Workers’ Compensation Division Seeks Employer Input

Two state entities are holding a series of public meetings across the state to gather comments about current workers’ compensation issues from employers and other stakeholders.

The open forum discussions are planned by the state Department of Industrial Relations (DIR) and the Division of Workers’ Compensation (DWC). DIR and DWC also seek suggestions for improvements.

DIR Director Christine Baker and DWC Administrative Director Rosa Moran will be among the speakers at the meetings.

Topics of discussion will include:

• Providing appropriate medical treatment without unnecessary delay, the Medical Provider Network (MPN), Utilization Review (UR) or other issues.
• Enabling injured workers to return to work as quickly as medically feasible.
• Adequate compensation for permanent disabilities.
• Reducing the burden of liens on the system.
• Identifying appropriate fee schedules.
• Reducing unnecessary litigation costs.
• Assessing appropriate use of opiates and other care.
• Any other improvements needed.

The California Chamber of Commerce would very much like to have its members participate in this process. Please visit CalChamber.com to register to attend one of the open forums.

Anyone wishing to participate should contact Jeremy Merz, CalChamber policy advocate.

Governor Acts to Protect Workers’ Compensation System

HR Watchdog recently blogged on several employment-related bills that Gov. Jerry Brown signed into law. The governor also took action on eight bills related to the workers’ compensation system in California.

Gov. Brown signed five CalChamber-supported bills:

• AB 335 (Solorio; D- Anaheim) Lowers Frictional Costs in Worker’ Compensation — Brings an estimated savings of $42 million to the workers’ compensation system by requiring the workers’ compensation administrative director (AD) to work with the Commission on Health and Safety and Workers’ Compensation (CHSWC) to develop regulations regarding notices to injured workers; requires AD and CHSWC to develop and make accessible a booklet written in plain language about the workers’ comp claims process; streamlines and simplifies other notices to employees.
• AB 378 (Solorio; D-Anaheim) Lowers Pharmaceutical Costs — Lowers workers’ compensation costs by establishing guidelines for dispensing compound drugs, the circumstances under which those drugs would be covered and the reimbursement amount, and removes the incentives for physicians to refer patients to pharmacies in which the physician or physician's family has a financial interest.
• AB 397 (Monning; D- Carmel) Ensures Contractors Have Coverage — Seeks to address the underground economy problem by singling out contractors that do not have workers’ compensation coverage but requiring contractors that are exempt from having coverage at the time they are licensed to certify they are still exempt or have gotten coverage at the time of their license renewal.
• AB 1168 (Pan; D-Natomas) Contains Workers' Compensation Costs — Lowers costs for employers and insurers by establishing a fee schedule for vocational experts' services.
• AB 1426 (Solorio; D-Anaheim) Streamlines Workers’ Comp System — Streamlines the workers’ comp process and eliminates duplicative bureaucracy and inconsistency by eliminating the court administrator position.

Gov. Brown vetoed three CalChamber-opposed bills:

• AB 211 (Cedillo; D-Los Angeles) Increased Workers’ Comp Costs — Increases costs in the workers’ comp system by establishing a flat $6,000 supplemental job displacement voucher to cover retraining and skills enhancement for injured workers without clarifying the timeframe when the injured worker can start receiving the voucher.
  Read the governor’s veto message.
• AB 584 (Fong; D-Cupertino) Delays Workers' Compensation Cases — Causes delays in utilization review (UR) and increases costs by unnecessarily requiring UR physicians to be licensed in California.
  Read the governor’s veto message.
• AB 947 (Solorio; D-Anaheim) Extension of Temporary Disability (TD) Benefit — Increases costs to employers by broadening the definition of the types of injuries that qualify for an extended timeframe to receive TD benefits, from 104 weeks to 240 weeks.
  Read the governor’s veto message.

Visit CalChamber’s Top Story for more in-depth coverage of the governor’s actions and how they affect the workers’ compensation system.    

Court Ruling on Cost-of-Living Adjustments Is Workers’ Comp Victory for Employers

(September 8, 2011) California employers and insurers scored a victory in a recent California Supreme Court decision on annual cost-of-living adjustments for certain workers' compensation claimants.

In the case of Christine Baker v. Workers' Compensation Appeals Board and X.S., the court looked at how the Legislature intended cost-of-living adjustments to be calculated for total permanent disability and life pension payments.

The question before the court was whether a 2002 law required the total permanent disability and life pension payment cost-of-living adjustments to be calculated:

• prospectively from January 1 following the year in which the worker first becomes entitled to receive benefits;
• retroactively to January 1 following the year in which the worker is injured; or
• retroactively to January 1, 2004 for every case regardless of the date of injury or the date the first benefit payment becomes due.

Supreme Court Ruling

The Supreme Court ruling agreed with a friend-of-the-court brief filed by the California Chamber of Commerce that the Legislature intended that cost-of-living adjustments be calculated and applied prospectively beginning on the January 1 following the date on which the injured worker first becomes entitled to receive and actually begins receiving benefit payments.

Background

The case involved "X.S.," a shortened version of a fictitious name assigned by the presiding workers' compensation administrative law judge to protect the applicant’s medical privacy.

