Can Sick Leave Replace Workers’ Comp?

Injured workers often receive payment from their own sick or vacation accounts instead of the indemnity benefits they are entitled to. Carriers have argued that payment of this sick leave constitutes payment of wages and have denied payment of indemnity on that basis. The issue becomes more complicated when the employer indicates that the sick time will be reinstated at some future time.

Medina v. Miami Dade County

In Medina v. Miami Dade County, 2020 Fla. App. LEXIS 10146 (1st DCA, July 15, 2020) the First DCA addressed the question of whether an insurance company (or self-insured) is responsible for payment of indemnity benefits to the Claimant during periods in which an injured worker receives full pay from his or her accrued sick leave. The First DCA held that the carrier/self-insured could not avoid payment of indemnity during periods in which an injured worker received payments from sick leave.

The claimant in Medina was a corrections officer who suffered a compensable work accident in 2017 when he slipped and fell on a prisoner transport bus. As a result, he sustained several injuries, among them a knee injury for which surgery was performed.

During post-surgical recovery, the County paid two weeks of temporary indemnity period but thereafter, the claimant received full payment from his sick and vacation leave, and during that time, the County declined to pay indemnity. Instead, the adjuster issued payments that would have been due to the claimant, directly to the employer. According to the adjuster’s testimony, the sick time paid to the claimant would be reinstated at some point, although the adjuster admitted that he had no control over when the reinstatement would occur. He testified that this was a matter within the control of the County’s payroll department.

The claimant was a long-term employee who over his 25 years with the County had accumulated substantial sick and vacation leave pursuant to the employer’s policies. A significant portion of the claimant’s sick leave had been used as a result of the work accident. The final compensation order denied the claimant’s claim for temporary partial disability benefits and ordered the claimant’s sick leave to be reinstated.

Nolan v. Delta Airlines

In reaching its conclusion, the Court relied on Nolan v. Delta Airlines, 733 So. 2d 1076 (Fla. 1st DCA 1999). After a work accident, the claimant in Nolan had used her sick and vacation time to receive full pay but thereafter, she filed a claim for temporary disability payments for the same periods in which he had received the sick leave payments. Pursuant to the employer’s policy, the claimant received thirteen weeks of salary which were not deducted from the injured worker’s sick time. However, after thirteen weeks, the claimant was given the choice to receive either his/her full salary deducted from his/her sick leave or receive workers’ compensation indemnity.

The claimant in Nolan argued that Delta violated section 440.21(2) of the Florida Statutes (1987) since the options of receiving full pay through the employee’s sick leave or receiving workers compensation indemnity was an agreement by an employee to waive the right to workers’ compensation indemnity. Section 440.21(2) states,

No agreement by an employee to waive his right to compensation under this chapter shall be valid.” Id.

Delta countered that Nolan was not forced to use the sick time but rather she chose to do so of her own volition. The court reversed stating that the choice between receiving workers’ compensation or using her sick time was illusory since choosing to receive workers’ compensation benefits, the claimant would be receiving less than half of her regular wages as a result of the applicable maximum compensation rate.

The County attempted to distinguish Nolan on the basis that the County had not obligated the claimant to choose between workers’ compensation and sick leave, however, the Court rejected that argument.

The Court found that in failing to provide indemnity the County had violated section 440.09(1), which states that “the employer must pay compensation or furnish benefits required by this chapter if the employee suffers an accidental compensable injury.” The County had not complied with its obligation to provide compensation because sick leave is a benefit that belongs to the claimant. Therefore, the claimant is essentially paying himself.

The County argued that the payment of sick leave was in lieu of compensation benefits however this argument was rejected since this would require the employee to reasonably believe and the employer to intend that payment of wages is in lieu of indemnity. There was no evidence of any such understanding or agreement. Moreover, the Court reiterated that payment of sick leave was using the claimant’s own money and therefore could not be considered “in lieu” of compensation. The Court clarified that a claimant may receive sick leave to supplement his or her indemnity.

Escambia County Sherriff’s Dept. v. Grice

If a claimant decides to receive both sick leave and indemnity, and this results in the claimant receiving more than his or her average weekly wage, does the carrier get to claim an offset pursuant to Escambia County Sheriff’s Dept. v. Grice, 692 So.2d 896 (Fla.1997)? The First DCA noted that there are simply some benefits that do not qualify for an offset and sick leave is one such benefit. Additionally, the County did not timely raise this affirmative defense.

The final issue addressed by the First DCA was whether ordering reinstatement of sick leave exceeded the jurisdiction of the judges of compensation claims. The Court reasoned that because statutory judges are limited to the authority granted only by statute, and Chapter 440 does not address reinstatement of sick leave, the judges of compensation claims have no jurisdiction to make such determinations.

Final Thoughts

Sick leave is like money in a claimant’s personal bank account. If a claimant entitled to indemnity chooses to withdraw money from that account, that does not relieve the carrier from its statutory obligation to pay indemnity. Unfortunately, this convoluted practice involving indemnity, sick leave, and subsequent reimbursements of sick time has been used by employers such as the County, to the detriment of the injured worker. Instead of issuing payment of indemnity to the claimant, the claimant uses his or her sick time, indemnity checks are issued but paid to the employer, and the employer at some future time reinstates the sick leave. The First DCA has clearly stated that this practice is not in accordance with the law and hopefully with the holding of the Medina case, this practice will discontinue.

If you need help understanding your legal rights after a workplace injury or within a workers’ compensation claim, our team at Touby, Chait & Sicking, PL is here for you.

Call us at (305) 257-9472 or contact us online to put more than 100 years of combined legal experience on your side.