California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - JUNE 2000
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MCLE SELF-STUDY

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Workers' compensation for the GP

Brushing up on the whys and wherefores of workers' comp law is good for all general practitioners

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By PATRICIA A. HIGA
and WILLIAM E. MALECKI
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William E. MaleckiWhen a person is injured at work, or suffers an injury or illness which is deemed to be work-related, in most cases the employee’s sole remedy will be recovery of workers’ compensation benefits. Because workers’ compensation has been established by the California Constitution and Labor Code to be the “exclusive remedy,” the employee will have no action at law for damages, with very narrow exceptions. Article XIV, 4 of the California Constitution gives the legislature “plenary power . . . to

create, and enforce a complete system of workers’ compensation . . . and enforce a liability on . . . all persons to compensate . . . their workers for injury or disability . . . in the course of their employment, irrespective of the fault of any party.”

Division 4 of the Labor Code, consisting of 3200-6000, contains the majority of the provisions related to workers’ compensation. Every employer, except the state itself, is required to either be insured for their workers’ compensation liability or secure a certificate of consent to self-insure from the Department of Industrial Relations (3700); this includes counties, cities and other political subdivisions (3700(c)).

Eligibility for benefits

For a person’s injury or illness to come under the provisions of workers’ compensation law, the injury must “aris[e] out of” and occur in the “course of employment” (AAOE/COE), and the “conditions of compensation [must] concur (3600).”

The person seeking compensation must be an “employee” (3351), and the person or entity from which compensation is sought must be an “employer” (3300). Although there are various classes of persons who, by statute (3350-3371), are either included or excluded from the definition of “employee,” it is presumed that “any person rendering service for another” (3357) is an “employee.” If the injury causes death, benefits (4700) may be recoverable by the deceased employee’s dependents (3501).

At the time the injury or illness occurs, the employee must be “performing service growing out of an incidental to his or her employment and is acting within the course of his or her employment” (3600(2)) and the injury must be “proximately caused by the employment.” (3600(3)). Finally, the injury must not be the result of intoxication, self-infliction, suicide, initial physical aggression, a felony, voluntary off-duty recreational activity, certain psychiatric injuries or following layoff. (3600(4-10)).

Compensation & medical benefits

The benefits payable due to an injury or illness include both compensation and medical benefits. Compensation benefits include temporary disability indemnity (4650(a)), permanent disability indemnity (4650(a)) and vocational rehabilitation benefits (4538). Medical benefits consist of “medical, surgical, chiropractic, acupuncture and hospital treatment” (4600).

Temporary disability indemnity is paid when an employee is unable to work due to the work-related injury or illness. The amount paid is “two-thirds of the average weekly earnings during the period of such disability.” (4653) The payments are subject to a statutory maximum, currently $490 per week, which varies according to the date of injury (4453). These payments continue, without a time limitation (4656) until the employee is released to return to work, actually returns to work or his condition becomes “permanent and stationary.” Industrial Indemnity Exch. v. IAC (Riccardi), 90 Cal. App. 2d 585, 586-587, 14 Cal. Comp. Cases 2 (1949).  

Permanent disability indemnity is paid when the injury “impairs a worker’s earning capacity, or a worker’s bodily function, or . . . creates a handicap in the open labor market.” (Hanna, Calif. Law of Emp. Inj. 8.01, Rev. Ed. 1999). Permanent disability may either be “total” or “partial.” (4658).

Permanent disability is assessed according to a schedule which takes into account the nature of the injury, the employee’s occupation and the employee’s age. (4660) A percentage number is determined between one and 100. If the percentage is less than 100, the disability is partial: if it is 100, then it is total. Certain disabilities, such as blindness, are presumed total (4662).  The weekly amount paid is also “two-thirds of the average weekly earnings,” but is paid only for a period of time determined by a schedule wherein each percentage point of disability allows a specified number of weeks. This also is subject to a statutory maximum, which varies according to the date of injury and the percentage of disability and is currently as high as $230 per week. (4659)

Vocational rehabilitation benefits are provided when the employee is determined to be a “qualified injured worker,”(4638(a)), a status where the employee meets the requirements of both “medical eligibility” and “vocational feasibility.” (4635). “Medical eligibility” is when the employee, as a result of the injury, is incapable of “engaging in his or her usual and customary occupation or the position he or she was engaged in at the time of injury.” (4638(a)(1)). “Vocational feasibility” is when “the employee can be reasonably expected to return to suitable gainful employment through the provision of vocational rehabilitation services.” (4638(a)(2)). Benefits include a weekly maintenance allowance, necessary additional living expenses, and costs of the program itself including counseling fees, training costs, tuition, etc., up to a maximum of $16,000 total (139.5(c)). 

Medical benefits are defined as “medical, surgical, chiropractic, acupuncture and hospital treatment” and include, but are not limited to: nursing, medicines, medical and surgical supplies, crutches, and apparatus, including orthotic and prosthetic devices and services. Any of these which are “reasonably required to cure or relieve from the effects of the injury shall be provided by the employer.” (4600). The employee may designate a treating physician in advance; if not, the employer retains control of medical treatment for 30 days following the date of injury. (4600). Following the 30-day period, the employee has the right to change treating physicians. The employer may petition the Administrative Director of the Division of Workers’ Compensation (“DWC”) for a change of physicians, on the showing of good cause. (4603). There are no deductibles or maximum values imposed on the type, duration or cost of the treatment; the employer must pay medical charges within 60 days of receipt; if the employer contests a bill it has only 30 days to object. (4603.2).  The medical provider may file a lien for any unpaid charges (4903), but is not permitted to bill the employee. (3751(b)).

