Employee misconduct can justify denial of workers’ compensation benefits under new Wisconsin law

By Daniel Pedriana, Esq., guest contributor

Due to a new law  that took effect March 2, Wisconsin employees terminated for misconduct or substantial fault, are not eligible for workers’ compensation temporary disability benefits. These are the benefits that help cover wages lost due to an on-the-job injury.

These standards have not made their way into workers’ compensation case law yet, but examining Wisconsin unemployment decisions — where the same fault system is utilized — is illustrative of the way these cases may be handled.

Misconduct

An example of misconduct includes dishonesty to an employer in the course of its investigation of a worker’s conduct. See Mischler v. Harbor Senior Concepts LLC, UI Hearing No. 06401778GB (26 Nov. 2006). In that case, the employee was terminated after being dishonest about who authored a letter complaining about a supervisor. This dishonesty was considered misconduct sufficient to deny unemployment benefits. Therefore, it would presumably be equally sufficient to deny temporary total disability benefits following a termination.

Substantial fault

Substantial fault is a lesser standard of fault, but it is difficult to convince a judge that an employee’s actions were substantial fault, and not merely inconsequential errors. If an employee is negligent in not following an employer’s rule, warned about the minor rule infraction, and then repeatedly commits the minor infraction, it is possible that the employee may be terminated for substantial fault. See, e.g., Deglow v. Muscoda Protein Products, UI Hearing No. 15001774MD (25 Sept. 2015). However, if a mistake is so minor as to be inconsequential, then the judge is unlikely to find substantial fault. For example, in Becker v. Wal-Mart Associates Inc., UI Hearing No. 14000494MD (16 May 2014), an employee forgot to clock in at work for the seventh time after being placed on a final warning for prior incidents. The commission determined that there was no substantial fault because the final incident was the direct result of an inadvertent error made by the employee. Additionally, if an employee can demonstrate lack of ability, competence, equipment, or skill, he or she can avoid disqualification of benefits. See Campo v. Park Towne Management Corp., UI Hearing No. 14000528MD (27 June 2014).

As you can imagine, these standards are difficult to meet, so insurers will need to proceed with caution when denying benefits for misconduct or substantial fault. It will be interesting to see the workers' comp cases that run through the system that address these changes.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

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