Grinberg: What's Included in That S&W Penalty?

Tuesday, October 17, 2023 | 0

When is industrial disability leave not compensation? When the Workers' Compensation Appeals Board is calculating potential serious and willful penalties.

Gregory Grinberg

Labor Code Section 4553 provides that “the amount of compensation otherwise recoverable shall be increased one-half … where the employee is injured by reason of the serious and willful misconduct.”

So let’s take a look at a recent Court of Appeal decision, California Department of Corrections and Rehabilitation v. WCAB (Michael Ayala). Therein, the Court of Appeal was asked to address the question of whether the “compensation” that could potentially be increased by half as per LC 4553 includes industrial disability leave.

Ayala was a correctional officer at Lancaster State Prison when he was severely injured due to an attack by inmates. The PD was ultimately resolved for 85%, but applicant’s serious and willful petition was not resolved until a split WCAB panel found that the defendant had engaged in serious and willful misconduct. 

Applicant contended that the compensation to which he was entitled was his full salary, as that is what he received, while defendant contended that applicant’s compensation should be calculated based on the TTD rate alone.

The trial judge sided with defendant, limiting applicant’s 4553 increase to the TD rate, while the WCAB reversed, finding that the industrial leave supplemental bringing applicant to full salary should be included in any S&W penalty. On appeal, the WCAB sided with defendant. 

The Court of Appeal reasoned that “compensation” under Labor Code Section 3207 refers to “every benefit or payment conferred by [Division 4 of the Labor Code].” However, the Court of Appeal traced industrial disability leave to Government Code 19871, which is not part of Division 4 of the Labor Code.   

Accordingly, the calculation of serious and willful penalties is limited to consideration of those benefits that would be payable under Division 4 of the Labor Code, and no other benefits. 

As per this Court of Appeal decision, it seems that any benefit that enters the calculus for serious and willful exposure must be traced to somewhere in Division 4. Otherwise, the Ayala court would have us exclude it.

Gregory Grinberg is managing partner of the Tobin Lucks office in Burlingame and a certified specialist in workers’ compensation law. This post is reprinted with permission from Grinberg’s WCDefenseCA blog.