Third Quarter 2018
By: Stephen P. Murray
Question: In an otherwise compensable workers’ compensation case, is an employer permitted to use salary continuation and can payments of it serve as a credit against TTD obligations?
Short Answer: Yes. In Nebraska, if payments of wages are made in lieu of workers’ compensation indemnity benefits, credit for the wages is allowed.
Discussion: In Nebraska, an employer is entitled to continue the salary or wages of an injured worker in lieu of paying indemnity benefits as long as the employer is not denying liability for the injury. In Godsey v. Casey’s General Stores, Inc. 15 Neb. App. 854, 738 N.W.2d 863 (2007), the Court ruled that if an employee is paid his regular wage although he does not work at all, it is a reasonable inference that the allowance is in lieu of compensation, however, the employer can claim no credit if it denied its workers’ compensation liability while paying the wages.
The Supreme Court of Nebraska has also commented on this topic, confirming in Zwiener v. Becton Dickinson-East, 285 Neb. 735, 829 N.W.2d 113 (2013) that “if payment of wages upon a return to work was intended to be in lieu of indemnity benefits for which the employer accepted responsibility, then credit for those wages is allowed under workers’ compensation law.”
Practice Tip: When a claim is filed against an employer and the claim is compensable, the continuation of an employee’s salary is an acceptable alternative to paying out TTD benefits as long as the employer is continuing the salary with the intent that those wages are being paid out in lieu of indemnity benefits. A best practice tip for an employer is to document the dates an employee missed work and formally write a letter to the employee or the employee’s attorney indicating the dates that the employee would otherwise be entitled to TTD benefits and provide an explanation that it is the intention of the salary continuation to take the place of indemnity benefits.