Iowa Workers’ Compensation Reform Act Amends Entitlement to and Assessment of Industrial Disability/Loss of Earning Capacity

One of the additional changes under the Iowa Workers’ Compensation Reform Act affects the application and determination of industrial disability. Previously, any employee with an injury to the body as a whole resulting in permanent impairment and/or permanent restrictions was entitled to assessment of industrial disability regardless of employment status. The new amendments to the Act now require that a determination in any reduction in an employee’s earning capacity/industrial disability must take into account the number of years it was reasonably anticipated that the employee would continue to work at the time of his or her injury.

The Act further indicates that if an employee is eligible for permanent partial disability benefits based on the assessment of industrial disability, that employee will only be compensated based on the functional impairment rating resulting from the injury and not in relation to any lost earning capacity/industrial disability if that employee returns to work or is offered work for which the employee receives or would receive the same or greater wages. Basically, industrial disability will not be assessed and permanent partial disability benefits are based solely on the impairment rating.

However, please note that if that employee returns to work with the same employer, is compensated solely on basis of functional impairment, and is subsequent terminated from employment by that employer, the employee may seek review by the Iowa Workers’ Compensation Commissioner for a determination of actual industrial disability/reduction in earning capacity caused by the permanent disability.

In interpreting this Act, it appears that what the Senate was trying to state was that if an employee has an injury to the body as a whole but returns to work or is legitimately offered employment at the same or greater wages, the only indemnity due will be based on the functional impairment rating. However, should that employee subsequently be terminated by the employer, that employee will then have the right to request an assessment of industrial disability/loss of earning capacity.

This is a prime example of the importance of returning injured workers back to work when possible. Employers need to be made aware of this concrete change in Iowa workers’ compensation law as it will ultimately affect both their bottom line in terms of what they pay in workers’ compensation indemnity and also encourage them to attempt to make reasonable efforts to accommodate and return injured workers to employment.

For questions regarding Iowa Workers’ Compensation please don’t hesitate to contact Iowa Workers’ Compensation attorney Paul Barta at PBarta@BaylorEvnen.com. Please continue to follow-up with the blog as we will be preparing entries for some of the additional amendments to the Iowa Workers’ Compensation Act that were recently made in April 2017 by the Iowa State Senate.