Basic Workers Compensation Practice

Basic Workers Compensation Practice - Presented to the Southern California Mediation Association's
2003 MEDIATING EMPLOYMENT/WORKPLACE DISPUTES Program,
May 17, 2003

1. Introduction
   
   Employees in the State of California who are injured in the course and scope of their employment are covered by the Workers Compensation Laws of the State of California. This is an administrative system with benefits and remedies set out by the legislature. Injured workers in general are limited to the benefits provided by statute, and are barred from bringing civil suits against their employers for injuries covered by the workers compensation laws. This is known as the exclusive remedy doctrine. The laws are codified in the California Labor Code, §§3200-6208. The main distinctions between the workers compensation system and tort law are: no fault liability, compulsory insurance, automatic provision of benefits, limitations on benefits, and expeditious administrative procedures for dispute resolution. Note that federal employee injuries are covered under the Federal Workers Compensation System. In addition there is a separate procedure for Longshoremen and Harbor Workers.
   
   
2. Employment
   
   This is defined in the Labor Code as "performing service growing out of and incidental to his or her employment and acting within the course of his or her employment." Labor Code §3600(a)(2). Most cases of employment are self evident, but there is a large body of case law dealing with difficult situations. Ordinarily, injuries occurring on the way to and from work are not covered (the "going and coming" rule) unless the employee is on a special mission for the employer, or is using a company vehicle, or other special circumstance. A salaried employee who is off premises for lunch is covered; however and hourly employee under the same circumstances is not. If an employee is provided living quarters and is injured there, the injury will generally be covered under the "bunk house" rule. Not covered are injuries on the premises resulting from the employee's intoxication, if the employee was the initial aggressor in a fight and is injured, or if the injury was self inflicted. Likewise, an injury caused by a third party totally unrelated to the employment may not be covered if the employment was merely the "accidental staging ground".
   
   
   1. Specific injuries. These are injuries that occur suddenly and specifically, such as a fall from a ladder resulting in a broken leg.
      
      
   2. Continuing trauma injuries. These injures are caused by repetitive stress and strain due to wear and tear on the body from performing the same activity over a sustained period of time, and include carpal tunnel syndrome, degenerative back problems from repetitive lifting, tendonitis, etc.
      
      
   3. Occupational injuries. These include toxic exposures over time, such as chemical exposure, pulmonary irritants, etc. causing internal or lung damage. They also can include stress cause illnesses and disability, eg. heart disease, gastric or other internal disorders.
      
      
   4. Aggravation of pre-existing disease. A person who comes to the work place with a disease that is made worse by the work is eligible for compensation for the increase in disability. This can be orthopedic, internal, psychiatric, rheumatologic.
      
      
   5. Psychiatric. There are specific legislative limitations on psychiatric claims that do not apply to other kinds of injuries. Psychiatric claims that result from sudden acts in the workplace, such as the response to a robbery, are generally not covered by the limitations. Rather, the stress of work leading to emotional injury, or the psychiatric sequelae of a physical injury, are limited in various ways.
   
   
   
3. Benefits
   
   
   1. Medical Treatment. Labor Code §4600 requires the employer/insurance carrier to provide medical, surgical chiropractic, acupuncture, and hospital treatment "that is reasonably required to cure or relieve from the effects of the injury." Insurance carriers are permitted reasonable control over the costs of treatment. Employees are required to treat with providers selected by the carrier for the first 30 days following injury. Thereafter, an injured worker may select his own treating source. There is a procedure whereby the employer can petition for change in treating source, if the designated treater fails to follow appropriate rules for reporting. In some instances, an employer can set up a "Health Care Organization", which, if properly administered, permits the employer to control treatment for up to 12 months from the date of injury.
      
      
   2. Temporary Disability Benefits. These monetary benefits are payable to injured workers whose physicians certify that they are unable to return to work as a result of the injury, during treatment. Benefits are payable at the rate of two thirds of average weekly wages, with a minimum and maximum cap. The caps depend on date of injury. The maximum payable for injuries between 7/1/1996 and 12/31/2002 is $490.00 week. For injuries on or after 1/1/2003, the maximum weekly payment is $602.00. Employees who are able to work only part time because of their injuries are entitled to partial temporary disability payments.
      
