Alabama Workers' Comp Blawg

  • 13
  • Jun
  • 2017

How to Fix the Alabama Workers’ Compensation Act

A lot of buzz was recently created when a Circuit Court Judge in Jefferson County entered an interlocutory order declaring the Alabama Workers’ Compensation Act unconstitutional. The ruling put a bright spotlight on the fact that the Act has not seen substantial change since 1992. Over the years, there have been numerous bills introduced in the legislature that would amend the Act in regard to a variety of issues. However, with few exceptions, most of those bills died in committee because they were introduced by one interest group or the other, and not by a consensus of employers, insurers, and labor representatives.

In 1992, it took cooperation and input between all interested parties to bring about substantial, and much-needed change. Most people involved with the workers’ compensation system on a day-to-day basis agree that is what needs to happen again. However, nobody seems to be able to agree on what is necessary to get the ball rolling. When Utah was recently faced with similar issues, its state legislature created a "workgroup" aimed at bringing the parties together to institute change. A similar approach may be the best place to start, because it addresses each of the various concerns that proposed bills have attempted to address over the last few years. Here is a proposed Alabama version of the Utah statute which created the workgroup.


Workers’ Compensation Workgroup– Creation– Membership–Compensation–Duties–Report



(1) There is created the Workers’ Compensation Workgroup within the Alabama Department of Labor, consisting of the following members:

(a) the Director of Workers’ Compensation, or the Director’s designee;

(b) one member of the Senate, appointed by the President or current presiding officer of the Senate, and one member of the House, appointed by the Speaker or current presiding officer of the House;

(c) four representatives of the worker’s compensation insurance industry:

(i) two of whom are practicing attorneys with significant experience with workers’ compensation claims in the state of Alabama; and,

(ii) two of whom represent a commercial insurer with significant experience in workers’ compensation claims in the state of Alabama or the self-insured industry; and

(d) four representatives of the labor side of workers’ compensation, appointed by the chair:

(i) at least two of whom are practicing attorneys with significant experience with Alabama workers’ compensation law.


(2) The chair may appoint one or more individuals with an interest in workers’ compensation to serve as ex officio, non-voting members of the Workgroup.


(3) The Director of the Workers’ Compensation Division or the Director’s designee shall be the Chair of the Workgroup.

(4) (a) A majority of the members of the Workgroup constitutes a quorum.

(b) The action of a majority of a quorum constitutes the action of the Workgroup.

(c) In the case of a tie vote, the Chair and the member of the Senate appointed under Subsection (1)(b) shall break the tie.


(5) (a) The salary and expenses of each member of the Workgroup who is a legislator shall be paid in accordance with proper Alabama legislative procedure outlining compensation for such.

(b) A member of the Workgroup who is not a legislator may not receive compensation, benefits, per diem, or travel expenses for the member’s service on the Workgroup.


(6) The Alabama Department of Labor shall provide staff support to the Workgroup.


(7) The Workgroup shall review and make recommendations on the following issues:

(a) the process for determining the amount of weekly payments in Permanent Partial Disability (PPD) cases, including but not limited to, the implementation of a weekly cap on payment of permanent partial disability (PPD) benefits to injured employees;

(b) the award of attorney fees in workers’ compensation cases, including but not limited to, the implementation of a cap on contingency fees;

(c) the totality of employer liability regarding all permanent disability payments, including but not limited to, the length of the period(s) in which payments must be paid, and any factors that would qualify the cessation of such payments;

(d) the totality of employer liability for medical payments to injured employees who have stopped receiving claim-relevant treatment for a fixed period of time;

(e) the outlines for determining criminality of worker’s compensation fraud, and appropriate procedure in achieving just and equitable remuneration for all victims of such fraud;

(f) the qualifying factors necessary to substantiate workers’ compensation claims for psychological injuries;

(g) the proper procedures for employee drug and alcohol testing and the consequences of failed drug and/or alcohol tests;

(h) any additional issues that the Workgroup:

(i) determines to be an important issue related to worker’s compensation; and,

(ii) decides to review.


(8). The Workgroup shall present a final report on the items described in Subsection (7), including any legislative recommendations, to an appropriate committee in the Alabama Senate within one hundred and eighty (180) calendar days of the formation of the Workgroup.



Our Two Cents


As it is in the other 49 states, the Alabama Workers’ Compensation Act has always been known as the great compromise or grand bargain between employers and employees. Therefore it is unreasonable to think that all concerned parties will get everything they want. However, the statutory creation of a workgroup would likely yield some positive changes that all concerned could live with.


About the Authors


This article was written by Mike Fish and Charley Drummond of Fish Nelson & Holden, LLC. Fish Nelson & Holden is a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation cases and related liability matters. Drummond and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields. If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the authors or (205) 332-3414.

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