August-September 2009

SFM Up North
A publication from the Duluth offices of SFM Companies
Editor: Kathleen S. Bray, Attorney

THIS MONTH'S TOPICS:

• Workers' compensation benefits and motor vehicle accidents: Why doesn't the motor vehicle insurer pay when they're at fault?
• Come learn about return to work strategies and more—Arrowhead H.R. Association fall seminar
• Policies requiring disclosure of medication usage may violate the Americans with Disabilities Act (ADA)
• Are volunteers covered by workers' compensation insurance?

Workers' compensation benefits and motor vehicle accidents: Why doesn't the motor vehicle insurer pay when they're at fault?

SFM's "Auto accidents" CompTalk provides a good overview of the interplay between motor vehicle accident liability and workers' compensation liability issues.

When an employee is injured in a motor vehicle accident while in the course and scope of employment activities, the employee has an injury that is compensable under the Minnesota Workers' Compensation Act. Besides reporting the accident to the auto carrier, it's also prudent to report the accident to SFM even if you're unsure whether the accident is considered work-related or whether the employee sustained any injuries. That way, the case can be handled in a thorough and timely way if the symptoms of an injury later develop.

The most important action an employee or employer can take after a work-related automobile accident is get a copy of the traffic accident report. When an employee is in an auto accident while performing a work duty, workers' compensation is always the primary source of insurance for medical treatment and wage-loss benefits.

In situations where the other driver was primarily at fault, SFM will attempt to recover the workers' compensation benefits it's paid from the other driver's personal auto insurance carrier at a later date. This is called subrogation.

It's important to note here that SFM may not recover the entire amount of the claim, although it takes all necessary steps to maximize the recovery. There are many reasons why SFM rarely recovers 100 cents on the dollar. In Minnesota and Wisconsin, the statute authorizing employers and insurers to pursue subrogation claims contains a formula that usually limits subrogation recoveries to a maximum of two-thirds of the workers' compensation benefits paid. In addition, many times the third party is not 100 percent at fault, so the subrogation claim must be discounted because of shared liability between the third party and your employee.

Often times there is simply not enough insurance money to go around. If your employee is seriously injured by a driver whose auto insurance policy limits are less than the amount of incurred workers' compensation benefits, SFM may be very fortunate to recover one-third of the benefits ultimately paid on the claim. In other cases, SFM is unable to recover the losses incurred until after the injured employee's claim is closed, which could take anywhere from a few months to a few years.

Because open claims are most likely still active claims, the claims representative may want to determine the final dollar amount incurred on the claim before collecting subrogation monies. Although it may be a long process and not always the full amount hoped for, the recovery of dollars through subrogation ultimately is reflected in the employee's workers' compensation loss history.

Come learn about return to work strategies and more—Arrowhead H.R. Association fall seminar

I hope to see some of you at the Sept. 30 all-day human resource seminar at the Mt. Iron Community Center, where I have been invited to present on "Managing your Return to Work Programs in Difficult Economic Times." The program has been approved for 4.5 (General ) recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

The schedule for the Sept. 30 event is:

Specifically, in the last presentation of the day, SFM Loss Prevention Team Leader Joe Morin and I will address:

• Importance of return to work
• Impact of return to work on workers' compensation claims and exposures
• Light duty programs
• Effective and enforceable job offers
• How recent ADA changes affect return-to-work programs

This presentation will provide practical tips and current legal information concerning employers' return to work programs.  Look forward to seeing you at this informative day-long event! For more information, contact Connie Larson at larsonc@vpuc.com or visit the Arrowhead HRA website.  

Policies requiring disclosure of medication usage may violate the Americans with Disabilities Act (ADA)

A Sept. 1, 2009 Minneapolis Star Tribune article reported that the Equal Employment Opportunity Commission (EEOC) has accused a Pine City manufacturer of violating civil rights law by requiring employees to report their use of legal prescription drugs. The EEOC filed a federal lawsuit against the employer for firing an employee because he was taking prescription Vicodin for back pain. The employee apparently had worked for the employer for over 10 years without any performance concerns. The EEOC alleged the employer regarded the employee as disabled by incorrectly perceiving that the medication made the employee unfit for work.

The EEOC took issue with the employer's policy that required employees to report whether they were taking a prescription or over-the-counter medication. If the employer's policy is not related to the ability of employees to do their jobs, it may violate the Americans with Disabilities Act (ADA). Such a policy may require employees to unnecessarily disclose information about disabilities they have, and share medical information that is irrelevant to the employees' job performance.

