Workers’ Comp Essentials: Coverage Rules, Contractor Risks, and Common Pitfalls

Navigating workers’ compensation compliance can present significant legal and financial risks for businesses, particularly when navigating contingent workforces and independent contractor relationships. Join employment attorneys Les A. Schneider and Thomas L. Walker from Wimberly, Lawson, Steckel, Schneider & Stine, P.C. for a practical breakdown of workers' compensation obligations, hidden liabilities, and risk-mitigation strategies.

Watch Webinar

Click here to subscribe to WimLaw on YouTube

Key Takeaways

This webinar provided a comprehensive overview of Georgia workers' compensation law, specifically focusing on coverage requirements, the role of statutory employers, and best practices for managing injured employees to minimize legal and financial liability.

Coverage and Statutory Employer Obligations

• In Georgia, employers with three or more employees are legally required to carry workers' compensation insurance.
• A 'statutory employer' is a general contractor held vicariously liable for the workers' compensation benefits of an injured employee of their subcontractor, regardless of whether the subcontractor is subject to the Act.
• The 'control test' is the primary metric used by the State Board to determine if a worker is an independent contractor or an employee; providing tools, setting specific hours, and direct supervision often lead to a classification of 'employee.'
• Workers' compensation benefits are statutory and cannot be waived by employees or subcontractors through private agreements.

Managing Injured Employees and Return-to-Work

• Terminating an employee who has filed a workers' compensation claim is strongly discouraged due to potential exposure to ADA, FMLA, and other legal claims.
• Employers can suspend benefits for employees refusing light-duty work either through a formal hearing or by following the strict, detailed requirements of the WC-240A/B process.
• Maintaining regular, empathetic communication with injured employees can improve morale and reduce the likelihood of adversarial litigation.

Settlement and Liability Protection

• Workers' compensation settlements must be approved by the State Board and should be kept separate from other legal releases to ensure enforceability.
• Broad, 'one-size-fits-all' releases often fail to protect employers and can complicate settlement negotiations.
• Employers should verify subcontractor coverage directly through the State Board rather than relying solely on certificates of insurance.

Next Steps

1. Audit your current subcontractor agreements to ensure they include robust indemnification and hold-harmless clauses to protect against vicarious liability.
2. Implement a rigorous verification process for all subcontractor certificates of insurance by contacting the State Board directly to confirm active coverage status.
3. Review your internal HR policies regarding injured employees to ensure they align with ADA and FMLA requirements, avoiding retaliatory termination practices.
4. Contact Wimberly & Lawson to conduct a comprehensive legal review of your current workers' compensation coverage and employment contracts to identify and mitigate potential vulnerabilities.
5. Schedule a consultation with Wimberly & Lawson to develop a tailored, legally sound return-to-work program that protects your business from unnecessary tort liability.

Les A. Schneider (00:00):
Oh, good afternoon. , My name is Les Schneider, and across the table from me is Thomas Walker. , We're here today from Wimberley & Lawson to discuss aspects of the Georgia workers' comp law and as it relates to coverage. And we're going to go through some hypotheticals with you, and I'm gonna offer the questions, and Tom's gonna provide the answers. And then we have some other topics if time allows us to go over, which again affects the workers' compensation law in Georgia. , Many of these same principles will apply to other states, but, , you need to check with your attorney in your area to make sure that what goes on in Georgia would necessarily go on in some of these other states, although there is a great deal of commonality across states when it comes to the workers' compensation law. So let me start out with our first hypothetical, and I'll raise that to Tom.

Les A. Schneider (00:58):
Tom, Construction Inc. Is owned and operated by Joe Schmoe. He has no employees, but hires a number of subcontractors to perform work for him on the construction projects that he acquires and completes. So the first question I have for you, is Joe, through his company, responsible for workers' compensation coverage for those subcontractors that perform work for his company?

Thomas L. Walker (01:24):
Because Joe has no employees, he wouldn't be subject to the Georgia Workers' Compensation Act. As you may recall, to be subject to the Georgia Workers' Compensation Act, you have to have three or more employees. So if you have three or more employees, you have to purchase workers' compensation insurance. But because he has no employees, he's just himself, he's not obligated to purchase work for compensation insurance, so therefore he cannot be a statutory employer to his subcontractor's employees who might get hurt.

Les A. Schneider (01:53):
Okay. Well, let me follow up with this, Tom. Let's say these subcontractors do perform work for other contractors and individuals. What, if any, subs only performed work for Construction Inc. And no one else? Would that change your answer? If

Thomas L. Walker (02:09):
The subs only perform work for Construction, Inc? Yes. , If they're true. If, if you have a subcontractor who has multiple employees, then, , th- they're working for other companies that, that doesn't affect it might actually strengthen it. If you have a subcontractor who's only doing work for Joe Schmoe, , then you run, you. It, it's not as clear cut because the state board could look and say, "Well, these aren't really subcontractors or independent or in - or in this case, independent contractors. These are actually your employees." So you really have to look at what is the, , Joe Schmoe doing with his subcontractors. If they act as a foreman, but Joe Schmoe is paying the, , employees of the sub, then they're gonna all look like they're employees, and Joe's gonna be in trouble for not having workers' compensation insurance. If he told the subcontractor, , you know, "We have this project, we want you to do the hanging drywall, , you get this X amount of money, you are solely responsible for setting the time, , , hours, , and days of your, , employees, although you, you have some control over when they work because you're, you know, the general and you're looking over everything." But, , as long as, as the general is not getting into the details of supplying tools, , supplying, , or telling them when they have to be there, what their hours are going to be, doesn't do supervising of the subcontractors employees, and they're probably, , same situation.

Thomas L. Walker (03:47):
But if it's just working for Joe Schmoe, you do create a potential legal question, are these actual, , is this actual subcontractor? You know, are these actual independent contractors or are these in fact employees, but we're just calling them something to try to get around the, the three employee rule.

