Fundamentals of Work Comp Law - Part 1

Saturday, February 1, 2003 | 0

The following article is the first in a series for attorneys and other professionals just getting started in workers' compensation. Authors Richard Owen and Harold Greene have graciously permitted the republication of their outline from their 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.

I. History:

A. Roseberry Act of 1911 (voluntary); Boynton Act of 1913 (compulsory); Workman's Compensation Insurance and Safety Act of 1917 (basic statutory framework of the current workers' compensation system).

B. Margolin-Greene Workers' Compensation Reform Act of 1989, amended 1990 (created the claim form and conferred WCAB jurisdiction with the filing of the claim form with the employer; made numerous other changes in workers' compensation law and procedure).

C. Workers' Compensation reform acts of 1993 (retained the claim form [DWC-1] but returned the act of conferring WCAB jurisdiction to the filing of an application with the WCAB; made numerous other changes in workers' compensation law and procedure).

D. Workers' Compensation reform acts of 2002 (AB 749 and AB 486): First benefit increases since the 1993 reforms, established a "court administrator" to manage WCAB proceedings, limited the presumption of correctness of the treating physician to those predesignated by the injured prior to the date of injury, repealed baseball arbitration, and made numerous other changes in workers' compensation law and procedure.

E. Major revision of WCAB Rules effective 1/1/2003: During 2002, the WCAB made major revisions to its rules effective 1/1/2003, some grammatical and non-substantive but many significant changes in procedures. See new Rules 10300-10999.

II. Principle Distinguishing Features:

A. A compulsory, no-fault system with benefits limited and defined by statute.

B. Automatic delivery of benefits.

C. Constitutional mandate to " . . . accomplish substantial justice to all cases expeditiously, inexpensively, and without encumbrances of any character; . . .." California Constitution Article XIV, section 4.

D. Liberal Construction (Labor Code section 3202): "This division [Division 4 - Labor Code sections 3202-6202]. . . shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment."

III. Employment, Injury AOE/COE, and other "Threshold" issues:

A. An employer - employee relationship must exist before workers' compensation benefits are due an injured person. (Labor Code sections 3300-3301, 3350-3371)

1. Presumption that one rendering services is employee (Labor Code section 3357): "Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee."

2. Independent Contractor (Labor Code sections 3353, 2750.5): "￯﾿ﾯ￯ﾾ﾿￯ﾾﾢ￯﾿ﾯ￯ﾾﾾ￯ﾾﾀ￯﾿ﾯ￯ﾾﾾ￯ﾾﾘIndependent contractor' means any person who renders service for a specified recompense for a specified result, under the control of his principle as to the results of his work only and not as to the means by which such result is accomplished."

3. Unlicensed contractors (Labor Code section 2750.5): "Rebuttable" presumption that unlicensed contractors are "employees" rather than "independent contractors".

B. Injury AOE/COE (Labor Code section 3600):

1. The injury must satisfy a 2 prong test (Labor Code section 3600 (a)(2)):

a) It must "arise out of the employment" (AOE) generally meaning proximately caused by the employment; and

b) It must be "in the course of the employment" (COE) generally meaning time, place, etc. must relate to the employment.

c) Going and Coming Rule: The ordinary commute to and from the place of employment is not considered to be within the course of employment (COE). Ocean Acc. & Guar. Co. v. IAC (Slattery), 173 Cal. 313, 3 IAC 406 (1916); Hinojosa v. WCAB, 8 Cal.3rd 734, 37 CCC 734 (1972). But there are many exceptions!

d) Special Mission/Errand Rule: If the employer specifically requests that the employee make a special trip as part of his commute, or imposes some other special condition on the commute, then the "special mission/errand" will take the commute out of the going and coming rule and any injury occurring during such commute will be considered a compensable event.

e) Commercial Traveler Rule: A person on a business trip (a form of special mission) is considered in the course of his employment during the entire trip. Wiseman v. IAC, 46 Cal.2nd 570, 21 CCC 192 (1956).

2. Specific incident/accident (Labor Code sections 3208, 3208.1, 5411): "The date of injury, except in the cases of occupational disease or cumulative injury, is that date during the employment on which occurred the alleged incident or exposure, for the consequences of which compensation is claimed."

3. Cumulative injury/disease (Labor Code sections 3208, 3208.1, 5412) "The date of injury in cases of occupational diseases or cumulative injuries is that date upon which the employee first suffered disability therefrom and either knew, or in the exercise of reasonable diligence should have known, that such disability was caused by his present or prior employment.