Procedure

When an employer receives notice that an employee has or may have sustained an “injury,” a “claim form and notice of potential eligibility” must be provided to the employee within one working day if the injury “results in lost time beyond the date of injury” or requires “medical treatment beyond first aid.” (5401(a)).  The claim form is required to be completed by the employee and returned to the employer. (5401(b)). The employer, usually through their insurance carrier, has 90 days within which to accept or reject liability. If liability is not rejected within the 90-day period, the injury is presumed compensable. (5402).

If liability is rejected, or if, at a later time, either the employee or the employer dispute whether the employee is eligible for benefits, the aggrieved party may file an Application for Adjudication of Claim with the Workers’ Compensation Appeals Board (WCAB). (5500). The application generally must be filed within one year of the date of injury, although various limitation periods apply depending upon the particular benefit sought. (5405). The specific procedures applicable to proceedings before the Workers’ Compensation Appeals Board are contained in Title 8 of the California Code of Regulations, in 10300 through 10999 and are collectively designated Workers’ Compensation Appeals Board Rules of Practice and Procedure (“Rules”). Disputes regarding medical eligibility for benefits are resolved by the use of medical examiners. The “medical-legal” procedures, which are set out in 4060 through 4068, involve the use of “qualified medical examiners” (QME’s).

A physician may be certified as a QME if the physician has met certain eligibility requirements to perform evaluations of workers’ compensation injuries. If the employee is not represented by legal counsel, the employee must select a QME from a randomly generated list of three physicians provided by the DWC.  If both the employee and the employer are represented by legal counsel the parties may concur on a single “agreed medical examiner” (AME) or each select a QME.

After the evaluations have taken place or, in the case of disputes regarding non-medical issues (e.g. AOE/COE), when the issue is ready for hearing, the party desiring a hearing before the WCAB must file a Declaration of Readiness to Proceed (DOR) wherein the party certifies that it is ready to proceed to hearing and has made an effort to informally resolve the disputed issue(s). (Rule 10414).

A party, for good cause, may object to the DOR. (Rule 10416). The WCAB will then assign the case to a Workers’ Compensation Administrative Law Judge (WCALJ) and set a date for a Mandatory Settlement Conference (MSC). Discovery closes at the MSC and evidence not obtained or disclosed shall be inadmissible and witnesses not disclosed may testify except upon a showing of good cause. (5502(d)(3)).

If the case is not settled at the MSC, a hearing is set. At the hearing, witnesses and evidence may be presented. The burden of proof is on the party seeking to prove affirmatively an issue or assert an affirmative defense. (5705). The WCAB is “not bound by the common law or statutory rules of evidence and procedure” in conducting the hearing (5708) and “no informality in proceeding” shall affect the validity of a WCAB decision. (5709).  Follow-ing the hearing, the judge will issue a “Findings and Award” if benefits are awarded. If benefits are not awarded, a “Take Nothing” order will be issued.

A party has 20 days from the date of service of the award or order to file a Petition for Reconsideration. (5903). There are five bases for reconsideration: 1) “that by the appeals board or the workers’ compensation judge, the appeals board acted without or in excess of its powers;”  2) fraud; 3) “that the evidence does not justify the findings of fact,” 4) discovery of new material evidence or; 5) that the findings of fact do not support the order, decision, or award. (5903).

Following reconsideration, an aggrieved party may file a petition for a Writ of Review with the Court of Appeal within 45 days after the filing of the order, decision, or award following reconsideration or after a petition for reconsideration is denied and subsequently with the Supreme Court (5950). However, no other courts, except the Supreme Court and the Court of Appeal have jurisdiction with regard to decisions of the WCAB. (5955.)

Conclusions & resources

Because California’s workers’ compensation system is a complex, multi-layered statutory scheme for the provision of benefits to California employees, an enormous amount of statutory, regulatory and case law has arisen around it. Fortunately, the practitioner has many resources available to assist in navigating the maze of workers’ compensation law.

The State Bar’s Workers’ Com-pensation Section, through standing committees, seeks to promote better legal practice, education and legislation affecting workers’ compensation. It reviews proposed state legislation and regulatory rules, and make recommendations to the authors. Section membership is currently 2,200 members. The purpose of the section is to serve our members, workers’ compensation practitioners, and the people of California by promoting an efficient and just compensation delivery system.

The section publishes the Workers’ Compensation Quarterly newsletter and offers classes at its own Spring and Summer Education-al Conference as well as the State Bar’s Annual Meeting and Spring and Fall Section Education Insti-tutes. The section also has a web page at calbar.org/2sec/3wor/2worndx.htm.

Other excellent resources include the California Applicant’s Attor-ney’s Association (CAAA) and the California Workers’ Compensation Defense Attorneys’ Association. They can be accessed at caaa.org and cwcdaa.org.

On the publication side, Hanna, Calif. Law of Emp. Inj. 8.01, Rev. Ed. 1999; Herlick, California Workers’ Compensation Law;  Herlick, California Workers’ Compensation Handbook are very informative resources. Soon to be published is a brand new book covering workers’ compensation practice from the Continuing Education of the Bar (CEB.) 

Patricia A. Higa is an attorney with Pacific Gas & Electric and a member of the Executive Committee of the Workers’ Compensation Sec-tion of the State Bar. William E. Malecki is an attorney with State Compensation Insurance Fund, a certified specialist in workers’ compensation law and a member of the Executive Committee of the Workers’ Compensation Section of the State Bar.