STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

SCOTT R WITTNEBEL, Applicant

VERLO MATTRESS, Employer

OHIO FARMERS INSURANCE COMPANY, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1995062852

On May 15, 1998, an administrative law judge (ALJ) for the Workers Compensation Division in the Department of Workforce Development issued a default order in this matter. The employer filed a timely petition for commission review. Thereafter, the employer submitted a brief.

The commission has carefully considered the entire records in this case. Having done so, the commission sets aside the findings and order of the ALJ, and substitutes the following therefor:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant sustained a compensable work injury when he sprained his knee while working for the employer. The applicant was seventeen at the time of the injury. This case involves the application of Wis. Stat. § 102.60(intro.) and (1) which provides for increased compensation when a minor is injured while working without the required child labor permit Wis. Stat. § 103.70. Because there has been no hearing, the following findings of fact are based on the commission's review of the case file.

On December 7, 1995, the department wrote the insurer a letter explaining the penalty. The department's letter went on to state that the applicant was a minor, that no labor permit was on file, and that the employer should contact its insurer to determine the amount of the penalty. Finally, the letter informed the employer that, if it denied liability, a formal hearing would be scheduled.

There is no record of a response by the employer in the case file. However, the payment record in a subsequent February 23, 1996 letter from the department indicates that the employer paid the $476.67.

Specifically, on February 23, 1996, the department wrote the employer again. This letter stated that double compensation was owed as a result of the illegal employment of minor. It listed primary compensation paid (presumably by the insurer) of $531.67, increased compensation owed of $531.67, increased compensation paid (presumably by the employer) of $476.67, and increased compensation still outstanding of $55. The letter demanded a response or receipt of payment within 14 days, or else a default order would be issued.

Again, although there is no record of it in the department's file, the payment record in a subsequent September 23, 1997 letter indicates the employer in fact paid the additional $55 outstanding.

On September 23, 1997, the department sent the employer a third letter. This third letter was identical to the second in form, but listed different amounts owed, paid, and due. Specifically, the September 23, 1997 letter showed primary compensation (presumably, by insurer) paid of $4,016.67, increased compensation owed of $4,016.67, increased compensation paid of $531.67, and increased compensation outstanding of $3,485.00. The letter again stated that a default order would be issued unless a response or receipt of payment were forthcoming within 14 days. (1)

Evidently at this point, the employer hired an attorney, Richard C. Kelly. Mr. Kelly wrote the department on October 1, 1997. Mr. Kelly asserted that the applicant was working under a "school-to-work" program, that he therefore was not required to obtain a work permit, and that school coordinator of the school- to-work program informed him that school-to-work participants never obtained permits. Mr. Kelly's response, of course, was within two weeks of the department's September 23, 1997 demand letter.

Thereafter, on January 26, 1997, a representative of the department's Worker's Compensation Division wrote to the employer (not Attorney Kelly) in apparent response to Mr. Kelly's letter. The representative informed the employer that the Equal Rights Division (which handles the department's wage-and-hour claims) informed her that even "student learners" were required to get permits. The only exception, the department representative continued, was for apprentices. The representative went on to ask the employer to pay $3,485.00 within 30 days, or to contact the division to schedule a hearing. Failure to comply, the department representative concluded, would result in default order, without hearing, for the penalty amount.

According Mr. Kelly, he demanded a hearing in response to the department's letter well within the 14-day deadline. Specifically, Mr. Kelly asserts he mailed a letter to the department demanding a hearing on February 2, 1998. Mr. Kelly attaches a copy of his letter as the last page of its petition for commission review.

Mr. Kelly's letter is not in the case file provided to the commission for review. Presumably, the department apparently either never received Mr. Kelly's letter or unknowingly misfiled it. In any event, the ALJ issued a default order, without hearing, requiring payment of the increased compensation in the amount of $3,485. The employer, by Mr. Kelly, appeals.

As the ALJ points out in her decision, Wis. Stat. § 102.18(1)(a) authorizes the department to issue default orders without hearing. Necessarily, however, the department's authority to resolve a case without hearing by default under Wis. Stat. § 102.18(1)(a) depends on a party actually being in default.

The commission cannot conclude that the record before it supports the conclusion that the employer was in default. Mr. Kelly states in his brief for the employer that he sent a timely letter requesting a hearing in response to January 26, 1998 letter from the Workers Compensation Division. Because Mr. Kelly had previously responded to the department's September 23, 1997 letter within the required 14 days, the commission sees no reason to question his statement that he responded to the January 26, 1998 letter promptly as well.

Therefore, the commission concludes that Attorney Kelly in fact sent a letter to the department requesting a hearing, in timely response to the January 26, 1998 correspondence from the department. The employer is not in default. This matter is remanded for further appropriate action by the department, including, if necessary, a hearing on the employer's defense to Wis. Stat. § 102.70.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

ORDER

The findings and order of the administrative law judge are set aside. This matter is remanded to the Worker's Compensation Division for further action consistent with this decision.

Dated and mailed: November 30, 1998
wittnes . wrr : 101 : 3  ND § 8.32,   § 7.41  

/s/ David B. Falstad, Chairman

Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

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Footnotes:

(1)( Back ) The dramatic increase in the penalty, is the result of including the eventual functional PPD rating. That is, the $531.67 primary compensation mentioned in the February 23, 1996 letter is 9.667 weeks of TTD at $55 per week. Thereafter, the applicant's PPD was assessed at 5 percent at the knee, or 21.15 weeks at the PPD rate of $164 per week, for a total of $3,485. The $4,016.67 amount in the September 23, 1997 letter reflects both the TTD and PPD.