Les A. Schneider (04:06):
Okay. So let's go to our second hypothetical. Ben Builders, Inc. It's owned by Ben Eisenstein, and Ben has three office employees and his employee. He does provide workers' compensation for those individuals since his insurance agent has told him that the law in Georgia requires an employer with three or more employees to have workers' comp coverage for those employees. In addition, Ben hires during the year various independent contractors as subcontractors to perform various types of construction work for the project that he acquires, painters, plumbers, electricians, people like that. So the first question in that, , hypothetical is, what is Ben Builders, Inc. Responsibility in providing workers' compensation coverage for those subcontractors? And keep in mind that these subcontractors do perform work for other contractors and individuals beside Ben Builders. How would you respond to that?

Thomas L. Walker (05:07):
So that's the interesting thing about workers' compensation, is that, at least in Georgia, is that i- if you are a general contractor and you're subject to the act, you can, , be considered a statutory employer. But if you're an. Let's say you're a subcontractor, but you just hire one other person, you don't meet the three employee threshold, and you're not subject to the Workers' Compensation Act. If your employee as a sub - your subcon - you're subcontractor, your employee gets hurt and you're not subject to the act, they can still make a claim as a sta - , against a general contractor as a statutory employer. , So, you know, in this situation, , if the subs, whether regardless of their, whether or not they are subject to the workers' compensation act or not, their employees would be able to make a claim against, , Ben Builders because he is subject to the act and he has the workers' compensation coverage.

Les A. Schneider (06:01):
So what if these subs only performed work for Ben Builders? Does that make it worse or better for Ben Builders as far as workers' compensation coverage?

Thomas L. Walker (06:10):
It, it probably doesn't change the answer because they would either be considered employees or they would be considered statu - or they'd be the statutory employer. So, , that doesn't change a whole lot. , Y- you know, if, if you have just one, , subcontractor who's a sole proprietor, who's an ind - you know, you could argue that they're an independent contractor, but again, that's going to be very fact specific. And the state board's not gonna look at what you call the relationship, they're gonna look at who has control. And if the general contractor, you know, hires one person as an independent contractor yet tells them, you know, you have to be on the job site between 9:00 and 5:00, you can only take your lunch break during this period, you, , are going to use our tools, we're gonna supervise your work, we're, you know, then you're gonna probably have a, a situation where they're employee.

Thomas L. Walker (07:06):
Well, if you have an independent contractor, , you may be able to say, you know, we're, we have our, you know, system done, you know, we, we work from these hours and we need this result, but that's pretty much all you can exercise. You tell them the results you want, , and maybe when they can work and tell them that, you know, when it has to be done by, but if you start supervising, you start getting control, you start providing, you know, , tools, you start telling them when they come and go, then they become, looks less like an independent contractor and more like an employee. So-

Les A. Schneider (07:37):
So there's a real control test to some extent.

Thomas L. Walker (07:40):
Exactly. And there are, there are some, , categories of employee that are considered independent contractors regardless. They're cer- certain farm workers, certain salespeople, but then ultimately, for everyone else, in terms of independent contractor, they're going to look at control. And again, that goes to, you know, if you just tell somebody, "We want this result by this date, we don't care how you do it. We don't care, you know, who you employ, we don't care, , how you, you go about doing it, but just as long as we get this result by this date," that's gonna be independent contractor. But if you start saying, "You gotta be here from, you know, these hours, you can only take your break during this time, you have to do it this way, we're gonna supervise you, we're gonna provide you tools," then, you know, you can call them independent contractor, but they're gonna be called, they're gonna be called employed by the state board, you're gonna be responsible for them under our comp.

Les A. Schneider (08:30):
As to workers' comp. As to workers'

Thomas L. Walker (08:32):
Comp. Well,

Les A. Schneider (08:32):
You've, you've mentioned the term statutory employer. Can you tell everybody what the term statutory employer means as it relates to the workers' compensation law coverage in Georgia? Okay.

Thomas L. Walker (08:44):
Well, that's what I'm gonna have to read off because I cannot remember the definition - Okay. , Off the top of my head. But under Georgia law, a statutory employer is a principal, intermediate, or subcontractor who is held secondarily liable for workers' compensation benefits to an injured employee of their, , subcontractor. , This doctrine is codified at OCGA Section 3498 and permits a workers' compensation liability to attach vicariously to an entity other than the injured employee's immediate employer. Under the no-fault quid pro quo structure of Georgia workers' compensation, , system, a statutory employer who is potentially liable for these benefits receives complete immunity from civil tort liability for the employee's work-related injuries. , In addition to contractors, Georgia law deems a temporary health contracting firm or employee leasing company to be a statutory employer for the purposes of working with the Workers' Compensation Act. So if you remember, Les, when I said you might have, , in subcontractor who only has one employee who's not subject to the act and, you know, you get sucked in as a general, , for paying as a statutory employer for workers' compensation benefits, you might say, "You know, that's not fair.

Thomas L. Walker (09:59):
Why are we having to, you know, pay for benefits of an employee who got hurt whose employer isn't subject to the act?" , and there are a lot of reasons why you do it for humanitarian reasons. Comp isn't so much about fairness. I mean, it is ultimately about fairness because the idea is to shift the burden of, , injuries to the customer who ultimately purchase the service of the product, and you do that through workers' comp coverage. But the benefit to being a statutory employer is that if somebody gets hurt on the job site and you are deemed a statutory employer, they can't sue you in tort. , You know, , again, workers' compensation is no fault. , And y - if you had, you know, tort liability, then the employee could go after a much, you know, could get their, their full lost wages. In workers' comp, there are caps and, , weekly, you know, maximums that you can, that, that limit what an employee can get.

Thomas L. Walker (10:54):
, In workers' comp, you have to go to an authorized treating physician, and the physician has to abide by the fee schedule. In liability, , you know, if somebody could sue in, in court, they can go whatever doctor they want to, and the doctor can bill, and you might have to pay whatever the doctor would wanna charge. And then it would be puni - there could be, , pain and suffering, which is not in workers' comp. And in a, a worst case scenario, you could even face punitive damages. But under the statutory employer situation, , an employee or an employer who might, you know, be facing punitive damages or, or, , pain and suffering gets out of it from being a statutory employer.

