Board grants motion for credit against future benefits for overpayments of wage loss compensation, but only in part, concluding that employer was primarily at fault in creating the substantial overpayment and then failing to detect it in a timely manner.

This case involved a motion by the employer seeking a credit against future benefits for overpayments on wage loss compensation. The claimant suffered a work injury to her left hand on September 23, 2019. An agreement was entered into paying the claimant compensation for temporary total disability as of September 24, 2019, at the rate of $713.36, based on an average weekly wage of $1,070.05. That agreement was terminated when the claimant returned to work, and a new agreement for recurrence of total disability, as of December 13, 2019, was issued reflecting the same average weekly wage and compensation rate. By the time of the Board hearing on April 22, 2021, it had been determined that the claimant’s average weekly wage should, in fact, have been $515.05, resulting in a compensation rate of $343.36 per week. By the time the correct compensation rate was implemented with the approval of claimant’s counsel, the employer calculated an overpayment to the claimant in the amount of $24,367.13.

The evidence showed that the carrier calculated the wage and compensation rate through an automated system. It further showed that in the claimant’s case, there was human error in inputting the wage information by adding an extra number. The new claim representative who took over the file in December 2020 ran an audit and discovered the error in the original average weekly wage and compensation rate. The Board discussed a number of prior cases involving overpayments of compensation and requests for credits. The guiding principle is that the Board has discretion as to whether to make a reformation of an agreement retroactive, and the outcome is highly factually dependent. Here, the Board concluded that to grant the full credit sought by the employer would be inequitable, since doing so would completely absolve the carrier of all responsibility for the error that was totally self created. On the other hand, to deny any credit would be inequitable, since the extent of the overpayment was difficult to endorse in that the claimant had received more in compensation than her actual average weekly wage. The Board also reasoned that to divide the overpayment 50-50 between the parties would be inequitable, since it would suggest that they were equally at fault, whereas the primary fault clearly rested with the carrier.

Therefore, the Board concluded that they would apportion the fault 75% to the carrier and only 25% to the claimant. Since the total overpayment was $24,367.13, the carrier was entitled to a credit against future benefits of just 25% of that amount, which comes to $6,091.78. The Board further agreed with the claimant’s request that this credit only be applied against future permanency and disfigurement benefits.

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