Comp can't be reduced by short-term disability payments

In Oregon, short-term disability benefits do not reduce the amount of workers' compensation benefits the worker is entitled to.

Case name: Safeway Stores, Inc. v. Martinez, No. A139838 (Or. Ct. App. 12/01/10).

Ruling: The Oregon Court of Appeals held that the employer was not entitled to reduce the workers' compensation benefits it paid by the amount of the short-term disability benefits the worker received.

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What it means: In Oregon, short-term disability benefits do not reduce the amount of workers' compensation benefits the worker is entitled to.

Summary: A worker suffered a compensable knee injury that required surgery. Following her surgery, the worker returned to modified work. She received temporary partial disability benefits based on the difference between her preinjury wages and the wages she received for her modified work. Less than two weeks after she returned to work, she suffered a heart attack while off the job. The worker received short-term disability benefits for the heart attack under the employer's short-term disability plan. The employer sought to reduce the temporary partial disability benefits by the amount of short-term disability benefits the worker received. The Oregon Court of Appeals held that the employer was not entitled to reduce the amount of workers' compensation benefits.

The employer argued that short-term disability benefits were wages that should reduce the amount of workers' compensation benefits. It asserted that the short-term disability benefits were a similar advantage to board, rent, housing, and lodging. The court disagreed, stating that short-term disability benefits are fungible. The court also explained that the employer's argument ignored the fact that the worker received short-term disability benefits because she could not provide services.

The employer also argued that short-term disability benefits are "post injury wages" because they were sick leave. The court noted that the employer's short-term disability plan differentiated sick leave benefits and short-term disability benefits. The court found that the administrative rule reducing temporary partial disability benefits by the amount of post injury wages did not extend the definition of sick leave to include short-term disability payments.

Read more at the WorkersComp Forum homepage.

January 31, 2011

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