RETURN TO WORK MUST BE WITH THE SAME EMPLOYER FOR SECTION 85.34(2)(v) TO APPLY

On July 30, 2020, the Commissioner of the Iowa Workers’ Compensation Division, Joseph Cortese, II, announced a new interpretation of the law in Martinez v. Pavlich, Inc. In Martinez v. Pavlich, the employee did not return to work with his former employer after a work related injury. Instead, the employee found another job, with higher pay, in a comparable line of work. The debate in the case centered on whether the employee should be compensated for industrial disability or functional disability alone. Notably, this is the first time the Commissioner has had a chance to review Section 85.34(2)(v) since the statutory revisions to the section in 2017.

Section 85.34(2)(v) states that when an employee returns to work at the same or greater pay, they are only compensated for their loss of functional disability alone. Notably, Section 85.34(2)(v) never states that the return to work has to be with the same employer. An argument could be made that returning to work with any employer at the same rate of pay or greater, could result in the employee only being entitled to compensation for functional impairment; not industrial disability.

However, the Commissioner rejected this interpretation of the law. While Section 85.34(2)(v) is not explicit that the return to work must be with the same employer for the provision to apply, a holistic view of the statutory scheme in which it sits, makes it clear that the return to work must be with the same employer for the provision to apply, according to the Commissioner.

This means that if an employee returns to work with a different employer, earning the same or greater wages, the employee will be assessed for his loss of industrial disability and Section 85.34(2)(v) will not apply. For an employer to take advantage of Section 85.34(2)(v), it must be the one to continue to employ the workers’ compensation plaintiff.

Of note, there are a number of interesting legal issues presented in this case, which also makes the ruling ripe for appeal in Iowa and it may be overturned. If you have questions on how Martinez v. Pavlich might impact your case or how it might be altered on appeal, please contact Paul Barta or Micah Hawker-Boehnke at 402-475-1075, for more information.