Wasted Money?

Monday, October 15, 2012 | 0

In the last several weeks I've done three conference presentations on Senate Bill 863.

Based on audience questions at the various seminars, one of the least controversial parts of the recently enacted comprehensive workers' comp reform is the section dealing with reforms to the supplemental job displacement benefit, commonly known as the "voucher."

So it was with interest that yesterday I noted the title of an article by Jim Sams on WorkCompCentral.com, "Claims Pros See Easy Money in Revamped SJDB Program." And then I noted the headline of David DePaolo's blog piece, "Money For (Almost) Nothing."

Both Sams' article and DePaolo's are commenting on the new Labor Code 4658.7 that will apply to injuries occurring on or after Jan. 1, 2013. Section 4658.7 requires the DWC to adopt regulations for administration of the section.

Among the provisions of the new voucher system is a provision allowing use out of the $6,000 for "purchase of computer equipment, up to $1,000" (see 4658.7(e)(5)).

4658.7 also contains a provision which allows out of the $6,000 voucher payment of:

"Up to five hundred dollars ($500) as a miscellaneous expense reimbursement or advance, payable upon request and without need for itemized documentation or accounting. The employee shall not be entitled to any other voucher payment for transportation, travel expenses, telephone or internet access, clothing or uniforms, or incidental expenses."

Do these provisions amount to a $1,500 giveaway?

DePaolo notes that, "While most of the $6,000 voucher requires some documentation or other verification that the money is going to be used towards retraining or obtaining another job, two provisions thus far (without further regulatory constriction) have most folks opining that $1,500 is just a giveaway."

In his blog, David DePaolo references a provision in Florida's law that requires a $2,000 permanent disability advance to a worker who either is not able to return to work at the same or similar employment or who has sustained significant wage earning loss. As publisher of WorkCompCentral.com, David follows not just California workers' comp, but also keeps a keen eye on developments in other states.

Here is what DePaolo concludes:

"Thus far in Florida, there is no good data to suggest that this "giveaway" has resulted in any significant impact on claims costs. It seems more a point of irritation than any great impact on the system, simply because the threshold for getting 'free money' is so low and the settled law is that so long as the injured worker is "better off" with the money, then it is payable. Thus I suspect the same with the California provision; it doesn't seem that this will affect costs one way or the other for the most part. I think it will be a 'sore point' for some who bemoan the entitlement mentality that sometimes pervades social systems be that as it may, is it better or worse than the prior voucher system, or vocational rehabilitation that preceded that? Honestly, I don't think it makes a difference one way or the other. Those who are serious about returning to work will probably not use the voucher provisions, and those that aren't serious about returning to work probably won't use the voucher beyond getting a new computer and some extra cash."

In the WorkCompCentral.com piece by Jim Sams, Douglas Gorman, return to work coordinator for Contra Costa County Risk Management, is quoted as commenting at DWC public hearings in Oakland that, "Every voucher is potentially, and I'm sorry to use this term, a $1,500 giveaway."

Let me push back a bit before this $1,500 for nothing narrative takes hold as conventional thinking.

Unfortunately, a narrative that the workers' comp system gives "free stuff" become quite pernicious, particularly where there is increasing concern about whether we live in a culture where significant numbers of folks feel entitled to support.

The thought process behind the $1,000 for a computer is to enable workers who need one to have sufficient funds to purchase what is a tool to better themselves. In the real world most workers need a computer for resume preparation, job search or information gathering. Yes, some workers, depending on where they live and transportation access issues, may have potential computer access at a library or through a friend.

But allowing the worker money to get computer equipment (which regulations presumably would indicate include a printer/scanner or perhaps a Smart phone?) will help many workers get the tools they need to either look for a job or research their options.

When we are talking "free computer" it's easy to forget that we are talking about workers who either lose their job because of their injury or who at a minimum were not given a timely return-to-work offer.

And what about the $500 payable on request without the need for documentation?

Under the former California vocational rehabilitation scheme, great amounts of time and energy were spent by voc rehab counselors, claims examiners and lawyers on reimbursement issues involving mileage, clothing allowance and other incidental expenses.

Those who don't represent injured workers don't always get it that a fair number of those individuals are really so economically stressed that they have trouble putting gas in their car to come to court, go see doctors and look for work.

Whether the majority of the workers who get the $500 miscellaneous reimbursement will spend it wisely is not clear.

But the provisions of the new law take those reimbursement issues off the table, in essence opting for a liquidated amount payable (from the $6,000 retraining voucher) to the worker. Looking at it another way, the worker is going to be fronted some money to get the self-generated retraining process going.

Will some workers who can't return to their jobs take the $500 and a computer and call it a day? Perhaps. But even those who don't avail themselves of the other $4,500 available with the voucher will probably find that the computer allowance and miscellaneous reimbursement helps them in locating some options for their future.

So let's not go overboard with the "free stuff" argument. There is good policy and many practical reasons to be in support of the reworked SJDB section.

And let's not forget the big picture. These amendments speed up the provision of the voucher.

Currently (and for injuries til 1/1/2013), a retraining voucher is available for employees who do not return to work for the employer within 60 days of the termination of temporary disability (unless the employee rejected a timely-made offer of modified work or alternate work). The voucher for pre-2013 injuries is payable in amounts between $4,000 and $10,000, depending on the amount of the permanent disability award.

Therein lies the problem.

Currently the PD award is often determined quite a while after the last date of temporary disability payable. So use of vouchers has been low. Workers have typically not been able to use retraining vouchers at the time they would be most useful.

Newly added Labor Code Sec. 4658.7 addresses that problem. For injuries after 1/1/2013, the trigger for a voucher will be where an employer does not offer regular, modified or alternative work within 60 days of receipt of a P&S report finding that the injury has caused permanent partial disability.

This may act as an incentive for employers to hasten the reasonable accommodation process required under FEHA.

And it surely will make the voucher more usable, coming at a time when the return-to-work issue is paramount.

Stay tuned.

Julius Young is a partner with the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers' Comp Zone blog.