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Yes, 15% Drop Applies to pre-P&S PD

July 29th, 2013

Ok, so get this – injured worker is off work for a period of temporary total disability, then returns to work – full duty.  The employer high-fives the worker and says “glad you’re back!”  The worker smile and says “glad to be back!”  The self-insured employer (Or the employer’s insurance company) sends out a Notice of Offer of Regular Work.

The treating physician sees that the injured worker is back to full duty for a few months and high-gives the worker saying, you’re Permanent and Stationary!  The injured worker says “ow, careful, my shoulder still hurts a bit.”

So, the primary treating physician assigns some percentage of whole person impairment, and closes his books.

Meanwhile, the self-insured employer (or employer’s insurance company) does a rating based on the report and pays out permanent disability, but takes 15% off the top in accordance with Labor Code section 4658(d)(a)(3).

When the employer/insurer sends its brave defense attorney to get a stipulation with request for award approved, a problem arises.

The Workers’ Compensation Judge declines to approve the agreement because applicant was entitled to a full $230/week from the first day after returning to work until the P&S date.  And, since the full amount was not paid, the defendant should pay at least a 10% penalty on the $34.50 per day for all those days between returning to work and Permanent and Stationary date.

What result, dear readers?

Well, first of all, if the injury happened after January 1, 2013, the 15% bump doesn’t apply anymore – there has been so much split authority and headache in trying to apply 4658(d) that the legislature did away with it and replaced it with another incentive to return disabled workers to the assembly line: there’s no longer an obligation to make permanent disability advances if you make an offer of work.

If the injury occurred prior to January 1, 2013, the story is different, and I submit to you the following two panel opinions (shoot me an e-mail if you would like a copy):

In Fidel Quintero v. City of Sebastopol, a split panel decision issued on January 7, 2011, the employer sent the injured worker a Notice of Offer of Regular Work on October 22, 2009, and the injured worker was found permanent and stationary on February 23, 2010.  The split panel held that the employer was entitled to a 15% reduction in permanent disability advances from October 22, 2009 onward, and reasons specifically that the case “chronology indicates that the employer returned the permanently disabled employee to work at the earliest opportunity.  Therefore, the employer is entitled to the incentive offered by section 4658(d)(3)(A).”

The other panel opinion is that of Deborah Paine v. City of Sebastopol, issued on November 15, 2010, in which the injured worker returned to her regular duties on April 14, 2008, and the employer sent the injured worker a Notice of Offer of Regular Work on December 4, 2008.  The injured worker was found permanent and stationary in a PQME report dated received March 9, 2009, and the employer promptly paid permanent disability benefits at a rate of $195.50 from the day after her return to work of April 13, 2008.

The WCAB, I Paine, noted that the treating physician reports reflected that the injured worker was making significant improvement in her pain and some strides with regards to her stiffness.  In the Paine case, applicant had undergone shoulder surgery prior to her return to work.

In finding that the employer was entitled to a 15% decrease in all permanent disability benefits, the WCAB specifically cited the en banc case of Blackledge v. Bank of America (2010) 75 Cal.Comp.Cases 613, noting that it is the physician’s role in assigning whole person impairment.  As Ms. Paine’s primary treating physician “did not provide a final WPI rating for applicant’s condition,” and “a physician’s judgement, training and experience are necessary in determining the final WPI,” the Paine commissioners were “not persuaded that defendant had sufficient notice regarding the extent of permanent disability.”

But here’s an important counter to note: the employer must send a timely notice that temporary disability benefits are ending and that permanent disability benefits are being delayed.  (See Andrew Martinez v. City of Santa Rosa)  The burden is always on the defense to show that it did not unreasonably delay the permanent disability benefits/advances.

So, dear readers, if you’re looking for that 15% drop in PD advances between the date of applicant’s return to work and the date of your Notice of Offer of Regular Work, get ready for an uphill fight and be ready to prove that no advances were owing.

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