Download this document in MS Word format

AutoFill Template


Introduced by Representatives McDonald of Berlin, Baker of West Rutland, Barnard of Richmond, Branagan of Georgia, Brennan of Colchester, Canfield of Fair Haven, Clark of St. Johnsbury, Clark of Vergennes, Consejo of Sheldon, Devereux of Mount Holly, Donaghy of Poultney, Errecart of Shelburne, Flory of Pittsford, Godin of Milton, Helm of Castleton, Hube of Londonderry, Johnson of Canaan, Koch of Barre Town, Komline of Dorset, Krawczyk of Bennington, Larocque of Barnet, Lawrence of Lyndon, Livingston of Manchester, Marcotte of Coventry, McAllister of Highgate, McFaun of Barre Town, McNeil of Rutland Town, Mook of Bennington, Morley of Barton, Morrissey of Bennington, O’Donnell of Vernon, Oxholm of Vergennes, Peaslee of Guildhall, Perry of Richford, Scheuermann of Stowe, Turner of Milton, Valliere of Barre City, Winters of Williamstown and Wright of Burlington

Referred to Committee on


Subject:  Labor; workers’ compensation; vocational rehabilitation; COLA; waiting period

Statement of purpose:  This bill proposes reforms to the workers’ compensation laws to ensure the viability of Vermont’s workers’ compensation system in order to make it strong, stable, and competitive to encourage business growth.  These changes employ a three-pronged approach of workplace safety and health; benefit realignment; and system accountability that includes:

     (1)  Setting the maximum weekly compensation rate at 100 percent of the average weekly wage.

     (2)  Refining the definition of a “compensable injury” to be based on objective medical definitions and “occupational disease.”

     (3)  Setting the minimum compensation rate at 15 percent of the average weekly wage.

     (4)  Providing immunity to coemployees.

     (5)  Defining gainful employment and return to work as the goal of vocational rehabilitation.

     (6)  Requiring medical case management intervention for serious workplace injuries.

     (7)  Offsetting wage replacement benefits for injured workers who are not permanently disabled once they become eligible for certain governmental benefits.

     (8)  Requiring mandatory after-accident drug testing in certain cases.

     (9)  Basing indemnity benefits on a 52-week wage statement.

     (10)  Limiting cost-of-living increases in cases of short-term temporary or partial disability.

     (11)  Extending the “21-day” rule to 60 days.

     (12)  Changing the statute of limitations from three to two years.

     (13)  Excluding “first aid only” claims of less that $750.00 from reporting requirements.

     (14)  Improving the effectiveness and enforcement mechanisms for fraud by creating a fraud investigation unit.

     (15)  Requiring a study and legislation on vocational rehabilitation best practices, premium discounts for safety programs, rate reduction for return‑to‑work, fairness regarding preexisting conditions, and a permanent partial disability safety net.


It is hereby enacted by the General Assembly of the State of Vermont:


The general assembly finds that:

(1)  The high cost of workers’ compensation insurance affects Vermont’s economy, ability to develop businesses, employers, and employees.

(2)  The cost of workers’ compensation insurance can be lowered considerably without disrupting medical and indemnity reimbursements to injured workers through a realignment of benefits that promote return to work programs aimed at gainful employment in the following ways:

(A)  Increasing and improving workplace safety.

(B)  Conforming benefits to correspond with national norms.

(C)  Improving accountability.

(D)  Improving enforcement of workers’ compensation fraud.

(E)  Promoting return-to-work programs by modifying rehabilitation laws to encourage employee participation.

Sec. 2.  8 V.S.A. § 4750(b) is amended to read:

(b)  The commissioner may require an insurer to file annually its anti-fraud plan with the department and an annual summary of the insurer’s anti-fraud activities and results.  Upon request of the commissioner of labor, a workers’ compensation insurer shall file its anti-fraud plan with the department of labor with information about any fraud investigations, referrals, or prosecutions conducted involving Vermont workers’ compensation claims.

Sec. 3.  13 V.S.A. § 2031 is amended to read:


(a)  Definitions.  As used in this section:

* * *

(2)  “Insurance policy” has the same meaning as in 8 V.S.A. § 4722(3) and includes a workers’ compensation policy issued pursuant to chapter 9 of Title 21.

(3)  “Insurer” has the same meaning as in 8 V.S.A. § 4901(2) and includes a workers’ compensation insurer pursuant to chapter 9 of Title 21.

