8-42-124. Assignability and exemption of claims - payment to employers - when.
Statute text
(1) Except for amounts due under court-ordered support or for a judgment for a debt for fraudulently obtained public assistance, fraudulently obtained overpayments of public assistance, or excess public assistance paid for which the recipient was ineligible, claims for compensation or benefits due, or any proceeds thereof, under articles 40 to 47 of this title shall not be assigned, released, or commuted except as provided in said articles and shall be exempt from all claims of creditors and from levy, execution, and attachment or other remedy or recovery or collection of a debt, which exemption may not be waived.
(2) The power given in any power of attorney or other authority from any injured employee or the dependents of any killed employee purporting to authorize any other person to receive, be paid, or receipt for any compensation benefits awarded any such claimant shall be wholly void and illegal and of no force and effect; except that:
(a) Any employer who is subject to the provisions of articles 40 to 47 of this title and who, by separate agreement, working agreement, contract of hire, or any other procedure, continues to pay a sum in excess of the temporary total disability benefits prescribed by articles 40 to 47 of this title to any employee temporarily disabled as a result of any injury arising out of and in the course of such employee's employment and has not charged the employee with any earned vacation leave, sick leave, or other similar benefits shall be reimbursed if insured by an insurance carrier or shall take credit if self-insured to the extent of all moneys that such employee may be eligible to receive as compensation or benefits for temporary partial or temporary total disability under the provisions of said articles, subject to the approval of the director. If the employee is injured while under a fixed duration contract of employment, all salary and wages paid pursuant to that contract shall be prorated over the duration of the contract in determining whether in any given week the employer paid a sum in excess of the temporary total disability benefit.
(b) This subsection (2) shall not apply to an attorney licensed to practice law in this state and acting in accordance with a power of attorney given by the claimant solely for the purpose of distributing funds pursuant to an admission of liability or an order of the division.
(3) Such payments shall be paid directly to the employer during the period of time that such employer continues to pay a sum in excess of the temporary total disability benefits prescribed by articles 40 to 47 of this title and has not charged any earned vacation leave, sick leave, or other similar benefits to any employee so disabled and for so long as such employee is eligible for temporary disability benefits under the provisions of articles 40 to 47 of this title. The payment of such moneys to an employer shall constitute the payment of compensation or benefits to the employee in accordance with the provisions of section 8-42-103.
(4) When the payment by an employer to any such disabled employee is reduced to a sum equal to or less than the temporary total disability benefits prescribed by articles 40 to 47 of this title, or when the employer has charged the employee with any earned vacation leave, sick leave, or other similar benefits for any reason, the rights of the employee to receive direct payment of any award for temporary partial or temporary total disability that said employee may be entitled to on and after the effective date of such reduction shall be reinstated in accordance with the provisions of articles 40 to 47 of this title.
(5) Any employer subject to the provisions of articles 40 to 47 of this title and otherwise qualifying for direct payment of employee benefits as provided in this section shall notify the division and the insurance carrier of such employer's eligibility to receive such moneys. The director shall approve such direct payment after the filing of such information by the employer as the director may require.
(6) Nothing in this section shall be construed to limit in any way the right of any employee to full payment of any award which may be granted to said employee for permanent partial or permanent total disability under the provisions of articles 40 to 47 of this title; except that benefits for permanent total disability and permanent partial disability shall be subject to wage assignment or income assignment as wages pursuant to section 14-14-102 (9), C.R.S., and subject to garnishment as earnings pursuant to section 13-54.5-101 (2)(b), C.R.S., and subject to administrative lien and attachment pursuant to section 26-13-122, C.R.S., for purposes of enforcement of court-ordered child support and subject to garnishment as earnings pursuant to sections 13-54-104 (1)(b)(IV) and 13-54.5-101 (2)(d), C.R.S., for purposes of enforcement of a judgment for a debt for fraudulently obtained public assistance, fraudulently obtained overpayments of public assistance, or excess public assistance paid for which the recipient was ineligible.
(7) Following an injury, any injured employee may authorize in writing the continuation of any payroll deduction which the employee had authorized or could have authorized before the injury, which authorization shall be legal and may be honored by the employer to the extent that proceeds of compensation of claims are available to the employer or are made available to the employer by the employer's insurance carrier for this purpose until the authorization is revoked in writing by the injured employee.
(8) If any employer who pays to an injured employee a sum in excess of the temporary total disability benefits prescribed by articles 40 to 47 of this title and who has not charged the employee with any earned vacation leave, sick leave, or other similar benefits seeks to have assigned the compensation benefits otherwise due the injured employee as provided in this section, the employer shall notify the employee of said request at the same time the employer makes the request of the director or insurance carrier or both.
History
Source: L. 90: Entire article R&RE, p. 498, 1, effective July 1. L. 92: (6) amended, p. 218, 22, effective August 1. L. 94: (6) amended, p. 2048, 6, effective June 3. L. 96: (6) amended, p. 621, 29, effective July 1. L. 2000: (2) amended, p. 224, 1, effective July 1. L. 2001: (6) amended, p. 720, 1, effective May 31. L. 2006: (1) and (6) amended, p. 948, 6, effective August 7. L. 2007: (1) amended, p. 879, 9, effective May 14.
Annotations
Editor's note: (1) This section is similar to former 8-52-107 as it existed prior to 1990.
