DWC Seeks Revised Penalty Regulations

Saturday, April 4, 2009 | 0

By Alan Leno


The California Department of Workers' Compensation has submitted revised penalty regulations to the Office of Administrative Law for review and approval; final approval is expected by early April.

These regulations impose significant administrative penalties for failure to provide specified notices or failure to comply with procedural requirements for the Supplemental Job Displacement Benefit (SJDB voucher) process.

Failure to provide or send timely the 10133.52 Notice of Potential Right - up to $500
Failure to send the 10133.52 timely - $100
Failure to send an accurate 10133.52 - $100
Failure to provide or send timely the 10133.57 SJDB voucher - up to $1000
Failure to pay/object voucher expenses w/in 45 days of invoice - up to $1000

Insurers and claims administrators should note that these SJDB penalties will be part of par audits, meaning that noncompliance with SJDB requirements will be reviewed in the initial audit and noncompliance with SJDB requirements could lead to more extensive  and more expensive  DWC audits. Substantial noncompliance could place claims administrators at risk for a LC  129.5(e) business practice penalty as well.


SJDB Voucher Frequently Asked Questions

Question: We offered the employee a permanent modified job based on her work restrictions. However, the job was not within 85% of her prior wages. She declined the offer and now wants a voucher. What do you think? Does the same law apply to voucher as it did when voc rehab was around? Do we owe +15 ppd? We offered her a job.

Answer: You owe the applicant a voucher. L.C.  4658.6 sets out the criteria that enable the employer to avoid liability for a voucher. One of the criteria is that the job pays the applicant at least 85% of his/her pre-injury wage. The employee is not obligated to accept an offer that pays less than 85%.

You also owe the 15% PD increase because the definitions of modified and alternative work include a requirement that these jobs pay at least 85% of the pre-injury wage (see L.C.  4658.1).


Question: Do we have to file and serve DWC-AD 10133.53 to the AD each time EE is released to return to work modified? Here is an example: EE is TTD from 01/01/09 to 01/30/09 - released to modified duty on 01/30/09 (light duty/transitional work). A Notice of Potential Rights is sent within 10 days of TTD ends and AD 10133.53 within 30 days then cc: AD within 30 days of the offer. EE is TTD again from 02/05/09 to 02/28/09 - released to mod on 03/01/09.

Do we need to repeat sending the Notice of Potential Rights within 10 days of TTD ends and AD 10133.53 within 30 days of the offer? Are we required to file and serve these documents via EAMS each time EE is released to modified duty to the AD or not?

Answer: You need to send the Notice of Potential Rights (DWC AD 10133.52) to the applicant only once and there is no requirement to file the document with the AD via EAMS. In fact, there is no EAMS version of the 10133.52.

The DWC AD 10133.53 Notice of Offer of Modified or Alternative Work (EAMS version) must be filed with the AD within 30 days of the offer (or when the applicant replies, whichever occurs first). Assuming the applicant returns to the same modified or alternative job, there would be no need to complete and file a second form; the job is unchanged so a second form would not be providing any new information to the AD.

However, if the job assignment is further modified to accommodate new work restrictions, then you would need to complete, file and serve a new DWC AD 10133.53. The process and rationale are essentially the same as for the old RU-94 - you need to send a new form only if the job changes. Note, however, that your one year time frame has been extended by 23 days (the length of time for the second period of TTD).


Question: Where an employee voluntarily quits, is the adjuster still required to send the perm. mod/alt. work offer to get the 15%? Also, I do not think they are entitled to the voucher since they quit, but just want to make sure.

Answer: If you want to take the 15% PD credit (and insure that you avoid the 15% PD increase) allowed by L.C.  45658(d)(3)(A), you will need to send the employee an offer of regular, modified, or alternative work. This Labor Code section says the employer gets the 15% PD credit when an offer of work is made; it does not, unfortunately, include any exceptions. There is no case law on this subject yet, so it is possible that the courts will make a common sense decision at some future point to at least preclude a PD increase where an employee quits and takes the RTW option out of the employers hands. Until then, the only safe way to take your 15% credit is to make an offer and let the former employee either reject the offer or fail to respond.

The same concept applies to the SJDB voucher; make the offer. If the employee rejects the offer or fails to respond, the employer has no obligation to provide a voucher. If no offer is made, L.C.  4658.5 arguably requires the employer to provide a voucher simply because no offer was made.


