February 21, 2023

Self-insured employer's claim for reimbursement for workers' compensation payments it made to a firefighter for a work-related injury rejected

In this appeal the City of Newburgh Fire Department [Department] challenged the Workers' Compensation Board's [WCB] decision that the Department, a self-insured workers' compensation employer, was not entitled to reimbursement or credit for certain payments it made to a Claimant [Firefighter].

Firefighter suffered a disabling work-related injury in the course of his performing his firefighting duties and established a claim for workers' compensation benefits. Ultimately classified as permanently partially disabled, Firefighter was paid his full salary during his period of disability by the Department. The Department filed requests for reimbursement of those wages against any award of workers' compensation benefits.*

In April 2016 Firefighter's application for performance of duty disability retirement pursuant to Retirement and Social Security Law §363-c was approved and provided for a 50% pension. Although full wage payment to Firefighter pursuant to General Municipal Law §207-a(1) were discontinued upon Firefighter's disability retirement, the Department commenced paying Firefighter the difference between the amount received from his pension and the amount of his regular wages under color of General Municipal Law §207-a[2].

In 2019, Firefighter submitted a request for additional benefits, claiming that his "permanency classification" entitled him to retroactive workers' compensation awards from April 2016 and continuing, which payments had been discontinued. The Department sought credit against any workers' compensation awards based upon its supplemental pension payments pursuant to General Municipal Law §207-a(2).

Ultimately Firefighter was awarded benefits "retroactive to April 30, 2016 and continuing". However, the Workers' Compensation Law Judge [WCLJ] found that the Department was not entitled to reimbursement against the workers' compensation awards for pension payments made to Firefighter under General Municipal Law §207-a(2).

The Department appealed but ultimately the WCB affirmed the decision of the WCLJ, noting that "any determination as to the setoff/reimbursement of the workers' compensation payments against the pension supplement the [Department] pays pursuant to General Municipal Law §207-a(4-a) was outside its jurisdiction." The Department's subsequent application "for reconsideration and/or full Board review was denied" and it appealed this ruling by the WCB.

The Appellate Division said was "unpersuaded by the [Department's] contention that because [Firefighter] is receiving a performance of duty disability pension, as opposed to an accidental disability retirement pension, the matter is distinguishable from Matter of Harzinski v Village of Endicott (126 AD2d 56 [3d Dept 1987]) and, as such, [the Department] is entitled — pursuant to Workers' Compensation Law §25(4)(a) or §30(2) — to reimbursement of its General Municipal Law §207-a(2) payments against [Firefighter's] workers' compensation awards."

Workers' Compensation Law §25(4)(a), said the court, provides that in the event an "employer has made advance payments of compensation, or has made payments to an employee in like manner as wages during any period of disability," the employer "will be entitled to reimbursement out of any unpaid workers' compensation award (emphasis provided by the court in its decision)" and Workers' Compensation Law §30(2) provides for the reimbursement of "any salary or wages paid" to a firefighter pursuant to General Municipal Law §207-a against any workers' compensation award.

Explaining that "because the supplemental retirement benefits paid by the [Department] were not wages, the workers' compensation awards were not reimbursable to the [Department] by way of Workers' Compensation Law §25(4)(a) or §30(2)," the Appellate Division sustained the WCB's determination.

To the extent that the Department argued that limiting "any offset or reimbursement to future General Municipal Law §207-a(2) supplemental payments" as set forth in General Municipal Law §207-a(4-a) is inappropriate and thwarts the statutory scheme,** the court said the Board made no determination with regard to the applicability of that statute, noting that its determination in that regard would be inappropriate. In the words of the court: "The employer does not challenge this finding on appeal and, as such, it is not properly before us."

* Any award of workers' compensation to Firefighter was to be designated reimbursable to the employer.

** General Municipal Law §207-a(4-a) provides that "[a]ny benefit payable pursuant to [General Municipal Law §207-a(2)] to a person who is granted retirement for disability incurred in performance of duty pursuant to [Retirement and Social Security Law §363-c] shall be reduced by the amount of the benefits that are finally determined payable under the workers' compensation law by reason of accidental disability."

 

Click HERE for access to the decision of the Appellate Division posted on the Internet.