LB 961 Raises Benefit Rate for Volunteer Firefighters and EMTs; Changes Rules Regarding Releases

Rural and suburban governments, take note: Volunteer firefighters and emergency medical technicians (EMTs) who are injured in the performance of their duties will soon be entitled to a higher benefit rate. LB 961 was approved by Governor Heineman on April 16, 2014. The change in the statute is designed to correct an inconsistency in the current law that can lead to a volunteer firefighter/EMT who does not have regular employment receiving higher workers’ compensation indemnity benefits compared to a volunteer firefighter/EMT who works in addition to volunteering. As the law currently provides, a volunteer who is not regularly employed receives the maximum compensation rate if injured, while a similarly situated volunteer firefighter/EMT who has a regular job receives indemnity benefits based upon the wages from the regular employment. The result could mean that two volunteer firefighters/EMTs who get hurt performing the same function can receive different indemnity benefits.

The amendment to Neb. Rev. Stat. § 48-126.01 states that when determining the compensation rate to be paid to volunteer firefighters/EMTs, it is assumed the wages are one and one-half times the maximum weekly income benefit specified in § 48-121.01, or the wages received by the individual from his or her regular employment, whichever is greater. The effect is that all volunteer firefighters/EMTs will now receive the maximum weekly benefit amount for temporary benefits regardless of whether the volunteer had other employment. In those cases where the person is employed outside the volunteer duties, the wages from the regular employment can be considered when paying permanency benefits, if using those wages will result in a higher benefit amount.

The statue addressing volunteer firefighters/EMTs was also amended to clear up any potential ambiguity when the volunteer receives reimbursement or a nominal fee for the volunteer work. As the law currently provides, receipt of a nominal fee such as a per call fee or shift fee could be interpreted as wages and remove the individual from their volunteer status. The nominal fee could be viewed as wages and used when calculating indemnity benefits. In such a case, an injured firefighter/EMT could be limited to receipt of the minimum $49.00 per week benefit, even though he or she is unable to work. The amendment to § 48-126.01 provides that the individual’s volunteer status under the Nebraska Workers’ Compensation Act is not lost if the individual receives reimbursement for expenses, reasonable benefits, a nominal fee, a nominal per-call fee or a nominal per-shift fee. Payment of the fee is conclusively presumed to be nominal “if the fee does not exceed twenty percent of the amount that otherwise would be required to hire a permanent employee for the same services.” The result of the new law is that an individual can still be considered a volunteer even if that individual receives a nominal fee to perform the duties.

Additionally, LB 961 amended Neb. Rev. Stat. § 48-139 regarding when settlement proceeds are to be paid when the settlement is by release. The Workers’ Compensation Act will now provide that the settlement proceeds must be paid 30 thirty days of filing the release with the Workers’ Compensation Court. If the payment is not made within 30 days, the employer is subject to a 50 percent waiting time penalty. This amendment aligns the rules regarding payment of settlement proceeds by release with the rules regarding payment of settlement proceeds by Court-approved lump sum settlements.

The amendment to § 48-139 is a direct result of the 2013 Nebraska Supreme Court case of Holdsworth v Greenwood Farmers Co-op. In Holdsworth, the parties filed a Release of Liability and Joint Stipulation to Dismiss with Prejudice and the Compensation Court entered an Order of Dismissal with Prejudice. Payment of the settlement was sent 42 days after the Release was filed and the Order of Dismissal was entered. The claimant sought penalties from the carrier because the settlement proceeds were not paid within 30 days. The Compensation Court agreed that the employer was subject to a 50 percent penalty and attorney’s fees. The Nebraska Supreme Court reversed the award of penalties, finding that Neb. Rev. Stat. § 48-139(3) states that an injured worker, by filing a Release of Liability, “waives all rights under the Nebraska Workers’ Compensation Act, including . . . the right to ask a judge of the compensation court to decide the parties’ rights and obligations.”

With the change in the statute, the Legislature has now mandated that all settlement funds, whether the settlement is by a release or Court-approved lump sum settlement, must be paid within 30 days of filing the release, or within 30 days of the Court Order approving the lump sum settlement. If payment is not made within 30 days, 50 percent shall be added as a penalty. It is therefore of utmost importance that settlement proceeds be paid timely.

The amendment to Neb. Rev. Stat § 48-126.01 and § 48-139 will become law on July 18, 2014. For more information on how the amendments affect employers in Nebraska, contact Brenda Spilker or Sara Hughes at (402) 475-1075.