
for injuries caused by the employee’s failure to use safety devices or follow employer
safety rules. In those cases, with certain qualifiers, compensation (not medical expenses)
can be reduced by 15% to a maximum of $15,000 per injury date. Expands the statute to
a total compensation bar where the injury is caused by the employee’s violation of”the
employer’s policy concerning drug or alcohol use.” It does not say that the drug and
alcohol policy has to exist prior to the injury, that it has to be written, or that it has to be
“reasonably enforced,” as is set forth in the 15% part of the statute. It does not bar the
payment of medical expenses. This provision will cause litigation to increase because it
is broader than the previous version. The earlier version essentially required proof of
legal intoxication. Under the proposal, if an employer prohibits any alcohol use, it would
apply because the employer’s policy defines the level of prohibited intoxication. More
cases will potentially apply. However, the causation requirement will limit the increase.
Litigation costs may also increase, however, as parties seek expert opinions to prove that
a certain level of intoxication caused the injury.
Here is a link to the entire agreed bill:
http://docs.legis.wisconsin. gov/20 15/related/proposals/sb536
William R. Sachse, Jr.
Weld Riley, S.C. was founded in 1991. The firm consists of lawyers across four offices (Eau Claire, Menomonie, Wausau and Black River Falls) and offers a full range of legal services, including labor and employment, business law, estate planning, tax representation, municipal law, mining and mineral rights, environmental law, banking and creditor rights, civil litigation, criminal defense, immigration, and family law.