This is a victory for injured workers in Florida, many of whom found it hard to find an attorney to represent them in their workers’ compensation cases due to the statutory caps on fees.

Business and insurance groups immediately complained there would be an “avalanche” of claims filed against Florida employers as a result of the ruling. But let’s put into perspective what was really at stake here: Workers, who through no fault of their own, had been injured on the job and their employer/ insurer were refusing to pay for basic medical care and a portion of lost wages. These individuals are simply trying to secure basic compensation, but they are up against well-lawyered businesses and insurance firms. Meanwhile, the worker is restricted in how much and in how their own attorney may be paid. Under the previous cap, plaintiff’s attorney in Catellanos v. Next Door Company was paid $1.53 an hour for more than 100 hours of legal work – all of which a judge deemed reasonably necessary to winning the case. 

The only way businesses or insurers are made to pay is if they lose the case. That is, the court determines the worker was rightfully owed workers’ compensation benefits in the first place and companies denied them.

Let’s also bear in mind: Almost all employees in Florida are entitled to workers’ compensation and the whole point of the system is to avoid litigation. Workers have the benefit of a no-fault system that allows them a relatively quick turnaround for compensation on work-related injuries and employers get to avoid costly litigation. But because of the evolution of the laws in recent years, the scales have become unfairly tipped toward the employers.

When an employer/ insurer knows workers do not have access to adequate legal support, they are less likely to agree to pay workers’ compensation benefits they know are rightly owed – especially when the injuries in question are severe.

So that takes us back to the Castellanos case, in which the Florida Supreme Court ruled the mandatory attorney fee schedule for workers’ compensation cases is unconstitutional under the constitutions of both Florida and the U.S. government. The state high court noted that while the legislature has expressed the intent for the workers’ compensation system to deliver benefits quickly and efficiently, the reality of the matter is that the system is increasingly complex – to the detriment of the worker – and employees depend on assistance from an experienced Florida workers’ compensation lawyer to help them navigate through the thicket.

The court noted that just a few of the changes that make workers’ compensation claims difficult if not impossible without a lawyer:

• The elimination of the provision in the law that indicated cases should be liberally construed in favor of the worker (F.S. 440.015);
• Reductions in the duration of temporary benefits;
• An extensive fraud and penalty provision;
• A heightened standard of “major contributing cause” that now applies to most cases;
• The elimination of an opt-out provision;
• The addition of an offer of settlement provision that allows only the employer – but not the worker – to make an offer to settle.

Plaintiff had been injured in the course of employment and when he was denied benefits, filed a workers’ compensation claim with the help of an attorney. The attorney successfully refuted a number of the defenses raised by the employer and the insurance carrier and ultimately prevailed. However, workers’ compensation attorney fees are contingent not only on the success of the case but the size of the award. Here, that meant the attorney was entitled to just $1.53 an hour. This was under the scheme of what the legislature had deemed “reasonable,” and there was no mechanism for refutation.

The right of a claimant to obtain reasonable attorney’s fees when they win is an essential feature of workers’ compensation law and has been since 1941. The court held the irrebuttable presumption that a certain fee is reasonable is unconstitutional.

Even if the ruling results in a higher number of workers’ compensation claims, it would only be because they were artificially low to begin with. What this ruling does is even the playing field.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

Catellanos v. Next Door Company , April 28, 2016, Florida Supreme Court

More Blog Entries:

Rish v. Simao – Low-Speed Car Accident Lawsuit, March 26, 2016, Miami Workers’ Compensation Lawyer Blog

When a family hires an individual to perform duties in or around their home, they are considered a household employer. The IRS views the worker — whether a nanny, senior caregiver, health aide, etc. — as an employee of the family for whom she works. For most families, having household payroll and tax responsibilities is akin to learning a new language and most have no clue where to go for guidance. So to help simply this process, here are five quick tips you need to know about household employment before your hire.

#1: Tax responsibilities kick in at $1,900

If a household employee is paid $1,900 or more in a calendar year, the employer is required to withhold and remit payroll taxes to the state and the IRS. If the employer pays less than $1,900, they are still legally obligated to adhere to federal and state labor laws even though no employment tax filings are required.

#2: Household employers must withhold taxes from their employee’s paycheck each pay period

Specifically, 6.2% of gross wages should be deducted for Social Security taxes and 1.45% for Medicare taxes. By law, these taxes (collectively known as “FICA”) must be withheld from the employee’s pay – or else the employer is responsible for them. The employee’s federal and state income taxes are NOT required by law to be withheld, but it is a good idea for the employer to do so. Otherwise, the employee may have a large tax bill due at the end of the year and may be subject to underpayment penalties.

#3: Household employers are required to pay federal and state employer taxes

Just like the employee’s withholdings, employers must pay a 6.2% Social Security tax and a 1.45% Medicare tax on top of the gross wage they pay their employee. It’s sometimes called the “employer match” of the FICA taxes. Additionally, household employers are responsible for paying federal and state unemployment taxes. These taxes must be reported and remitted along with the withheld employee taxes throughout the year.

#4: Additional paperwork is required at year-end

By the end of January, household employers should provide a Form W-2 to their employee. They should also file Form W-2 Copy A and Form W-3 with the Social Security Administration and attach Schedule H to their federal income tax return.

#5: Employers must meet federal and state labor law requirements

Household employees are classified as non-exempt workers. As such, they must be paid at least minimum wage for every hour they work and be paid overtime for all hours over 40 in a 7-day workweek. The rate for overtime pay must be at least 1.5 times the regular rate of pay. (Note: Live-in employees in New York must be paid overtime once they reach 44 hours in a week). In addition, most families in New York are required to carry a Workers’ Compensation and Disability insurance policy (policies can be procured through the New York State Insurance Fund). Following the Domestic Worker Bill of Rights in New York passage in 2010, household employees are entitled to 3 days of paid vacation and 2 days of paid sick leave after one year of service.  Finally, employers in New York must provide a written wage notice (or employment agreement) each year by February 1 as well as detailed paystubs illustrating hours worked, total wages and all tax withholdings.

If you have any questions, please consult IRS Publication 926 or feel free to call us at 1-888-273-3356.

• 1. Be sure that the worker is properly classified. See IRS guidelines (opens new window)
• 2. Obtain a Workers’ Compensation insurance policy. Your homeowners’ insurance agent will likely be able to help you with this. This should cover medical expenses and lost wages if a problem arises. It protects you and it protects the caregiver.
• 3. Be very careful to keep these tax records separate. Do not intermingle them with family records or records maintained for another business you may have.
• 4. Carefully budget to pay for employer taxes and to take advantage of tax breaks. See the IRS Employer Guide (opens new window) and the 2014 California Employer’s Guide (PDF).
• 5. This person will almost certainly be your employee, not an independent contractor.
• 6. Most household employees are “non-exempt.” This means that they have a right to overtime pay when they work over 40 hours in a seven day week. There may be exceptions for live-in workers or companion care.

Pioneers of Elder Law – For over 30 years, Gilfix & La Poll Associates LLP has innovated creative legal solutions to help you manage and plan the future of your estate.
To contact an estate planning lawyer visit http://www.gilfix.com/ or call 800.244.9424.