By Kevin Weaver

The Kentucky Supreme Court recently clarified an employer’s/insurer’s liability for temporary total disability (TTD) benefits during periods of time when an injured employee has not reached maximum medical improvement (MMI) but returns to work on a light duty basis. In Trane Commercial Systems v. Tipton, the Court was tasked with further defining the phrase “customary work” in the context of TTD benefits.

An injured employee is entitled to TTD benefits until he or she reaches MMI or has improved to the point that she can “return to employment”—meaning they can perform the type of work that is customary for the employee or that he was performing at the time of injury.  However, the Court has stipulated that workers who are unable to perform their “customary work” after an injury aren’t automatically entitled to TTD benefits. Administrative Law Judges (ALJ) have had discretion to determine whether return to work in a light duty position constitutes a return to employment/customary work, but before Tipton, an employer still faced a substantial risk of owing TTD benefits on top of light duty wages paid if this issue was later submitted to an ALJ for determination.

In Tipton, the Court held that

absent extraordinary circumstances, an award of TTD benefits is inappropriate if an injured employee has been released to return to customary employment, i.e. work within her physical restrictions and for which she has the experience, training and education.

Noting that the “purpose of awarding income benefits such as TTD is to compensate workers for income that is lost due to their injury,” the Court reasoned that “it does not further the purpose for paying income benefits, to pay TTD benefits to an injured employee who has returned to employment simply because the work differs from what she performed at the time of injury.”

An ALJ still has discretion to determine if TTD benefits are owed during periods of light duty work, but that discretion has been narrowed down by the further defining/redefining of “customary work”, i.e. work within the employee’s physical restrictions and for which she has the experience, training and education.  If there is any doubt on an employer’s part as to whether an injured employee is returning to her “customary work,” the employer should protect itself with a partial settlement agreement in which the employee waives her right to TTD benefits during the periods of light duty work.

It is significant to note that Tipton appears to be applicable only to situations in which an employee voluntarily returns to light duty work.  It does not provide the basis for the employer to require an employee to return to light duty work or face the termination of TTD benefits.  If an employee is not at MMI and declines to return to light duty work, the employer must still make a judgment call as to whether the light duty restrictions in place allow the employee to return to his/her customary work or the work he/she was performing at the time of injury before terminating voluntary payment of TTD benefits.  If an interlocutory award of TTD benefits has been issued, the employer should seek relief from the ALJ before terminating TTD benefits.