The Buck Stops Where? Maryland Workers’ Compensation Attorney's Fees Clarified
On April 24, 2025, the Supreme Court of Maryland issued a decision in Mark Zukowski, et al. v. Anne Arundel County, which found that attorney’s fees for representing an injured employee under Maryland’s Workers’ Compensation Act (Act) are calculated based on the percentage of the compensation awarded after applying the statutory offset provision.
This ruling has the greatest impact on employees of government entities in Maryland, as the “offset provision” found in L & E § 9-610(a)(1) of the Act generally applies only to them. Government employees often receive pension benefits, such as accidental disability retirement benefits (ADR benefits) that are awarded to them because of an on-the-job injury. The “offset provision” states, in pertinent part, that if a covered employee receives other benefits, such as ADR benefits, then the payment of those other benefits by the employer satisfies the payment of workers’ compensation benefits. In other words, if a government employer’s award of ADR benefits equals or exceeds the amount of workers’ compensation benefits to which the employee is entitled, such employee would not be entitled to separate workers’ compensation benefits. In doing so, the “offset provision” is intended to prevent an injured employee from being compensated twice for the same injury.
This “offset provision” affects the calculation of attorney’s fees because under the Act, the calculation of attorney’s fees for attorneys who represent injured workers before the WCC are based on a percentage of an injured employee’s award of compensation. Thus, in the context of government employees, the issue is whether an award of attorney’s fees under the Act should be calculated based on the total award of compensation an injured government employee is entitled to or based on the award of benefits an injured government employee receives after the “offset provision” is applied.
The Supreme Court of Maryland determined that in calculating an award of attorney’s fees for representing an injured employee under the Act, an attorney is entitled to a percentage of compensation benefits actually payable to the injured government employee after applying the “offset provision” of the Act. The practical implications of this ruling are two-fold: First, this ruling affirms that injured workers are the sole party responsible for compensating their counsel from the workers’ compensation benefits they receive, not the government employer’s responsibility to pay counsel’s fees out of the total award of compensation awarded, including ADR benefits. This ruling ensures that government employers are not responsible for paying two separate awards – one to the injured employee for their on-the-job injury and another to the attorney for representing the injured employee.
Second, this ruling ensures that attorneys of injured workers do not profit more than their own clients. One can certainly imagine a scenario where an attorney’s fee taken before the “offset provision” may be larger than the amount of workers’ compensation benefits an injured employee receives after the “offset provision” is applied. In such a scenario, it would be counterintuitive to the Act’s purpose to ensure that covered employees are properly compensated for their injuries if the employee’s attorney profited more than the employee.
Mabel Tang