By – Melissa A. Day and James B. Cousins
Right now, WCL §35 is a unknown quantity for WC practitioners. Section 35(3) allows for an “Extreme hardship redetermination” which allows any claimant, classified with an LWEC of “greater than 80 percent” to apply “within the year prior to the scheduled exhaustion” of the cap, and ask that the Board “reclassify the claimant to permanent total disability or TID due to factors reflecting extreme hardship.” Notably too, §35(2) states specifically that no provision of the section shall be read to “derogate or impair” existing case law on TID, nor a claimant’s right to obtain such a status.
The effect of this amendment is unknown because the panel has reported no cases discussing such a redetermination, and it is fair to assume, based on the age of the amendment, that cases are not yet, or only just now, becoming ripe on this issue (the cap is 8.65 years, and LWEC, and §35, apply for all claims after 2007 – so allowing for time for treatment, surgery, etc, plus the litigation time for classification, in theory, 81% claimants may just now be approaching the end of their caps.)
In our opinion, §35(3) is going to have many of the same growing pains that the rest of the reforms have had. From our view, we think the two clearest factors of relevance are the (1) timing of the application and (2) burden of proof resting on the claimant. Reading the statute, we think any application made after the caps expire is late and thus not actionable. Further, we think it will be up to the claimant to prove “extreme hardship.”
Sheldon Silver wrote a Memorandum in Support for Bill A6163 (2007 Reforms) which was dated 03/13/2007 and in relevant part it stated:
Section 5 of the bill adds a new section 35 to the Workers’ Compensation Law to establish a safety net for permanent partial disability claimants who surpass their number of maximum benefit weeks. Section 35 requires the Commissioner of Labor to survey and recommend best practices for return-to-work programs. In addition, this section incorporates existing case law on total industrial disability. For those with loss of wage earning capacity of 80 percent or greater, the bill additionally allows claimants to seek an exemption on extreme hardship grounds. This provision provides an exemption for extreme financial hardship, while allowing judges to take into account factors in addition to claimants’ income and other available resources. Finally, the Commissioner of Labor is directed to track those who are classified as permanently partially disabled over time.
This makes us believe the inquiry will look at the claimant’s financial status which seems to be a necessary component of proving an entitlement to the safety net but that “factors in addition to claimants’ income and other available resources”, such as change in medical condition, non-occupational medical conditions, aging and other factors can also be considered in proving “extreme hardship.”
Looking to way other laws have used that term may be useful in preparing a defense and shaping the application of the law in terms of developing favorable case law driven factors. “Extreme hardship” is used in immigration law, and those courts have rejected “common results” of deportation as extreme hardship saying that the to qualify, the results would need to be unusual or beyond what would normally be expected. Federal bankruptcy law carries the term “undue hardship” which, if proved, allows the debtor to discharge student loans. It is also a very high standard which considers near penury to not be “undue” and that a hardship is only “undue” is repayment would require the debtor to live below a “minimal” standard of living for a long period of time. It also requires evidence that the debtor made a good faith effort to repay the loan before declaring bankruptcy. New York criminal law allows conditional driver’s licenses for those convicted of drug and alcohol crimes if they show “extreme hardship.” In that context, extreme hardship cannot be based entirely on the licensee’s testimony – he or she must give some corroborating evidence. Generally, the licensee must show that they have employment, or schooling to attend that would be otherwise harmed by an inability to travel. In that way, quite a few people likely qualify for, and receive, such conditional licenses.
Considering those few examples (we are sure there are more, but this is a quick review of low-hanging fruit) we would argue that the claimant’s burden should meet several tests/factors like those above, and that the claimant be required to produce vocational data, and some other corroborating proof including the possibility of medical evidence reflecting a deterioration, to establish entitlement. Our analysis reflects that financial hardship will be a threshold test.
That said, expect the Board and WCLJs to apply the section liberally, because as a “remedial statute serving humanitarian purposes, the Workers’ Compensation Law should be liberally construed (see Matter of Merchant v Pinkerton’s Inc., 50 N.Y.2d 492, 495; Matter of Husted v Seneca Steel Serv., 41 N.Y.2d 140, 145; Matter of Wolfe v Sibley, Lindsay Curr Co., 36 N.Y.2d 505, 508).” Burns v. Miller Contruction, Inc., 55 N.Y.2d 501 (1982), and that proper standards won’t be set until there are at least a handful of appellate rulings on the matter. We suspect that if the claimant can establish that they live at or below the poverty level that it is quite likely that the Board will grant ongoing benefits to the person.