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Workers' Compensation FAQ

Workers' Compensation Disability Benefits; a Constitutionally Protected Property Interest

When an employee is injured on the job and they cannot go back to work, they may be eligible for disability benefits through workers' compensation. Depending on the nature of the injury, the benefits could be temporary or permanent. Temporary disability benefits provide the employee with some compensation for lost wages while they are unable to work. Permanent disability benefits are awarded when a worker will never recover completely from his or her injury. Since the injured party has lost some earning potential they are given compensation for future lost wages.

Once an employee has been found eligible for permanent disability benefits, which is no easy task, it is difficult to take these benefits away. The courts have found that the right to continue to get disability benefits, once approved, is a constitutionally protected property right. They have come to similar conclusions about social security and welfare benefits. The 5th and 14th amendments of the United States Constitution state that a person cannot be deprived of life, liberty or property without due process of law. Once the court decides that receiving disability benefits is a protected property interest they must determine what sufficient due process would be.

In order to determine the due process that is required the court considers three factors: 1) the private interest that will be affected by the official action; 2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and 3) the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Basically they are asking how important is this (property) interest? Could someone really be harmed if we didn't have sufficient process before taking this right away? Would it be an concern to provide more procedural safeguards?

After considering the issues above the court decided that the right to continue to receive disability benefits was an important one and that minimal procedural protections must be followed before the benefits can be terminated. The procedures that are required are: 1) give the claimant (employee) notice of the termination before you terminate the benefits, 2) provide a summary of the medical evidence supporting the termination and 3) give the claimant an opportunity to respond. These are the minimal procedural protections which are required by the Constitution but the states may add requirements as they see fit.

Since the court first decided that these are the minimal procedures required before benefits could be terminated they have expanded on these criterion a little bit. Employees must be notified before their disability benefits are terminated, but not just any notification will do. The notification must be sufficiently detailed to frame the precise issues, delineate the Bureau's theories and rationale for terminating benefits, and summarize the significant evidence supporting the Bureau's conclusions. While in that case the court expanded on the rights of the employee, other cases have highlighted the limits of the employee's rights. The courts have said when it comes to the employee's right to "respond" to the termination of their benefits that doesn't give the employee the right to have a hearing, present evidence and confront witnesses. This would be too much of a burden for the government. The court found that the right to submit something in writing was sufficient.

Since workers' compensation disability benefits are a recognized property right an employee is assured of at least some procedural safeguards before the benefits can be terminated. That is why a great deal of time and money can be expended before the disability benefits are awarded in the first place. Also, in addition to the minimal procedures required by the constitution, states may have their own standards for terminating disability benefits. While the constitution may not require that an employee have a hearing before their benefits are terminated state law could require it. Although it may not be very difficult for the state to meet their burden of satisfying all three criteria it is a good starting point for the employee to have a constitutionally protected interest at stake.

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