Chapter 7: Compensable Disability ^[1]

I.   Introduction

§7.1   To receive weekly wage loss benefits, the current law generally requires an injured worker to show that the person is disabled, i.e., that a work-related injury or disease prevents that worker from performing or obtaining work suitable to the person’s qualifications and training at the person’s prior maximum wage-earning capacity. If such a worker suffers wage loss connected to that work-related disability, benefits are generally payable. A persuasive physician’s explanation that a work-related condition contributes to functional limitations, which also appear to prevent a worker from performing or obtaining past or similar work at prior wages, should typically result in the voluntary payment of benefits, in the absence of persuasive evidence of a job actually available for the claimant to perform. That is a brief sketch of the current law, but it is also important to pay attention to the details as described at length below.

The current definition of disability has developed over time, the result of complex and often contradictory caselaw and amendatory legislation. An examination of how we got to where we are today can be helpful in understanding the current definition, a discussion of which begins in §7.9.

While there may be a finding of disability, that is not the end of the analysis. Disability does not itself entitle an injured worker to benefits. There must also be a loss of wages for a worker to be entitled to benefits, except in the case of an amputation or other “specific loss.” See §§11.7–11.8, or total and permanent disability, a specific category of disability that is further discussed in chapter 10. This wage loss must be connected to the work-related injury or disease, and this concept is not as simple as it may sound. See §§7.18–7.30.

Chapter 8 discusses various ways in which subsequent events can affect a disabled worker’s entitlement to benefits. Two of them are particularly relevant with regard to this discussion of disability. If a worker refuses an offer of reasonable work, benefits stop. See §§8.5–8.17. In addition, if a worker returns to work for a period of time and then leaves, that work may establish a wage-earning capacity, which in turn reduces the individual’s right to benefits. See §§8.18–8.28. However, employers may sometimes reduce a claimant’s benefits by virtue of postinjury wage-earning capacity, whether or not the claimant has actually returned to work. See §§7.17 and 7.18.

II.   Disability Before 1987

A. Disability Before 1982

§7.2   Surprisingly, before 1982, the Worker’s Disability Compensation Act did not explicitly define disability resulting from a personal injury. As a result, the courts looked to the predecessor to what is now Section 371(1) for guidance:

“The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employé, computed according to the provisions of this section, as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the accident, the same to be fixed as of the time of the accident, but to be determined in view of the nature and extent of the injury.”

Foley v Detroit United RR, 190 Mich 507, 514, 157 NW 45 (1916). This became the standard in the absence of anything more definitive. (It is worth mentioning that a disability arising from occupational diseases had its own statutory definition that was slightly different until the 1985 amendments.)

The statute’s focus on the work the employee was doing at the time of injury led to a distinction between skilled employment and unskilled employment (which also came to be known as “common labor”).

A skilled worker was totally disabled if unable to perform the specific skilled job the worker had performed before an injury occurred, even if the worker remained fully capable of working in another field. MacDonald v Great Lakes Steel Corp, 274 Mich 701, 265 NW 776 (1936). On the other hand, an unskilled laborer was totally disabled only if unable to perform any kind of work within the general field of common labor and partially disabled if unable to perform some but not all of the jobs in the general field of common labor. Miller v S Fair & Sons, 206 Mich 360, 171 NW 380 (1919). As a consequence, before 1982, a worker could be totally disabled even though there was some work the person could perform. See, e.g., White v Michigan Consol Gas Co, 352 Mich 201, 89 NW2d 439 (1958). Before 1982, the extent of a worker’s disability did not generally affect the amount of the worker’s entitlement to benefits (although a disabled skilled worker who returned to work at lower wages could often be paid up to their full lost wages rather than two-thirds of their actual wage loss.) However, the impact of being only partially disabled has become more significant in recent years as a result of recent supreme court orders and then by 2011 amendments to the Act.

B. Disability Between 1982 and 1987

§7.3   Effective January 1, 1982, the legislature for the first time incorporated into the Act a definition of disability, adding Section 301(4), which then read, “As used in this chapter, ‘disability’ means a limitation of an employee’s wage-earning capacity in the employee’s general field of employment resulting from a personal injury or work related disease.” The establishment of disability does not create a presumption of wage loss. Although the statutory definition was amended again effective May 14, 1987, the court of appeals held that this amended definition did not apply to those injured before its effective date. Turrentine v GMC, 198 Mich App 572, 499 NW2d 411 (1993).

The new language was so similar to that used in various court decisions over the years that it could be forcefully argued that the legislature merely intended to codify the already-existing definition of disability discussed in §7.2. In fact, the author of this language has indicated that no change was intended. See Gillman, The Rise and Fall of Reasonableness: Favored Employment in Michigan Workers’ Compensation, 1 Cooley L Rev 177, 206 (1982).

However, in Wright v Vos Steel Co, 205 Mich App 679, 517 NW2d 880 (1994), the court of appeals held that the 1982 amendments eliminated the distinction between skilled and unskilled work. While skilled and unskilled workers were no longer treated differently, most commentators at the time recognized that wage loss benefits, regardless of the extent of the disability, would be still be calculated as a percentage of actual wage loss under new sections added to the Act that are now found in their current form at Sections 301(5) and 401(6).