Les A. Schneider (11:34):
All right. So at the end of the day, really where we are is if you have less than three people, then you might be able to not cover some of the subs. But clearly, if you have more than three people in your employee as employees, there's no question that if those subs don't have workers' comp coverage through their company that they're working for, then you're definitely gonna have to have coverage. You're gonna. You as the general is gonna have to subsume that because of the, the trade-off that you get on the tort liability.

Thomas L. Walker (12:11):
Yeah. I mean, if, if you're a general and you have three or more employees, then you've gotta have the co - the workers' compensation insurance, and then you don't really have to worry so much about being drawn as a statutory em- employer. If you are less than three, if you have, like, two, or if you're just a sole practitioner or, you know, you're - By yourself. Or, or, or you have a corporation, but you're the only corporate officer, I guess that'd be a better example, then it's a risk because when you have the, the, the subs, you, you really, they have got to be true subs, or if you have hire independent contractors, they've got to be true independent contractors. You know, one of the, one of the things to keep in mind is that when the Workers' Compensation Act was first enacted, the very first section thereof, CGA Section 3491, stated that it was going to be liberally construed.

Thomas L. Walker (13:01):
And the administrative law judges and, , even the, the superior court judges, everyone would view that as, "Well, this is to be liberally construed in favor of the employee," because work - Of, of the worker. Yeah, the, of the worker. Because, you know, workers' compensation was, , overturning the common law system. In common law, you had, , assumption of risk, you had contributory negligence, you had a lot of - You tort

Les A. Schneider (13:24):
Liability.

Thomas L. Walker (13:24):
You tort liability, a lot, of course, a lot of defenses, but when you enacted workers' compensation, you kind of changed that whole system, and they viewed it, the judges, the ALJs, viewed it as, "Well, we're going to, , we're going to favor the employee." Well, in the 90s, like, I think it was 90 - 94, 95, the general assembly said, "Wait a minute. Wait, wait, wait." We didn't mean that we wanna tilt the scale in the favor of the employees. We. What we really meant is we wanted to have a balance system between the employer and employee in terms of going to court and, , you know, whether or not the case was compensable. What we meant by liberally construed is that we meant that it should be liberally construed to find coverage. Coverage. So, you know, again, it goes back to if you are, you know, , a corporation with just your one employee and you don't have coverage, you better be very, very certain that you have done everything right with having your, your sta - your subcontractors, and they are, in fact, truly subcontractors.

Thomas L. Walker (14:25):
And if you hire independent contractors again, they're truly independent contractors. I've seen time and time again where businesses will, you know, they, they wanna cut costs. They don't wanna buy the insurance. I mean, they can't afford the insurance. And so they hire 20 independent contractors, but they go and they pick up the independent contractors, they drive them to the job site, they supply them with the tools. They tell them, "You gotta be here between 9:00 and 5:00. You can only take your lunch at this time or, you know, I'm gonna supervise how you do it, you're gonna do it the way I want you to do it. You can't have any control." Those lose all the time. I mean, all, every time they're always deemed, , to be employees. So, you know, if you truly have subcontractors, if you truly have independent contractors, you can, but just go in knowing that the state board's gonna really scrutinize that unless it's one of the statutory, , you know, - Exceptions.

Thomas L. Walker (15:19):
Exceptions where, , statutory defined independent contractors, , you know, and, and just, you know, do at your own risk, I would have to say.

Les A. Schneider (15:28):
Well, let's, let me, let me pose another question, and maybe this is more clarified for our listeners. Let's say you have a. Can a worker who acts as a subcontractor for the general carry his own workers' compensation coverage or some other type of coverage to comply with the state workers' compensation law and relieve the general contractor from liability of having workers' compensation coverage? How would you respond to that? Well,

Thomas L. Walker (15:56):
Absolutely. I mean, if, if you're a subcontractor and you've got three or more employees, including yourself, , you gotta have coverage. You, you can't get out of. It's, it's the law. If you don't have workers' compensation insurance when you are required to, , it's a misdemeanor for one thing. , And also, if you have an injured worker who, when you don't have coverage, there's gonna be a 20% add-on to the income benefits. There's going to be a automatic assessed attorney's fees, , which, you know, the, . I have represented a few employees in uninsured, , cases, and with those, I didn't cut my time. I didn't go by insurance company billing rates. I just asked for my, my normal hourly rate. Judges didn't bat an eyelash. So, you know, y- you're. The, the downside, if you don't have coverage when you should, , is too great to take that risk.

Thomas L. Walker (16:52):
If you're a s - a sole proprietor and you, and you only have one employee, , at a time, you, you never reach that three employee threshold, because once you reach that three employee threshold, you've got to get the coverage. , If you go back down, you're still supposed to have the coverage. , You know, how would they know that? They, they, it would be difficult for them to prove, but, but once. But if you're a sub and you've only had the one employee with you, or if you're, , and we can get to this too in a second, if you're a corporation and you, and you're a corporate office, you exempted yourself out and you just have one or two people working for you, , then, , you can still purchase the workers' compensation cover. You can have. In fact, I had one client who, , was, , just working for herself, and she purchased workers' compensation insurance, , for her own, you know, to cover herself.

Thomas L. Walker (17:41):
Okay,

Les A. Schneider (17:41):
But what about the scenario where you have the, , the general contractor, they have less than three, they simply require their subs to have workers' compensation coverage, and they have that. In that case, then isn't it true that the general would not have to worry about having the coverage, but he ought to have a certificate from the sub that makes clear that there is coverage for those employees of the sub?

