Is Workers' Compensation Reform in the Pipeline in Oklahoma?

Posted by: Chris

Like a pendulum, Oklahoma’s 2013 workers’ compensation reforms may be swinging back in the other direction. The reforms radically changed the system by severely limiting benefits and moving responsibility for the adjudication of claims from a workers' compensation court to a workers’ compensation administrative commission.

The changes were made to reduce costs for employers by, among other things, limiting benefits and allowing employers to choose not to participate in the system but instead provide similar benefits in-house. These changes are indeed reducing costs for employers, but they are also creating a backlash as workers suffer benefits cuts. In addition, courts have overturned portions of the law.

One of the key benefits of workers’ compensation is income replacement when injured employees cannot work. Under the old system, temporary total disability (TTD) payments were capped at $801 per week. The new system reduced that amount to $596.03 per week—a 25 percent cut. The new law also prohibited employees who file multiple claims in their first six months of employment from receiving benefits, and it denied compensation for permanent partial disabilities (PPD) to employees who return to work.

While the TTD reduction remains in effect, the provisions denying benefits for injuries in the first six months and for permanent impairments have been stricken down by the Oklahoma Supreme Court. The Court ruled that because state law requires on-the-job injuries to be addressed through the workers’ compensation system rather than in the state court system, those denied benefits for claims in the first six months would be left with no recourse.

The Court also ruled that the failure to provide compensation to employees with permanent partial disabilities if they return to work denies them of due process rights The Court stated that this result runs counter to the “entire purpose of the workers’ compensation system.”

Yet another portion of the law to be nullified by the Supreme Court was the “opt out” provision. This feature allowed employers to not participate in the state workers’ compensation system but instead administer their own in-house systems. The Court found this to be unconstitutional because it allowed employers to select injured employees for inequitable treatment.

There are multiple other challenges to the 2013 law currently pending in various state courts. These may result in additional findings that portions of the law are unconstitutional. In any event, the cases decided so far, as well as horror stories about injured employees being devastated by the benefits cuts, are leading some to call for the 2013 law to be revisited. So far, however, there does not appear to be any legislative initiative to backtrack beyond the various court rulings.

If you have questions about an on-the-job injury, especially as it relates to the new law,  please call us today at 918-582-2500, or contact us online for a free consultation with an experienced attorney.