The COVID-19 Pandemic and the Temporary End of Modified Work: An Earnings Capacity Approach

James Rossi, Esq. Simi Valley, California

As we live through the COVID-19 pandemic, we are all having to find ways to cope with the massive restrictions placed on our lives. One of the most significant issues at this time is the countless number of people who are out of work due to layoffs and business closures. As a result, an area likely to result in significant litigation in workers’ compensation is liability for TTD benefits of those who, due to the pandemic, were laid off while working modified duties. This article asserts that an earning capacity framework is a viable way to address the situation, where individuals on modified duties may not, due to the circumstances of the economy the shelter-in-place measures have brought on, have an earning capacity associated with their layoff.

The Issue

The litigation over TD liability will not be limited to claims involving an industrially caused COVID-19 injury. The impact of the disease will likely extend well beyond COVID-19 injuries. In particular, the question arises as to whether injured workers who were working modified duty until their employer had to shut down due to-stay-at-home orders are entitled to have their TTD benefits continue. After all, the employer is no longer able to accommodate the restrictions they had been accommodating. In this scenario, the nonindustrial COVID-19 stay-at-home order may be the sole reason the employer is no longer accommodating applicant’s restrictions.