(4)  “Person” means a natural person, company, corporation, unincorporated association, partnership, professional corporation, agency of government, or any other entity.

* * *

(g)  This section shall not apply to workers’ compensation fraud. Cases involving workers’ compensation fraud shall be prosecuted under section 2024 of this title.

* * *

Sec. 4.  21 V.S.A. § 601(18), (19), and (23) are amended to read:

(18)  “Maximum weekly compensation” shall mean means a sum of money equal to 150 100 percent of the average compensation, rounded to the next higher dollar.

(19)  “Minimum weekly compensation” shall mean a sum of money equal to 50 15 percent of the average compensation, rounded to the next higher dollar.  However, solely for the purposes of determining permanent total or partial disability compensation where the employee’s average weekly wage computed under section 650 of this title is lower than the minimum weekly compensation, the employee’s weekly compensation shall be the full amount of the employee’s average weekly wages.  For the purpose of determining temporary total or temporary partial disability compensation where the employee’s average weekly wage computed under section 650 of this title is lower than the minimum weekly compensation, the employee’s weekly compensation shall be 90 80 percent of the employee’s average weekly wage prior to any cost of living adjustment calculated under subsection 650(d) of this title.

(23)  “Occupational disease” means a disease that results from causes and conditions characteristic of and peculiar to a particular trade, occupation, process or employment, and to which an employee is not ordinarily subjected or exposed outside or away from the employment and arises out of and in the course of the employment.  arises out and in the course of employment only if the disease is all the following:

(A)  Directly causally connected to the employment conditions.

(B)  A natural incident of the work as a result of exposure occasioned by the nature of the employment.

(C)  Proximately caused by employment, and not caused by substantial exposure outside employment.

(D)  Incidental to the character of the business and not independent of the employer-employee relationship.

(E)  The result of exposure connected with employment conditions and was a natural consequence of that exposure.

(F)  Not an “ordinary disease of life” which is a disease to which the general public is exposed outside any employment and may be compensable if at least one of the following is established by clear and convincing evidence:

(i)  The disease is infectious and contagious and was contracted in the course of employment in a hospital, sanitarium, laboratory, nursing home, or other health care facility and was caused by the direct delivery of health care or in the course of employment as a health care worker.

(ii)  The disease is characteristic of the employment and was caused by conditions peculiar to the employment.

Sec. 5.  21 V.S.A. § 618(a) is amended to read:

(a)(1)  If a worker receives a personal injury by accident arising out of and in the course of employment by an employer subject to this chapter suffers a compensable injury as defined in subdivision (2) of this subsection, the employer or the insurance carrier shall pay compensation in the amounts and to the person hereinafter specified.  The compensation of a person who is under guardianship shall be paid to the person’s guardian.

(2)  “Compensable injury” means a personal injury by accident arising out of and in the course of employment.  The injury, its work-related cause, and any resulting manifestations or disability shall be established to a reasonable degree of medical certainty, based on objective relevant medical findings that the compensable injury is the major contributing cause of any resulting injury or disability.  For the purposes of this chapter, “major contributing cause” means that the cause is more than 50 percent responsible for the injury or disability as compared to all other causes combined for which treatment or benefits are sought.  Major contributing cause shall be demonstrated only by medical evidence.  For purposes of this section, “objective relevant medical findings” are conclusions that correlate to the subjective complaints of the injured employee and are confirmed by physical examination or diagnostic testing.

(3)  A mental or nervous injury occurring as the result of a compensable physical injury shall be proven by clear and convincing medical evidence by a licensed psychiatrist.  The evidence shall meet criteria established in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association.  The following are not compensable injuries under this chapter:

(A)  A mental or nervous injury resulting only from stress, fright, or excitement.

(B)  A mental or nervous injury suffered without an accompanying physical injury requiring medical treatment.

(C)  A physical injury resulting from a mental or nervous condition unaccompanied by physical trauma requiring medical treatment.

(D)  A mental or nervous injury resulting from being out of work or losing employment opportunities that resulted from a preexisting mental, psychological, or emotional condition or due to pain or other subjective complaints that cannot be substantiated by objective, relevant medical findings.