If an employer has a policy that requires disclosure of medication usage, medical treatment or other medical information relating to the employee, the policy must be narrowly tailored to the requirements of the job. The EEOC's Enforcement Guidance "Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act (ADA)" reminds employers that disability-related inquiries of employees must be "job-related and consistent with business necessity." The Guidance specifically addresses whether an employer may inquire about an employee's prescription drug usage, explaining that an employer generally may not ask employees about their use of prescription medications, as a broad-based inquiry is not job-related and consistent with business necessity. The Guidance goes on to state:

In limited circumstances, however, certain employers may be able to demonstrate that it is job-related and consistent with business necessity to require employees in positions affecting public safety to report when they are taking medication that may affect their ability to perform essential functions. Under these limited circumstances, an employer must be able to demonstrate that an employee's inability or impaired ability to perform essential functions will result in a direct threat.

For example, a police department could require armed officers to report when they are taking medications that may affect their ability to use a firearm or to perform other essential functions of their job. Similarly, an airline could require its pilots to report when they are taking any medications that may impair their ability to fly. A fire department, however, could not require fire department employees who perform only administrative duties to report their use of medications because it is unlikely that it could show that these employees would pose a direct threat as a result of their inability or impaired ability to perform their essential job functions.

If an employer has a policy inquiring into prescription usage or medical treatment, review by the company's employment law counsel is advised, particularly in light of the recent ADA amendments.

Are volunteers covered by workers' compensation insurance?

This article is taken from SFM's "Volunteers in the Workplace" Legal Advisory for Minnesota employers.

A person must be an employee—someone who performs services pursuant to a contract for hire—in order for the Minnesota Workers' Compensation Act to provide coverage for an injury. Typically, volunteers of an organization are not covered for workers' compensation liability. When there is no remuneration, the injured person is considered a volunteer rather than an employee. When the parties contemplate that the worker will receive compensation for his or her services, the compensation need not be monetary. Payment in kind—such as free meals from a restaurant employer or reduced rent from a landlord employer—may give rise to an employer/employee relationship making the recipient eligible for workers' compensation.

However, receiving something of value in exchange for performing work for an employer does not necessarily make the recipient an employee. For example, the fact that a volunteer at a church supper receives a free meal does not transform him into an employee for purposes of workers' compensation benefits. The parties must agree that the worker will be compensated for his or her services; a mere gratuity is not enough. There must be some intent, express or implied, to enter into an employment relationship.

Statutory exceptions to the general rule exist. Certain types of volunteers, even though not paid for their services, are specifically included under the definition of "employee" under Minn. Stat. §176.011, subd. 9, and are eligible to receive workers' compensation benefits if injured while performing volunteer services. Almost all of these statutory exceptions involve the provision of volunteer services to programs or institutions administered by state or local government. These exceptions include:

• Volunteers rendering services in state institutions (e.g. correctional facilities) under the supervision of the commissioner of Human Services or the commissioner of Corrections.
• Volunteers participating in programs established by local social services agencies.
• Volunteers in the building and construction industry who are rendering services for joint labor-management nonprofit community service projects.
• Volunteers providing services at a Minnesota veterans home.
• Volunteer ambulance drivers and attendants, who are considered employees of the political subdivision, nonprofit hospital, nonprofit corporation, or other entity for which they perform services.
• Volunteer first responders (i.e., providers of emergency services such as firefighters) while acting under the authority of a municipality or other political subdivision.

Even if an injured volunteer is not eligible for workers' compensation benefits, an employer's general liability or some other insurance policy may provide a defense for the employer and pay any damages resulting from a claim or lawsuit pursued by an injured volunteer. Therefore, employers should consult with their insurance agent and attorneys to review potential liability issues raised by using volunteers in various capacities.

For the full discussion concerning workers' compensation coverage for volunteers, see SFM's "Volunteers in the Workplace" Legal Advisory for Minnesota employers.

NOTICE: The distribution and receipt of the information provided in this newsletter does not create or continue any attorney-client relationship. The information provided is general in nature and should not be treated as legal advice concerning any particular set of facts or circumstances. Recipients should consult with their attorney before acting on any information discussed in each issue.

Copyright © 2009 by SFM Companies. All rights reserved.
SFM Companies 3500 American Blvd W #700, Bloomington, MN 55431