(2) Section 9 of chapter 208, Session Laws of Colorado 2006, provides that the act amending subsections (1) and (6) applies to judgments entered prior to, on, or after August 7, 2006.
Annotations
Cross references: For the legislative intent contained in the 2006 act amending subsections (1) and (6), see section 8(2) of chapter 208, Session Laws of Colorado 2006. For the legislative declaration contained in the 2007 act amending subsection (1), see section 1 of chapter 226, Session Laws of Colorado 2007.
Annotations
ANNOTATION
Annotations
Law reviews. For note, "Rural Poverty and the Law in Southern Colorado", see 47 Den. L. J. 82 (1970). For article, "Update on Colorado Appellate Decisions in Colorado Workers' Compensation Law", see 30 Colo. Law. 69 (April 2001). For article, "Update on Colorado Appellate Decisions in Workers' Compensation Law", see 33 Colo. Law. 117 (Nov. 2004). For article, "Settlement Procedure in Workers' Compensation Claims", see 46 Colo. Law. 40 (July 2017). For article, "The Game of Liens: Untangling the Statutory Lien Scheme in Colorado Workers' Compensation Cases", see 50 Colo. Law. 48 (Apr. 2021).
Annotator's note. Since 8-42-124 is similar to 8-52-107 as it existed prior to the 1990 repeal and reenactment of the "Workers' Compensation Act of Colorado", articles 40 to 47 of this title, relevant cases construing that provision have been included in the annotations to this section.
This section reflects a legislative intent to ensure that workers' compensation benefits are available as a wage substitute. This policy would be contravened by a judicial holding that such awards are marital property to be divided upon dissolution of the marriage. Unliquidated workers' compensation awards are different from pensions, and whether award is marital property depends on extent to which award compensates for loss of earning capacity and medical expenses incurred during the marriage. If award compensates the spouse for post-dissolution loss of earning capacity, it is not marital property even if the compensable injury occurred during the marriage. If workers' compensation claim is pending on date of dissolution and will likely include indemnification for loss of marital earnings or medical expenses, trial court may reserve jurisdiction to apportion marital interest upon receipt of award. In re Smith, 817 P.2d 641 (Colo. App. 1991).
The general assembly intended that the 2001 amendment to subsection (6) be applied retroactively. Am. Comp. Ins. Co. v. McBride, 107 P.3d 973 (Colo. App. 2004).
Only permanent total disability benefits may be garnished for child support, under the plain meaning of the exception stated in subsection (6). Permanent partial disability benefits may not be so garnished. In re Hamby, 954 P.2d 635 (Colo. App. 1997).
Because the 2001 amendment to subsection (6) did not specify an effective date, the amendment creating an exception that permitted garnishment of temporary total disability benefits for enforcement of child support orders was effective upon its enactment on May 21, 2001, and had to be applied immediately because it was remedial and procedural in nature. Am. Comp. Ins. Co. v. McBride, 107 P.3d 973 (Colo. App. 2004).
Retroactive application of a statute is not necessarily unconstitutional. Where a statute effects a change that is procedural or remedial, it may be applied retroactively. A statute is remedial if it does not create, eliminate, or modify vested rights or liabilities. When retroactive application of a statute is unconstitutional, it is deemed retrospective. Am. Comp. Ins. Co. v. McBride, 107 P.3d 973 (Colo. App. 2004).
Generally, claim that is not assignable does not survive death of claimant. In re Dick v. Indus. Comm'n, 197 Colo. 71, 589 P.2d 950 (1979).
Child Support Enforcement Procedures Act did not create exception to statute specifically prohibiting satisfaction of judgments out of workers' compensation benefits. In re Snyder, 739 P.2d 923 (Colo. App. 1987) (decided prior to 1987 amendment to subsection (1)).
If benefits have been received by claimant and subsequently deposited into a bank account, they are no longer "due" under this statute. Therefore, such benefits are no longer exempt from garnishment when a plaintiff serves a writ of garnishment on defendant's bank. Borrayo v. Lefever, 159 P.3d 657 (Colo. App. 2006).
Vacation and sick benefits paid to claimant are earned benefits and cannot be deducted from or credited against the temporary disability benefits to which claimant is entitled. Pub. Serv. Co. v. Johnson, 789 P.2d 487 (Colo. App. 1990).
But benefits that an employer pays an employee under a wage continuation plan only if the employee suffers a compensable work-related injury can be deducted from or credited against the temporary disability benefits to which the employee is entitled. Baum v. Indus. Claim Appeals Office, 2019 COA 94, 487 P.3d 1079.
Employer did not charge claimant sick leave within the meaning of subsection (2)(a) when it returned and reinstated the sick leave previously used by claimant after a determination that the claimant suffered a compensable injury. Further, employer continued to pay claimant his full wages in excess of the temporary total disability benefits prescribed under this section throughout the relevant period of time. Therefore, employer is not liable for further temporary disability benefits. City & County of Denver v. Indus. Claim Appeals Office, 107 P.3d 1019 (Colo. App. 2004).
Attorney lien statute does not create implied exception to protections offered to workers' compensation benefits, because the workers' compensation statute unequivocally exempts workers' compensation benefits from any remedy ordinarily available to satisfy a debt, with only one explicit exception. James E. Freemyer, P.C. v. Indus. Claim Appeals Office, 32 P.3d 564 (Colo. App. 2000).