(2)(4)  If the injury occurred while engaged off the premises of the employer in a recreational activity that is available to the employee as part of the employee’s compensation package or as an inducement to attract employees, it shall not be considered to have occurred in the course of employment unless the commissioner finds at least one of the following:

* * *

Sec. 6.  21 V.S.A. § 624(h) is amended to read:

(h)   The injured employee or the employee’s personal representative shall be prohibited from commencing a civil action to enforce liability against a

co-worker or against the workers’ compensation insurance carrier for conducting workplace inspections, or an employer-employee safety committee except in the case of gross negligence or wilful misconduct.  The employee or the employee’s personal representative shall have the burden of proving gross negligence or wilful misconduct.

Sec. 7.  21 V.S.A. § 632 is amended to read:


If death results from the injury, the employer shall pay to the persons entitled to compensation or, if there is none, then to the personal representative of the deceased employee, burial and funeral expenses in the amount of $5,500.00 and expenses for out-of-state transportation of the decedent to the place of burial not to exceed $1,000.00.  The employer shall also pay to or for the benefit of the following persons, for the periods prescribed in section 635 of this title, a weekly compensation equal to the following percentages of the deceased employee’s average weekly wages.  The weekly compensation payment herein allowed shall not exceed the maximum weekly compensation or be lower than the minimum weekly compensation:

* * *

Sec. 8.  21 V.S.A. § 640(e) is added to read:

(e)  In the case of a work‑related, first aid only injury, the employer shall file the first report of injury with the department of labor.  The employer may then file the first report of injury with the workers’ compensation insurance carrier or pay the medical bill within 30 days.  If the employer contests a claim, a first report of injury shall be forwarded to the department of labor and the insurer within five days of notice.  If additional treatment or medical visits are required or if the employee loses three or more days of work, the claim shall be promptly reported to the workers’ compensation insurer, which shall adjust the claim.  “Work‑related, first aid only treatment” means any one-time treatment that generates a bill for less than $750.00.

Sec. 9.  21 V.S.A. § 641(a) is amended to read:

(a)  When as a result of an injury covered by this chapter, an employee is unable to perform work for which the employee has previous training or experience, the employee shall may be entitled to vocational rehabilitation services, including which may include retraining and job placement, as may be reasonably necessary to restore the employee to suitable employment employability.  The employer may voluntarily provide vocational rehabilitation services to the injured employee.  In the event these services are not voluntarily provided, the employee may present evidence establishing the employee’s inability to perform suitable work and the need for vocational rehabilitation services.  Upon receipt of this evidence, the employer shall either provide an entitlement assessment or present evidence supporting the denial of vocational rehabilitation services.  Vocational rehabilitation providers shall be paid pursuant to a fee schedule determined by the commissioner by rule. Vocational rehabilitation services shall be provided as follows:

(1)  The An employer providing vocational rehabilitation services shall designate a vocational rehabilitation provider from a list provided by the commissioner to initially provide services.  Thereafter, the employee may select request another vocational rehabilitation provider by written request to the commissioner that includes reasons for dissatisfaction with the designated provider and the name and address of the proposed new provider selected from a list provided by the commissioner and the commissioner may designate the requested provider.

* * *

(3)  The commissioner shall adopt rules to assure that a worker who requests services or who has received more than 90 days of continuous temporary total disability benefits is timely and cost-effectively screened for benefits under this section.  The rules shall:

* * *

(F)  Assure that vocational rehabilitation benefits shall not:

(i)  Extend for more than 52 weeks unless approved by the commissioner.

(ii)  Continue for any individual while outside the United States.                                                  (iii)  Continue when an injured employee has been rehabilitated to return to appropriate work based on the realities of the job market at the time the services have been provided.

* * *

Sec. 10.  21 V.S.A. § 642 is amended to read:


Where the injury causes total disability for work, during such disability, but not including the first three days, the day of the accident to be counted as the first day, unless the employee received full wages for that day, the employer shall pay the injured employee a weekly compensation equal to two-thirds of the employee’s average weekly wages, but not more than the maximum nor less than the minimum weekly compensation.  In addition, the injured employee, during the disability period shall receive $10.00 a week for each dependent child who is unmarried and under the age of 21 years, provided that no other injured worker is receiving the same benefits on behalf of the dependent child or children.  However, in no event shall an employee’s total weekly wage replacement benefits, including any payments for a dependent child, exceed 90 80 percent of the employee’s average weekly wage prior to applying any applicable cost of living adjustment.  The amount allowed for dependent children shall be increased or decreased weekly to reflect the number of dependent children extant during the week of payment.  If the total disability continues after the third day for a period of seven consecutive calendar days or more, compensation shall be paid for the whole period of the total disability.  If the disability is defined as a serious injury, pursuant to rules of the department, or continues for a period of more than 45 consecutive days, the employer shall utilize medical case management review and intervention, and the injured employee shall cooperate with the medical case management plan.

