No. 40470 (Emergency Rule): Section R612-200-2. Payment of Benefits, Interest and Attorney Fees

DAR File No.: 40470
Filed: 06/06/2016 07:25:29 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this emergency rule is to remove a section regarding the payment of attorney fees.

Summary of the rule or change:

This rule change strikes the provisions regulating the payment of attorney fees in workers' compensation cases.

Emergency rule reason and justification:

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

Justification: The Utah Supreme Court issued its decision in Injured Workers Assoc. of Utah v. State of Utah, 2016 UT 21, on May 18, 2016. The Court found Utah Code Section 34A-1- 309, the statutory provision that required the Utah Labor Commission to regulate attorney fees in workers' compensation cases, to be unconstitutional. The Court also found Subsection R602-2-4(C)(3), the administrative rule section that governs and regulates the payment of attorney fees, to be unconstitutional. The Commission's sole authority to regulate attorney fees comes from Section 34A-1- 309. As such, the provisions of the Utah Administrative Code that allow the Commission to regulate attorney fees, including the payment of attorney fees, need to be removed as they conflict with the Court's decision. Subsection R612-200-2(B) specifically references the statue and administrative rule the Court found to be unconstitutional. Subsection R612-200-2(B) requires the issuance of a separate check for attorney fees to an injured worker's attorney in an amount approved or ordered by the Commission. The rule also prohibits two-party checks issued jointly to an attorney and the injured worker. The Commission lacks the authority to require a separate check for an injured worker's attorney and to approve or order the amount of the check. The Commission also lacks the authority to prohibit checks issued jointly to an attorney and the injured worker. Relevant portions of Subsection R612-200-2(A)(3) also place the Commission in violation of the decision in that the rule requires payments to be made directly and solely to injured workers. This rule would likely interfere with agreements between injured workers and their attorneys regarding the payment of attorney fees.

State statutory or constitutional authorization for this rule:

• Section 34A-2-101 et seq.
• Section 34A-1-104
• Section 34A-3-101 et seq.

Anticipated cost or savings to:

the state budget:

There will be no cost or savings to the state budget because of this rule change. Attorney fees are paid from the injured worker's benefits.

local governments:

There will be no cost or savings to local government because of this rule change. Attorney fees are paid from the injured worker's benefits.

small businesses:

There will be no cost or savings to small businesses because of this rule change. Attorney fees are paid from the injured worker's benefits.

persons other than small businesses, businesses, or local governmental entities:

The Commission is unable to anticipate whether there will be a cost for injured workers related to this rule change. Attorney fees are paid from an injured worker's benefits, and though possible, it is unclear whether the Supreme Court's decision will immediately result in attorneys seeking a higher percentage of the injured worker's benefits for attorney fees. Any impact, however, would be related to the Court's decision rather then deletion of this rule as the current rule is in direct conflict with the Court's decision.

Compliance costs for affected persons:

The Commission is unable to anticipate whether there will be a cost for injured workers related to this rule change. Attorney fees are paid from an injured worker's benefits, and though possible, it is unclear whether the Supreme Court's decision will immediately result in attorneys seeking a higher percentage of the injured worker's benefits for attorney fees. Any impact, however, would be related to the Court's decision rather then deletion of this rule as the current rule is in direct conflict with the Court's decision.

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

There should be no fiscal impact of businesses because of this rule change, as attorney fees are paid from the injured worker benefits.

Sherrie Hayashi, Commissioner

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

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

Direct questions regarding this rule to:

• Ron Dressler at the above address, by phone at 801-530-6841, by FAX at 801-530-6804, or by Internet E-mail at [e-mail]
• Jaceson Maughan at the above address, by phone at 801-530-6036, by FAX at 801-530-6390, or by Internet E-mail at [e-mail]

This rule is effective on:

06/06/2016

Authorized by:

Sherrie Hayashi, Commissioner

RULE TEXT

R612. Labor Commission, Industrial Accidents.

R612-200. Workers' Compensation Rules - Filing and Paying Claims.

R612-200-2. Payment of Benefits, Interest and Attorney Fees.

A. Timing and payment of benefits. A workers' compensation benefit is due and payable when the claimant has satisfied all legal requirements applicable to that benefit.

1. Payment intervals for compensation. After entitlement to disability compensation or dependent's benefits has been established, such compensation shall be paid in regular intervals of at least once a month, except that TTD and TPD benefits shall be paid twice monthly.

2. Form of payment. A payor may choose to pay benefits by check, debit card or electronic fund transfer, provided that the form of payment allows a claimant to access the full amount of the benefit on the date the payment is due. No fee or charge of any kind may be assessed against the claimant.

3. [Payment to be made directly to claimant. Workers' compensation disability benefits and dependents' benefits shall be paid solely and directly to the claimant.]Employer coordination of employee benefits. Benefits may be paid "in care of" the employer if the employer coordinates employee benefits.[If payment of such benefits is made by check, the check shall be personally delivered to the claimant or mailed to the claimant's home address.

B. Deduction and payment of attorney fee. The computation and payment of fees for claimants' attorneys is governed by 34A-1-309 and Section R602-2-4, "Attorney Fees." A separate check should be issued to the worker's attorney in the amount approved or ordered by the Commission, unless otherwise directed by the Commission. Payment of the worker's attorney by issuing a check payable to the worker and his attorney jointly constitutes a violation of this rule.]

[C]B. Interest. As required by Subsection 34A-2-420(3) of the Utah Workers' Compensation Act, any final order of the Commission awarding benefits will include interest on the principal amount of the benefits at the rate of 8% per annum from the date the benefit or any part thereof was due and payable.

[D]C. Discounting of lump sum payments. Any proposal to pay all or part of a claimant's future workers' compensation benefits in a present lump sum must be submitted to the Adjudication Division for review and approval. A discount rate of eight percent per annum shall be used to determine the present value of such benefits. The following table may be used to determine a benefit's present value by interpolating, when necessary, the weeks to be discounted between the weeks listed on the table.

 

TABLE

 
 Unaccrued  X  Weekly     X  Cumulative  =  Discount $ 
Weeks         Benefit $     Discount 
 
     1                       .001475 
    10                       .008076 
    20                       .015343 
    30                       .022538 
    40                       .029663 
    50                       .036719 
    60                       .043706 
    70                       .050626 
    80                       .057478 
    90                       .064264 
   100                       .070984 
   110                       .077639 
   120                       .084229 
   130                       .090756 
   140                       .097221 
   150                       .103623 
   160                       .109963 
   170                       .116243 
   180                       .122463 
   190                       .128623 
   200                       .134724 
   210                       .140767 
   220                       .146752 
   230                       .152680 
   240                       .158552 
   250                       .164368 
   260                       .170129 
   270                       .175835 
   280                       .181488 
   290                       .187087 
   300                       .192633 
   312                       .199219

 

KEY: workers' compensation, filing deadlines, time, administrative proceedings

Date of Enactment or Last Substantive Amendment: June 6, 2016

Authorizing, and Implemented or Interpreted Law: 34A-2-101 et seq.; 34A-3-101 et seq.; 34A-1-104

 

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