No. 31643: R602-4. Procedures for Termination of Temporary Total Disability Compensation Pursuant to Reemployment under Section 34A-2-410.5

DAR File No.: 31643
Filed: 06/30/2008, 04:41
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule implements H.B. 384, effective 07/01/2008, which added Section 34A-2-410.5 to the Utah Workers' Compensation Act. Section 34A-2-410.5 requires the Labor Commission to accept and adjudicate employer and insurance company requests to terminate or reduce temporary disability compensation payments in cases of alleged employee misconduct. (DAR NOTE: H.B. 384 (2008) is found at Chapter 349, Laws of Utah 2008, and was effective 07/01/2008.)

Summary of the rule or change:

The rule defines terms and establishes the process by which employers or insurance carriers can institute proceedings to request permission to terminate or reduce temporary disability compensation. The rule establishes alternative methods by which the employer or insurance carrier can notify the injured worker of proceedings to terminate or reduce benefits. The rule also establishes standards for discovery, hearings, and decisions. In particular, the rule implements Section 34A-2-410.5's requirement that administrative law judges issue decisions in these cases within 45 days after the employer or insurance carrier has filed its request with the Labor Commission.

State statutory or constitutional authorization for this rule:

Subsection 34A-1-104(1) et seq., and Section 34A-2-410.5

Anticipated cost or savings to:

the state budget:

This rule implements a new Section 34A-2-410.5 that allow employers and insurance carriers to request Labor Commission permission to reduce or terminate temporary disability benefits in cases of employee misconduct. The Labor Commission believes there will be a relatively small number of these requests and that the costs of adjudicating them can be absorbed with existing resources and without any impact on the state budget.

local governments:

Section 34A-2-410.5 permits, but does not require, local governments in their capacity as employers to request permission in cases of employee misconduct to terminate or reduce temporary disability compensation otherwise payable to the employee. By providing simplified procedures for adjudicating such requests, the Labor Commission anticipates that this rule will reduce costs that local governments would otherwise incur if more formal procedures were applied to these proceedings.

small businesses and persons other than businesses:

Section 34A-2-410.5 permits, but does not require, small businesses to request permission in cases of employee misconduct to terminate or reduce temporary disability compensation otherwise payable to the employees. By providing simplified procedures for adjudicating such requests, the Labor Commission anticipates that this rule will reduce costs that small businesses would otherwise incur if more formal procedures were applied to these proceedings.

Compliance costs for affected persons:

This rule establishes simple, expedited procedures for filing and adjudicating employer/insurance carrier requests to terminate or reduce temporary disability compensation payments in cases of employee misconduct. By eliminating or modifying the procedural and evidentiary standards that would otherwise apply, the Labor Commission anticipates that compliance costs such as personnel and attorney expenses will be reduced.

Comments by the department head on the fiscal impact the rule may have on businesses:

Section 34A-2-410.5 of the Utah Workers' Compensation Act, and this rule implementing that statutory provision, provide businesses with a practical means to reduce or terminate temporary disability payments to workers who are unemployed due to work-related misconduct. While businesses will incur some costs in proving that such benefits payments should be reduced or terminated, I anticipate that the procedures established by this rule will allow the Commission to resolve these cases fairly and efficiently. However, at this time it is uncertain whether businesses will experience a net fiscal benefit from this new procedure. Sherrie Hayashi, Commissioner

Emergency rule reason and justification:

Regular rulemaking procedures would place the agency in violation of federal or state law.

H.B. 384 creates a new right for employers and insurance carriers to assert that certain disability benefits should be terminated to injured employees who have been guilty of work-related misconduct. The statute requires the Labor Commission to adopt such procedural and adjudicative standards as are necessary to implement these new proceedings.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Labor Commission
Adjudication
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY UT 84111-2316

Direct questions regarding this rule to:

Richard M. Lajeunesse at the above address, by phone at 801-536-7928, by FAX at 801-530-6333, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

This rule is effective on:

07/01/2008

Authorized by:

Sherrie Hayashi, Commissioner

RULE TEXT

R602. Labor Commission, Adjudication.

R602-4. Procedures for Termination of Temporary Total Disability Compensation Pursuant to Reemployment Under Section 34A-2-410.5.

R602-4-1. Purpose, Authority and Scope.

Section 34A-2-410.5 allows an employer or its insurance carrier ("employer" hereafter) to request Labor Commission permission to reduce or terminate an employee's temporary disability compensation. Under authority of section 34A-2-410.5(7), the Commission establishes these rules to govern the adjudication of such requests. This rule supersedes the provisions of R602-2, 602-3, R602-5, R602-7 and R602-8 R602-4-3 as to any actions brought pursuant to section 34A-2-410.5.