Question: What is an employer's obligation to answer the question of whether or not they are able to accommodate permanent restrictions for an injured worker who has already retired, prior to her MMI date? We have a case where we only recently received (from an AME) the permanent restrictions. Normally, we would ask the employer to advise on their ability to accommodate, but now that this employee has taken herself out of the labor market, how do we handle the 15% add or subtract issue for PD?

Answer: This is a variation of the preceding question. Here, the employee has taken the return to work option out of the employer's hands by electing to retire. However, L.C.  45658(d)(3)(A) requires that a job offer must be made in order to take the 15% PD credit. And, once again, the employer is arguably required to increase weekly PDAs by 15% if no offer is made. Keep in mind that there is no proof that the employer actually could take the employee back unless an offer is made.

Question: One of our examiners is getting differing opinions. She has a claim in which the injured employee was P&S on 1/26/09, no PD was paid. On 3/9, she received a report indicating PD on 1/26/09. She wants to send out the RTW offer and deduct the 15% from PD dating back to 1/26/09. To me, the Labor Code clearly indicates 15% PD must be deducted on remaining PD payments from the date we actually make the offer on 3/9. The 15% deduction can be taken on all PD paid after 3/9.

Answer: The 15% credit can be taken against PD payments due after the work offer is made; PD payments for the period 1/26/09 to 3/9/09 were due before the work offer was made, so would be due at the usual L.C.  4650 rate (the period falls within 60 days of the P&S determination). Your conclusion is the correct one.

NOTE: There have been a couple of cases (most recently in Ornelez v Albertsons) holding that the work offer is not exclusively determinative of the date the credit can be asserted when the employer has already allowed the employee to return to work. The WCJs in these cases made common sense decisions BUT these cases are lower level and not citable as judicial authority. In my opinion, claims administrators would be best served by observing the plain language of L.C.  4658(d0(2) and 4658(d)(3)(A) and taking the 15% PD credit only after there has been an actual offer of work. Taking PD credits before offers of work via forms DWC AD 10133.53 and DWC AD 10118 could result in the imposition of DWC penalties.

Question: I specialize in Dragon voice recognition. We are certified by Nuance as a VAR in this type of software. Would this certification be approved by Claims Administrators for training and provide voucher payment on? Would you know of a claims administrator that may confirm if this is a considered certification?

Answer: Nuance (the distributor for Dragon Dictate) is not a recognized certifying agency pursuant to L.C.  4658.5 so you would not be an accredited school or training facility. A claims administrator would not be able to pay your invoice unless you obtained approval from a California state agency or the U.S. Dept. of Education. Note that the approval or certification can be by any California state agency so you do not have to wait for the Legislature to create a replacement for BPPVE. You can approach other agencies that might have need of your training program (e.g., the Department of Rehab) to see if they would be willing to list your program as one of their approved training facilities.


Question: I have an employer who wants to offer an injured worker a lower position making less money than she is now working a temporary modified duty job. My question is - if the salary of the position being offered is less then 85% of the amount she is making now, does the injured worker have to accept it? And if not, will she be entitled to a voucher?

Answer: Since this is a temporary modified job, you cannot use the 85% requirement. Prior to P&S, you MUST do a wage loss calculation on any wages paid when the employee returns to work and pay him/her whatever the calculation requires. The 85% requirement applies only to permanent modified or alternative jobs offered after P&S.


Question: Assuming the job is physically appropriate, the applicant must either accept the temporary job or forego his/her TTD (again, modified by the wage loss calculation).

Answer: The SJDB voucher would not be at issue until the applicant is P&S. After P&S, the applicant would not be entitled to a voucher if the employer makes a timely offer of modified or alternative work pursuant to L.C.  4658.6.


VR Issues

The Los Angeles Board held a second hearing on March 27, 2009, to address the issue of consolidating more than 1,000 VR appeals that have been filed since Jan. 1, 2009. The cases being appealed generally fall into two categories: (1) cases with allegations of retro VRMA due based on unresolved Qualified Injured Worker (QIW) disputes and/or VR benefits and services demanded but not provided prior to 1/1/09, or (2) initial requests for VR services or requests for reinstatement of VR services on or after 1/1/09. Some cases bridge both categories where the QIW issue has yet to be resolved and the applicant is demanding a VR plan.

