LOUISIANA New Procedure and New Form 1002 for Average Weekly Wage Disputes in Louisiana

New Procedure and New Form 1002 for Average Weekly Wage Disputes in Louisiana

AWW Calculation Penalties and Attorney Fees – Act 860 [R.S. 23:1201H] Effective 2/1/13

One of the major goals of the business sponsored legislation was to address the costs associated with the awards of penalties and attorney fees for late payments of benefits or miscalculation of the average weekly wage in Louisiana workers’ compensation claims.  While the business lobby was not able to get legislative approval for all of the law changes in this area, they were able to establish a procedure for an employee to challenge the employer’s calculation of the AWW and permit the employer to correct any errors without being subject to penalties and attorney fees, thus providing a safe harbor for employers.

By placing the emphasis on getting the compensation rate correct as soon as possible, and away from casting blame on an adjuster for any miscalculation, the amendment aids the injured claimant without providing incentive to force the matter into litigation just to collect a penalty and attorney fee.  Furthermore, the procedure is conducted summarily, over the phone, and without the need for an attorney for either side.

The amendment to §1201 establishes a procedure for the payor (insurer or self-insured employer) to send a notice of payment form to the employee or his representative (as well as the OWC) declaring the amount of the average weekly wage and compensation rate.  The claimant then has an opportunity to notify the employer that he disputes this amount.

Upon receipt of a written notice from the claimant that the compensation rate is wrong, the payor has 5 business days to either send the correct amount or file a request for a preliminary determination by the workers’ compensation judge. The preliminary determination hearing must occur within 15 days of the request. The hearing is by telephone and the judge may order the parties to produce relevant records (such as wages and records of hours worked). No later than 30 days from the filing of the request for the preliminary determination, the judge is to render a recommendation. The payor is then given 10 calendar days from receipt of the recommendation to either pay the recommended amount or notify the employee and his representative in writing that it does not accept the recommendation. At that point litigation can be filed on the AWW issue and if the payor is found to have made an error in the calculation, penalties and attorney fees may be awarded. However, a payor who accepts the recommendation or agrees to pay in accordance with the recommendation but files a dispute with the OWC to controvert the recommendation will NOT be subject to penalties or attorney fees on that issue alone.

New Form 1002 – The new form 1002  should be issued to the claimant or his attorney under the following circumstances: (a) The new form should be sent to the claimant or his attorney WITH the First payment of TTD [also file with the OWC]; (b) the form should also be sent to the claimant or his attorney within 10 days of termination of indemnity benefits or any modification of indemnity benefits (such as changing to SEB) [also file with the OWC within 10 days of termination or modification of indemnity benefits]. This form will put the employee on notice as to your determination of their AWW and if they disagree with the calculation they are required to notify the employer/insurer on the same form 1002.  If you have issued the new form 1002 to the employee or his attorney, any dispute over the calculation must first be done in accordance with the new preliminary determination procedures. These procedures will enable the employer/insurer to correct any calculation errors without the risk of penalties and attorney fees.

If the employee or his attorney returns the form 1002 with a notice that they disagree with your determination of the correct indemnity benefit or your suspension of modification of indemnity benefits, YOU MUST RESPOND TO THIS NOTICE within 5 days. You can either respond by sending the claimant a new notice of payment (form 1002) with the corrected calculation of indemnity owed AND payment of any back due benefits OR you must request (within 5 days of receipt of the claimant’s objection to the 1002) a request to the OWC for a preliminary determination (an informal hearing with the WC judge). Only if you follow these procedures and respond within the 5 days will you be able to avoid the risk of penalties and attorney’s fees.

Attached is a memorandum from the Workers’ Compensation Chief Judge Sheral Kellar to the workers compensation judges with instructions for processing and hearing the 1002 preliminary determination and appeal.

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