Oregon Court of Appeals Clarifies Evidence Needed to Establish Overpayment
Overpayments are an inevitable part of processing Oregon workers’ compensation claims. Whether due to procedural time-loss benefits being paid following a medically stationary finding but prior to closure, or due to the impossibility of immediately tracking changes in employment status while a worker is released from work, many claims result in an overpayment of benefits. In recent years, the legislature and the Board have made recovering these overpayment more difficult.
Thankfully, the Court of Appeals recently provided clarification on the type of evidence which can be used to support an overpayment. In Stacey v. Cascade Steel Rolling Mills, 354 Or App 44 (2026), the court found the testimony of the claims adjustor (and the worker), along with a payment ledger with audit, sufficient to establish the existence of an overpayment. The worker had been on temporary total disability but was offered a modified duty position and was receiving wages for several weeks before the adjustor was notified. The adjustor confirmed with the worker that they were receiving wages, modified their benefits to temporary partial disability, and sent notice of the asserted overpayment. An employer/administrator bears the burden of initially establishing the existence of an overpayment, and the worker can then present evidence to show why the employer’s evidence is insufficient, if such an argument has merit. The court in Stacey established that evidence such as wage records are not required to meet the initial burden, and that testimony with supporting notation can be used in the right context to establish an overpayment.
This is not a hard and fast rule establishing that testimony alone is always sufficient. Rather, the court’s holding should be read as showing that an employer can establish evidence of an overpayment with sufficient evidence, but the evidence does not need to take a particular form (in particular, it does not need to come in the form of wage records). One effect of the holding will be to reward good communication between the adjustor and the worker, as open lines of communication allowed the adjustor in Stacey to obtain sufficient information to enforce the overpayment, without needing to wait for all the underlying records to be processed.
Additionally, the holding touched on the requirement to send notice to a worker when temporary disability benefits are ceased under ORS 656.262(4)(j)(A). The worker in Stacey argued the overpayment was invalid because the adjustor had not sent notice that temporary disability benefits would be changing from total disability to partial disability. The court confirmed this is a misreading of the statute, which only requires notice when benefits are ending, not when they are shifting from total to partial. Especially in cases where a worker is slowly building up their capacity to work, with temporary setbacks, a requirement to send notices with every change in the type of benefits could quickly become overwhelming. The court helpfully confirmed that the notice requirement is intended for one major switch only, the switch from some benefits to no benefits.
The holding in Stacey can be a helpful touchpoint to determine whether there is sufficient information to assert an overpayment. If you have any questions about overpayments, or the notice requirement to end benefits, reach out to me at or (971)-867-2718.
Posted by Matthew Baker.
