Friday F.A.Q. “What does the ‘Extreme Hardship Redetermination’ of an LWEC classification mean for an employer’s exposure?”

Tashia Rasul, Esq.
Tashia Rasul, Esq.

The 2007 New York Workers’ Compensation Law reforms capped the number of weeks of compensation a claimant can receive for a permanent partial disability (PPD). However, the 2017 reforms now allows claimants who are classified with higher than a 75% LWEC the opportunity to seek redetermination due to “extreme hardship”. This means that a claimant with a 76% or higher LWEC can request that the Board reclassify him and allow more benefits – potentially benefits for life – thereby creating more exposure for the employer. What qualifies as an “extreme hardship”?This new rule applies to claimants who were previously classified with above a 75% LWEC and are currently receiving benefits.

WCL Section 35(3) now provides:
In cases where the loss of wage-earning capacity is greater than seventy-five percent, a claimant may request, within the year prior to the scheduled exhaustion of indemnity benefits under paragraph w of subdivision three of section fifteen of this article, that the board reclassify the claimant to permanent total disability or total industrial disability due to factors reflecting extreme hardship.

The claimant is required to file his application, which is the new Form C-35 within one year (365 days) of the scheduled exhaustion of his benefits. The Form C-35 must be complete and include all pertinent information, which the Board will review prior to scheduling a hearing. In making a redetermination, the Law Judge will take the claimant’s assets, monthly expenses, and household income, as well as any other factors listed in the Form C-35, into consideration.

While the claimant can seek this relief only during the year before his benefits are scheduled to end, the time for the employer to start thinking about this is before classification. This means posturing the claim for an LWEC finding of 75% or less because if the claimant seeks redetermination and is classified with a permanent total disability, he will be entitled to benefits for life. This means obtaining a strong IME report to rebut a high medical impairment claim, and conducting investigation into the claimant’s functional and vocational factors so as to have sufficient evidence to contest a high LWEC claim. For the claims where the claimant has already been classified with a higher than 75% LWEC, employers should consider a Section 32 settlement to curb any potential increased exposure.

Tashia Rasul is an Partner at Lois LLC where she defends employers and carriers in New York workers’ compensation claims. Tashia chairs the Firm's Diversity Committee and is active in the national Alliance of Women in Workers' Compensation. She can be reached directly at trasul@lois-llc.com or 201-880-7213.