Lack of intent for advance payment foils offset for overpayment

In Arkansas, an amount in excess of wages paid over the weekly compensation rate cannot be credited against future benefits awarded unless both parties intended for the payments to be compensation paid in advance.

Case name: Main v. McGehee Metals, No. CA10-111 (Ark. Ct. App. 09/15/10).

Ruling: The Arkansas Court of Appeals held that a company was not entitled to an offset for a worker's full salary that it continued to pay after his injury because there was no evidence that both parties intended for it to be an advance payment of compensation.

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What it means: In Arkansas, an amount in excess of wages paid over the weekly compensation rate cannot be credited against future benefits awarded unless both parties intended for the payments to be compensation paid in advance.

Summary: A worker for a metal company was shot during a robbery with a sawed-off shotgun. He sustained injuries to his left arm and torso. The company agreed that the worker sustained a compensable injury. The company paid the worker's medical expenses and continued to pay his salary. The company owner testified that he was also trying to help the worker financially because his wife was suffering from cancer. The worker contended that the company was not entitled to a credit for his salary paid because there was no agreement that he was receiving an advance payment of compensation. The Arkansas Court of Appeals agreed, holding that the company was not entitled to a credit for the excess amount paid to the worker.

The court stated that there was no showing that both parties intended for the salary paid to be an advance payment of compensation. The owner never informed the worker that the money was an advance payment of compensation.

The worker also argued that since he had no functional use of his injured arm and hand, the 88 percent impairment rating assigned was incorrect. The court stated that the impairment rating was supported by evidence and that the worker stated that he did have some functional use of his left arm.

Read more at the WorkersComp Forum homepage.

December 2, 2010

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