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January-February 2012

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


The retirement presumption automatically applies to end Minnesota permanent total disability benefits at age 67

Permanent total disability benefits for injuries occurring in Minnesota on or after October 1, 1995 are governed by Minnesota Statutes § 176.101, subd. 4. That statute provides, in relevant part:

Permanent total disability shall cease at age 67 because the employee is presumed retired from the labor market. This presumption is rebuttable by the employee. A subjective statement the employee is not retired is not sufficient in itself to rebut the presumptive evidence of retirement but may be considered along with other evidence.

This so-called "retirement presumption" is rebuttable, as noted, and a discussion of how that presumption can be rebutted by the employee was discussed in the November-December 2010 issue of the "Up North" newsletter.

Recent case law addressed the presumption from the perspective of settlement or ongoing benefits, as litigation arose over discontinuing permanent total disability benefits after an employer and insurer had voluntarily paid ongoing permanent total disability benefits under a stipulated settlement. After appeal to the Minnesota Supreme Court, and remand back to the Minnesota Court of Appeals, the courts have confirmed that an employer and insurer may discontinue payment of permanent total disability benefits when the employee reaches age 67, due to the retirement presumption set forth in the statute. The Supreme Court determined that the employer and insurer may cease paying these benefits without the need of a formal Petition to Discontinue. In practice, a letter advising the employee (and his or her attorney, if appropriate) of the impending discontinuance is recommended. 

See the complete decision of the Minnesota Court of Appeals on remand after the Minnesota Supreme Court's decision.

Reqiring a high school diploma for employment may raise Americans with Disability Act (ADA) concerns

The Equal Employment Opportunity Commission (EEOC) recently issued "Questions and Answers about the EEOC and High School Diploma Requirements," in follow up to an informal discussion letter that drew a lot of attention.

In discussing the Americans With Disabilities Act's (ADA) applicability to job requirements, employers were concerned that the EEOC was prohibiting employers from requiring job applicants to have a high school diploma. The EEOC confirmed that employers may require applicants to possess a high school diploma, but reminded employers of the need to possibly allow applicants to establish qualification for the job in alternate ways if a disability prevented the applicant from obtaining that diploma. Establishing qualification in alternate ways may include evaluating work experience in the same or similar jobs, or providing opportunity for the applicant to prove the ability to perform the job's essential functions. The employer also may require the applicant to provide proof that the lack of high school diploma was due to a disability.  

The EEOC reminded readers that requiring a high school diploma may expose an employer to other discrimination exposures, as well, referring to the 1971 U.S. Supreme Court decision, Griggs v. Duke Power Co., 401 U.S. 424 (1971), which held that "a high school diploma requirement was discriminatory because it had a disparate impact on African Americans who had high school diploma rates far lower than whites in the relevant geographical area, and because the requirement was not job related for the position in question and consistent with business necessity." 

Another example the EEOC offered regarding the dangers of requiring a high school diploma for certain positions was a 2003 lawsuit filed by the EEOC on behalf of an employee with an intellectual disability who had been employed as a nursing assistant for the employer for four years, but then was terminated when the employer adopted a new job requirement that nursing assistants possess high school diplomas. The employee had not had success obtaining her GED because of her disability. The employer refused to explore alternate ways for the employee to satisfy the requirement, and the employer subsequently settled with the EEOC. Read the full text of the EEOC's "Questions and Answers about the EEOC and High School Diploma Requirements."

Early return to work one of the most effective ways to decrease claims length and costs

Bringing an employee back to work as soon as medically possible can substantially reduce the claim's impact on your workers' compensation premium.  For example, if an employee sustains a back injury, and temporary medical restrictions are assigned for three months, how the injury affects the cost of the claim and ultimately an employer's premium may be significantly affected by how quickly the employee is returned to work.

The chart below illustrates several different scenarios, and the impact that wage loss benefits and return to work have on the overall cost of a claim:

Example return to work scenarios and their premium impact

Chart courtesy of www.sfmic.com

These examples are illustrative only, and the specific facts and circumstances of the claim and the employer's situation may affect e-mod and premium, as well.

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.