 

R602-4-2. Commission Permission Required.

An employer shall not terminate or reduce an employee's temporary disability compensation pursuant to section 34A-2-410.5 prior to issuance of a final order by the Commission ordering the reduction or termination.

 

R602-4-3. Mediation.

Prior to filing a request to terminate or reduce temporary disability compensation pursuant to section 34A-2-410.5, the parties are encouraged to request assistance from the Mediation Unit of the Commission's Industrial Accidents Division.

 

R602-4-4. Pleadings and Discovery.

A. Definitions.

1. "Application" means an Application for Hearing for Termination or Reduction of Compensation (Adjudication Form 402), all supporting documents, proof of service and Notice of Request for Termination or Reduction of Compensation (Adjudication Form 404) which together constitute the request for agency action regarding termination or reduction of benefits pursuant to Section 34A-2-410.5.

2. "Supporting medical documentation" means any medical provider's report or treatment note that addresses the employee's medical condition or functional restrictions.

3. "Supporting documents" means supporting medical documentation, Persons with Knowledge List (Adjudication Form 403), any documents related to reasons for the requested termination or reduction, and any documents describing the employee's work duties.

4. "Proof of Service" means any of the following: 1) the employee's signed and dated acceptance of service of the Application and all supporting documents; 2) a certificate of service of the Application and all supporting documents signed by the employer or insurer's counsel and accompanied by a return receipt signed by the employee; or 3) a return of service showing personal service of the Application and all supporting documents on the employee according to Utah Rule of Civil Procedure 4(d)(1).

5. "Persons with Knowledge List" (Adjudication Form 403) means a party's list of all persons who have material knowledge regarding the reasons for the request to terminate or reduce compensation. The list must specify the full name of the person, a summary of the knowledge possessed by the person, and a statement whether the party will produce the person as a witness at hearing.

6. "Notice of Request for Termination or Reduction of Compensation" means Adjudication Form 404.

B. Application for Hearing.

1. An employer may request Commission approval to terminate or reduce an employee's temporary disability compensation under section 34A-2-410.5 by filing an Application with the Commission's Adjudication Division.

2. An Application is not deemed filed with the Division until the employer submits a completed Application with all required documentation.

C. Discovery.

1. At least 15 days prior to a hearing on an Application, each party shall mail or otherwise serve on the opposing party a list of all witnesses that party will produce at the hearing. Because it is presumed that the employee will appear at the hearing, the employee is not required to list himself or herself on the list. The employer will also mail to or otherwise serve on the employee a copy of all exhibits the employer intends to submit at the hearing.

2. Testimony of witnesses and exhibits not disclosed as required by this Rule shall not be admitted into evidence at the hearing. A party's failure to subpoena or otherwise produce an individual previously identified by that party as an intended witness may give rise to an inference that the individual's testimony would have been adverse to the party failing to produce the witness.

3. Other than disclosures required by this rule and voluntary exchanges of information, the parties may not engage in any other discovery procedures.

4. Subpoenas may be used only to compel attendance of witnesses at hearing, and not for obtaining documents or compelling attendance at depositions. All subpoenas shall be signed by an administrative law judge.

D. Defaults and Motions.

1. Defaults shall only be issued at the time of hearing based on nonattendance of a party. Motions will only be considered at the time of hearing.

 

R602-4-5. Hearings.

A. Scheduling and Notice.

A hearing will be held within 30 days after an Application is filed with the Commission's Adjudication Division. The Division will send notice of hearings by regular mail to the addresses of the employer and employee set forth on the Application. A party must immediately notify the Division of any change or correction of the addresses listed on the Application. The Division will also mail notice to the address of any party's attorney as disclosed on the Application or by an Appearance of Counsel filed with the Division. Notice by the Division to a party's attorney is considered notice to the party itself.

B. Hearings.

Each hearing pursuant to section 34A-2-410.5 shall be conducted by an administrative law judge as a formal evidentiary hearing. The evidentiary record shall be deemed closed at the conclusion of the hearing, and no additional evidence will be accepted thereafter. After hearing, the administrative law judge shall issue a decision within 45 days from the date the Application was filed.

C. Motions for Review.

Commission review of an administrative law judge's decision is subject to the provisions of section 63G-4-301, section 34A-1-303, and R602-2.M.

 

KEY: worker's compensation, administrative procedures, hearings, settlements

Date of Enactment or Last Substantive Amendment: July 1, 2008

Authorizing, Implemented, or Interpreted Law: 34A-1-104(1) et seq.; 34A-2-410.5