Oklahoma Workers’ Compensation Law Provisions Ruled Unconstitutional

The viability of Oklahoma’s recently revised workers’ compensation law has been severely threatened with recent rulings determining that key provisions of the law are unconstitutional. The law’s changes, in effect for just a few years, were an attempt to reduce the increasing costs of the state workers’ compensation insurance system and to limit fraud.

In a comprehensive restructuring, the Legislature changed the workers’ compensation system from a court-based system to an administrative one. In doing so, it phased out the Oklahoma Workers’ Compensation Court and created the Oklahoma Workers Compensation Commission (OWCC) to handle workers’ compensation claims. The law’s changes also authorized employers to “opt out” of the system if they were able to provide their own workers’ compensation benefit plan that could offer coverage equivalent to the state’s system. Moreover, the new law limited payments for temporary and permanent disability claims, and provided for the deferral of partial disability benefits in certain instances.

However, the law’s new limitations on disability claims payments as well as its provision that deferred benefits if an employee returned to work, were overturned in recent decisions: In February, the OWCC held that the opt-out program was unconstitutional. And, in March and April, the Oklahoma Supreme Court ruled as unconstitutional the provisions within the law that barred benefits for cumulative trauma injuries if the employee did not work for at least 180 continuous days, and allowed the deferment of partial disability benefits to employees. The Court said those provisions violated the state’s constitutional guarantee of due process.

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