      
   3. Permanent Disability Benefits. An injured worker is entitled to permanent disability benefits once his condition has stabilized, and become "permanent and stationary," according to the treating doctor. If the condition, having stabilized, still causes impairment, either by way of work restrictions, subjective symptoms, or objective limitations, the employee has permanent disability. This is measured in percentages, from 0 up to 100. The percentage of disability is intended to reflect loss of ability to compete in the open labor market. Permanent disability percentages are based on the physician's restrictions, and are payable according to a "Money Table", which is a chart, with weekly amounts based on date of injury, pre-injury earnings, and the degree of restriction. A copy is attached. Ratings are a specialized subunit of workers compensation practice; each Workers Compensation Appeals Board contains a separate Unit that specializes in rating reports, called the Disability Evaluation Unit (DEU).
      
      
   4. Vocational Rehabilitation. If an employee is unable to return to her past work as a result of her industrial injuries, once her condition has stabilized, she is eligible for vocational rehabilitation. A vocational rehabilitation counselor is selected to work with the injured worker, and a Plan is developed to attempt to restore the worker to productive employment. Options, in order of preference, include: return to modified work for the same employer, return to alternate work for the same employer, direct placement to other work, and retraining. Benefits are capped at $16,000, which covers a weekly allowance of $246., the fees of the counselor, any tuition, books, uniforms, tools, etc., mileage reimbursement, and other assistance necessary to facilitate the program, such as babysitting costs. Effective 1/1/03, rehabilitation can be settled for no more than $10,000.
      
      
   5. Death Benefits. These are payable to specified dependents in set amounts, upon the industrially caused death of an injured worker. There are child's benefits and funeral expense benefits in addition to lump sum benefits. The maximum death benefit for a total dependent (eg. spouse or child) for an injury between 7/1/96 and 12/31/05 is $125,000. A partial dependent (eg. a spouse who was also employed) during the same time is entitled to four times the annual support provided by the deceased worker, but no more than $125,000.
   
   
   
4. Procedures
   
   
   1. Claim. A case is initiated by the filing of a claim. In general, there is a one year statute of limitations for filing a claim; however there are many ways to extend the statute. If an employer provides any benefits for an injury, such as medical treatment or disability pay, the statute is extended to five years from the date of injury. If an employer knows of an injury but fails to advise the employees of his workers compensation rights, the statute is tolled.
      
      
   2. Investigation. An employer has ninety days from knowledge of the claim to investigate. This is accomplished by taking statements from co-workers, taking a statement or deposition from the injured worker, sending the worker out for medical evaluation, etc. If a claim is not denied within 90 days, it is presumed admitted. This is a rebuttable presumption, however, evidence that could have been obtained within the 90 days is inadmissible in a later proceeding. If the claim is admitted, benefits are provided.
      
      
   3. Denied Claims. Once a claim is denied, a notice is sent advising the worker that the claim was denied and that the matter must be brought to the WCAB within a year. No benefits are provided. Injured workers at this stage will generally obtain counsel if they disagree with the determination. A denial in seldom a bar to recovery of some benefits, although potentially only nuisance value. No benefits will be paid in such a case until conclusion of the claim. Counsel can obtain a Medical Legal evaluation which addresses injury, causation, disability and need for further treatment.
      
      
   4. Procedures at the WCAB. A file is created at the WCAB by the filing of an Application. A case may be placed on calendar by the filing of a Declaration of Readiness to Proceed. The case is then set for a Conference. There are now four types of conferences: Status, Priority, Expedited, and Mandatory Settlement Conferences. Each applies to a specific procedural status of the case. A Workers Compensation Judge will determine at the conference if the matter is to be set for trial. Often, a case will go off calendar after the conference for additional discovery, joinder of additional parties, etc.
      
      
   5. Trial. Trials at the WCAB are fairly informal; the rules of evidence are applied loosely. Medical testimony is disfavored; all medical evidence is supposed to come in by way of reporting. Thus, proper preparation and medical development are critical. A court reporter takes down the testimony but it is not routinely transcribed. After each session, the WCJ dictates a Summary of Evidence, which is provided to the parties. At the conclusion of trial, the WCJ issues a Findings and Award.
      
