Observations Based on Recent Case Law

Saturday, November 22, 2003 | 0

Are 4650 penalties due on late lump sum VRMA payments?

A few months back, we reported on the WCAB en banc decision in Crump/Rivera where the Board determined that L.C. section 4650 penalties were due on any late payments of indemnity, including lump sum payments due on settlements or commutations.

Although VRMA was not one of the issues in these cases, the Board specifically noted that VRMA was an indemnity payment and therefore was not exempt from 4650 self imposed penalty requirements.

The Rivera case was appealed; the 2nd DCA has annulled this decision and returned it to the Board for further proceedings. The DCA determined that lump sum payments were not "regular payments" within the meaning of 4650 and therefore not subject to the self imposed penalty requirements. The DCA did not mention the Board's inclusion of VRMA as an indemnity payment; however, the remand of this case means there is no requirement for employers/insurers to pay the SIP pending further action by the Board (and any subsequent appeals.

Late payment of VRMA does require that the employer/insurer pay the delayed benefit at the TD rate and outside the cap pursuant to L.C. section 4642(a).

FEHA cases can be expensive.

A Riverside County jury has awarded a former sheriff's investigator $460,000 under the Fair Employment and Housing Act (FEHA) because the employer failed to offer the employee a job modification to accommodate his mental disability.

The County believed it had no affirmative obligation because the employee had been provided retirement and disability benefits and other jobs were available within the County - all the employee had to do was apply and demonstrate that he was qualified.

The Department of Fair Employment and Housing (DFEH) argued, on behalf of the employee, that the employer was aware of the employee's disability and it therefore had an affirmative obligation to investigate his need for accommodation.

This case has relevance to private sector employers who are used to their insurers spearheading the modified/alternative work job search.

With the demise of L.C. sections 139.5 and 4638, many insurers will no longer assist employers with this function.

Employees who need to return to work and also need accommodation may turn to DFEH for assistance if their employers decline to consider job accommodation. As this case aptly demonstrates, the lack of an affirmative return to work program can prove far more costly to an employer than a workers comp case with rehab.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.