Ch 5: Benefits and Payments to Employees PDF

Chapter 5 Benefits and Payments to Employees Key concepts: x Payment for Medical Treatment x Temporary Disability Payments x Permanent Disability Payments x Supplemental Job Displacement Benefits x Death Benefits The California Constitution (Article XIV, Se...

Chapter 5 Benefits and Payments to Employees Key concepts: x Payment for Medical Treatment x Temporary Disability Payments x Permanent Disability Payments x Supplemental Job Displacement Benefits x Death Benefits The California Constitution (Article XIV, Section 4) states that a complete system of workers’ com- pensation must include “adequate provisions for the comfort, health and safety and general welfare of any and all workers and those dependent upon them for support to the extent of relieving from the consequences of any injury or death incurred or sustained by workers in the course of their employment, irrespective of the fault of any party.” The California Constitution also states that the system must include “full provision” for: x Securing safety in places of employment x All medical, surgical, hospital, and other treatment reasonably necessary to cure or relieve the effects of injuries and illness x Adequate insurance coverage and alternate means of securing liability, including regulation of insurance coverage and management of a state compensation insurance fund x Vesting power, authority, and jurisdiction in an administrative body that can determine dis- putes, “to the end that the administration of such legislation shall accomplish substantial justice in all cases expeditiously, inexpensively, and without encumbrance of any character, all of which matters are expressly declared to be the social public policy of this State” (Cali- fornia Constitution, Article XIV, Section 4) The workers’ compensation system provides the following six types of benefits to injured workers. Medical Treatment Medical treatment is an important benefit to workers in the system. Treatment must be provided by an employer that is reasonably required to “cure or relieve” from the effects of the industrial in- jury. This statutory mandate includes a wide range of treatments in various specialties and has been broadly interpreted by the courts. Employers have an obligation to authorize medical treat- ment up to $10,000 within one working day after the claim is filed. If the employer fails to provide the necessary treatment, a worker may self-procure treatment, with the WCAB retaining jurisdic- tion over reimbursement. The benefit includes both treatment that is needed currently and treat- ment (including nursing services, medications, hospital services, and surgery) that may be required in the future even after the claim has been settled. It also includes interpreter services related to the treatment. 24  Chapter 5 Temporary Disability Payments Temporary disability (TD) payments are paid to the worker while the injury is being treated. When workers are unable to perform any work, they receive temporary total disability (TTD) benefits. If workers work less than their full schedule, they can receive temporary partial disability (TPD) payments. These payments are based solely on wage loss. There must be an actual wage loss in eve- ry case (i.e., if full wages are paid, no TDP is due). The following points are worth noting. x Temporary disability is not paid to injured workers for the first three days of missed work unless they are hospitalized or miss more than 14 days of work. x Payments must begin within 14 days of the employer’s knowledge of the claim and disabil- ity, unless the employer contests the claim. The employer has 90 days from the notification of the injury to contest the claim. x The payments are equal to two-thirds of the employee’s average weekly earnings at the time of the injury, up to a ceiling determined by the legislature. The current minimum and maximum payments are listed on the DWC website. TD for an injury may last up to 104 weeks within five years from the DOI for dates of injury from January 1, 2008, to the pre- sent; for dates of injury from April 19, 2004, to December 31, 2007, 104 weeks commencing from the first date TD is actually paid; before April 19, 2004, 240 weeks or more. The TD limit is extended to 240 weeks within 240 weeks of the DOI for injuries involving certain chronic or severe conditions, including hepatitis B and C, amputations, severe burns, HIV, chemical eye burns, pulmonary fibrosis, and chronic lung disease. x These replacement wages are not taxable. x If there is estimated wage loss, TPD payments are equal to two-thirds of the estimated wage loss (e.g., if the employee is paid a lower wage or works fewer hours because of the temporary disability). x Full-time workers may face huge earnings losses when they are receiving workers’ compen- sation benefits. Disability payments can vary from 50% (or less) to 66% of a worker’s wage. The benefits that can be paid have a ceiling; accordingly, the impact of lost wages will be higher for a worker who earns a higher salary. x Income from work outside the regular job does not affect TD payments. Permanent Disability Payments Permanent disability (PD) payments are to compensate an employee who does not completely re- cover from an injury. They are based on a worker’s prospective loss of earning power in the overall job market. Under California law, the amount is determined according to the percentage of disabil- ity. The current minimum and maximum payments are listed on the DWC website. x For total disability (100%), the employee will receive the weekly amount that was deter- mined for temporary disability for life. x For partial disability (up to 99.75%), the employee receives weekly payments for a number of weeks determined by the employee’s disability rating. x For dates of injury between January 1, 2005, and December 31, 2012, if within 60 days of when the injury became permanent and stationary, an employer does not offer the employ- ee regular work, modified work, or alternative work in the form and manner prescribed by the AD for a period of at least 12 months, each remaining disability payment from the date 25  Chapter 5 of the end of the 60 days shall be increased by 15%. If within 60 days of when the injury be- came permanent and stationery, an employer does offer the employee regular work, modi- fied work, or alternative work in the form and manner prescribed by the AD for a period of at least 12 months, and regardless of whether the employee accepts or rejects the offer, each remaining disability payment from the date the offer was made shall be decreased by 15%. The 15% increase applies to employers who employ 