Fundamentals of Work Comp Law - Part 3

Saturday, March 1, 2003 | 0

The following article is the third in a series for attorneys and other professionals just getting started in workers' compensation. The first article reviewed the history of workers compensation in CA, and provided an overview of the system framework. The second article reviewed benefits for temporary and permanent disability. This article will review death benefits, penalties and provide an overview of benefit rates.

Authors Richard Owen and Harold Greene have graciously permitted the republication of their outline from the annual class on workers' compensation they give to the CA State Bar Section Education Institute. Though not in narrative format, workcompcentral editors felt the material to be of excellent educational quality in present form and are proud to publish it here.

F. Death Benefits (Labor Code sections 4700-4727):

1. To be compensable, there must be an industrial injury that results in death within 240 weeks of that injury.

2. Who are "dependents" (Labor Code sections 3501-3503)? Labor Code section 3501(c) was added by AB 749 providing that the parents of the deceased employee "shall be conclusively presumed to be wholly dependant for support upon the deceased employee" in the event no other person qualifies as a total or partial dependant. Said subsection was deleted by AB 486.

3. Death benefits to dependents: Go to Death Benefits Calculator.

4. Burial expenses: See schedule below for a summary of burial benefits.

5. Continuation of benefits until minors reach 18 years of age for deaths resulting from injuries occurring on or after January 1, 1990. (Labor Code section 4703.5)

6. AB 486 added Labor Code section 4702(a)(6) providing that for injuries occurring on or after 1/1/2004, if there are no dependants, a death benefit of $250,000 is payable to the estate of the deceased.

G. Penalties for unlawful discrimination (Labor Code section 132a):

1. "Any employer who discharges, or threatens to discharge, or in any manner discriminates against any employee because he or she has filed or made known his or her intention to file a claim for compensation . . is guilty of a misdemeanor and the employee's compensation shall be increased by one-half . . . [not to exceed $10,000]. Any such employee shall also be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer."

2. Similar penalties for similar acts of discrimination against potential witnesses except for the 50% increase in compensation benefits.

3. Similar penalties for "any insurer that advises, directs or threatens an insured under penalty of cancellation or raise in premium or for any other reason" to discriminate against an injured worker or potential witness.

4. There must be a separate petition filed with the WCAB within 1 year of the discriminatory act or date of termination or the action is barred.

H. Penalties for Serious and Willful Misconduct:

1. By Employee (Labor Code section 4551):

a) 50% reduction of benefits where the "injury is caused by the serious and willful misconduct of the injured employee" except in cases of death, disability over 70%, employer Cal-OSHA violations, or where the injured is 15 years of age and under.

2. By Employer (Labor Code section 4553-4553.1):

a) 50% increase in benefits where the "injury is caused by reason of the serious and willful misconduct of the employer or his managing representative. The penalty is to be calculated on the entire compensation award, not just indemnity benefits, subject to a general limitations that such penalty cannot exceed the employee potential civil tort recovery; such limitation is necessary to prevent sanctioning constitutionally excessive damages. Ferguson v. WCAB (Raley's Supermarkets) 33 Cal.App.4th 1613, 60 CCC 275 (1995).

b) A Cal-OSHA violation/citation of a safety order that proximately caused the injury is tantamount to a prima facia showing of S&W.

c) There is no cap on the amount of increased benefits due as a result of a S&W finding.

d) Illegal hiring of a person under the age of 16 is also a basis for a 50% increase of benefits. (Labor Code section 4557)

e) S&W is a penalty and is not covered by workers' compensation insurance; it is liability owed directly by the employer. (Insurance Code sections 11661, 11661.5) f) There must be a separate petition filed with the WCAB within 1 year of the date of injury or the benefit is barred by the statute of limitations. This statute is strictly construed. (Labor Code section 5407)

I. Liens (Labor Code sections 4900-4905, Rules 10770- 10772):

1. "No claim for compensation nor compensation awarded, adjudged, or paid is subject to be taken for the debts of the party entitled to such compensation except as hereinafter provided." Labor Code section 4901.

