An employer that unsuccessfully fights a workers’ compensation claim and forces an injured employee to retain an attorney faces a penalty of up to 20% of the money due the injured employee, which goes on top of the normal amount due. But the law also provides an incentive for employers to begin making payments early.
Employers that offer early payments will get a credit for those funds, which will be treated as if they had been paid without any litigation. For example, if the employer offers payments based on an injury being 20% disabling and it turns out the injury was 30% disabling, attorneys’ fees are due only on the difference (i.e., 20% of the dollar value of a 10% disability).
Recent case: Philip Menichetti hurt his knee at work. Less than two months later, his employer offered to pay on the basis that the knee injury was a 15% partial disability. It then began payments but had its doctor examine Menichetti. That doctor said the disability was just 7.5% disability.
Then Menichetti’s doctor said the disability was 45% and the parties settled for 22.5%. The question then became: What figure should be used to calculate the attorney’s 20% fee?
The court said the employer should get a credit for the 15% payment it made, making the attorney’s fee 20% of the dollar value of a 7.5% disability. (Menichetti v. Palermo Supply Company, No. A-2290-06T1, Superior Court of New Jersey, 2007)