Back to Basics: While easy to overlook during the COVID-19 pandemic, double checking details in Washington Claims is still as important as ever

As the impacts of COVID-19 continue to occur and affect people and businesses, it is easy to get swept up in the breadth of complexities this pandemic has created. While businesses grapple with safety, financial, and personnel issues and decisions, day-to-day business details can get lost in the shuffle. Among these details, important items such as workers’ compensation time loss benefits and the proper calculation of amounts due to injured workers are certainly easily placed on the back burner or perhaps overlooked entirely. While it is understandable that issues such as worker safety and social distancing concerns, furloughs, and remote workers may take precedence right now, improper or simply incorrect time loss calculations in a Department of Labor & Industries wage order, this could later prove costly for Washington employers. Absent specific circumstances, a potentially costly error may also be unfixable.

Statutory Standards

Of course, not every Washington claim involves or results in a wage order as they only occur if there is a dispute that results in a Department order. The Department also provides forms which gives employers a simple tool to communicate with workers about how wage loss is calculated and what information is used in that calculation. However, if a dispute over wage calculations arises, it is critical to review a proposed wage order carefully as there are limited recourses available once a wage order becomes final and binding. Department orders become final and binding 60 days from the date the order is issued. RCW 51.52.020(1). Parties may request Department reconsideration or may appeal to the Board of Industrial Injuries within those 60 days. RCW 51.52.020(2). However, if no protest or appeal is filed within 60 days from the date of the Department order, it becomes final and binding.

While Washington statute allows an employer to seek to modify orders after the 60-day window, these circumstances are limited and highly-fact specific. RCW 51.32.240(1)(a). This statute allows an employer to seek repayment or recoupment of benefit payments made due to clerical error, mistaken identity, innocent misrepresentation by or behalf of a claimant, or other similar circumstances absent willful misrepresentation. If an error fits within one of these categories, an employer can seek repayment or recoupment of benefits paid if the request is made within one year of the disputed payment.

However, absent these circumstances, the Department is only authorized to assess an overpayment of benefits due to adjudicator error when the overpayment is based on an order that is not yet final. RCW 51.32.240(1)(b). “Adjudicator error” is defined as failure to consider information in the claim file, failure to secure adequate information, or an error in judgment.

Case Law and Statutory Interpretations

Washington courts have held that even if an order contains a clear error of law, failure to appeal that order “turns the order into a final adjudication precluding any re-argument of the same claim.” Marley v. Dept. of Labor and Indus., 125 Wash.2d 533, 538 (1994). Thus, even if a wage order is clearly and blatantly incorrect, Marley restricts the Department, Board, or court from correcting it.

However, despite Marley and the limited circumstances identified in Washington statute allowing order corrections, courts have applied RCW 51.32.240(1)(a) in situations that appeared beyond the face of the statute. In Birrueta v. Dep’t of Labor & Indus., claimant’s representative mistakenly marked that claimant, who was single, as married on initial claim reporting documents. 186 Wash.2d 537, 540 (2016). Prior orders from 2004 to 2008 stating claimant was married were otherwise final and binding. Nevertheless, the Department issued two orders in 2011 assessing an overpayment and changing claimant’s marital status for future benefit payments, both dated from the time the Department learned of his actual marital status in 2011 to the time he was placed on a pension, were upheld. Id. at 555. The Court ruled that “overpayments made solely for one of the reasons listed in RCW 51.32.240(1)(a) may be recouped within one year of the payment, regardless of whether the underlying order was temporary or binding. . . . [W]e also hold the Department has the authority to correct prior orders that are erroneous only because of the reasons listed in RCW 51.32.240(1)(a).” Id.

The Birrueta court further defined “adjudicator error” in RCW 51.32.240(1)(b) as “an error attributable to an adjudicator’s misinterpretation of the law or failure to properly apply the law to the facts in the claim file—the types of errors that may be addressed on reconsideration or direct appeal and not any error contained in an adjudication.” Id. at 544.

The Board of Industrial Insurance Appeals also opened a door to potentially extend Birrueta to address clearly incorrect orders that are otherwise final and binding. In re: Paul McDonald, Dkt. No. 18 21584 (October 15, 2019), allowed correction of a wage order issued eight years earlier that reflected claimant’s marital status as single even though the claim file contained paperwork reflecting his domestic partnership. Further, the wage order used an incorrect date to determine claimant’s wage loss eligibility. Even though these mistakes seemed both a failure to consider information in the claim file and a mistake of law, the Board ruled the former a clerical error due to misfiled paperwork and found the order was not final and binding as to claimant’s marital status.

Analysis

While Birrueta is a Washington Supreme Court case and thus considered binding precedent, McDonald is not a significant Board decision and is thus only persuasive authority at best. However, McDonald suggests a broader reading of “clerical error” than Marley and a plain reading of RCW 51.32.240(1)(a) contemplates. Claimant’s domestic partnership paperwork was “information in the file” and available when the claims adjudicator issued the wage order in 2010. Further, claimant’s protest occurred eight years after the wage order.

This suggests that employers may have broader recourse to fix incorrect wage orders not protested or appealed within the 60-day window set out in RCW 51.52.020(1). This may be so even if an error is plain on the face of the wage order and an act as simple as adding the numbers reveals an error such as transposed numbers or an amount is added rather than subtracted.

Given the important role wage orders play in establishing current time loss benefits as well as determining pension values in cases of permanent total disability, this potential to correct erroneous wage orders could be significant.

Conclusion

Ultimately, as the Birrueta court stated and even with McDonald as a potentially persuasive basis to address incorrect orders, RCW 51.32.240(1)(a) is limited in scope and applicability. This statute should not be relied upon as a tool to replace or substitute the practice and habit of reviewing and double-checking wage order calculations. While clerical errors and math mistakes happen, regularly reviewing wage orders as they are received and/or well within the 60-day window before they become final and binding is the best and recommended method for correcting these errors. Even in the midst of a pandemic such as COVID-19 and the complexities it is raising for workers and employers alike, it is still important to remember the basics. If you have any questions regarding wage calculations, please do not hesitate to contact me at colson@sbhlegal.com or (503) 412-3117.