2. Determination of liens against compensation payable: Only those liens specified in the Labor Code are chargeable against the injured workers' benefits.

a) Reasonable attorney's fee for legal services pertaining to any claim for compensation, and reasonable disbursements in connection therewith. No fee for legal services shall be awarded to any representative who is not an attorney, except for cases filed on or before December 31, 1991 (Labor Code section 4903(a)); only reasonable legal and medical services claims valid (Labor Code section 4906).

b) Reasonable medical treatment and reasonable medical-legal expenses (Labor Code section 4903(b)). Note: AB 749 adds Labor Code section 4903.5 proscribing a statute of limitations for the filing of liens for medical expenses under 4903 from the latest to occur: 6 months after the final resolution of the claim by the WCAB, 5 years from date of injury or 1 year from the date the services were provided.

c) Reasonable value of living expenses of an injured employee or of his/her dependents, subsequent to the injury (Labor Code section 4903(c)).

d) Reasonable burial expenses not to exceed amount specified in Labor Code section 4701 (Labor Code section 4903(d)).

e) Reasonable living expenses of the spouse or minor children of the injured worker, or both, subsequent to the date of injury, where the injured worker has deserted or is neglecting his/her family (Labor Code section 4903(e)).

f) Unemployment compensation disability benefits (Labor Code sections 4903 (f), 4904).

g) State Disability Insurance benefits (Labor Code sections 4903 (g), 4904).

h) Indemnification granted by the California Victims of Crime Program under Government Code sections 13959 et seq. (Labor Code section 4903 (h)).

i) Compensation and related benefits provided by the Asbestos Workers' Account pursuant to Labor Code section 4401 (Labor Code section 4903 (I)).

J. 10% penalty for unreasonable delay or refusal of payment of compensation (Labor Code section 5814):

1. The 10 percent penalty is applied to the class of benefits where payment was unreasonably delayed. And the penalty applies to the entire class of benefits, not just the benefits delayed. See Gallamore v. WCAB, 23 Cal.3rd 815, 44 CCC 321 (1979). By analogy to Labor Code section 4603.2 (b), the Supreme Court has held that Labor Code section 5814 penalties for the delay in the payment of medical mileage claims attach to the entire species of medical treatment when such claims are not paid within sixty days. Avalon Bay Foods v. WCAB (Moore) (1998) 18 Cal. 4th 1165, 63 CCC 902. But see State Compensation Insurance Fund v. WCAB (Stuart) (1998) 18 Cal.4th 1165, 63 CCC 902, in which the Supreme Court requires the WCAB should consider the totality of the circumstances in determining whether a delay is unreasonable. "When penalties are assessed in the workers' compensation setting, we have cautioned that 'the board should proceed with a view towards achieving a fair balance between the right of the employee to prompt payment of compensation benefits, and the avoidance of imposition upon the employer or [insurance] carrier of harsh and unreasonable penalties' (Gallamore [v. WCAB (1979)] 23 Cal 3rd 815, 828, [44 CCC 321].) We have reiterated this position . (Christian v. WCAB (1997) 15 Cal. 4th 505, 517 [62 CCC 576]); Rhiner v. WCAB [(1993) 4 Cal.4th 1213, 1230, [58 CCC 172].)" Stuart, supra, 18 Cal.4th at pp 1216-1217. County of San Luis Obispo v. WCAB (Barnes) (2001) __CA4th__, 66 CCC 1261. [emphasis added]

2. Multiple penalties may be awarded if there have been separate and distinct incidents where benefits have been unreasonably delayed. See Gallamore, supra. But where multiple installments of a single benefit are delayed as a result of a single decision and a single course of conduct, only one penalty for delay is payable. See Christian v. WCAB, 15 Cal.4th 505, 62 CCC 576 (1997). AB 749 codifies this rule: "Multiple increases shall not be awarded for repeated delays in making a series of payments due for the same type or specie of benefit unless there has been a legally significant event between the delay and the subsequent delay in payments of the same type or specie of benefit"

3. Now in most situations, reasonable attorneys' fee shall be awarded in addition to any penalty imposed (Labor Code section 5814.5). This section had been limited to those employers under Labor Code section 3700 (c), which generally were cities, counties and other political subdivisions of the State. Labor Code section 3700 relates to all employers, other than the State of California, required to secured workers compensation coverage. This change was made by AB 749, effective 1/1/2003.