What Does An Employer Do When An Employee Is Eligible For The Voucher System?

Saturday, June 3, 2006 | 0

A thread on the WorkCompCentral Forums (www.workcompforums.com) addressed an issue that the editors felt was of importance to the workers' compensation community. It is republished here, edited for grammar, spelling, with identities redacted.

Q: An employee has permanent work restrictions which makes him eligible for the voucher system. What does an employer do? How does the employer advise the employee there is no longer a position for him? Is there any formal paperwork that needs to be completed? When does the insurance company advise the EE that he is eligible for the voucher?

Can anyone share verbage that is used for an employer to advise their employee that there is no longer a positon available to them per the permanent work restrictions given by the W/C doctor? Any/all assistance would be most helpful.

A1: The labor code is very specific about how to advise the employee about their eligibility for the voucher. The claims administrator will handle all issues and paperwork regarding the voucher on behalf of the Employer, starting with sending notice within 10 days of the end of TD. The voucher, and yes there is formal paperwork, will not become available to the Employee, however, until there is a determination/agreement on the exact percentage of disability. Therefore, your employee will probably be receiving PD advances and nothing else for quite some time.

You, the employer, can inform the employee that he will be eligible for a voucher to be used for tuition and books and a little counseling, however the amount, (either $4, 6, 8 or $10,000) is yet unknown. You can inform the employee that all information about the voucher will eminate from the claim administrator.

Hopefully you are aware of the potential for cost savings if you can return this employee to work within 60 days of the end of TD. (certain criteria apply) You can reduce PD payments by 15% on the workers comp side. But, if you cannot accommodate the employee, again, the claims administrator will include this language in correspondence they send to the employee.

Meanwhile, your concern about meeting workers' compensation compliances regarding lack of work within the employee's restrictions should be far less worrisome than the greater exposure under the FEHA. By merely leaving it up to the claims administrator to "take care of things for you", you are leaving a wide open gap for a civil claim for disability discrimination. The employer has the obligation to engage the employee in interactive discussions regarding the need for job accommodations. Interactive is best done face-to-face. This should involve HR, supervisor, union, employee, etc and the meeting should be documented.

You should have a VERY WELL DONE job analysis to review and discuss at this meeting, and to serve as a working document of job tasks and a springboard for the discussion about accommodation. Even if you already know that you cannot provide a permanent accommodation, you must allow the Employee the opportunity for dialogue.

Many, if not most, employers leave themselves exposed.

A2: Touche, employers in their exchange for a bargain with the devil now face much more expensive litigation in the form of FEHA and ADA entitlements since the applicant's no longer receive VR.

It would be fun to see some statistics as to what VR actually cost employers vs. 1/1/04 and forward FEHA and ADA costs in litigation and awards as most employers in CA are clueless.

A3: For the voucher, the notices are to be sent by the claim administrator. Separate from the voucher is the 15% increase in PD if the employer cannot provide mod/alt work meeting the LC definitions and requirements. Those notices also come from the claim administrator.

On the employer side, it sounds like you are seeking to terminate the employee based on the permanent restrictions. That may or may not be lawful. The employer needs to have a full understanding of its rights... as well as its obligations and potential liabilities. The liabilities can include discrimination per LC 132a, wrongful termination and issues under the FEHA/ADA if the employer is a covered entity.

While there is a lot of talk about the repeal of VR causing this result, that is just not the case. These requirements have been in place since the early 90's. They are just becoming more prominent. WC Central posted a case yesterday from 1997-1998 showing that an employer which relies on its WC claim organization to manage return to work/termination issues does so at it's peril under the disability discrimination laws.

Bottom line, every employer in CA covered by the FEHA who feels that their employee has permanent restrictions that impact upon the ability to do the essential functions of their U&C likely needs to assess the legal obligations for mod/alt search for the voucher, the 15% PD impact, for ADA/FEHA and before they take action to terminate, they must make sure they have also addressed any LC 132a and potential wrongful termination issues. There is not a form to manage these issues but they are indeed extremely manageable if you consult with knowledgeable professionals who understand the integration of the issues and have a proven track record of success.

A4: and the 15% increase/decrease has rules of its own and only applies for injuries after 1/1/05 for an employer with more than 50 employees... on and on ad nauseum.

So the employer needs a heck of a work comp attorney and a heck of a labor law attorney to perfect its processes immediately.

A5: Two lawyers are not necessary at all. In fact a lawyer is not necessary.

The employer, as they have for years in CA, needs to have access to a resource who understands the integration points of each process. The problem is there appear to be dire few folks with the integrated expertise to provide assistance.

The most obvious point of integration is the mod/alt search process of SB899 and the VR laws before that which can easily be adapted to meet the interactive requirements and to satisfy the WC and FEHA requirements. This is something we have recommended for years. Some clients do it and some don't. For the ones who do it, they have never been subject to an FEHA or 132a claim.

Having two separate lawyers, IMO, is cumbersome and truly a waste of resources, but often times is the way larger entities handle these, especially in a litigation context... More often than not the labor attorney does not have an understanding of the WC process and the WC attorney limits the practice to just WC.

The existence of the voucher and the PD supplement adds nothing to the FEHA process/integration process that also existed under VR. In my view, that sounds well and good if arguing the WC abolition of VR has these untoward complications on the FEHA side but it is just not the case. Both VR and the voucher/PD supplement contemplate a mod/alt search. The FEHA contemplates the interactive process and the mod/alt search. There has always been the opportunity to integrate. What we are seeing is more attention being paid to the rights and liabilities that have existed for many years.

A6: I wholeheartedly agree. It is rare to find an Employer, barring some of the larger (and/or public) entities, that has an in-house person/department who is knowledgeable in navigating both systems. I find that it either falls under the HR, Safety or Risk Departments, but it is rarely well handled. It is conquerable for any employer and you are so correct in noting that this really is nothing new. It is only more magnified now for folks who have been soley engaged in the WC system, as the abolishment of VR leaves them more at risk than before. Employers cannot walk amid the narrow tunnel of WC and think that they are being defended or protected from costly litigation by their claims examiner or WC defense attorney.

They can outsource casework to a professional or bring in that same professional to develop and implement an integrated program. (A bit self-serving....apologies !!!) Returning disabled employees to work, whether that disability stems from occupational or non-occ circumstances, is good business. It saves costs, lowers experience/premiums, reduces lost work days, re-engages the employee with the company, lowers risk of litigation which reduces expenses and provides a population of people with meaningful employment.

A7: Yesterday, WC Central posted the unpublished Court of Appeal Decision in Albertson's Inc vs Fair Employment and Housing Commission. The case contains some discussion of the employer's obligations under WC and under FEHA and how they coexist and how such obligations need to be independently satisfied.

As I indicted before, this fact pattern came about in 1997/98 during the time VR was in place. Probably provides a very practical explanation why there has not been a proliferation of these claims until what we are seeing now. The rights and liabilities were not clearly identified and the employee's attorney often times just handled the WC and told the employee to find another lawyer for FEHA issues, and the employee never did.

This decision and the recent decision in Green vs State of CA(even though Review by the Supreme Court has been granted) are must reading for anyone who looks to practice and advise in this area. So too is the decision of the CA Supreme Court in City of Moorpark vs Superior Court(Dillon) which is the leading case on the ability to maintain an action for independent violations of the WC/FEHA/wrongful termination laws in CA.

While I will concede that SB899 has some nuances that can really influence these issues and likely will, there are many obvious issues that still need to be grasped before an employer should consider the termination of an employee based on events that have occurred in the WC matter/claim.

Click for Albertson's case.

Article adapted from a post in the California Professional WorkCompForums.

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