“Directory, Not Mandatory” – The 20-Day Hearing Rule under 12 NYCRR 300.23(b)(2) Re-Defined

Introduction

In Matter of Juncal v. Maspeth Remodeling Co., 238 A.D.3d 1441 (3d Dep’t 2025), the Appellate Division, Third Department, confronted a recurring procedural question in workers’ compensation practice: What happens when a carrier requests a reduction or suspension of ongoing temporary disability payments, but the Workers’ Compensation Board does not schedule the requested hearing within 20 days as contemplated by 12 NYCRR 300.23(b)(2)?

The employer Maspeth Remodeling Co. and its workers’ compensation carrier (collectively, “the carrier”) argued that the payments should be retroactively reduced—either as of a favorable Independent Medical Examination (IME) date or, at the latest, 20 days after the Request for Further Action (RFA-2) was filed. The Board disagreed, and, on appeal, the Third Department affirmed. The court held that the 20-day period in section 300.23(b)(2) is directory (aspirational), not mandatory, and that benefits continue in full until a hearing actually occurs and a finding justifies reduction.

Parties

Claimant: Miguel Juncal, injured in a 2021 workplace fall.
Employer: Maspeth Remodeling Co.
Carrier: State Insurance Fund (represented by David F. Wertheim).
Respondent Board: New York Workers’ Compensation Board, represented by the Attorney General.

Summary of the Judgment

The Third Department affirmed the Board’s decision to:

Maintain Juncal’s temporary total disability rate through the March 6, 2023 hearing;
Apply a tentative 60 percent rate only after that hearing, per the parties’ agreement;
Reject the carrier’s two alternative retroactivity theories (from the August 31, 2022 IME or from September 16, 2022, the RFA-2 filing date).

The court reasoned that because no hearing occurred and no finding justified a reduction before March 6 (>20 days after the RFA-2), the carrier was barred from unilaterally reducing payments. The regulation’s language—using “may”, not “shall”—and its remedial purpose support treating the 20-day time-frame as directory.

Analysis

1. Precedents Cited and Their Influence

Matter of Vandenburg v. Saratoga Harness Racing, 125 A.D.2d 802 (3d Dep’t 1986) – Early acknowledgment that carriers remain bound by prior awards until the Board authorizes modification.
Matter of Laverghetta v. Tug Edge Dairy, 56 A.D.3d 913 (3d Dep’t 2008) – Lists exceptions permitting unilateral suspension; none applied here (return to work, incarceration, no disability).
Matter of Dickinson v. Daines, 15 N.Y.3d 571 (2010) – Describes agency-imposed time limits as “directory” unless mandatory wording or statutory purpose dictates otherwise.
Matter of Burns v. Miller Constr., 55 N.Y.2d 501 (1982) – Emphasizes remedial nature of Workers’ Comp Law; favors claimants when procedural ambiguities arise.
Board precedent: Employer: Transportation-Region 10 (WCB Oct. 24, 2023) – The Board re-examined 300.23(b)(2) and concluded the 20-day rule is aspirational.

These authorities collectively guided the court toward a claimant-protective reading of section 300.23(b)(2) and reinforced the concept that administrative time limits often lack strict enforceability unless expressly mandatory.

2. The Court’s Legal Reasoning

Textual Analysis. 12 NYCRR 300.23(b)(2) states that the chair “may schedule a hearing” and benefits cannot be reduced until a hearing is held and a finding justifies it. The absence of the verbs “shall” or “must” indicates discretion.
Regulatory Purpose. The provision safeguards injured workers from sudden loss of income. Reading the 20-day window as mandatory would invert that purpose, punishing claimants for the Board’s scheduling constraints.
Administrative Practicality. Logistically, hearings cannot always be set inside 20 days, especially in high-volume districts. The regulation’s flexibility preserves administrative feasibility.
Abuse-of-Discretion Review. The court looked for arbitrary action but found none; continuation of payments until March 6 was reasonable.

3. Potential Impact

The decision clarifies statewide procedure in contested temporary disability reductions:

Claimant Protection: Ensures uninterrupted income absent an actual hearing and finding.
Carrier Strategy: Carriers must anticipate longer periods of full-rate liability and may press the Board for expedited hearings but cannot self-help after 20 days.
Board Administration: Confirms that failure to meet the 20-day goal does not automatically confer a right to retroactive reduction, mitigating fear of error repercussions.
Litigation Guidance: Attorneys will cite this case whenever a carrier attempts unilateral reductions tied to lapsed scheduling deadlines.
Regulatory Revision? The Legislature or the Board might revisit the rule to introduce clearer, perhaps dual-track deadlines (e.g., a “show-cause” conference) if they wish to balance interests differently.

Complex Concepts Simplified

Temporary Total Disability (TTD): A status where an injured worker is presumed completely unable to work, but the condition is not yet classified as permanent.
Independent Medical Examination (IME): A one-time medical evaluation arranged by the carrier to assess injury severity.
RFA-2 (Request for Further Action): The form a carrier files to ask the Board for a hearing or ruling, here to reduce benefits.
WCLJ (Workers’ Compensation Law Judge): The administrative judge who conducts hearings and issues decisions within the Board.
Directory vs. Mandatory: A “mandatory” rule must be followed to the letter, whereas a “directory” rule is a guideline—the failure to comply does not automatically void subsequent actions.

Conclusion

Juncal v. Maspeth Remodeling establishes a clear precedent: The 20-day hearing window in 12 NYCRR 300.23(b)(2) is directory, not self-executing, and carriers remain obligated to pay the existing temporary disability rate until the Board actually conducts a hearing and makes a contrary finding. The ruling harmonizes procedural fairness, administrative realities, and the remedial spirit of the Workers’ Compensation Law. In practical terms, claimants gain assurance of continued support, while carriers must prepare for potential delays without unilateral shortcuts. Future litigation on benefit suspension or reduction will now pivot on this interpretation, cementing the Third Department’s decision as a touchstone for both practitioners and the Board itself.