When is retirement not retirement? When the retiree is on workers’ comp — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

When is retirement not retirement? When the retiree is on workers’ comp

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No doubt about it, the workers’ compensation system is a headache for employers. It’s full of frustrations and surprises.

Consider, for example, the fairly common scenario of a retired employee receiving workers’ comp payments. Seems like retiring would end workers’ compensation payments, right? Not necessarily, as the following case illustrates.

Recent case: Martha Hudson hurt herself while working for General Motors and filed a workers’ comp claim for muscle spasms and degenerative joint disease. After time off, she returned to a light-duty job. Then GM laid her off.

The company then offered Hudson an early retirement, and she signed an agreement in which she represented that she was not disabled and was voluntarily giving up any right to come back to work for the company.

GM moved to terminate her workers’ comp benefits. But the Industrial Commission of Ohio’s hearing officer said Hudson hadn’t voluntarily stopped working, but had merely accepted the retirement offer because she needed the money. Further, she told the hearing officer she would have gladly gone back to the light-duty position if it were available.

The commission refused to change the decision.

The company appealed, but the Court of Appeals of Ohio sided with Hudson and the hearing officer. Hudson’s testimony apparently trumped the written agreement she signed. (State of Ohio ex rel. Powertrain Division, General Motors v. Hudson and Industrial Commission of Ohio, No. 06-AP-1268, Court of Appeals of Ohio, 10th Appellate Division, 2007) 

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