Third Quarter 2017

Nebraska

By: Stephen P. Murray

Question: Under Nebraska law, can a temporary transitional placement at a not-for-profit or similar employer be used to terminate TTD benefits when the injured employee has not reached MMI?

Short Answer: The Nebraska Workers’ Compensation Act does not specifically address this issue, although the Act does encourage employer’s to accommodate an employee’s work restrictions whenever possible in an effort to return that employee to the work place.

Discussion: Employers and employees benefit alike when injured employees quickly return to work following a work-related injury. Often, to return an employee to work quickly, an employer must modify current work assignments or create alternate assignments in an effort to accommodate an employee’s work restrictions as they recover from an injury. In Nebraska, an employer has the right to suspend an employee’s TTD benefits if that employer accommodates the employee’s work restrictions. This may happen prior to the employee reaching MMI. It is important to note that when an employer accommodates an employee’s work-related restrictions at a reduced wage, that employer owes that employee TPD benefits in lieu of TTD benefits.

Unfortunately, not all employers have the ability to accommodate injured employees. In situations like this, an employee that otherwise would be working some type of “light duty” work assignment sits at home as an employer or insurance carrier pays full TTD benefits as they recover from an injury. To prevent this occurrence, many employers throughout the country have started to implement what is known as Modified Duty Off-Site (MDOS) programs. Through MDOS programs, an employer can direct injured employees to a local charity or non-profit organization for light-duty work while the employees recover.

Several businesses in Nebraska have implemented the MDOS program, but Nebraska law remains silent on whether such a program is permissible under the Act. Nothing within the Act directly prevents or discourages the use of the MDOS program. In fact, the Nebraska unicameral designed the Nebraska Workers’ Compensation Act in such a way that encourages an employer to accommodate an employee’s work restrictions when possible. This suggests that the unicameral supports the MDOS program since the MDOS program helps accommodate an employee’s work restrictions. Until the Act is modified in such a way that specifically addresses the MDOS program, the employer remains at the mercy of the courts. At this time, no court has ruled that such programs are not in compliance with the Act. As such, employers may implement the MDOS program when they cannot accommodate an employee’s work restrictions. Employers may subsequently terminate an employee’s TTD benefits once that employee begins working a modified-duty assignment.

Practice Tip: Since the Nebraska Workers’ Compensation Act encourages an employer to accommodate an employee’s work restrictions whenever possible, an employer in the jurisdiction of Nebraska should first attempt to accommodate work restrictions within its own organization whenever possible. If an employer cannot accommodate an employee’s work restrictions within its own organization, that employer can then attempt to implement a MDOS program with a charity or not-for profit organization.

When an employer seeks to implement a MDOS program in Nebraska, they must be mindful of Nebraska’s Loaned-Servant Doctrine, which clarifies the definition of an “employee” to another company. In other words, when an employee is loaned to a charity by an employer, that employee simultaneously becomes an employee of the loaning employer and the receiving charity.  As such, companies should protect the charity or nonprofit organization from being liable for workers’ compensation. To do this, the loaning employer should continue to check-in daily with the employee. In addition, the employer should maintain control of that employee throughout their recovery period. Additionally, an employer that requires employees to participate in a MDOS program at the time of hire, limits that employees’ “intent” of working at any specific charity or non-profit organization. This helps to sever the employee-employer relationship between the loaned employee and the charity or non-profit organization to which the employee is loaned. This practice limits the liability of the charity or non-profit organization.