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Ohio Court of Appeals Reinstates Lump Sum Payments of Permanent Partial Loss and Loss of Use Awards

On May 12, 2016, the Cuyahoga County Court of Appeals (Cleveland), declared unconstitutional the portion of House Bill 487, which had amended Ohio Rev. Code 4123.57(B), thereby reinstating the payment of permanent partial loss and “loss of use” awards in a lump sum, instead of over weeks, months, or even years.

R.C. 4123.57(B) allows injured workers to receive a permanent partial award when they have suffered the loss of specified body parts. For instance, an employee who sustains a work injury and loses a hand is entitled to receive 175 weeks of compensation at the maximum rate for the year of injury. A 2016 injury would result in a permanent partial loss award of $154,875.00 (176 weeks multiplied by $885.00).

Scheduled Loss - Schedule B

With the passage of H.B. 487, the 2012 Mid-Biennium Budget Review Bill, a change was made in the way loss awards under R.C. 4123.57(B) were paid. House Bill 487 directed the payment of permanent partial loss awards to be made on a weekly basis over the total number of weeks allowed for the award. In the case of an employee who lost a hand, the employee would have to receive payments for a period of over three (3) years, i.e. 175 weeks.

In Jeffrey Kljun, et al. v. Sarah Morrison, et al., Cuyahoga App.No. 103292 (May 12, 2016), the Eighth District Court of Appeals held H.B. 487 was not consistent with the “one-subject rule” set forth in Section 15(D), Article II, of the Ohio Constitution, because the 2012 Mid-Biennium Budget Review Bill should not have also included the subject of a change to the workers’ compensation permanent partial law. In the Kljun case, the plaintiffs were six (6) employees who sustained various losses (including “loss of use”) of various body parts. When they sued to prevent the Ohio Bureau of Workers’ Compensation (BWC) from enforcing the changes to R.C. 4123.57(B), the BWC moved to dismiss the case. While the trial court denied the motion to dismiss, the court did grant summary judgment to the BWC, thereby denying the plaintiffs’ lawsuit. Upon appeal by the plaintiffs, the Court of Appeals agreed that H.B. 487 violated the Ohio Constitution’s one-subject rule. The case is now returned to the Cuyahoga County Court of Common Pleas to enter judgment, as a matter of law, in favor of the plaintiffs.

The BWC has forty-five (45) days from the entry of judgment of the Court of Appeals to appeal to the Supreme Court of Ohio. For the time being, Ohio Administrative Rule 4123-3-15(C)(3)(b), provides that when a permanent partial scheduled loss or loss of use award is granted by the BWC, “*** the bureau or self-insuring employer shall pay the award or the balance remaining on the award in one payment for the entire award or the balance remaining on the award.”

If you have any questions about permanent partial loss or “loss of use” awards, please call Charles Zamora, a Certified Specialist in Workers’ Compensation Law. 614-221-1300.