Thomas L. Walker (18:15):
Yeah. You know, if you're a general and you want to make sure that your subs are covered, , you can request that they forget, that they provide you with a copy of their certificate of coverage from, , their insurer. The other thing I would also do in that situation is I wouldn't just simply rely on them providing a certificate of coverage. I had a case where I was defending where, , our employer had requested that the sub, , was actually an independent contractor where they were, , different sub - they were doing different work for that company than that company typically did. So it was a very, very much definitely, you know, s- subcontractor, independent contractor situation, and the sub provided the certificate coverage, but then when one of his employees got hurt, all of a sudden there's like, "Oh, well, there's no coverage. I don't have coverage." , we tried to, or I, I personally tried to contact the, , insurance agent to, to get some, , clarity here because we had a co - a certificate of coverage and, , you know, the, they would never call me back.

Thomas L. Walker (19:20):
They would, you know, completely give me the runaround. So, , with that experience, what I would do, in addition to getting the certificate of coverage, , you can call the state board and, , ask them to verify coverage. You can give them the employer, you can tell the dates, , you know, , that you're looking for the, the coverage, , and they will tell you if that person has coverage or not.

Les A. Schneider (19:41):
So it's really a two-step matter. You, you get the certificate of insurance to. Which is supposedly is supposed to show that they have workers' comp coverage, but you're saying they could, you can also call the board to verify that that's true and it hasn't been canceled or anything else?

Thomas L. Walker (19:58):
Yes. And, and the reason why I would probably recog - get the certificate of coverage and then call the state board is that way you know what legal name the company is using. And so that way it'll, it'll be easier, but if. Because a lot of times businesses will have a DBA, and if you get the DBA, the state board might have no record of, of what the DBA is, but they will have a record of the corporate name and, , the, , insurer.

Les A. Schneider (20:24):
Okay. Well, let's go to our next question. What if the sub is a corporate entity, an LLC, or a business entity other than a sole proprietorship or an individual? Does this change a general contractor's obligation as it relates to workers' compensation coverage for the general contractor's subcontractors?

Thomas L. Walker (20:44):
No, not really. It doesn't matter what the corporate entity is, but if you are a corporation or an LLC, you can, , exempt out corporate officers up to five and, and members up to, , five as well. And you would use, , let's see, you would use this form here, I'm sharing it with you, you'd use a WC-10, and this is notice of election or rejection of coverage, of, of workers' compensation coverage. And typically, if you, if you are, , a corporation or an LLC, you are now automatically. The, the corporate offices and the members are automatically deemed employees. At, at one time in Georgia, they were not, and you had to elect to get into, , to have them count as employees or, , yeah, to have them get count as employees. Then the law was changed to where now they're automatically considered employees and you have to re- reject them to, to get out.

Thomas L. Walker (21:45):
You have,

Les A. Schneider (21:45):
You have to reject the coverage, and these are some people that can be rejected. Yeah, you

Thomas L. Walker (21:50):
Have to reject these people as em- employees or, well, reco - as could be considered, you know, , for employees for coverage purposes. If you do wanna go back, if you're a corporate officer and you want to be considered back to, , an employee status for workers' compensation purposes, then you'd have to follow the WC-10 again to, to do that. But the te - WC-10, , is where you, , do it in here. Your sole proprietor partner, you can, , elect to have coverage out, you know, which here, , elect to be covered under the provision of the Georgia Workers' Compensation Act. , I elect to revoke the previous election of, you know, whatever. So there are ways to, -

Les A. Schneider (22:30):
So this is really a way, to some extent, if a company has 10 employees, they can take five of those and exempt them and then pay the premium on the remaining five employees. Is that correct?

Thomas L. Walker (22:45):
Yes.

Les A. Schneider (22:45):
Okay. So again, this is a ma - a way at which you can possibly save some of your workers' comp premium, but you are exposing yourself to that tort liability issue that Tom talked about earlier. Tom, what is the value to the general contractor of a written agreement that would state that a subcontractor is providing his own workers' compensation coverage? What kind of defense or shield does that provide?

Thomas L. Walker (23:14):
So, , you wouldn't. It would, it would be helpful if you, , if, if you are, , a sole practitioner and you're not required to have coverage, it would be helpful in that you can do an indemnification. So, , if you're not required to have coverage, , then your employees would go to the, this, the general and they make a claim. If, if, , you are subject to the act, then. Let me, let me re - let me back this up. So if you have workers' compensation. If, if you're a general and you've got workers' compensation coverage, and you hire somebody who should have coverage but doesn't, , one of the employees gets hurt, they make a claim against a general as a statutory employer, , then the insurance company can go back after the uninsured employer for subrogation. They can come back and say, "Well, you owe us money for what we paid out for this claim." If the person wasn't subject to the act, it's not as clear that they could come back and ask for benefits because, well, you had no requirement to have workers' compensation in the first place.

Thomas L. Walker (24:20):
But if you, if you had an agreement, you could do it where you would have a whole harmless clause or, , indemnification, so that way you, you would be able to, , , you would be able to have some way to go back to the s - the sole pro- proprietor and get the, the coverage back. Okay. Or get, or get reimbursed for what you paid out.

Les A. Schneider (24:43):
All right. Let me give you another question. Can the subcontract, can a subcontractor waive his or her right for workers' compensation coverage and relieve the general contractor that financial obligation under Georgia's workers' compensation law?

Thomas L. Walker (25:00):
No. , Workers' compensation benefits, they are, , statutory. You've got to have them regardless. You can't waive them or, , cut them out. You, you. If, if you were subject to the act, you've got to have the coverage. So

Les A. Schneider (25:13):
Anything on that piece of paper is worthless in terms of trying to get rid of the liability. Right.

Thomas L. Walker (25:19):
You can't ask your employees to waive their rights to workers' compensation. You can't get a, , sta - , a subcontractor to waive its right to, , statu - to be considered as a statutory employer.

Les A. Schneider (25:31):
Okay. , well, that finishes our area of the coverage and whether or not you need it or not and how you can deal with it. Let me ask you some other questions that we've gotten from some of the participants who are listening today. , Let's say there's an employee who refuses accommodation for them on a return to work on modified duty. How d - how is an employer do you handle that? Okay.