X.S. was injured in January 2004 while employed as an accountant/controller, and eventually was deemed eligible to receive $728 weekly for life.

A dispute arose when the applicant claimed the weekly payments that began on October 20, 2006 should be increased to reflect annual increases in the state’s average weekly wage by calculating retroactive cost-of-living adjustments from the January 1 following the date on which he was injured to the date on which his total permanent disability payments began.

The Workers' Compensation Appeals Board said the cost-of-living adjustment should apply on the January 1 following the date of injury, regardless of when the first payment was received.

The Court of Appeal, however, annulled the board’s decision and sided with the California Applicants’ Attorneys Association, finding that the cost-of-living adjustment begins to accrue January 1, 2004, without regard to the date of injury. The appeals court reasoned that otherwise a worker whose total permanent disability does not become permanent and stable for a number of years would see payments "exposed to the ravages of inflation over time, eroding the real value of the benefits."

Double Windfall Nixed

The Supreme Court overruled the Court of Appeal, finding the lower court’s interpretation to be at odds with the language of the law and could result in a “windfall ‘double escalator’” by applying the cost-of-living adjustment retroactively from January 1, 2004 until the date the worker was injured. Because the indemnity payments owed to the injured worker were already increased by statute, there was no reason for the Legislature to have further included a cost-of-living adjustment increase.

Pointing to the very same legislative records highlighted by the CalChamber during oral argument in May, the state high court also cited the language of the law in finding "no compelling reason" to conclude the Legislature intended the cost-of-living adjustments in the law to “broadly redress all the potentially erosive effects of inflation” in the two categories of disability benefits covered by the section of law in dispute.

This ruling results in the most favorable interpretation possible for California employers and insurers, representing potential savings of billions of dollars in these two categories.

Staff Contact: Erika Frank

CalChamber-Sponsored Leave Clarification Bill Signed by Governor

​Gov. Jerry Brown recently signed a California Chamber of Commerce-sponsored bill that clarifies the requirements of paid bone marrow and/or organ donation leave.

SB 272 (DeSaulnier; D-Concord) provides employers with the needed clarity and certainty as to how this leave should be implemented, so that employers can comply with this leave requirement and minimize any risk of litigation.

SB 1304 (DeSaulnier; D-Concord), enacted in 2010, requires employers to provide employees with paid leave of either five days for bone marrow donation or 30 days for organ donation, within a one-year period. Given the ambiguity with some of the terms utilized in SB 1304, California employers were uncertain how this paid leave should be implemented.

Specifically, SB 272 clarifies that the one-year period referenced in the statute is 12 consecutive months from the date the employee’s leave begins, not one calendar year.

SB 272 also confirms that the days of leave are business days, as opposed to calendar days. Additionally, SB 272 provides certainty that the benefits of an employee must be maintained at the same level during the paid leave, as if he/she had continued to work during that period.

Finally, SB 272 specifies that employers that have a paid time off (PTO) program, rather than sick leave and vacation leave, can require that an employee take up to five days of PTO as a part of the employee’s leave.

The clarification and certainty provided by SB 272 will help employers properly implement this leave when an employee requests it, which ultimately will benefit both the employer and employee.

Jennifer Barrera:CalChamber Policy Advocate, Labor and Employment, Taxation 

Protected Status For Medical Marijuana Users?

SB 129 (Leno) passed out of the California Senate's Judiciary Committee earlier this week. The bill proposes to establish a protected classification for employees who use medical marijuana. 

CalChamber is actively opposing this bill. Last week, CalChamber policy advocate Jennifer Barrera provided critical testimony highlighting the costly impacts the bill would have on employers. In addition, Barrera discussed the fact that SB 129 threatens the health and safety of other employees and members of the public. Watch this video of the testimony. 

Much like Proposition 19 from 2010, SB 129 would prohibit employers from terminating, disciplining or refusing to hire employees who are qualified patients that can legally possess and use marijuana for medical purposes. Although SB 129 precludes any employee from using marijuana at the workplace, it does not preclude an employee from possessing marijuana in the workplace, or using marijuana minutes before coming onto the worksite and beginning his/her shift. 

Under this bill, even when employer smells the odor of marijuana and observes an employee's red eyes (which under current law would likely be enough to send the employee home or conduct a drug-test), the employer would have to wait to do anything until the employee showed clear signs that the marijuana was affecting or "impairing" his/her performance.

The subjective nature of the term "impairment," coupled with the private right of action provided under SB 129 for any alleged violation, would make employers hesitant to take any action until there was objective evidence of impairment, such as an industrial accident or injury. This would likely impact employers’ workers' compensation premiums and increase employers' litigation expenses as a result of the likelihood of negligent hiring claims to follow.

CalChamber will continue efforts to defeat this measure as the bill is considered during future committee hearings in the Legislature. 

By: Denise Davis, Vice President of Media Relations and External Affairs, CalChamber 

CalChamber members can read up on "protected classes" of employees in HRCalifornia's Law Library. Not a CalChamber member? Test-drive HRCalifornia with a 15-day Free Trial.