Ronald A. Izzo
In our paperless, easy-banking world, where money changes hands at the drop of an app, it’s hard for an employer to imagine not being credited for funds that unequivocally landed in its employee’s bank account.
But, that’s precisely what happened in 2016, when the Rhode Island Worker’s Compensation Appellate Court affirmed a lower court decision that, due to missing paperwork, an employer would NOT receive credit for benefits it had clearly paid. Consequently, the employer was forced to pay (again) nearly a year’s worth of wages, on top of attorney fees (See, Rashiti v. Narragansett Improvement Company).
As the Rashiti case illustrates, we’ve begun to see claimants and their attorneys successfully prosecute a previously overlooked provision of the Rhode Island Worker’s Compensation Act; namely, one that penalizes any insurer or TPA that makes payments of indemnity benefits without timely filing a Memorandum of Agreement (“MOA”) or non-prejudicial MOA. Such claims handlers will not receive a credit for those payments.
In the past, failing to file an MOA or non-prejudicial MOA within the statutory ten-day time frame (and to comply with the statute’s notice requirements) would usually not result in severe penalties. However, IGC has observed the recent practice of claimant attorneys arguing for, and Rhode Island judges granting, “double comp” when the employer has paid its injured employee without formal documentation. In Rashiti, the employer appealed just such a result.
So now, we have an appellate decision on the books that essentially requires Worker’s Compensation judges to abide by a strict reading of the statute.
What does the relevant section of the statute (RIGL Section 28-35-1) mandate?
The above information is, of course, for general information purposes only and does not constitute legal advice. Please contact Ron Izzo, Bill Gardner, or Keith Cardoza for guidance regarding any specific case.