Thomas L. Walker (25:59):
, If I looked a little distracted before, it's because I was trying to. I was having trouble with our webinar, , ca - co - , camera coverage here, , after we had shared that screen. , So we may not be sharing screens in the future on this one. , So this is really, this is a really cool and interesting question. Whoever asked that, you know, I really wanna thank you for asking that question. So if you have an employee who's re - who's re- refusing, , a, a light duty job, , there are two ways about going about getting their benefits suspended. Now, the, the first method, the old school method, method is under OCGA Section 349240A, and that permits the employer to request a hearing requesting an order from the state board, , you know, by an ALG to suspend benefits. And what I like about that is that you wouldn't necessarily have to have the authorized treating physician give an opinion that the employee can do like that light, a light duty job or that particular light duty job.

Thomas L. Walker (27:01):
And you could go to an IME physician, independent medical examination physician. You could, you know, ask them to evaluate the employee's ability to do work. , You know, you can do as many IMEs as you want. You could request that the employee go to an IME with, , a, , rehab facility to see what their capabilities are. , You don't get to suspend the benefits until the state forward, , that has, has a hearing and issues an order, but you can, , go to a hearing, you can present a lot of evidence. You don't have to, you're not hide into what the authorized treating physician says. The authorized treating physician may not be somebody that is helpful to you that you even like. , You know, and, , you can go and ask for it to be suspended. Of course, there is a, a, a risk here is that if you are not reasonable in your request for a hearing, , if you didn't have good medical, if you didn't leave, if you left all this up, you could still potentially be, , assess attorney's fees, , although the employee could be assessed attorney's fees as well for, , a frivolous defense.

Thomas L. Walker (28:09):
But, , that is the old way of dealing. A lot of attorneys that haven't been practicing, you know, since 94 don't really think about that because that was the method that you had to use as the only method you had to suspend benefits up until 1994. In 1994, the General Assembly created a second way of suspending benefits, and that was under 349-240B. And that, , looks like a good situa - a good thing because you can suspend them unilaterally. You don't have to go to the state board to get an order to do that. But there are a lot of downsides. It's, it's, it's kind of, I almost call it, wanna call it fool's gold, because you have to get the authorized treating physician to approve a job description. , And this isn't just, you know, well, we want them to pick up boxes. This is a very detailed job analysis that, that I'll, I'll share that in a moment.

Thomas L. Walker (29:04):
But you do it on what's called a WC240A. It's another state board form, and it's very detailed, it's very complicated, it's very precise, and you have to get the authorized treating physician to approve it. And the authorized treating physician has to have seen the employee, had to have examined the employee within 60 days of his approval of that 240A. You then would take that 240A and you attach it to the WC-240, and you have to get that to the employee at least 10 days before the date that you want him to show up for work, or her, her, or have her show up for work. , Once you've delivered to the attorney, to the employee and their attorney, if they have one, , then the employee has to show up on that date at that time that you told them to, and they have to work at least eight hours, , or if the work, normal workday is longer than eight hours, they have to work the entire workday, whatever longer.

Thomas L. Walker (30:01):
, On the day that the employee is to show up, you can file the WC-240 with the 240A attached along with a WC2 suspending benefits you, you, the insurer would follow with the state board, and the person's benefits would be suspended on the day they're to show up for work. Now, if the person never shows up for work, that WC-2 suspension stays in effect until the employee requests a hearing and gets the state board to reinstate benefits. , If the employee shows up and works, has an eight hour workday but only works an hour or two hours or even seven hours and say, "Oh, this is too much, I can't do it," and quits, suspension still is in play until the state board orders the employer to, , reinstate them at a, after a hearing. , If the workday is typically longer than eight hours, if it's a 12-hour workday, and that's what we normally do, if they don't work that normal 12-hour day, then again, they, they, they would have to request a hearing to get benefits re - , reinstated.

Thomas L. Walker (31:02):
However, if they come and show up for that day, they do their eight-hour or, you know, their full work day if it's longer, and the next day they say, "You know what? I can't do this. I'm out." Then the employer has to reinstate their benefits, and if the employer says, "Well, this guy's faking, they're just a malingerer, we don't believe they're, they're telling the truth here," then the, , employer would, would have to file a hearing request and get, you know, the state board to suspend the benefits. So you kind of. And, and, and the employee can, can try the job for 15 days. If the work, if the employee works for more than 15 days and then quits, then the employee would have to file a hearing request to get benefits reinstated. , If the employee quits on, , after 15 days, you know, 16 days, "You know what?

Thomas L. Walker (31:49):
I've tried this for 15 days, this is just too physically taxing, I can't do it," then you get, then you as the employer, you've got to reinstate the benefits and you've got to go back and request a hearing. So that, that would kick you back into the 240A. So that's why, , you know, there, there are things that are nice about the 240B because you can do the automatic suspension, but they're very easy for the employee to get around, that's why I kind of call it the fool's goal. If you do the 240A, you just say, "You know what? We're gonna go and request a hearing and we know it might take a little time to get to a hearing, , but we're gonna, gonna, going to do that," then, , you know, that might be the, the better way to go. One of the reasons why you might try to do a return to work under 240B is that now you've got the employee concerned.

Thomas L. Walker (32:39):
, You know, a lot of times this is a, a good measure to, , leverage a case for settlement. A lot of times employees, they just don't wanna come back to work. You know, if you got somebody who's light duty and they're refusing it, you know, they're, they don't wanna come back to work, and those are the cases that are, are more ripe for settlement, , which in a compensable case you probably wanna do anyways to close out the books. , But, , those are two ways. And I'll see if we can - Okay.

Les A. Schneider (33:07):
All right, let me see if I can move us along on another area. On occasion, we get approached by the employer asking about firing an employee who has made a workers' compensation claim. What do you typically advise employers to do in those circumstances?

