Workers' Compensation--disability--credit for payments--restoration of vacation and sick
leave balances
Although the Industrial Commission properly concluded in a workers' compensation case
that plaintiff's vacation and sick leave payments taken during her period of disability were “due
and payable” when made based on the fact that they have been earned by the employee and are
not solely under the control of the employer, the Commission erred by concluding that defendant
employer is entitled to a credit against compensation payments for those payments and plaintiff
employee is entitled to restoration of vacation and sick leave because: (1) the only provision
under N.C.G.S. § 97-42 allowing a credit to an employer for payments made to an injured
employee is for payments not “due and payable” when made; and (2) for the same reasons that
defendant is not entitled to a credit, plaintiff is not entitled to restoration of vacation and sick
leave.
Barnes, Braswell & Haithcock, P.A., by W. Timothy Haithcock,
for plaintiff-appellee.
Attorney General Michael F. Easley, by Assistant Attorney
General William H. Borden, for defendant-appellant.
McGEE, Judge.
Plaintiff was injured during an employer-mandated self-defense
class and was unable to work from 6 June 1998 to 11 June 1998 and
from 18 July 1998 to 22 September 1998. Because defendant denied
plaintiff's request for workers' compensation, plaintiff used
fifty-two days of accrued sick leave and vacation leave while she
was out of work. The North Carolina Industrial Commission (the
Commission), on 10 March 2000, awarded plaintiff temporary total
disability compensation of $532.00 per week for the period thatplaintiff was out of work. The Commission also awarded defendant
a credit for fifty-two days at the compensation rate of $532.00 per
week, and ordered defendant to restore plaintiff's vacation and
sick leave on a dollar-for-dollar basis equal to the amount of
defendant's credit, minus plaintiff's attorney's fees.
Defendant timely filed notice of appeal. Defendant assigns
error to the failure of the Commission to grant defendant full
credit for all payments made to plaintiff during her period of
disability. Defendant also challenges the jurisdiction of the
Commission to order defendant to restore plaintiff's vacation and
sick leave balances.
Plaintiff filed a petition for writ of certiorari on 21 August
2000, seeking to assign error to the Commission's grant to
defendant of any credit for vacation and sick leave payments made
to plaintiff. Because there is no evidence that plaintiff has
filed a copy of the petition with the chairman of the Commission as
required by N.C.R. App. P. 21(c), we deny plaintiff's petition. We
note, however, that defendant's appeal raises the same issues that
plaintiff sought to bring before this Court.
"[A]ppellate courts reviewing Commission decisions are limited
to reviewing whether any competent evidence supports the
Commission's findings of fact and whether the findings of fact
support the Commission's conclusions of law." Deese v. Champion
Int'l Corp., 352 N.C. 109, 116, 530 S.E.2d 549, 553 (2000).
Defendant does not bring before this Court a challenge to any of
the Commission's findings of fact. Therefore, the sole issue in
the present case is whether the Commission's Finding of Fact No. 13that
Plaintiff's time sheet from Cherry Hospital
shows plaintiff using 27 days of sick leave
and 25 days of vacation leave for the work
missed due to her compensable injury by
accident. These days were not employer-
provided sick and disability payments, in that
the days had already been earned and accrued
by the plaintiff in the course of her
employment with the [S]tate of North Carolina.
Therefore, the payments made for the vacation
and sick leave were due and payable when used
by the plaintiff.
supports the Commission's Conclusion of Law No. 7 that
Defendant is entitled to a credit for the
amount of pay received by the plaintiff over
the 52 days in which plaintiff received
vacation and sick pay, with the credit being
based on the $532.00 per week compensation
rate. N.C. Gen. Stat. § 97-42.
and Conclusion of Law No. 8 that
Plaintiff is entitled to have vacation and
sick leave restored on a dollar-for-dollar
basis to coincide with the credit received by
defendant in order to reach a fair and just
result, less the attorney fees hereafter
awarded. If the attorney fees are not
deducted from the amount of vacation and sick
leave restored, the plaintiff's attorney fees
will, in effect, have been paid by the
defendant. The difference in pay received by
the plaintiff that is above the $532.00 per
week compensation rate shall stand as vacation
or sick leave used by the plaintiff in order
to maintain her normal salary and shall not be
restored.
Defendant first assigns error to the failure of the Commission
to grant defendant a credit for all payments made to plaintiff
during her periods of disability. The grant of a credit against
compensation payments under the Workers' Compensation Act (the Act)
is governed by N.C. Gen. Stat. § 97-42 (1999), which provides:
Payments made by the employer to the
injured employee during the period of hisdisability, or to his dependents, which by the
terms of this Article were not due and payable
when made, may, subject to the approval of the
Commission be deducted from the amount to be
paid as compensation.
Whether the Commission may grant defendant any credit thus depends
on whether defendant's payments to plaintiff for vacation and sick
leave were "due and payable" when made. Although the Commission
purported to find as a fact that defendant's payments to plaintiff
were "due and payable" when made, that determination was actually
a conclusion of law and we review it as such.
In Moretz v. Richards & Associates, 316 N.C. 539, 342 S.E.2d
844 (1986), the plaintiff-employee was injured on the job and the
defendant-employer accepted the injury as compensable under the
Act. When the Commission finally specified an award of
compensation to the plaintiff, the defendants requested a credit
against the compensation that they had already paid to the
plaintiff. In affirming the Commission's denial of the credit, our
Supreme Court held that:
Because defendants accepted plaintiff's injury
as compensable, then initiated the payment of
benefits, those payments were due and payable
and were not deductible under the provisions
of section 97-42, so long as the payments did
not exceed the amount determined by statute or
by the Commission to compensate plaintiff for
his injuries.
Id. at 542, 342 S.E.2d at 846 (emphasis in original). However, the
Court went on to hold that because the plaintiff had already
received more benefits from the defendants than he was entitled to
receive by statute, he had been fully compensated for his injury
and the defendants owed the plaintiff no additional compensation. Id. at 542, 342 S.E.2d at 846-47.
In Estes v. N.C. State University, 102 N.C. App. 52, 401
S.E.2d 384 (1991), as in Moretz, the defendant-employer accepted
the plaintiff-employee's injury as compensable under the Act.
However, the plaintiff did not request workers' compensation, and
instead used his accumulated vacation and sick leave to receive
full pay until he retired. When the plaintiff was subsequently
awarded compensation by the Commission, the defendant requested a
credit under N.C. Gen. Stat. § 97-42 for the vacation and sick
leave payments made to the plaintiff. This Court held that because
the defendant had accepted the plaintiff's injury as compensable,
any payments made to the plaintiff were "due and payable" under
Moretz and no credit was available. Id. at 58, 401 S.E.2d at 387.
We further held that because an employee's accumulated vacation and
sick leave could be used by the plaintiff for purposes other than
those served by the Act, they were not tantamount to workers'
compensation benefits. Id. at 58-59, 401 S.E.2d at 387-88.
Such benefits have nothing to do with the
Workers' Compensation Act and are not
analogous to payments under a disability and
sickness plan. Unlike the employee in Moretz,
plaintiff in the instant case cannot be held
to have received duplicative payments for his
injury or to have received more than he was
entitled by the Workers' Compensation Act to
receive.
Id. at 59, 401 S.E.2d at 388. We held that the plaintiff was
entitled to receive the full workers' compensation benefits awarded
by the Commission. See id.
In Foster v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d670 (1987), unlike Moretz and Estes
, the defendant-employer denied
that the plaintiff-employee's injury was compensable under the Act.
The defendant instead paid the plaintiff pursuant to its Sickness
and Accident Disability Benefit Plan, which provided benefits to
employees for all disabling injuries, even those not work-related.
The plaintiff received full pay for her first three months out of
work, followed by partial pay until she was able to return to work.
When the Commission subsequently granted compensation to the
plaintiff, the defendant requested a credit under N.C. Gen. Stat.
§ 97-42 for the payments already made to the plaintiff. Our
Supreme Court held that because the defendant had not acknowledged
that the plaintiff's injury was compensable under the Act, the
defendant's payments to the plaintiff were not "due and payable"
when made and the defendant was entitled to a credit for them. Id.
at 115-16, 357 S.E.2d at 672. The Court reasoned that:
In cases such as this one where compensability
under the Act is disputed, it may be some time
before the injured worker begins to receive
workers' compensation benefits. . . . Payment
by the employer under a private disability
plan accomplishes sound policy objectives by
providing immediate financial assistance to
the disabled worker while she is disabled.
Through its plan, defendant affords a
much-needed continuity of income to injured
employees fully consistent with the expressed
policies of workers' compensation.
Id. at 116-17, 357 S.E.2d at 673 (emphasis in original). The
defendant's plan functioned as a wage replacement program much like
workers' compensation, so denying the defendant a credit for
payments under the plan would provide the plaintiff with a double
recovery for the same injury. Id. at 117, 357 S.E.2d at 673. Besides being disfavored under the Act, a possibility for double
recovery would be a disincentive for employers to have such
alternate compensation plans in place. Id. However, the Court
explicitly declined to consider whether payments made under a plan
to which an employee had contributed would likewise be within the
purview of N.C. Gen. Stat. § 97-42. Id., n1.
In Lowe v. BE&K Construction Co., 121 N.C. App. 570, 468
S.E.2d 396 (1996), as in Foster, the defendant-employer did not
accept the plaintiff-employee's injury as compensable under the
Act, and instead paid him sick leave compensation. The sick leave
plan, like the Sickness and Accident Disability Benefit Plan in
Foster, provided the plaintiff with three months of full salary,
followed by partial salary for the remainder of the plaintiff's
time out of work. When the plaintiff was later awarded
compensation by the Commission, the defendant requested a credit
under N.C. Gen. Stat. § 97-42 for the sick leave payments made to
the plaintiff, asserting that they were not "due and payable" when
made. This Court held that it was error for the Commission to deny
the credit, citing Foster and noting the factual similarity between
the two cases. Lowe at 576, 468 S.E.2d at 399.
Defendant, in the present case, argues that under the four
cases above, whether a payment is "due and payable" when made is
determined solely by whether the defendant-employer has first
acknowledged that the underlying injury is compensable under the
Act. By such reasoning, it would follow that because defendant
disputed the compensability of plaintiff's injury, no payment madeby defendant during plaintiff's disability was "due and payable"
when made and defendant is therefore entitled to a credit for any
and all such payments. Such a broad rule clearly was not
contemplated by our Supreme Court in Foster when it explicitly
declined to include within its holding the possibility of a
compensation plan with employee contributions. We likewise decline
to adopt such a broad per se rule in the present case.
Defendant further argues that the analysis in Estes in regard
to accumulated vacation and sick leave is inapplicable to the
present case. Defendant characterizes Estes as a two-step
analysis, with the first step being whether the employer has
acknowledged that the injury is compensable under the Act.
Defendant contends that, because it did not acknowledge the
compensability of plaintiff's injury, the second step in Estes does
not apply. It is true that Estes held, not that accumulated
vacation and sick leave payments are "due and payable" when made,
but that such payments are not tantamount to workers' compensation
and therefore cannot be excess compensation under Moretz. However,
the reasoning underlying the holding in Estes is equally applicable
to the present case.
In Estes, we held that accumulated vacation and sick leave do
not function as a wage replacement program like workers'
compensation. We now hold that payments for such vacation and sick
leave are "due and payable" when made because they have been earned
by the employee and are not solely under the control of theemployer. The policy concerns raised in Foster are unaffected
since, unlike the private disability plan in Foster, the use of
accumulated vacation and sick leave does not function as a wage
replacement program. Accumulated vacation and sick leave are not
guaranteed to be available when needed because they must first
accumulate. They do not present the possibility of a double
recovery because, if not used while injured, such accumulated leave
may be used later with no diminished effect. There is no reason
that the lack of a credit to an employer for payments for
accumulated vacation and sick leave during a disability, as opposed
to any other time, would serve as a disincentive to allowing
employees to accumulate such leave. The reasoning behind the
Foster decision is not diminished by our holding that payments for
accumulated vacation and sick leave are "due and payable" under
N.C. Gen. Stat. § 97-42 when made.
Defendant finally argues that Lowe requires defendant be
granted a credit for payments made to plaintiff. However, as in
Foster, there is no indication in Lowe that the "sick leave
compensation" granted to plaintiff was anything other than a
private disability plan fully funded by the employer. We conclude
that, insofar as our holding in the present case is permissible
under Foster, it is permissible under Lowe as well.
Thus, we hold that the Commission's legal conclusion that
plaintiff's vacation and sick leave payments were "due and payable"
when made is supported by its Finding of Fact No. 13. However, we
hold that the Commission's Conclusion of Law No. 7 that defendantis entitled to a credit for those payments is unsupported by
Finding of Fact No. 13, as the only provision in N.C. Gen. Stat. §
97-42 allowing a credit to an employer for payments made to an
injured employee is for payments not "due and payable" when made.
Defendant also assigns error to the Commission's Conclusion of
Law No. 8 that plaintiff is entitled to have a portion of her
accumulated vacation and sick leave restored, on the grounds that
the Commission lacks jurisdiction under the Act to so order
defendant. We need not address defendant's jurisdictional argument
because, insofar as defendant is not entitled to a credit under
Conclusion of Law No. 7, plaintiff is not entitled to restoration
of vacation and sick leave under Conclusion of Law No. 8. We
therefore dismiss defendant's assignment of error as moot.
We reverse and remand the Commission's opinion and award for
appropriate modification of the award in that Conclusions of Law
Nos. 7 and 8 are in error.
Reversed and remanded.
Judges GREENE and CAMPBELL concur.
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