Update! – Changes to the Wisconsin Worker’s Compensation System as a Result of the 2015 Budget Bill

By: Chelsie D. Springstead

Governor Walker initially submitted a budget bill on February 3, 2015, which, among other things, proposed removing the Worker’s Compensation Division from the Department of Workforce Development (DWD) and moving administrative law judges and the judicial functions to the Department of Administration – Office of Hearings and Appeals (DOA) and the remaining staff and day-to-day functions to the Office of Commissioner of Insurance (OCI).   In late May 2015, the Joint Finance Committee revised the bill to include the reassignment of the judges and the judicial functions to the DOA but rejected the proposal to move the staff and remaining functions to the OCI, proposing instead to keep them at the DWD. Additionally, the revised bill called for the work comp judges to spend 90% of their time at DOA adjudicating work comp cases, leaving the remaining 10% of their time for them to preside over other matters handled by DOA.

On July 12, 2015, Governor Walker enacted the 2015 Budget Bill which included the transfer of eighteen worker’s compensation administrative law judges and all adjudicatory functions to the DOA. The budget also stated that no less than six judges and two support staff positions should remain at the DWD to handle the day-to-day functions. As suggested by the Joint Finance Committee, the remaining staff and day-to-day functions (including claims management and insurance regulation) will remain at the DWD. However, Governor Walker used his line item veto to strike the sentence proposed by the Committee which called for 90% of the judges’ time to be spent on work comp cases, stating as an explanation that the DOA should have control over what cases the judges in their department preside over. These changes are set to take place on January 1, 2016.

It is currently unclear whether the six judges that will remain at the DWD will be able to preside over settlement conferences or whether that function will be transferred to the DOA. It is also unclear whether the eighteen judges that are being transferred to the DOA will be the only judges to handle worker’s compensation hearings, or whether other judges that are currently at the DOA will be cross-trained to handle worker’s compensation cases as well. This could mean an influx of new judges presiding over worker’s compensation hearings.  A committee is currently forming to aid the DOA and DWD in such decisions and to help make the transfer of the judges as seamless as possible. We will continue to supply you with up-to-date information as this process progresses.

While the recent budget bill is considered to have effected position changes only with no real substantive changes made to our existing worker’s compensation system, there are other proposed legislative bills currently being circulated which call for significant changes to the Act including altering the statute of limitations, eliminating minimum permanency ratings, enacting a medical fee schedule and allowing civil action against employers for abusive work environments. While none of these proposed bills have been submitted to the Legislature for review at this juncture, we will continue to monitor all proposals and will provide ongoing updates once/if any are presented to the Legislature.

Please feel free to contact Chelsie Springstead by email at cspringstead@lindner-marsack.com, or any member of the Lindner & Marsack Worker’s Compensation Defense Practice with any questions.

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