Thomas L. Walker (33:23):
Well, I always, I always tell people don't fire the employees, because they're no, unless, unless there's some benefit that you can quantify, there's some money you think you're gonna save, there's some, some quantifiable benefit that you're gonna get from it, don't do it. And then, and if you can't come up with some reason why, you know, a really good reason why you, you think there's gonna be a benefit for you, just, just don't do it. 'Cause The downsides are plenty. , If you're not in Georgia, Georgia is one of the unique states that d- does not have, , retaliatory discharge in workers' compensation.

Les A. Schneider (33:58):
It's part of the statute. As part of the

Thomas L. Walker (34:00):
State. Well, it's not even, not even. Well,

Les A. Schneider (34:02):
Every - Most other states, it is in the statute.

Thomas L. Walker (34:04):
Like, there, there's one other state that doesn't have retaliatory discharge in the other 48 states and territories of the US, retaliatory discharge is either statutorily created or has been created by the, , the courts. In Georgia, our general assembly said, "We're not doing retaliatory discharge in workers' compensation." And the court, and the courts have said, "Yeah, we're not, we're not doing it either. We're not, we're not gonna, going to create it." So if you're in one of the other 48 states besides Georgia, and I think the other one is Rhode Island, I'm not sure. That may have changed. I haven't looked that up recently. But the, the first thing I tell you is don't do it because you're not in Georgia, you may face a, a retaliatory discharge claim and it just isn't worth it. The other thing is that in workers' compensation, to limit your costs, you want to con - have as much control over the case you can't.

Thomas L. Walker (34:55):
And the, the best way is controlling the medical, which means you have your panel, your posted panel positions or your, you've, you've done everything you can to make sure you can, you know, get the, the employee to a doctor that you've had some say in, in choosing. , The other thing you can do is you, if the employee does get released to light duty but you fired them, you cannot can't bring them back. I mean, you can try and say, "Well, hey, you know, you know that whole time when we fired you because we, you made a claim, well, we were just kidding. Wanna withdraw that?" You know, state board's not gonna buy that. The state board isn't going to say, "Well, you get a do over, , you know, the, the, the employee re- refuses employment." 'Cause again, it's unjustified, , refusal of employment and an employee who's been fired, , might be able to, , justify not wanting to come back to the employer who is, is fired.

Thomas L. Walker (35:46):
You, you're not gonna look good in front of the state board, the ALJs, and, , you know, that really limits what you can do. The other, other issues you can face if you fire an employee, , who's made a workers' compensation claim is they might have, , entitlement to, , Family Medical Leave Act. They might have 12 weeks, and if you fired them, then you might be facing, , a Family Medical Leave Act claim. So, you know, okay, you know, you're in Georgia, you fired an employee who made a claim. , You know, you may not have gotten anything other than you feel better about yourself for some reason. , You don't have to worry about retaliatory discharge. Oh, but wait, now you've got a, a Family Medical Leave Act claim. Or

Les A. Schneider (36:27):
I assume also possibly an ADA claim.

Thomas L. Walker (36:30):
Exactly. I mean, if there's a reasonable accommodation that, you know, could have been made for, , for an employee, then, , you know, you might have, , again, the Americans with Disability Act claim. So it's just not, - It's

Les A. Schneider (36:43):
Not true to do that, basically, is what we're saying, unless the, the, the conduct of the employee was so outrageous or there was something that was so clearly in violation of company policy, but it is not something we normally recommend.

Thomas L. Walker (37:00):
Yeah. So, I mean, that's, that's a, a great question and great things you br - that you brought up last. So let's say you have em- employee back on light duty and, , they're, you know, they, they're showing up for work all the time. They're, they're, they're basically doing what you want them to do, but they do an egregious violation. They, they bring a gun onto your property and you, you've made it clear no guns on property, or they start harassing another worker, or they do something that's a terminable, , you know, fireable offense. You know, I'm not saying to keep those employees, because then you do have a tangible reason why you want to get rid of them. And the benefit there is that if you have a reason that is unrelated to disability and you fire them, then you don't have to put them back on benefits.

Thomas L. Walker (37:44):
So let's say you have an employee who's on light duty, you just don't like them because you don't, you're, you're mad about the claim, so you fire them, then they're pretty much gonna be able to go back and get their temporary total disability benefits. But if you have somebody who's on light duty, they, you, you, you, you terminate them for a reason unrelated to the disability, like a, a work r- rule violation, then, , that employee has to go and do, , a diligent but unsuccessful search for light duty employment, , before they can get, get benefits. , It's not a hard standard for them to do. They basically have to put applications in, , you know, maybe make calls. It's just gonna depend on your judge, depending on what they do, but at least it gets in where they have to do something, they have to request a hearing, they don't automatically get the, get the benefits.

Thomas L. Walker (38:34):
So, , you know, again, you know, if, if there's a real tangible reason why you want to terminate employee, do it, but if it's just because they made a claim, you know, there's no, no benefit to

Les A. Schneider (38:46):
That. No, in fact, there's a lot of downside to it. A lot

Thomas L. Walker (38:48):
Down. And, and the other thing we had talked about is there being a possibility of unemployment, that the employee could go and make a claim for unemployment benefits, maybe not right away, but if they get released to regular duty or, , you know, if they're on light duty, they might be able to get unemployment. Because one of the things that I've heard, , in the, , hearing officer says, "Well, yeah, they're disabled, but they're, they're ready, willing, and able to do the job work, the work within the restrictions." So, because with unemployment, you have to be ready, willing, and able to work.

Les A. Schneider (39:17):
Available for work.

Thomas L. Walker (39:18):
Right. And people think, well, if they're on light duty, they're not, well, the unemployment, the jury department labor has sa, "Well, no, they're ready, willing, and able to work the work they can do," so. Right.

