VRMA & TD Held to be Different Benefits by Appellate Court

Saturday, September 23, 2006 | 0

By Jake Jacobsmeyer

The Court of Appeal in the 4th Appellate District ordered publication of a previously issued decision involving calculation of maintenance allowance benefits payable pursuant to Labor Code Section 139.5. In its decision the court raised several significant distinctions between the payment of and calculations for maintenance allowance benefits and both temporary disability benefits and permanent disability benefits. The case is Gamble v. WCAB.

The applicant in this case was injured while working for United Airlines. Contemporaneous with that injury he also had a second job with a school district. The applicant would work both job contemporaneously for many years.

The employee was deemed a qualified injured worker for purposes of the United Airlines while continuing to work the job for the school district. After being determined to be a qualified injured worker the issue of applicant's benefits pursuant to Labor Code Section 139.5 was raised. In his initial decision the trial judge ordered maintenance allowance benefits on a wage loss basis with calculation to be made based upon applicant's earnings with the school district. After applicant filed the Petition for Reconsideration the trial judge issued essentially the same award finding the injured worker QIW, etc. and determining that no credit for wage loss should be allowed. Upon appeal the WCAB reversed the determination that wage loss credit was not to be allowed to the employer and awarded continuing maintenance allowance benefits on a wage loss basis.

Applicant appealed to the court of appeals who granted the matter for hearing. The court of appeals reversed the appeals board determination granting credit on the basis of wage loss calculations and in doing so drew several distinctions between maintenance allowance benefits and temporary disability benefits.

The court began its discussion with a brief yet comprehensive description of the California workers' compensation system and discussion of the history of vocational rehabilitation. Thereafter the court noted that there are several distinctions to be drawn between temporary disability benefits and maintenance allowance benefits. These distinctions include:

1. The maintenance allowance benefits are kept at much lower rate ($246 a week verses the maximum for temporary disability);

2. Labor Code Section 139.5 explicitly provides that once a worker is permanent and stationary the payment of temporary disability benefits ceases and is replaced with a payment of a different benefit called "maintenance allowance." (emphasis added by author)

3. There is a specific wage loss formula contained in Labor Code Section 4657 for partially disabled workers. Labor Code Section 139.5 does not contain any such language.

Based upon these distinctions the court determined that vocational rehabilitation maintenance allowance benefits are a different benefit when compared to temporary total disability benefits. As noted by the court:

"... very telling is the legislature's decision to set the maximum payment allowable for this combination of benefits by referring to Section 4453 (used for measuring permanent disability benefits) with no reference the wage credit reduction formula in Section 4657. What would be the point of supplementing the maintenance allowance with permanent disability indemnity if an employer could reduce the total amount to zero?"

In light of the argument and analysis presented by the court that wage loss benefits be paid without consideration of applicant's earnings in his second job. The court found inapplicable the holding in prior cases holding that wage loss benefits could be calculated for other types of benefits such as Labor Code Section 4850 benefits. The court then ordered that VRMA should be paid without consideration of applicant's second employment and based solely on earnings at the employment where the injury occurred.

The court's analysis of payment of VRMA now is probably different than most of us would have considered given the close identity that the system has typically given between temporary disability and rehabilitation maintenance allowance benefits. However the distinctions draw by the court appear to be well founded in the statutory language that they cite.

This language may also therefore have significance in other areas, the primary one being the requirement to pay Labor Code Section 4650 benefits for delays in payment of VRMA. Given the lengths that the court of appeals goes to differentiate the qualities associated with VRMA and temporary total disability benefits the distinction between those two benefits certainly suggests that Labor Code Section 4650 should be inapplicable to vocational rehabilitation maintenance allowance benefits. This is true particularly in light of the fact that Labor Code Section 4650 makes no mention of vocational rehabilitation maintenance allowance benefits. Further, now the arguments made by the WCAB in their decision holding 4650 does apply to VRMA (Rivera v. Tower, a decision later reversed on appeal on other issues) are significantly diluted with the court's emphasis the dissimilarities between VRMA and temporary disability and the holding that the benefits are for different purposes. In this case the court makes it clear that there is really a distinction to be draw between temporary total disability benefits both as to the the purpose of the benefits as well as the statutory language creating same.

To read a copy of this decision, click on the case title above.

Attorney Richard "Jake" Jacobsmeyer is a partner in the firm Shaw, Jacobsmeyer, Crain & Claffey and can be reached at jakejacobsmeyer@shawlaw.org.

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