50 or more employees (Labor Code § 4658(d)). x Workers with permanent partial disabilities of 70% or more continue to receive a small pension for life after their permanent disability amount is exhausted. Supplemental Job Displacement Benefits Workers injured on or after January 1, 2004, are eligible for a supplemental job displacement bene- fit (SJDB) voucher. The benefit amount varies by date of injury, as described below. Employees injured between January 1, 2004, and December 31, 2012, with injuries that result in permanent partial disability and who do not return to work for the employer within 60 days of termination of temporary disability may qualify for the SJDB voucher, unless the employer offers and the employee rejects, or fails to accept, modified work lasting at least 12 months. The benefit comes in the form of a nontransferable voucher that can be used to pay for education-related re- training or skill enhancement, or both, at state-approved or state-accredited schools. The voucher covers school tuition, fees for books, and expenses required by the school for training. No more than 10% of the value of the voucher can be used for vocational and return-to-work counseling. The amount of the voucher varies from $4,000 to $10,000, depending on the level of permanent disabil- ity. The current voucher amounts are: x For permanent disability of less than 15% $4,000 voucher x For permanent disability between 15% and 25% $6,000 voucher x For permanent disability between 26% and 49% $8,000 voucher x For permanent disability between 50% and 99% $10,000 voucher. Employees injured on or after January 1, 2013, with injuries that result in permanent partial disability, and whose employer does not offer other regular, modified, or alternative work, may also qualify for the SJDB voucher. The offer must be made within 60 days after receipt by the claims administrator of the Physician’s Return to Work & Voucher Report (Form DWC-AD 10133.36). The voucher amount is $6,000 for all levels of permanent disability and can be used for training at a California public school or any other provider listed on the list of the state’s eligible training providers. It can also be used to pay licensing or certification and testing fees, to purchase tools required by a training course, to purchase computer equipment valued at up to $1,000, and to reimburse up to $500 in miscellaneous expenses. Up to 10%, or $600, may be used to pay for the services of a licensed placement agency or vocational counselor. No more than 10% of the value of the voucher can be used for vocational and return-to-work counseling. Return-to-Work Fund A return-to-work program of $120 million annually derived from fees paid by employers into the Workers’ Compensation Administration Revolving Fund is administered by the AD (Labor Code § 139.48). The purpose of these funds is to make supplemental payments 26  Chapter 5 to workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss. Eligibility for payments and the amount of payments are deter- mined by regulations adopted by the AD, based on findings from studies conducted in consultation with the Commission on Health and Safety and Workers’ Compensation. De- terminations by the AD are subject to review at the trial level of the WCAB. Death Benefits Death benefits are payments to a spouse, the children, or other dependents if an employee dies from a work-related injury or illness, including reasonable burial expenses, not exceeding $5,000 for injuries before January 1, 2013, and $10,000 for injuries on or after January 1, 2013. Following an employee death, the amount of the death benefit depends on the number of their total or partial dependents. In the case of one or more totally dependent minors, after payment of the amounts specified below, death benefits will continue until the youngest minor’s eighteenth birthday (for DOI after January 1, 1990; for DOI after January 1, 2003, disabled minors receive benefits for life). Death benefits are paid at the total temporary disability rate, but not less than $224.00 per week. The period within which proceedings commence for the disbursement of death benefits is one year from the date of death when it occurs within one year of the DOI, or one year from the date when the last benefits were disbursed, or one year from death when it occurs more than one year from the DOI. No such proceedings may be commenced more than 240 weeks from the DOI. Current death benefit rates are listed on the DWC website. Initiating Benefits: Employee, Employer, and Physician The following employee and employer reports are required to initiate benefits and payments to in- jured workers. To receive compensation, an employee who is injured on the job or develops a work-related illness must inform the employer about the injury or illness within 30 days of the DOI. The employer must furnish the worker with a claim form (Employee’s Claim for Workers’ Compen- sation Benefits, DWC 1), within one working day of learning of the injury. The employee’s claim is initiated after the employer learns of the injury from any source. The worker must complete and return the form to the employer. A dated copy must be provided to the worker. Unless an employee has predesignated a personal physician, the employer directs the injured worker to a particular physician for at least the first visit. Treating physicians play an important role in ensuring that injured workers receive appropriate benefits in a timely fashion. Physicians must complete reports that will affect the provision of bene- fits to injured workers, including the Doctor’s First Report, progress reports, and medical-legal evaluations, all of which are used to establish the worker’s eligibility for benefits and to resolve dis- putes over treatment, disability, and other issues. See Chapter 7 for detailed information. Discrimination Not Allowed Employers are prohibited from discriminating against workers because of their health and safety activities or filing a workers’ compensation claim. Employers may not terminate an injured worker during the period of temporary disability, unless the employer can prove that the termination was due to a “business necessity.” With few exceptions, an employer cannot refuse to reinstate an in- jured worker, unless the worker can no longer perform the essential functions of the job. The Amer- 27  Chapter 5 icans with Disabilities Act and the California Fair Employment and Housing Act place further re- sponsibilities on the employer to provide reasonable accommodations for individuals with disabili- ties and prohibit discrimination based on an employee’s prior involvement in any workers’ compensation claim. 28