      
   6. Appeals. Any appeal from the Findings and Award is taken to the WCAB (the Board) in San Francisco by way of Petition for Reconsideration. The Board can reverse and issue a new decision, deny the petition, or remand for additional proceedings. An appeal from a final determination after Reconsideration is made by Writ of Review to the Court of Appeals; there is no automatic right to review.
   
   
   
5. Settlement
   
   
   1. Compromise and Release. Most cases are resolved by Compromise and Release agreement. This type of settlement must be reached by the parties; the WCAB has no authority to order it. The carrier pays a specific lump sum to the injured worker and the worker releases the employer and carrier for any further liability for the injury. The worker assumes responsibility for his future medical care. The sum is usually based on the value of permanent disability (often a compromise between the applicant and defendant medical reporting), and sum for future medical care based on the likely need as set out by the treaters and in part determined by how much treatment the worker has availed himself of, settlement of other issues such as penalties for late payments, self procured medical costs, unpaid periods of temporary disability.
      
      
   2. Stipulations for Award. If the injured worker wants to keep open the option for ongoing medical care, the case must be resolved with Stipulations. The carrier still pays out the agreed upon amount of permanent disability, but it is paid as a pension, in weekly amounts set out by regulation. Medical care is open; the workers compensation carrier becomes the medical insurer for the injury. Medical care can be for life. The settlement agreement can delineate what care is covered, eg. conservative care, surgery, etc.
      
      
   3. Reopening. Cases resolved by Stipulations can be Reopened within five years of the date of injury, if there is new and further disability or new and further need for medical care beyond that set out in the settlement agreement. A Petition for Reopening must be filed within the five years; it is good practice to include a medical report demonstrating the new and further disability.
   
   
   
6. Overlap with Tort Law - Third Party Cases
   
   
   1. If an employee is injured at work through the negligence of a third party, he can file a Personal Injury Suit, which is called a third party case. The workers compensation carrier must still provide benefits, but is entitled to recovery from the third party tortfeasor by way of either subrogation or credit.
      
      
   2. Subrogation rights refer to reimbursement from the 3rd party carrier for sums paid out during the pendency of the 3rd party litigation. These amounts can be recovered by the workers compensation carrier filing either a lien in the 3rd party proceeding, or by assuming party status in the civil case through a complaint in intervention. The third party case cannot be resolved without also resolving the rights of the workers compensation carrier. If there is employer fault, the recovery to the workers compensation carrier will be reduced.
      
      
   3. Credit rights to the workers compensation carrier are triggered when the civil case settles before the WC case is finished, and the WC insurer remains liable for ongoing benefits, including periodic payments and medical benefits. The WC carrier may assert credit to the extent of the injured worker's net recovery. In such a case, the WC carrier stops payment benefits until the amount of the approved credit is spent. The theory is that the injured worker not obtain a dual recovery.
   
   
   
7. Ancillary Benefits
   
   
   1. State Disability Benefits. In a denied claim, no temporary disability benefits are paid. The injured worker can apply for State Disability benefits, which are payable for one year, at a current maximum of $490. per week (or 2/3rds of average weekly wages, if less). A physician must certify that the worker is unable to perform his regular duties due to the injury. If a WC caseis also filed, the EDD, which administers SDI benefits, will file a lien. The WC case cannot be settled until the EDD lien is resolved.
      
      
   2. Private Disability policies are available if the employer or employee has purchased such a policy prior to the injury.
      
      
   3. Social Security Disability benefits are available to workers whose disabilities are severe: the disability must last a year and prevent not only the past employment, but any employment, taking into account age, occupation and educational level. This is a federally administered program.
      
      
   4. Private health insurance. If a claim is denied, the injured worker can obtain medical care through her private carrier; the carrier can file a lien in the WC case for reimbursement.
      
      
   5. Other public benefits include General Relief, MediCal, Food stamps, Medically indigent healthcare benefits - all needs based programs. In addition, some public employees are subject to separate benefits programs, such as PERS and the STRS system.