Sec. 11.  21 V.S.A. § 645(a) is amended to read:

(a)  In case of an injury enumerated in section 644 of this title, the employer shall pay to the injured employee 66 and two-thirds percent of the employee’s average weekly wages, computed as provided in section 650 of this title and subject to the maximum and minimum weekly compensation rates, for the duration of the employee’s permanent total disability, but in no event shall the employee receive benefits for less than three hundred and thirty 330 weeks. Benefits under this section shall continue beyond three hundred and thirty 330 weeks if the injury results in the loss of actual earnings or earning capacity after the injured employee is as far restored as the permanent character of the injuries will permit and results in the employee having no reasonable prospect of finding regular employment.  When an employee reaches the age of 65 or otherwise becomes eligible for government-sponsored retirement benefits, benefits under this chapter may be offset by retirement benefits as determined by rule of the department.

Sec. 12.  21 V.S.A. § 648(a) is amended to read: 

(a)  Where the injury results in a partial impairment which that is permanent and which does not result in permanent total disability, compensation shall be paid during the period of total disability, as provided in sections 642 and 643 of this title, and at the termination of total disability, the employer shall pay to the injured employee 66 2/3 66 and two-thirds percent of the average weekly wage, computed as provided in section 650 of this title, subject to the maximum and minimum weekly compensation rates, for a period determined by multiplying the employee’s percentage of impairment of the whole person by 330 weeks.  The percentage of impairment to the whole person is the percentage of impairment to the particular body part, system, or function converted to the percentage of impairment to the whole person as provided in subsection (b) of this section.

Sec. 13.  21 V.S.A. § 649 is amended to read: 



(a)  Compensation shall not be allowed for an injury caused by an employee’s wilful intention to injure himself or cause self-injury or to injure another or by or during his intoxication the employee’s impairment due to alcohol or drug use or by an employee’s failure to use a safety appliance provided for his the employee’s use.

(b)  An employee who claims to have suffered a work injury and refuses to be tested for drug or alcohol use shall not be entitled to compensation under this chapter.  This section shall not apply if the employer had actual knowledge of and permitted or condoned the employee’s use of alcohol or drugs.

(c)  The burden of proof shall be upon the employer if he the employer claims the benefit of the provisions of this section.

Sec. 14.  21 V.S.A. § 650(a), (d), and (e) are amended to read: 

(a)  Average weekly wages shall be computed in such manner as is best calculated to give based on the average weekly earnings of the worker during the 12 52 weeks preceding an injury; but where, by reason of the shortness of the time during which the worker has been in short duration of the employment, or the casual nature of the employment, or the terms of the employment, it is impracticable to compute the rate of remuneration, average weekly wages of the injured worker may be based on the average weekly earnings during the 12 52 weeks previous to the injury earned by a person in the same grade employed at the same or similar work by the employer of the injured worker, or if .  If there is no comparable employee, by the average weekly wages shall be based on the wages of a person in the same grade employed in the same class of employment and in the same district during the 52 weeks previous to the injury.  If during the period of 12 52 weeks an injured employee has been absent from employment on account of sickness or suspension of work by the employer, then only the time during which the employee was able to work shall be used to determine the employee’s average weekly wage.  If the injured employee is employed in the concurrent service of more than one insured employer or self-insurer the total earnings from the several insured employers and self-insurers shall be combined in determining the employee’s average weekly wages, but insurance liability shall be exclusively upon the employer in whose employ the injury occurred.  The average weekly wage of a volunteer firefighter, volunteer rescue or ambulance worker, volunteer reserve police officer, or volunteer as set forth in subdivision 1101(b)(4) of Title 3, who is injured in the discharge of duties as a firefighter, rescue or ambulance worker, police officer, or state agency volunteer, shall be the employee’s average weekly wage in the employee’s regular employment or vocation but the provisions of section 642 of this title relative to maximum weekly compensation and weekly net income rates, shall apply.  For the purpose of calculating permanent total or permanent partial disability compensation, the provisions relating to the maximum and minimum weekly compensation rate shall apply.  In any event, if a worker at the time of the injury is regularly employed in a higher grade of work than formerly during the  12 52 weeks preceding the injury and with larger regular wages, only the larger wages shall be taken into consideration in computing the worker’s average weekly wages.