Les A. Schneider (39:29):
All right, let me go to our next question that came in from one of our, , participants, , listening today. "When An insurer settles a workers' compensation claim, they must always, they must almost always obtain a general release of legal claims and may even request a voluntary resignation. "Are These general releases enforceable?

Thomas L. Walker (39:50):
Mm, probably not. I mean, some, some parts of them might be enforceable, some parts of them most definitely would not. The, the, the one that I've seen, and it's probably the most egregious one where there's not a part that's enforceable, is where they ask employees to give up their rights under the Fair Labor Standards Act, the wage and hour, , laws, unless you're more of an expert on this issue than I, , because you literally wrote the book. <Laugh> , but, you know, with, with, if you, if a person, , has settled, if they, they can't, they've, they can't waive their rights unless a court has approved a settlement or if they've made just a claim with the Department of Labor, if the Department of Labor has, has signed off on it. So you have to have either the Department of Labor or a court, if they filed a lawsuit, approve the settlement.

Thomas L. Walker (40:39):
And if you, so if you put a-

Les A. Schneider (40:41):
And that would be in the case of wage and hour or an age claim, et cetera, or something that's being investigated by the US Department of Labor. But going back to the point that we talked about, as to the workers' comp claim, will the workers' comp people, will they approve these broad settlements and releases for any and all claims?

Thomas L. Walker (41:04):
No, no, absolutely not. So when you settle a workers' compensation claim, there are two methods of doing it. And the one that was the original method was where a case was accepted as compensable, you would s - you would do a liability stipulation and agreement, and that was 34915, and that was originally in the law. , Eventually, someone said, "Well, we wanna settle a claim that has not been accepted as compensable," and the state board went ahead and, and, and did it, , and the court said, "Yeah, you, you can do a no liability stipulation and agreement, even though it's not been written law. It has now been codified. It's not part of the law." But when you, when you settle a case, either no liability or liability, you have to submit the stipulation and agreement to the state board for their approval. And with the liability, well, with both of them actually, they're gonna look and see, do they, do we think this person is being fairly compensated?

Thomas L. Walker (41:57):
And there are also certain loops that have to be, that the employers insurers have to jump through to get either settlement approved. One of the things though that the state board said, we will not approve anything that has a waiver of other things other than workers' comp, but we will only approve them if they have workers' comp. So with the, with a liability stipulation agreement with no liability, a lot of times insurance companies, , their attorneys will draft up a general release that doesn't get sent to the state board for approval, , because state board's not going to approve it. They can't put it into the stipulation agreement because they will only approve, you know, stipulation agreement that have just workers' comp into them, , and they will, they'll try to, to get that there and the, and the, and the sel - the argument or the selling point to the employer is like, "Well, look, yeah, we know we're not happy about settling, but we're getting is all this great protection here that you wouldn't get otherwise.

Thomas L. Walker (42:46):
Or you may not have so much great protection because you can't settle your, your, your wage now or your Fair Labor Standard Act cases without approval." ADA has very specific requirements where you have to give the person 21 days Age Discrimination and Employment Act. , You have to give the person 21 days to review that waiver.

Les A. Schneider (43:06):
Have a chance to show it to an attorney if they wish.

Thomas L. Walker (43:08):
They have to have a chance, right? And then once they've signed it, they've got seven days to revoke it. So unless all that's in that release, it's worthless. -

Les A. Schneider (43:16):
So at the end of the day, really what we're advising is the workers' comp release is really gonna be separate and apart from any other release, and they usually is two different independent forms of consideration to cover the situation. One size doesn't fit all is really what we're

Thomas L. Walker (43:37):
Saying. Right. Again, the Age Discrimination Employment Act has, you have to have independent consideration. It has to be more than what the person could have gotten anyway. So if you try to tie it into what's being paid for the workers' compensation claim, probably not gonna work. , You might be able to re- release or waive your claims under Title VII and the, , ADA. I think really the ADA is the, the American Disabilities Act is the one that really is the most concerning when you're settling a case because you don't want to settle a case, , you know, where a, a person's not gonna come back, you have a voluntary resignation. And then they say, "Well, you know, my voluntary resignation wasn't so much voluntary. I was forced to sign it in order to get my comp money and, , I'm gonna bring a claim because, you know, there were, there were light dut jobs I could done that you're not letting me come back and do." , I mean, those cases might not necessarily go far, but you don't wanna be litigating.

Thomas L. Walker (44:31):
You don't wanna have to go and do a position statement to the EOC. You don't have to provide a lot of documents to the EOC. Y don't wanna have them do an investigation on you. And then if the employee, you know, even if the EOC, , investigation goes your way and, , they, they find they don't find, you know, charge, or if the employee, , requests a right to sue letter before they've conducted an investigator, you don't wanna go to court and defend yourself there.

Les A. Schneider (44:54):
So at the end of the day, we, we would advise keep the workers' comp release separate and apart from any other release. And then if you're gonna have a second release, you have to weigh the pros and the cons of actually trying to do that. And, but the one size fits all usually is a disaster for the employer.

Thomas L. Walker (45:17):
Y - well, it doesn't provide you protection. And a lot, I mean, a lot of people might, when they settle their case, might be happy to just go on their way and they're done with their employer and they don't wanna have to do anything further. But if you get that one person who, , you know, is the outlier that's angry, then having this big, you know, hammer, you know, from the beginning of the world to the end of time where you're giving up every rights you ever had, have or will have, that's, that's not gonna buy -

Les A. Schneider (45:44):
It, it's just gonna irritate the situation and perhaps kill your settlement that you're trying to achieve in the workers' comp.

Thomas L. Walker (45:51):
Potentially. And it might be a red flag if someone's like, "Well, gee, I didn't know I had all these other rights I might be giving up." And then you have, have, you know -

Les A. Schneider (45:58):
Giving them food for though. <Laugh> Yeah.