4. Wilkinson Rule ( Wilkinson v. WCAB, 19 Cal.3rd 491, 42 CCC 406 (1977); Labor Code section 3208.2) ): If a series of injuries over time resulting in disabilities becomes permanent and stationary at one point in time, the resulting disability should be treated as arising from one injury for purposes of awarding permanent disability. The court held that it was unreasonable to attempt to apportion the disabilities between the different injuries when they have combined or merged into the formation of the final level of disability reported by the examining physicians. (Why is this important? Benefits are generally paid at the rate authorized by the law in force on the date of injury. With the increased level of benefits commencing 1/1/03 as authorized by AB 749 & 486 (see p.12-13), it is important to try to maximize those benefits by bringing the disabilities from all injuries forward together to get the higher rates. Wilkinson , supra, allows this if you meet its requirements.)

5. Presumptions for certain public safety employees (Labor Code sections 3212- 3213.2): "Heart trouble", hernia, pneumonia, tuberculosis, certain cancers for firefighters, skin cancers for life guards, blood-borne infectious diseases, meningitis, and lower back impairments are presumed compensable for public safety officers as defined in the statutes. These presumptions apply regardless of the actual facts of the case, and generally cannot be rebutted by pre-existing conditions or diseases. The best way to deal with these presumptions is to consider them an additional employment benefit provided by the State of California for the defined public safety officers. Always go back and re-read the presumptions if you have a peace office/firefighter class injured worker to see if a presumption applies or not; don't try to remember the details of each because each is slightly different from another.

6. Limitations on psychiatric/stress claims (Labor Code section 3208.3): Currently, an injured worker must "demonstrate by a preponderance of the evidence that the actual events of employment were predominant as to all causes combined of the psychiatric injury." Prior to July 16, 1993, the injured worker only had to demonstrate that "the actual events of employment were responsible for at least 10 percent of the total causation from all sources contributing to the psychiatric injury." Prior to 1990, all the injured worker had to demonstrate was that the worker's "perceived" stress from employment played an active role in the development of the injured worker's psychological condition. Albertson's Inc. v. WCAB (Bradley), 131 Cal.App.3rd 308, 47 CCC 460 (1982). Please note that these limitations do not relate to any psychological/emotional overlay resulting from a physical injury sustained by an injured worker. Additionally, section 3208.3(h) bars compensation for psychiatric injuries which are substantially caused by a "lawful, nondiscriminatory, good faith personnel action." See Larch v. Contra Costa County (1998) 26 CWCR 194 for a discussion of what constitutes such personnel action. See also Stockman v. State of California (1998) 26 CWCR 1042.

C. Statutory defenses (Labor Code section 3600(a)(4)-(10)):

1. Intoxication - alcohol or unlawful use of a controlled substance (Labor Code section 3600(a)(4)): But the intoxication must be the proximate cause of the accident/injury.

2. Intentionally self-inflicted (Labor Code section 3600(a)(5)).

3. Suicide (Labor Code section 3600(a)(6).

4. Initial physical aggressor of an altercation (Labor Code section 3600(a)(7)).

5. Injury caused during commission of felony by injured for which he/she is convicted (Labor Code section 3600(a)(8)).

6. Voluntary participation in any off-duty recreational, social, or athletic activity not constituting part of the employee's work-related duties (Labor Code section 3600(a)(9)).

7. Post termination psychiatric injuries, except as provided in Labor Code section 3208.3 (Labor Code section 3600(a)(10)): If claim form is filed with the employer after notice of termination has been given to the employee, the injured worker must come within one of the specified exceptions. Note, this defense is not available to post-resignation claims. See CJS Company v. WCAB (Fong) (1999) 64 CCC 954, 27 CWCR 214.

8. Injuries occurring while traveling to and from work in an alternate commute program sponsored or mandated by a local governmental entity are barred under Labor Code section 3600.8 unless the employer pays a regular wage or salary for the commute time or provides workers' compensation coverage for those employees.

9. Statute of Limitations (Labor Code sections 5400-5412): More holes than cheese! Generally (and this is probably a gross over-simplification), an application must be filed within 1 year of denial of liability for the claim, within 1 year of the last providing of any benefits, or within 5 years of the date of injury. There are many technical requirements about the notices that must be satisfied by the defendant insurance carrier; otherwise the defendant is estopped from asserting the statute of limitations defense. See Reynolds v. WCAB, 12 Cal.3rd 726, 39 CCC 768 (1974).

The next article in this series will review benefits, what are available and how they are calculated.

Richard D. Owen is a Sr. Staff Counsel, Supervisor, with State Compensation Insurance Fund; he is the Attorney-in-Charge for Glendale Legal's Unit A, comprised of 16 litigation attorneys and 14 clerical support, and participates in training/educating attorneys and claims adjusters for SCIF in throughout California. He has been a certified workers' compensation law specialist since 1992 He can be reached at rdowen@scif.com.
Harold L. Greene is an Attorney at Law with the offices of Greene and Weinberger in Simi Valley, CA, and has been a certified specialist in workers' compensation law since 1974. He can be reached at haroldlgreene@hotmail.com.