Voluntary Payments Instead of Workers’ Comp Can Cause Trouble

November 11, 1999
Issue: A valued employee suffers an on-the-job injury, and because your company wants to do the right thing, you foot the bill for the employee's medical benefits. But what happens when your company decides to discontinue the payment of benefits—much to the worker's dismay? What are the consequences to your company?

Answer: In another case of a good deed never going unpunished, voluntary payments made in lieu of workers' comp that's ordered through the usual legal channels can end up vexing your company in the long run.

An employer that offered a depressed worker full disability for one year and temporary total disability for a second year was accused of relegating the employee's workers' comp claim to the "back burner." In its reasoning, a California court cited the importance of investigating and resolving claims in the few months following the injury, when memories are fresher and other evidence is readily available.

The employer remitted good-faith payments instead of rejecting the worker's claim within the 90 days following her injury. As a result, a presumption set forth under California law kicked in, providing that work-related injuries are presumed compensable if not rejected within 90 days of the claim. This presumption is of particular importance in cases where the proof is closely balanced, such as when it is the worker's word against that of a supervisor.

Thus, although it seems unseemly to tell an injured employee to "just sue me," this may be the best course of action for both parties. And, of course, more conciliatory language can be related when the matter is discussed.

Cite: Williams v. Workers' Compensation Appeals Board, City of Pismo Beach, et al., California Court of Appeal, G024467, September 17, 1999.

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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.