The Voice of Business, Industry & the Professions Since 1942
North Carolina's largest business group proudly serves as the state chamber of commerce

Workers' Compensation Reform

Position: NCCBI continues to support changes in the North Carolina Workers' Compensation Act to fully restore that law to its original intent as a simple and efficient system of compensating employees injured in workplace accidents while protecting employers from civil litigation and unlimited and unpredictable compensation liability. Specifically, NCCBI supports changes to protect employers from being sued regarding workplace injuries where the employer is paying workers' compensation benefits to the injured employee, to limit payment of workers' compensation benefits only to those who are physically unable to work as a direct result of their workplace accident, and to make the administration of the act simpler and more efficient, thereby reducing the need for costly litigation.

Explanation:  NCCBI was the leading organization in the successful fight to reform North Carolina's workers' compensation system in 1994. That reform achieved its goal of relieving the dramatic upward pressure on workers' compensation costs to employers that had occurred during the decade prior to that reform. Since 1994, however, court decisions and other events have renewed the upward trend in workers' compensation costs. Some important changes need to be made now to prevent the kinds of double digit rate increases like those that occurred in the late 1980's.

For example, there should be limitations on how much a claimant can receive when a workplace injury combines with a preexisting condition to cause a disability. In such a situation, the employer should be liable only for that portion of the disability caused by the workplace incident, and not that which results from a preexisting condition. Alternatively, an employer should be held liable for compensation benefits only when the occupation is the primary cause of a disease or injury. Second, consistent with the practice in all of our neighboring states, there should be a limit on the number of weeks that a person can receive workers' compensation benefits for any one injury. North Carolina's Workers' Compensation Act originally limited a claimant to receiving 300 weeks of compensation except in the most extreme cases. That limit was written out of the law by a court decision and should be restored. Restoring the limit would streamline the system and reduce litigation. Third, because of the ease with which such claims can be fabricated, compensation for mental stress without physical injury should be prohibited. Next, wage replacement benefits should end at retirement age, when the employee would not have been earning wages to be replaced even without an injury.

Perhaps most importantly, once an injured employee is physically able to return to some type of work, the employee should be required to return to work or else prove circumstances that justify a decision to not return to work. In other words, there should be no presumption in favor of the employee that benefits should continue until the employee actually returns to work. The employee controls whether or not he or she actually returns to work and the employer should not be required to continue payment of benefits after the employee's treating physician determines that the employee is physically able to work.

These are the major changes that are necessary to restore our workers' compensation system to its original intent. To the extent that these unaddressed issues continue to cause ' unnecessary and unfair costs in our workers' compensation system, they continue to be a hindrance to economic development, job creation, and commercial competitiveness. So long as the workers' compensation system remains a highly litigated scheme of general entitlement to unemployment compensation and medical benefits, NCCBI believes that both employers and employees are ill-served.

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