(d)  Compensation computed pursuant to this section shall be adjusted annually on July 1, so that such the compensation continues to bear the same percentage relationship to the average weekly wage in the state as computed under this chapter as it did at the time of injury; except that compensation for temporary total, temporary partial, or permanent partial disability shall not be adjusted under this subdivision in the first three years following designation.

(e)  If weekly compensation benefits or weekly accrued benefits are not paid within 21 days after becoming due and payable pursuant to an order of the commissioner, or in cases in which the overdue benefit is not in dispute, ten percent of the overdue amount shall be added and paid to the employee, in addition to interest and any other penalties.  In the case of an initial claim, benefits are due and payable upon entering into an agreement pursuant to subsection 662(a) of this title, upon issuance of an order of the commissioner pursuant to subsection 662(b) of this title, or if the employer has not denied the claim within 21 60 days after the claim is filed.  Benefits are in dispute if the claimant has been provided actual written notice of the dispute within 21 60 days of the benefit being due and payable and the evidence reasonably supports the denial. Interest shall accrue and be paid on benefits that are found to be compensable during the period of nonpayment.  The commissioner shall promptly review requests for payment under this section and, consistent with the criteria in department rule 10.13, shall allow for the recovery of reasonable attorney fees associated with an employee’s successful request for payment under this subsection.

Sec. 15.  21 V.S.A. § 660(a) is amended to read: 

(a)  A notice given under the provisions of this chapter shall not be held invalid or insufficient by reason of any inaccuracy in stating the time, place, nature, or cause of the injury, or otherwise, unless it is shown that the employer was in fact misled to about the injury as a result of the inaccuracy.  Want of or delay in giving notice, or in making a claim, shall not be a bar to proceedings under the provisions of this chapter, if it is shown that the employer, the employer’s agent, or representative had knowledge of the accident or that the employer has not been prejudiced by the delay or want of notice.  Proceedings to initiate a claim for a work-related injury pursuant to this chapter may not be commenced after three two years from the date of injury.  This section shall not be construed to limit subsequent claims for benefits stemming from a timely filed work-related injury claim.

Sec. 16.  21 V.S.A. § 668 is amended to read: 


Upon the commissioner’s own motion or upon the application of any party in interest upon the ground of a change in the conditions, or whenever doubts have arisen as to the jurisdiction of the commissioner at the time the petition was presented, the commissioner may at any time within six years of the date of award review any award by giving at least six days’ notice thereof to the parties personally, or to the attorneys appearing in the cause.  On such review, the commissioner may make an order ending, diminishing, or increasing the compensation previously awarded, subject to the maximum or minimum provided in this chapter.  If it appears that the petition for hearing was presented without previous authority or that for other reason the commissioner did not have jurisdiction in the cause, the commissioner may make an order striking off the award, and.  The order shall state conclusions of fact and rulings of law and a copy of the order shall be sent immediately send to the parties a copy of the award.  Such a This review shall not affect any money already paid.


The department of labor in collaboration with the department of banking, insurance, securities, and health care administration shall develop legislative proposals for improving the effectiveness and enforcement of the current statutes.  The proposals shall be presented in writing to the governor and the general assembly on or before November 15, 2008.  The proposals shall include:

(1)  In collaboration with the attorney general, an assessment of the fraud problem, recommendations for improving enforcement, stimulating interagency cooperation, including sharing of information and prosecution, and creating a fraud unit, including staffing, reporting structure, and funding.

(2)   A specific legislative rule proposal, including appropriate administrative rules to effect the following:

(A)  Provide workers’ compensation premium discounts for employers whose employees successfully complete certified workplace safety training, and the employer is certified as installing and utilizing appropriate safety equipment and practices.

(B)  Providing rate reductions for employers who implement an effective return-to-work program or a drug and alcohol prevention program, or both.  The amount of credit will be determined according to rules proposed for adoption.

(3)  Legislation to improve the fairness of the distribution of workers’ compensation liability for preexisting conditions.  This legislative proposal may include a limitation if an injury is caused by something more than normal activity of everyday life. 

(4)  Legislation, including projected costs, to create a safety net designed to ensure that workers who are receiving permanent partial disability benefits return to gainful employment by examining best practices by providers and relevant programs in this and other states. 

(5)  A study of best practices to be applied to the vocational rehabilitation system that will improve its function and effectiveness, with the goal of increasing the percentage of employability; and a specific legislative proposal, including appropriate administrative rules, to implement the results of the study.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont