May 24, 2006Client Alert

New Worker’s Compensation Law Will Cut off Benefits for Drug Users and Alcohol Abusers, As Well As Employees Convicted of Certain Crimes

Under current Department of Workforce Development ("DWD") rules, worker's compensation is payable for temporary disability during an employee's healing period, unless suitable employment within the physical and mental limitations of the employee is furnished by the employer or some other employer. Current law does not provide an exception to an employer's liability for temporary disability benefits when an employee's employment is suspended or terminated during the employee's healing period due to misconduct. Brakebush Bros. Inc. v. LIRC, 210 Wis. 2d 623 (1997). In fact, an employee could be injured at work due to impairment by drugs or alcohol, and still collect worker's compensation benefits for absence from work due to the injury. An employee could be fired due to a crime perpetrated at the work place, and if injured on the job (even in the act of the crime), the employee would still be entitled to be paid because he is not working. This fact had many employers irate about the worker’s compensation system's protection to drug users/alcohol abusers and criminals.

The recent amendment will now allow for the denial of worker's compensation temporary disability benefits, if the employer has a written drug policy which is regularly enforced (i.e. applied to injured and uninjured employees equally), and the employee is guilty of violating that policy. The most common way that guilt will be proven will be through a positive drug/alcohol test. Without a written policy, benefits cannot be denied to the drug user/alcohol abuser, so employers will need to develop a policy, or they will not be eligible to benefit from this new provision in the law.

In addition, the law provides another hurdle to the denial of benefits to drug users/alcohol abusers. Worker's compensation benefits can only be denied to the drug user/alcohol abuser if he has been cleared to return to work in some capacity, such that he would have been returned to work, but for the termination due to the drug policy violation. In other words, if the employee is totally disabled due to the injury arising out of the drug/alcohol use, he still gets benefits. To shore up this situation, it will be important for an employer and/or its insurer to get a medical opinion releasing the employee to work in some capacity before benefits may be denied. Finally, benefits will not be denied for permanent disabilities or medical treatment.

While there is not a total denial of benefits to drug users and alcohol abusers under the worker's compensation law, this is a significant change, and may further deter the use of drugs and alcohol on the job. Employer's should communicate to employees that they may be denied some of their worker's compensation benefits if they are injured and come up positive in a post accident test.

This new law will also allow for denial of temporary disability benefits if the reason for the employee absence is due to conviction for a crime that is substantially related to the employment. Benefits may be suspended when the employee is charged with the crime. However, if the employee is not found guilty of the crime, compensation for temporary disability is payable in full.

What to do: Devolop a written drug and alcohol testing program and review that program with legal counsel to assure that it meets the requirements of the new law. Set up a testing program with a collection site and laboratory for testing and verify that their procedures will be consistent with the policy you have established.

For more information regarding either of these new laws, or for assistance in preparing and implementing a drug testing program, please contact Charles B. Palmer at 262.956.6518, or

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