Judge Mark Kahn indicated he will be issuing a stay order within the next few days to forestall further action on cases falling into these two categories. A third meeting has been scheduled for May 29, 2009 to frame stipulations and issues for the consolidation and to select cases the cases to try for the VR issues selected. At that point, Judge Kahn indicated he would present a panel of three judges for consideration by the parties; applicants and defense counsel will each get to eliminate one judge. The remaining judge will be responsible for trying the cases selected for the consolidation.

Judge Kahn advised the attendees that his decision to proceed with the consolidation would not preclude other judges within the WCAB from proceeding to trial on the very issues that are the subject of the consolidation. It is also entirely possible that a party will appeal his stay or the order of consolidation.

He also advised that the consolidation was not intended to include cases where there had been final determinations by the Rehabilitation Unit or the WCAB (i.e., cases where there had been a determination by the unit or an order by a WCJ that had not been appealed). Cases to be included in the consolidation were those where the defendant had declined to provide benefits or services based on an argument that the board lacked jurisdiction to order such benefits or services.

Judge Kahn reiterated his previous opinion that cases litigated under the consolidation order would almost certainly be appealed to the California Supreme Court. An appeal to the Supreme Court does not assure a decision by the court, but it does suggest that the VR issue is not going to go away any time soon.


Question: We have an employee who worked at a different location and was considered a QIW for the position she held at the facility. She is now working at our facility in a job that is much lighter. Evidently, the applicant is not a Qualified Injured Worker for this job. Does that mean that her permanent work restrictions that were given while working at the old job no longer applies?

Answer: Permanent work restrictions remain regardless of the job to which the applicant is assigned. These work restrictions are determined by the treating physician (or AME, if there is one) and can only be changed by that physician.

The applicant is determined QIW (or not) based on his/her work restrictions and the duties he or she was performing at the time of injury. Assigning the worker to a lighter job is the preferred way of addressing QIW liability, but such an assignment does mean the person is no longer a QIW. What it does mean is that the employer has satisfied its liability vis-a-vis the QIW determination and it does not have to provide full VR benefits or services (pre-2009, anyway). Of course, that liability was satisfied only if the employer properly documented the modified or alternative job via a DWC form RU-94 (a DWC AD 10133.53 for post 1/1/04 injuries).


Question:  I am wondering if you have any suggestions for obtaining payment from a carrier for authorized and agreed upon QRR services. The carrier has been dragging its feet in paying my bill. The claims administrator gives me lip service about paying it, but three months later - no money. As there is no Rehab Unit with which to take this matter, I am thinking about small claims court or maybe the WCAB.

Answer:  Since this is a workers' compensation matter, small claims court would be unlikely to accept jurisdiction. You can file a lien with the WCAB. A WCJ should order payment without hesitation since the claims administrator did not object to your invoice within 60 days as required by AD Reg.  10132(j). Failure to pay or object to VR invoices timely may subject the carrier to penalties under L.C.  129 and 129.5 as well as AD Reg  10111.1(a)(11) .

Question:  I have a question on this old case. The claimant was made QIW by QME-NOPE issued on 12/16/2008, She originally indicated "no" on her reply card, as the employer told her they would accommodate. Later, when employer informed her she had no job, she sent another reply card saying she wants VR. - received 02/20/09. What do you think of her VR status? She has an argument that she was QIW prior to 12/31/08, but wasn't told by her ER till 2009 that there was no job, then she immediately requested VR. Should I refer her to a counselor? Or is she just out of luck? Would there be any chance to do an RU122? - although she is unrepresented.

Answer:  You owe the applicant retro VRMA at the TD rate from 12/16/08 through 12/31/08, because the employer was not able to offer her modified or alternative work. She would not be entitled to VR services, because L.C.  139.5 was repealed effective 1/1/09. This is the kind of case though that will be included  and decided  in the VR consolidation effort currently underway at the board (see above).

An RU-122 would be useless, because 1) it is no longer a valid form, and (2) the claimant is not represented.

CASE LAW

The WCAB's en banc decisions in Ogilvie v. City and County of San Francisco and Almaraz/Guzman v. SCIF/Keenan have all been appealed to District Courts of Appeal. Generally, the principles in cases that are appealed are held in abeyance until the case(s) is ultimately decided. I am informed that this is not the case with WCAB en banc decisions; the findings in these cases will be binding on all boards unless they are overturned by a District Court of Appeal or, more likely with these cases, the California Supreme Court. Under these circumstances, we can expect to see substantial activity at local boards on the subject of diminished earnings capacity during the coming months.




Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.


The views and opinions expressed by the author are not necessarily those of WorkCompCentral.com, its editors or management.