How do you determine permanent partial disability benefits in a Kentucky workers’ compensation claim?

Benefits for Permanent Partial Disability (PPD) in Kentucky are determined by a complicated statute, KRS 342.730. Normally, the five factors that statute requires to be considered to determine the amount of PPD benefits are:

• Impairment rating;

• Average weekly wage (including maximums);

• Age (including retirement age cutoff);

• Education; and,

• Return to work.

These factors are placed in a very complex formula to determine the amount to be paid for disability. Quite frankly, the formula is too complicated to describe in this blog.

Benefits can also be enhanced by 30% if the employer committed an intentional safety violation, or decreased by 15% if the employee committed a safety violation. KRS 342.165. Attorney’s fees and enhanced past due interest can be obtained if there is an Unfair Claims Settlement Practice Act violation because of an unreasonable proceeding. KRS 342.310.

MULTIPLIERS of KRS 342.730

KRS 342.730 also requires the Plaintiff to be placed into one of three categories for return to work purposes. Typically, these categories are called the one, two and three multipliers. The one multiplier applies when the Plaintiff returns to work at the same job, and earns the same wage or greater. The two multiplier applies when the Plaintiff has the physical capability of performing the same job, but does not return to it. Benefits double for the two multiplier. The three multiplier applies when the Plaintiff does not have the physical capability of returning to work at the old job, and benefits triple.

The application of these multipliers can be one of the most debated issues in a workers compensation claim for PPD, because there is a conflict in the statutory language used to determine which multiplier to apply. Therefore, more than one multiplier can apply in several situations. The pertinent language of the statute for each multiplier is below:

One Multiplier

KRS 342.730 (1)(c) 2. If an employee returns to work at a weekly wage equal to or greater than the average weekly wage at the time of injury, the weekly benefit for permanent partial disability shall be determined under paragraph (b) of this subsection for each week during which that employment is sustained….

Two Multiplier

KRS 342.730 (1)(c) 2… During any period of cessation of that employment, temporary or permanent, for any reason, with or without cause, payment of weekly benefits for permanent partial disability during the period of cessation shall be two (2) times the amount otherwise payable under paragraph (b) of this subsection.

Three Multiplier

KRS 342.730 (1)(c) 1. If, due to an injury, an employee does not retain the physical capacity to return to the type of work that the employee performed at the time of injury, the benefit for permanent partial disability shall be multiplied by three (3) times.

To resolve conflicts in the application of the multipliers, an analysis pursuant to Fawbush v. Gwinn, 103 S.W.3d 5, 12 (Ky. 2003) is required. Essentially, the ALJ must determine if the claimant is likely to continue to be employed at a certain average weekly wage for the foreseeable future in their occupation.

The ALJ has to make three findings: 1) whether the claimant can return to the type of work performed at the time of the injury; 2) whether the claimant returned to work at an average weekly wage equal to or greater than his pre-injury average; and, 3) whether the claimant can continue to earn that level of wages into the indefinite future. Baker v. Bauman Paper Co., Inc., 2013-CA-000851-WC (Ky. App. 2013).

The Kentucky Supreme Court recently outlined the application of the factors of KRS 342.730 in an unpublished decision, SidneyCoal Co., Inc. v. Brock, 2012-SC-000348-WC (Ky. 2013). In that case, the Court upheld an award of the three multiplier of KRS 342.730, even though the claimant had returned to work at his old job.

Also, to obtain the two fmultiplier, the employee must return to work at his old job and earn the same wage. AK Steel Corp. v. Childers, 167 S.W. 3d 672 (Ky. App. 2005). Further, to qualify for the two factor, the employee has to return to work at the same wage or greater for at least a short period of time. Ball v. Big Elk Creek Coal Co., 25 S.W. 3d 115 (Ky. 2000).

In Chrysalis House, Inc. v. Tackett, 283 S.W.3d 671 (Ky. 2009), the Supreme Court held the reason for cessation of employment must be related to the disabling injury in order for the double income benefit to apply. In that case, the employee was apparently fired for misconduct unrelated to his injury, and disqualified from the two factor, even though he was no longer working at the defendant/employer.

There are other situations in which Courts have held the two multiplier applies. In Hogston v. Bell South Telecommunications, et al., 325 S.W.3d 314 (Ky. 2010), the Court stated: ” …we hold that KRS 342.730(l )(c)2 includes a cessation of employment due to the disabling effects of previous work-related injuries as well as the injury being compensated.”

Also, if the employer ceases to do business, or if the employee is laid off after return to work, the employee is entitled to the two factor. Randall v. C.W. Johnson Xpress, 2009-CA-001968-WC (Ky. App. 2011).

Then bottom line is it can be very complicated to determine benefits, even for an experienced attorney.