January 23, 2017
WC Appellate Division Decision issued on January 23, 2017 - Retirement Presumption
Below is a summary of a decision of the Appellate Division of the Workers’ Compensation Board issued on January 23, 2017. Please contact any member of the Norman, Hanson & DeTroy workers’ compensation practice group if you have any questions concerning the implications of this decision.
We are all well aware that under §223 when an employee terminates active employment and receives nondisability retirement benefits, it is rebuttably presumed that the employee does not have a loss of earning capacity resulting from an injury and is not entitled to benefits. In Paradis v. Twin Rivers Paper Company, App. Div. Dec. No. 17-4 the employee had a documented light duty work capacity at the time of his retirement but was not actually working at that point because no light duty work was available. The presiding ALJ ruled that the employee had terminated active employment at the time of retirement and was not entitled to benefits, and the employee appealed.
The Appellate Division vacated the decision of the ALJ on the applicability of the retirement presumption. Citing an earlier decision of the Division, the panel ruled that because the employee was not actually employed on the effective date of his retirement, he did not thereby terminate active employment and the presumption was unavailable.
To summarize the state of the law, the presumption applies when an individual terminates active employment on the actual date of retirement, whether that person is employed on a full-time or part-time basis, and whether that person is working with or without limitations. However, the presumption does not apply when a person has been released to light or modified duty as of the time of retirement but is not actually working when the retirement takes place.