Thomas L. Walker (46:00):
Yeah. I think about a narrowly tailored ADA release and a, a voluntary resignation, , that's probably going to be, you know, good enough. Right. , You know, I, I, a lot of times I, I have, when I did do workers' comp defense, a lot of times I'd find employers that have screwed up how they were paying their employees. They weren't paying them right. They were, you know, not paying the overtime properly. They weren't - They

Les A. Schneider (46:29):
Weren't exempt from an overtime position.

Thomas L. Walker (46:31):
Exempt and other stuff. And, , those would be situations where I had kind of like nudge and say, "Hey, you know, , you know, you might not, , be doing this right." But, , and typically with, with workers' comp defense attorneys, , they just know workers' comp. Anything beyond worker comp is beyond -

Les A. Schneider (46:49):
It's not their job. It's

Thomas L. Walker (46:50):
Not their job. They don't care. Well, they, really, they don't. They, they're, what, the criticism I have with workers' comp defense attorneys is they care what the adjusters want them to do. They care because those are the ones who are giving them, you know, business. Now, there are some attorneys who do create close relationships with, , some employers like, like we have. We have defended some employers who, , are essentially self-insured. They have excess liability policies that law, allow them to pick their defense counsel. And, you know, when people have, have come to us, you know, we can look at and say, "Okay, we're not just looking at your workers' comp claim and ignoring all the other bad stuff. We're looking at everything." And we say, "Hey, you know, here's some other areas we've got like, you know, some, , vulnerability on, and this is what we can do to make sure you don't have this situation in the, in the future, and this is what we can do to protect you now."

Les A. Schneider (47:40):
All right. Well, I think we've attempted today to give you an overview of the issue of coverage relating to the workers' compensation law in Georgia. We've tried to come up with other que - , to respond to your questions as to certain workers' comp, , areas. , And, , , and we will certainly, , take any other questions that you may have in the few minutes that we have. And I believe Tom has another one that he was going to respond to. Yeah,

Thomas L. Walker (48:11):
We had a late, we had a question that came in late, and, , the question was, if an employee is on modified duty and failed to comply with doctor's restrictions, what recourse does an employer have? Disciplinary action termination? , You know, that's, that's a tricky question because y- you, , I, I, like I said, I don't like terminating employees for the sake. I, I know, I can understand why you might want to not allow an employee to do something beyond restrictions and have a change of condition for the worse or have a new accident based on a aggravation of pre-existing condition. But I wouldn't terminate them. I might, if, if anything, I would probably, you know, say, "Hey, you know, we had this light duty job for you, but we don't think we can, you, you can, we don't think we, you can do this anymore.

Thomas L. Walker (49:02):
We don't really have this because you're, you're, you're having to do things or you're doing things that are beyond restrictions that we don't want you to get hurt. , So we're gonna have to take that light duty job back. But when, when you're ready to come back to work, you know, your, your job is still here, you know, we're gonna hold it open for you. , We're, you know, and you might have to put them back on temporary total disability as temporary parcel." But I, I think that would probably be the, the, the cleanest way of, of handling it. The question of disciplinary action, , I mean, I guess you can write them up for, for not doing it, but where are you going with that? 'Cause It, a lot of times, employers have progressive discipline, so you write them up, they still keep doing it, they write them again, you know, you give them a final warning.

Les A. Schneider (49:44):
And you might set yourself up for a discriminatory action, maybe under the ADA, maybe under another statute, but at the end of the day, if somebody is not, i- is refusing the light duty, basically, in the example you're giving, the worst scenario is really you're still paying them the benefits if they're justified in not doing the job or if you feel they're gonna be a danger to yourself - Yeah. To themselves.

Thomas L. Walker (50:14):
Yeah. So if you, if you terminate them again, so going back to termination, you could say, "Well, we terminate them for cause because they're not following what the doctor said." You know, the state board's gonna look at it and say, "No, you terminate them because they can't physically do what - That job. What the job requires." So you're gonna be putting them back on temporary total disability and-

Les A. Schneider (50:32):
And paying them benefits anyway.

Thomas L. Walker (50:33):
And paying them benefits anyway. So I think that the cleaner way would be to say, "You know what? We don't have this light duty job for anymore because the fact that you're doing things beyond what your doctor told you not to do means that this job requires you to do this and we don't wanna see you get hurt or worse." And, , you know, that. Their other thing that kind of relates to this, you know, that, that employee might say, wow, you know, my employer's a good, you know, guy or a good, you know, woman. , They're really looking out for me. They care about me. And, and I think, you know, if you have people on comp, you know, don't just ignore them. Don't just forget that they exist. , You know, follow up with them, like, every 30 day, see, you know, how you're doing, you know, are you okay?

Thomas L. Walker (51:11):
And even if they have an attorney, parties can talk amongst each other. Y might get a nasty letter from their defense from their, from a claimant's attorney, but there's nothing they can do. And, and, you know, if you're just saying, "Hey, you know, we, , we're thinking about you. We hope you're doing okay." , you know, that, I,

Les A. Schneider (51:28):
I - Having real concern, it's not a downside.

Thomas L. Walker (51:31):
Having real concern is not a downside. And, , you know, that I, I, you know, if you have employee, you know, employees, you know, you know, keep up with them. They, you know, if they're still on, on compliment of their birthday, send them a birthday card. Yo know, keep them, you know, in that - Engaged. Keep them engaged and keep them, you know, knowing that you care. Okay.

Les A. Schneider (51:50):
Well, we hope this session has been helpful to you. , If you have any critiques for us, we're more than happy to take that constructive criticism. So feel free to communicate us, , t- to the firm. , We wish you all a good Labor Day weekend, and if we, if you have any other questions, please send them in and we'll try to respond to them. We hope this has been helpful to you. Have a good weekend. Yeah,

Thomas L. Walker (52:15):
Please feel free to email or call us because we'd like to answer questions.

Les A. Schneider (52:19):
All right. Have a good weekend. Bye-Bye.

Status: Available On-Demand

Webinar Date: Friday, September 04, 2026

Start Time: 12:00 PM

End Time: 12:45 PM

Venue: Zoom