While the North Carolina Industrial Commission has not yet issued any decisions specifically related to COVID-19, there are prior cases that have considered whether a claimant is entitled to indemnity benefits when their disability is the result of economic conditions. In general, when a claimant’s disability is due to an economic downturn, rather than a work-related injury, indemnity benefits are not owed. See Segovia v. J.L. Powell & Company, 167 N.C.App. 354 (2004) and Medlin v. Weaver Cooke Constr., LLC, 367 N.C. 414, 760 S.E.2d 732 (2014).

Whether a claimant is entitled to indemnity benefits following layoffs due to COVID-19 will largely depend on whether the claimant was already out of work and receiving TTD benefits, or whether he was able to continue working within his restrictions prior to the outbreak. If an employer was able to accommodate claimant’s work restrictions until claimant was laid off due to company-wide layoffs as a result of COVID-19, an argument can be made that claimant’s disability is not related to a work injury, but is rather due to economic conditions as a result of a worldwide pandemic. In other words, but for the pandemic, claimant would be able to continue working.

In an accepted claim, it is generally claimant’s burden to prove their entitlement to indemnity benefits. In order to meet that burden, a claimant must show (1) that he was incapable after his injury of earning the same wages he had earned before his injury in the same employment, (2) that he was incapable after his injury of earning the same wages he had earned before his injury in any other employment, and (3) that his incapacity to earn was caused by his injury. See Hilliard v. Apex Cabinet Co., 305 N.C. 593, 290 S.E.2d 682 (1982). In Medlin v. Weaver Cooke Constr., LLC, 367 N.C. 414, 760 S.E.2d 732 (2014), the North Carolina Supreme Court stated, “Because the focus is on earning capacity, broad economic conditions, as well as the circumstances of particular markets and occupations, are undoubtedly relevant to whether a claimant’s inability to find equally lucrative work was because of a work-related injury. Whether in a boom or bust economy, a claimant’s inability to find equally lucrative work is a function of both economic conditions and his specific limitations. Both factors necessarily determine whether a specific claimant is able to obtain employment that pays as well as his previous position; the Commission makes this determination based on the evidence in the individual case.” 367 N.C. at 422-423, 760 S.E.2d at 737-738 (emphasis added). Therefore, if an injured worker is out of work due to COVID-19, and not as a result of his work-related injury, an argument can be made that they are not entitled to TTD benefits.

However, if an employer was unable to accommodate claimant’s work restrictions prior to the outbreak and claimant was already out of work receiving TTD benefits, it would be much more difficult to argue that claimant’s disability is only due to the economic crisis. Therefore, claimant would likely be entitled to ongoing TTD benefits regardless of the layoffs. Similarly, in cases where a claimant had returned to work but was working reduced hours and receiving TPD benefits, they would likely be entitled to ongoing TPD benefits following company-wide layoffs because their wage-earning capacity is not solely the result of the economy. Rather, their wage-earning capacity is the result of both their work injury and the current economic crisis.

Another issue that has arisen is when an employer remains open and has not instituted mass layoffs, but they are unable to continue accommodating a claimant’s light duty position. If most non-injured employees are able to continue working their regular jobs, but an injured employee’s restrictions are no longer able to be accommodated, it would be more difficult to argue that the claimant’s disability is strictly due to economic conditions since only the injured worker’s work status is affected. In that case, TTD benefits would likely need to be initiated.

These are unprecedented times we are in and our workers’ compensation attorneys are here to walk through it with you. Contact any team member with questions or to discuss your scenario in more detail.

This update provides general information and does not provide tailored legal advice or establish an attorney-client relationship.