By Jim Cline and Erica Shelley Nelson
Representing the Injured or Disabled Member
Part 35: An Introduction to Workers Compensation and the Injured Public Safety Officer
This article is the 35th in a multiple part series covering the rights your injured and disabled members have and how you, as a union or guild representative, can best assist them. Over the several weeks and continuing for the next several weeks, we’ll be publishing, in various segments, information on how state and federal laws protect your members who are hurt or otherwise unable to work. We’ll cover topics including disability discrimination law, the FMLA, job protection rights under the CBA, workers compensation, disability benefits, and the right to bring a civil lawsuit.
The topics we are covering all also going to be addressed in detail in an upcoming book we’re publishing: Helping the Injured or Disabled Member: A Guidebook for the Washington Law Enforcement and Fire Union Representative. It is also our intention over the course of the next year to travel through the state and provide training to public safety union and guild representatives on how best to enforce these rights. Expect to hear more on that in the months ahead.
The 35th article in these newsletter series provides a discussion introducing the topic how state workers compensation “time loss” benefits are coordinated with LEOFF II supplement benefits. For more information, visit our Premium Website. On the website you’ll find an on line version of the Injured or Disabled Member’s Guidebook and other information on the laws covering your members.
LEOFF I provided broad protection to public safety employees in the uniformed ranks of police officers and firefighters. LEOFF II significantly alters those protections. That is not a secret to anyone.
But the way the LEOFF II laws interact with workers compensation requirements still seems to be far more mysterious than it ought to over 30 years since the enactment of LEOFF II. There seems to be widespread noncompliance with the requirements of LEOFF II. Specifically, a number of jurisdictions are improperly applying the LEOFF II Supplement mandate.
In 1985, the legislature acted to address at least some of the equity issues that had been identified between LEOFF I and LEOFF II officers as to duty related injuries. They did this through the form of a “LEOFF II Supplement.” The LEOFF II Supplement certainly does not entirely close the gap, but it does extend more coverage under workers compensation for police and firefighters injured at work than the law extends to any other covered class of employees.
The statute requires employers to provide for a period of 6 months, a “disability leave supplement.” The supplement places the employee in the position of being able to maintain their wages. That supplement is defined in RCW 41.04.505:
The disability leave supplement shall be an amount which, when added to the amount under RCW 51.32.090 [L&I Time Loss Payments] will result in the employee receiving the same pay he or she would have received for full time active service, taking into account that industrial insurance payments are not subject to federal income or social security taxes.[1]
There are two key aspects of this section that need to be interpreted and understood. First, is the notion of “same pay,” which is neither defined in the regulations nor elsewhere in the law. Certainly, it means, at a minimum, that employees be paid the same base wage plus the applicable premiums the employee had before their on-the-job injury.
It is an open question about whether it requires continuation of other compensation such as deferred compensation. The statute does elsewhere require the continuation of “insurance benefits.” But this clause would not seem to extend to benefits such as deferred compensation.
The second key requirement of this section is that employers are to bring the employee up to the same pay by “taking into account that the industrial insurance payments are not subject to federal income tax or social security taxes.” This element seems clear enough, but it seems to be often ignored by employers.
There is an extensive misunderstanding and misapplication of the LEOFF II Supplement among public employers and even employees, as well. It has been a practice of employers to take the entire check from L&I and then paying the employee their regular wage. Employees have been persuaded by payroll clerks that this is a “better way” to do it. It usually is explained to them that there is some type of benefit that they are receiving in this “better way.” Although when employees are later asked what the advantage is , usually they are unable to point to anything other than that they were able to maintain a regular paycheck and their benefits — to which they are entitled to anyway.
The only other enhancement that they get out of maintaining their position on the payroll is that they continue to accrue contractual leave benefits under the CBA. But whatever advantage this reaps, it is more than offset by the loss incurred by subjecting this to federal payroll tax. It is the tax consequences that are the most misunderstood and that have led to a misapplication of proper payment procedure. To see how, you have to consider how the disability supplement would be applied if the employer did not convert the L&I check.
Under RCW 41.04.510, employers are required to arrange for a “disability leave supplement.” This supplement is to be paid one-half out of the accrued paid leave of the employee, and the other half simply paid by the employer. The purpose of the disability leave supplement is to return the employee to the “same pay.”
This is obviously a disadvantage to an injured employee who ends up depleting their leave banks at a much faster rate than if the rules had been properly applied. In fact, in this example, and in many actual cases, the leave banks will deplete at twice the proper rate.
The employers do this, perhaps, for two possible reasons. First, it simply is “easier” for payroll people who do not have to make the painstaking calculations about what the net wage actually is supposed to be. Second, the employee, in fact, does deplete the leave banks quicker, meaning that the employer has less of an obligation to an employee who ends up with a long-term injury from which they cannot return after the LEOFF Supplement expires after 6 months. But from the officers perspective, during the midst of an injury is when you most need to preserve your leave banks.
There is another element of this program employees should be aware of, as well. The statute allows employees who are out long-term and covered by the disability supplement to “buy back” their credit so they can keep accruing retirement credit. Employees must act affirmatively to obtain this benefit by contacting the Washington State Department of Retirement Systems once the period of disability begins.
As of 2015, each LEOFF II employee contributes 8.41% of their gross earnings to their LEOFF II retirement pension. If the employee is injured and out on a period of disability, the employee may or may not have to buy back their service credits depending on the period of disability. An employee who is disabled for a period of 0-6 months will continue to accrue service credits, but will not have to “buy back” credits (even though the employer is obligated to do so). An employee who is disabled for 7-24 consecutive months, may buy back service credits at 8.41% per month, or at the applicable rate, for the period of disability. Unfortunately, employees who are out on disability leave for a period exceeding 24-consecutive months may not buy back service credits. However, if an employee is out on disability leave for 24-consecutive months, returns to work for a period of time, and then has a medical setback and is forced to take disability leave for another period, then the 24-month buy back period (with the same 6-month grace period) starts anew.
Employers sometimes sell employees on the notion that they get to continue accruing credit toward retirement when they are on full payroll status by turning over their L&I checks, but this is attainable anyway by the employee making direct arrangements to have the service credit payment made. While it may be somewhat more convenient to make this service credit through the regular payroll process, as demonstrated above, there is a potentially significant cost for this convenience.
Employers may (and have claimed) that they have a right to the L&I check. We have even seen instances where employers have pursued claims of “theft” against employees who sought to retain their L&I check. But, in fact, the law provides the employee every right to retain the check. L&I interpretations of the statute indicate an employer is prohibited from compelling employees to turn over their time-loss checks to “buy back” sick leave. On the other hand, an employer discharges its statutory obligations when it supplements these payments using sick leave and the LEOFF II supplement. Ultimately it is up to the employee to determine whether to retain the check and have it supplemented or to turn it over in exchange for salary.
In the next article in this series, we’ll shift over to how independent medical examinations are to be covered under workers compensation law.
[1] (Emphasis supplied.)
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