VR Insights October 2019: The Significance of 425 Weeks

Within the North Carolina Workers’ Compensation Act, what is the significance of 425 weeks and why is 425 weeks more important than 500 weeks?  As those of us who were around on June 24, 2011, when the “new law” went into effect, for claims arising prior to June 24, 2011, there was no limit to Temporary Total Disability (TTD), but Temporary Partial Disability (TPD) was limited to 300 weeks.  After June 24, 2011, TTD is limited to 500 weeks from the first date of disability, but an injured worker can file for an extension of benefits if the injured worker can prove by a preponderance of evidence that he/she has sustained a total loss of wage earning capacity. 

Specifically, NC Statute 97-29(b) states: 

When a claim is compensable pursuant to G.S. 97-18(b), paid without prejudice pursuant to G.S. 97-18(d), agreed by the parties pursuant to G.S. 97-82, or when a claim has been deemed compensable following a hearing pursuant to G.S. 97-84, the employee qualifies for temporary total disability subject to the limitations noted herein. The employee shall not be entitled to compensation pursuant to this subsection greater than 500 weeks from the date of first disability unless the employee qualifies for extended compensation under subsection (c) of this section.

In a July 2011 Technical Bulletin published by The Travelers Indemnity Company that summarized the potential ramifications of the Indemnity Benefits section of House Bill 709 (Protecting and Putting North Carolina Back to Work Act), their analysis was:

While the increased number of TPD weeks allowed could increase costs, we believe there will be more significant cost savings from the cap on the TTD and PTD definitions.  It will be more difficult for an employee to be considered permanently and totally disabled given the new definitions.

Why does the writer opine it “will be more difficult” for an employee to be considered permanently and totally disabled?  According to NC Statute 97-29(d):

An injured employee may qualify for permanent total disability only if the employee has one or more of the following physical or mental limitations resulting from the injury:

1. The loss of both hands, both arms, both feet, both legs, both eyes, or any two thereof, as provided by G.S. 97-31(17).
2. Spinal injury involving severe paralysis of both arms, both legs, or the trunk.
3. Second-degree or third-degree burns to thirty-three percent (33%) or more of the total body surface.
4. Severe brain or closed head injury as evidenced by severe and permanent:

• Sensory or motor disturbances;
• Communication disturbances;
• Complex integrated disturbances of cerebral function; or
• Neurological disorders.

​​​​The “new law” narrowed the scope of injuries that would qualify for total disability and thus entitled to compensation, including medical compensation for the lifetime of the injured worker.  On the other hand, if the employer can show by a preponderance of evidence that the injured worker is capable of returning to “suitable employment,” then the injured worker will be precluded from permanent total disability.  According to North Carolina General Statute 97-2(22), 

The term "suitable employment" means employment offered to the employee after reaching maximum medical improvement is employment that the employee is capable of performing considering the employee's preexisting and injury-related physical and mental limitations, vocational skills, education, and experience and is located within a 50-mile radius of the employee's residence at the time of injury or the employee's current residence if the employee had a legitimate reason to relocate since the date of injury. No one factor shall be considered exclusively in determining suitable employment.

Which now brings us to 425 weeks and why this number is more significant than 500 weeks.  North Carolina General Statute 97-29(c),

An employee may qualify for extended compensation in excess of the 500-week limitation on temporary total disability as described in subsection (b) of this section only if (i) at the time the employee makes application to the Commission to exceed the 500-week limitation on temporary total disability as described in subsection (b) of this section, 425 weeks have passed since the date of first disability and (ii) pursuant to the provisions of G.S. 97-84, unless agreed to by the parties, the employee shall prove by a preponderance of the evidence that the employee has sustained a total loss of wage-earning capacity.

As of approximately July 1, 2019, injured workers suffering from the above-described work related physical or mental limitations could begin filing for an extension to the 500-week limitation (425 weeks divided by 52 weeks equals 8 years and one week).

Albeit the recognized injuries (physical and mental) have been constricted, what options are available to employers that would “show beyond a preponderance of evidence” that the eligible injured worker is capable of “suitable employment?”  The best avenue, a Labor Market Survey (LMS) that utilizes a methodology which establishes a research question founded on the purpose and necessity of data for a given occupation(s) based upon the injured worker’s work experience, education, aptitude and, functional limitations and impairments.  Research questions typically contain the following components: (a) What (overall purpose); (b) Who (scope of sampling); (c) Where (geographic area).  Finally, research questions must be feasible through the LMS query.

Labor Market Surveys are confidential limited assignments that, within the North Carolina Workers’ Compensation Act, do not require the submission of a Form 25N by the evaluator.  Because limited assignments prohibit the evaluator from having contact with either the injured worker or treating physician, they are confidential in nature and not required to be submitted simultaneously to either the injured worker or to the injured worker’s attorney.  Finally, the purpose of the LMS is not to locate the injured worker employment; rather, the purpose of the LMS is to “show beyond a preponderance of evidence” that “suitable employment” for the injured worker does exist within the injured worker’s local labor market.

Now you know the significance of the number 425.