Missing Check: The Status of the Law

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Oftentimes, when parties in a workers’ compensation matter agree to settle or when the claimant is entitled to certain indemnity benefits, the carrier sends payment to the claimant by mailing a check to an address provided by the claimant. There are situations, though, when the check goes missing or is stolen, perhaps in transit or at the address provided by the claimant. This begs the question – what are the rights and obligations of the carrier under the law?

In prior stolen check cases, the Workers’ Compensation Board has chosen not to render a decision on the respective duties of the parties as against a financial institution. Instead, the Board has determined that when a carrier has been given an opportunity to rebut the claimant’s evidence of non-receipt of payment and has failed to do so, it is proper to direct the carrier to reissue the check, such as in Matter of Turnabout Food Corp.

However, in rebutting an allegation of non-receipt of payment check, it is imperative that the carrier make a strong case that it has fulfilled its obligation by issuing and mailing a check to the claimant at the address provided.

The Board has noted that compensation is deemed paid upon the mailing of the payment check to the claimant’s correct address. The Board Panel has also opined that it is unaware of any authority that places the burden of restitution upon the carrier in cases where the claimant has been the victim of a crime in Cap Cities/the Walt Disney Co.

Interestingly, if the claimant has not previously reported failure to receive a payment, and the carrier has not changed the claimant’s home address of record in the course of mailing the missing check in issue, then the mailing and presumed receipt of the prior payments provides a stronger case for the carrier in rebutting the claimant’s non-receipt of payment claim. The Board Panel has noted that instead of reissuing a payment check, the carrier should make every effort to assist the claimant with any inquiry and demand to the bank that honored the check.

There has been one instance where the Board Panel was unpersuaded with the argument of the claimant’s attorney – that the carrier had to produce an envelope, or other proof, that the payment check was actually placed in the mail. In Sch. Food & Nutrition Service, the Board noted that there is no indication that the envelope was returned to the carrier by the United States Postal Service as undeliverable, and it was unclear what other proof could have been produced by the carrier.

Accordingly, the carrier’s responsibility under the law with respect to a payment check is to mail the check to the claimant’s address on record, and when the check leaves the carrier’s control, the carrier would have fulfilled its essential obligation. It should not be the carrier’s responsibility to police the check after it had been mailed to the claimant’s proper last known address.

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