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Original Author: Pullen, Mark
Date of Material: 08/18/1997

Insurance--Workers compensation

Method the City Uses in Paying Worker's Compensation

Reviewed Date: 07/15/2021
MTAS was asked whether it was legal for the city to pay an injured employee their regular paychecks for up to fourteen calendar days afer the day of injury and require the employee to return to the city any worker's compensation benefits they may have received.

August 18, 1997

Recently a question has come up as to the method the city uses in paying worker’s compensation. It seems that the city has the policy of paying an injured employee their regular paychecks for up to fourteen calendar days afer the day of injury. In return the employee is required to give the city any worker’s compensation benefits they may have received. You wanted to know if this was legal. The answer is no.

I must admit that in reaching this conclusion I have made several assumptions. T.C.A. 50-6-114 allows for setoff against worker’s compensation payments for any payments the city may have made the employee. The law also goes on to mandate that such set off must be included as part of the insurance policy. It is my understanding that your policy is issued by the TML Risk Pool. In a conversation with Dennis Huffer, attorney for the Pool, he indicated that the standard TML policy does not contain such a clause. Nor does it seem that anybody I have contacted with the city thinks your policy has this clause. In this event any payments the city makes to an employee is, under Tennessee case law, voluntary and thus supplemental to any payments made by workers compensation, Brown v. Western Electric Company, 646 S.W.2d 912 (Tenn. 1983).

The question now becomes what to do?

1. Stay with the policy of continuing to pay the employees but not have the offset from worker’s comp. This works a finacial hardship on the city.

2. Simply go with the workers compensation statutes, which would mean that the employees would not get paid for the first seven calender days off work since worker’s comp only begins on the eighth calender day after the day of injury.

3. Allow employees to take however many sick and/or vacation days they desire to supplement any benefits they may recieve during the first fourteen calender days starting on the day after the injury.

My guess is that option three, though a hardship on employees without much sick leave or vacation time, is probably the best. To follow the other options would simply invite abuse by those few who would do so. The policy I have drafted reflects this.

Please feel free to contact me if you have any further questions about this or any other matter.


WHEREAS, The City of _____ has, pursuant to Section 10.02 of the _____ Personnel Policies and Procedures Manual, paid employees their regular paychecks for up to the first fourteen days of occupational disability leave and, in return, required employees to sign over any worker’s compensation benefits they have received during this period, and;

WHEREAS, The City desires to amend this policy, and;

WHEREAS, Section 1.04 of the Personnel Policies and Procedures Manual requires notice to be given prior to any amendments to the Personnel Policy:


Section 1. Section 10.2 of the Personnel Policies and Procedures Manual of the City of _____ is hereby amended to read as follows:

An employee injured in the course of his/her employment shall be granted Occupational Disability Leave.

Employees on occupational disability will only be compensated in accordance with the provisions of the Tennessee Worker’s Compensation Law (T.C.A. 50-6-101 through 50-6-623). No compensation shall be allowed for the first seven days of disability resulting from the injury, excluding the day of injury, except for medical attendance and hospitalization. However, if disability extends beyond that period, compensation shall commence with the eighth day after the injury. In the event the disability from the injury exists for a period as long as 14 days, then compensation shall be allowed beginning with the first day after the injury (T.C.A. 50-6-205).

Employees on occupational disability leave due to an on the job injury will not be charged sick leave during the period of convalescence. Employees may chose to supplement worker’s compensation benefits with sick leave and/or vacation leave during the first fourteen days after the day after the injury. Employees shall continue to accrue sick leave and vacation leave at the employee’s regular rate while he/she is on occupational disability leave.

Before an employee is returned to full duty, the employee must be certified by the attending physician as capable of performing the essential functions of the job. The physician will be furnished a copy of the job description, a list of the essential job functions as determined by the Mayor and Board of Aldermen and the department head, and a form listing the required capabilities. The attending physician must complete the form provided by the City of _____ documenting the employee’s ability to perform the essential job functions. The city reserves the right to obtain a second medical opinion from a physician of its choosing before a final decision is made and return to light or full duty.

If an employee is unable to return to the position held at the time of the injury, the city shall take reasonable steps to place the individual in a comparable position, if one is available, for which such employee is qualified and able to perform the essential job functions, with or without reasonable accommodations.