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North Carolina General Assembly Passes Workers

North Carolina General Assembly Passes Workers' Compensation Reform

The Inside Perspective
(July 25, 2011)

In June, North Carolina amended its Workers' Compensation Act. The original bill was a business initiative, but the new law is a compromise among all participants in the workers' compensation system. While there is a little something for everyone, several provisions should be beneficial to employers:

  • Willful Misrepresentation in Applying for Employment: If an employee willfully misrepresents his physical condition at the time of hire, an employer can now defend against a claim by proving it relied on the misrepresentation in the hiring decision and that there is a causal connection between the misrepresentation and the employee's subsequent injury. Consider an applicant who denies any prior back injuries or lifting restrictions despite a bulging disc and a doctor's instructions not to lift over 20 pounds. If he aggravates the problem with heavy lifting, then the employer may assert this new defense. Employers should, once a conditional job offer is made, use detailed medical questionnaires to elicit full disclosure of pre-existing conditions pertinent to the physical requirements of the job—and require the applicant to sign and certify that all facts and representations are true, accurate, and made willingly and intentionally.
  • Access to Medical Information and Communication with Health Care Providers: The new law allows employers to obtain relevant medical records without the express authorization of the employee. If, however, the employee's claim is denied or the records pertain to treatment not being paid for by the employer/carrier, then the employer must provide the employee with contemporaneous written notice of the request for records. The bill also includes detailed requirements for both written and oral communications with medical providers.
  • New definition of "suitable employment." The term "suitable employment" can be key to the value of many workers' compensation claims, because an employee who is offered, and refuses to accept, such employment can lose benefits. The new law adds a definition of "suitable employment" for all claims filed after the law's enactment. Before the employee reaches maximum medical improvement ("MMI"), the term includes rehabilitative or other noncompetitive employment, i.e., a job that does not exist in the labor market. After MMI, "suitable employment" means any job the employee is capable of performing considering his limitations, vocational skills, education, and experience and that is located within a 50-mile radius of his residence. The new job can carry a lower wage rate and still be deemed suitable. As a compromise to pro-employee forces, though, the law says employees may now receive compensation for partial disability for up to 500 weeks instead of 300. While an early return to work may not always be in an employer's overall best interest, the new definition of "suitable employment" helps employers use that tool for managing claims.

TIP: North Carolina employers should understand the new workers' compensation amendments and adopt policies and practices that are now available to help investigate, defend and manage claims for benefits.

Caroline Hudson Lock
T (336) 378-5341
F (336) 378-5400
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