Incarceration Upon Conviction of a Felony and its Effects on Attachment to the Labor Market

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Attachment to the labor market is an important issue among employers and carriers. By pushing this issue, we can attempt to reduce indemnity costs and aid in the claimant’s return to work. Generally, a claimant who is temporarily partially disabled must show that he or she is attached to the labor market to be entitled to workers’ compensation benefits. The claimant need only seek employment within his or her restrictions, provided by the treating physician, and for a position for which he or she is qualified. Whether a claimant is actually attached to the labor market is a factual determination for the Board to determine.

Before the requirement to reattach exists, there must be a finding of a removal from the labor market. The case law is clear that where an employee has continued to be employed by the employer and the medical evidence establishes that the claimant cannot return to his or her job at that employer, the claimant has not voluntarily withdrawn from the labor market. Additionally, where the claimant testifies he or she continues to be employed by the employer, and the employer/carrier produces no evidence to refute this, the Board Panel has held the claimant remains attached. The claimant is not required to look for an alternate employer to be entitled to ongoing awards so long as he or she remains employed by the employer of record.

A caveat to the attachment to the labor market issue that seems to be arising more and more over the years involves incarceration of a claimant. Section 10 of the Workers’ Compensation Law states, “any person incarcerated upon conviction of a felony shall be deemed ineligible for all benefits….” A third department case confirmed this reading of the statute in Islam v. BD Const. & Bldg., holding benefits should not be paid if a sentence of incarceration is imposed as punishment for a felony conviction. The court went on to state that a felony conviction with a sentence of probation, as opposed to incarceration, does not allow for a suspension of benefits.

As such, there are two requirements that must be satisfied in order to suspend benefits a claimant would otherwise be entitled to:

  1. A conviction of a felony;
  2. A punishment of incarceration.

Therefore, if the above requirements are met, a claimant is entitled to benefits up to the date of sentencing. Benefits cannot be suspended prior to sentencing. For example, if a claimant is being held in jail during the pretrial stage, he or she would still be entitled to any benefits until incarcerated upon conviction of a felony during the sentencing phase of the criminal proceedings.

After the claimant is released from incarceration, he or she is not automatically entitled to indemnity benefits. The claimant would be required to reattach to the labor market before benefits are reinstated by obtaining up-to-date medical evidence and looking for work within his or her restrictions.

If you are ever unsure when a suspension for incarceration or reinstatement of benefits would be appropriate, please do not hesitate to contact an attorney. Goldberg Segalla is always available to address any questions or concerns you may have.