Education Code Benefits Trigger Two-Year TTD Cap

Tuesday, August 12, 2008 | 0

By Richard M. "Jake" Jacobsmeyer

In another case that adds to our growing understanding of Labor Code Section 4656(c)(1) (Two year limits on payment of TTD), the 1st Appellate District has reversed a Workers' Compensation Appeals Board decision after reconsideration which had ruled benefits provided under Education Code Section 44043 did not constitute temporary disability benefits and were not part of the applicant's two-year window of temporary total disability benefits.

The Court of Appeal ruled in Mt. Diablo USC v WCAB (Rollick), ably argued by Warren Pulley of Pulley & Cohen LLP of Oakland, such benefits included applicant's TTD benefit and therefore were to be counted toward the two- year/104-week payment limitation under Labor Code § 4656(C)(1)[1].

This case involved an initially contested injury to a special education assistant for the Mt. Diablo Unified School District, which was eventually accepted and became the subject of an award of continuing TTD by agreement.

After two years of payment, defendants sought an order terminating liability for TTD on the basis of the two-year limitation under Labor Code § 4656(c). The parties agreed that applicant received benefits under ED Code 44043
which provides for coordination of TTD benefits with accrued sick leave and vacation to allow an employee to receive full pay which the coordinated benefits last.  After Education Code benefits were terminated when the additional
leave benefits were completely used up, applicant received ordinary TTD benefits.

At trial the workers' compensation judge ruled Education Code benefits were not TTD for purposes of Labor Code § 4656(c) and denied defendant's petition to terminate the award, holding that Education Code benefits were not conferred by Division 4 of the Labor Code.  The WCAB, on defendant's petition for reconsideration, concurred with the workers' compensation judge's interpretation concluding that as Education Code benefits were limited in scope, they were not to be included in the calculations for TTD under Labor Code § 4656(c)(1).

The Appeal Court's analysis of the code sections appears to find the workers' compensation judge's and WCAB's analysis puzzling and incomplete.  The Education Code specifically provides that an injured employee, in order to take advantage of the ability to supplement TTD benefits with accumulated leave benefits, was required to turn over the TTD check to the District.  An alternate methodology also is provided by statute that allows the injured worker to keep his check and the employer to simply supplement the TTD with an additional payment, that, when added to TTD, provides for full payment of salary to the employee.  As noted by the Court:

"...entitlement to section 44043 benefits is contingent on payment of workers' compensation temporary disability benefits.  (See § 45192, subd. (f) [employee is entitled to use only so much of accumulated leave time which when added to workers' compensation award provides for full day's wage or salary].)  It follows that the date temporary disability payments commence can be no later than the first payment under section 44043.

"Further, each subsequent section 44043 payment is contingent on receipt of a temporary disability check and consists, in part, of temporary disability benefits.  The fact the school district issues a single check combining temporary disability and leave benefits does not change the essence of the underlying payments."

Applicant attempted to draw a distinction between the statutory provisions and the defendant's practice in this case regarding the methodology of payment.  The employer in this case (as does many school districts) had adopted a procedure whereby a voucher was issued to the school district for the amount of the TTD payment and the district in turn issued a single payment of full salary that included both the TTD and the supplemental benefits. The court took note of what it considered to be a minor variance from the statutory scheme and firmly rejected the argument that such a
method rendered the payments any less inclusive of TTD.

"...So the question is whether the result should be different here because the temporary disability checks never landed in Rollick's hands (at least until her accrued leave time was exhausted).  We conclude the answer is no because a contrary answer would elevate form over substance.  Rollick received exactly what she was entitled to under section 44043.  And it is no surprise that she accepted her Education Code payments without objection, and without having to go through the additional steps of receiving, endorsing and delivering her disability check to Mt. Diablo.  Although the Legislature has set forth a certain procedure to follow in section 44043, we do not believe it would be concerned with a slight administrative deviation that is mutually beneficial to the parties and achieves the same end result. To conclude otherwise would lead to an absurd result."

The Appellate Court was also unimpressed with the effort to characterize the payments as analogous to Labor Code § 4850 payments for public safety officers.

"We express no opinion on the WCAB's conclusion regarding Labor Code section 4850 salary continuation benefits.  Instead, it is readily apparent from comparing section 4850 with section 44043 that one is looking at two quite distinct provisions.  Labor Code section 4850 provides that defined public safety workers are entitled to a leave of absence while disabled, "whether temporarily or permanently," without loss of salary for up to one year.  (Id., subd. (a).)  The payment of salary is "in lieu of temporary disability payments."  (Ibid.)  Section 4850 does provide for the remittance of any disability insurance payments to the employer (id., subd. (d)), but receipt and transfer of such payments is not a prerequisite to payment of the salary continuation benefits.

Section 44043, rather than providing for payment in lieu of temporary disability payments, provides for payment of accumulated leave time in addition to temporary disability payments.  Section 44043 payments are contingent on receiving temporary disability benefits.  Section 44043 payments end when leave time is exhausted.  In sum, section 44043 provides a different and inferior benefit than Labor Code section 4850.[2]"

In rejecting this argument the court noted that the provisions for Education Code benefits were much more analogous to the provisions for industrial disability leave for state employees and cited the Brooks v WCAB decision in support of its analysis.

While we still have no definitive opinions as to the treatment for Labor Code § 4850 benefits, this is now the second appellate court that has noted the difference between injury benefits that include TTD payments or are contingent on receipt of TTD benefits and full pay for public safety officers.  It seems fairly safe to conclude that the courts are going to
allow this distinction to continue to control payment of TTD benefits and Labor Code § 4850 benefits.  However following the rational of this court, coupled with the holding in Brooks, it also seems fairly safe to conclude that if the payment of supplemental benefits in contingent upon the obligation to pay TTD and is defined by the same period as TTD, the payments will be considered as part of Labor Code § 4656(c)(1) limiting period.

It should be noted that the court specifically limited its holding to Education Code 44043 benefits and  did not consider other ED Code benefits that might be coordinated with TTD (Education Code §§ 44977, 44983, 44984, 45192 & 45196). The issue in this case is really unaffected by this limitation as the principle question is when did the first payment of TTD issue which results in the two-year TTD window being triggered.  However, for injuries after Jan. 1,  2008, where there is no longer a two-year window but an aggregate 104 weeks of benefits; such a distinction may be significant.  The court's analysis that TTD was included in and limited the provision of Educatioh Code 44043 benefits would seem applicable to the other sections where TTD is integrated with Education Code benefits to supplement the injured worker's income, but this case, as written, does not make that extension.

Richard "Jake" Jacobsmeyer is a partner with the firm of Shaw, Jacobsmeyer, Crain & Claffey.