A concept that we explain to many if not most of our clients is this strange creature of the Workers’ Compensation law called “Schedule Loss of Use” or “SLU” for short.
What it boils down to is that when you injure one or more of your ‘extremities’ on the job–your hands and fingers, arms, legs, feet and toes–or suffer a loss of hearing or vision in either or both ears or eyes, in most cases this can very often translate directly into a lump sum payout at the ‘end’ of your case (that is, after all of your major medical treatment is basically over, typically a year after the accident or your last accident-related surgery, whichever is later). You get this one-time award if you have any residual permanent ‘loss’ of one or more of those body parts (i.e., you can’t move your arm as high as you could before, you limp because of pain and instability in your foot, one of your eyes has decreased vision measurement, etc.).
Ironically, permanent damage to your head, neck, back, chest, or abdomen–anything other than injuries to your arms, legs, hands, feet, or eyes and ears–does not get you a quick and easy amount of money. Although we at Finkelstein, Meirowitz & Eidlisz frequently settle these claims through contractual lump sum settlements and get most of our clients a good resolution to their claims involving the so-called “systemic” body parts, the process is not as straightforward.
Many of our clients rightly wonder, why is Workers’ Compensation set up this way? Why does a permanent injury to an arm or toe get you a lump sum whereas a neck injury that causes permanent spasms and pain does not, or at least not automatically?
There are two ways to answer this question. The more critical and realistic answer is quite simply that it is a statutory scheme that allows cases to be disposed of quickly and cheaply to the direct benefit of the insurance companies. One of the major goals of the insurance industry is to provide for “cost containment” of a claim, that is, establish clear upper limits and caps on the amount of money they have to spend on each case in a predictable way so that claims do not spiral out of control or remain open indefinitely. Instead of continuing to pay someone for lost time, they pay a more or less predetermined amount of money and wrap up the case, fast and easy. The argument on the insurance-side is that this lowers premiums for employers.
The other answer comes from the theory behind Schedule Loss of Use as it is written in the law and interpreted by the courts and the Workers’ Compensation Board. SLU payouts represent anticipated loss of future earnings. In other words, you get money from a hand/arm/leg/foot/eye/ear injury, even if you are working, because it is expected that at some time in the future you will have some lost earning power–you will not be able to work as hard or as long or advance as high because of this injury. It’s sort of like an advance on payments for lost time that haven’t happened yet (and may never happen).
A very early case in Workers’ Compensation history discussed this at some length:
In case of statutory permanent partial disability, such as the loss of a hand, arm, foot, finger, etc., the compensation is paid for the period named in the schedule. The award is to compensate for loss of earning power…. It, therefore, provides for limited and certain,
not full but uncertain, compensation for the results of an injury….Any loss of physical function detracts potentially from earning power, and the legislature is, therefore, justified in establishing a fixed period of compensation based on a specific injury, such as the loss of a finger. If the injury detracts more or less from the earning power than the period fixed by the
statute, it may at least be said that the rule is simple and the scale of compensation definite.
Marhoffer v. Marhoffer, 220 NY 543 (1917).
You may never lose any more time from work because of this accident and you may keep working until you collect on your well-earned retirement without a hitch. On the other hand, your condition could get significantly worse and cause you to lose a lot more time from work and even necessitate surgery (in which case we actually can still reopen your claim and get you treatment and money potentially). Schedule Loss of Use says, “Okay, for some people these injuries will never cause them more problems but on the whole the majority of people will be impacted in some way by their permanent injury. So let’s pay everyone a set amount based on how badly they were hurt and close their cases so they can keep working if they can but still get something because of their accident.”
What puzzles many of our clients is that, once a doctor (either the insurance company IME or our client’s doctor) gives a Schedule Loss of Use finding (e.g,, “30% SLU left middle finger”), their bi-weekly payments stop. Why is that? Because the future SLU award is supposed “take care of” (or “wash” as many lawyers say) any future lost time from work, which means no more payments now but a lump sum award soon (usually within 2-5 months or so but it can be shorter or longer). The insurance carrier also gets to deduct all prior payments for lost time from the SLU lump sum for the same reason, or at least that’s how the “theory” is interpreted.
Does Schedule Loss of Use make sense? For some it gets them a decent amount of tax free money in their pocket (and with FME on your case, it is usually a very decent amount!) and lets them get on with their life. For others, they feel it’s not fair that they are limited in what they can get and are forced to take this as a payout. Most people are somewhere in between. SLU is a compromise–just like Workers’ Compensation is as a whole–and there are good arguments for and against it. But it has been around for over a hundred years (in New York) and is not going anywhere anytime soon.