WCDefenseCA

Are you tired of hearing more and more about new legislation coming out of Sacramento, dear readers?  I didn’t think so.

Your humble blogger has one for you that isn’t directly a workers’ compensation bill, but that you should be aware of.  Senate Bill 1162 was signed into law by Governor Newsome on September 27, 2022.  Aside from imposing various reporting requirements on employers regarding the race and sex of their employees, to also post a salary range with any job advertisement and create penalties for failure to do so.

How does this apply to workers’ compensation matters?  Well, imagine if you will an injured worker on TD benefits who happens to notice that his employer is hiring for the same position.  It doesn’t have to be a replacement, but perhaps the employer is looking for an additional professional for the same job – another plumber, another waiter, another janitor.

Well, as we know, TTD benefits are calculated based on the earning capacity of the injured worker at the time of injury.  What happens when the employer posts a pay scale in accordance with the new Labor Code section 432.3 and the scale provides for a higher rate of pay than the employee was receiving at the time of injury?

Suddenly, the employer is subject to depositions regarding how it arrived at the pay scale and why applicant is not receiving more on the pay scale than he is.  The adjuster is faced with demands to pay higher on the pay scale or be exposed to penalties.

SB 1162 goes further still – not only are new job posts to include the pay scale, but current employees can demand disclosure of a pay scale for their respective positions under LC 432.3(c)(2).  Your humble blogger anticipates that applicant attorneys will exploit this by having their clients, employees presently on TTD, demand the pay scale for their respective positions and then use workers’ compensation discovery procedures to develop the record on why the “earning capacity” should be higher on the pay scale.

Claims for higher TD rates and related penalties would certainly follow.

So, how do we address this newest burden imposed on employers and insurers in California?  Well, for starters, employers need to invest some serious time into considering a pay scale and having competent HR or supervisor employees explain the basis of the scale.  Employers should have a decision maker who can testify competently, under oath at a deposition or at an expedited hearing, how a particular pay rate was reached. 

From the side of litigation and claims, we need a strong channel of communication with the employer and HR to provide us with those competent witnesses, but also to update us as to the current pay scale for any given position, as those pay scales will certainly change with time and circumstances, and where applicant falls on the pay scale and why.

Time after time, Sacramento has made very clear to the employers and insurers of California that it is open season on anyone providing employment in California.  Given this climate, it only makes sense that the defense community become more proactive and more cooperative with the tools available to defend these claims and keep the lights on.

See you next week, dear readers!

I don’t know who your favorite Addams Family member is, but I’m fairly certain, dear readers, that it’s Wednesday… at least today.

Greetings from beautiful Lake Tahoe dear readers!  The air is thick with the smell of cigarettes, the floor is littered with eternal optimists nervously trying to “make back what [they] lost so they can at least break even,” and your humble blogger is here, jumping from one side of the border to the other madly chanting “Now I’m in California, now I’m in Nevada, now I’m in California again.”  This magical place never gets old!

But since you’ve made the commitment to visit the blog or open your e-mail, I owe you some news which I am not exactly thrilled to deliver.   Governor Newsome, in an effort to make a meal less affordable for Californians, has signed the disastrous AB 257 into law.

This will allow the state of California, through a council, to increase wages for fast food restaurants which are part of a “fast food chain” consisting of “100 or more establishments nationally that share a common brand or that are characterized by standardized options for décor, marketing, packaging, products, and services” up to $22 per hour.  Just for reference, the general minimum wage in California is set to reach $15.50 per hour on January 1, 2023.

Aside from making fast food either ridiculously expensive or unprofitable to the point that it would no longer be available, especially when being provided by smaller franchise groups, it’s also going to drive up costs on workers’ comp TD and PD benefits.

Imagine if this council raises a fast food employee’s wages up to $22 per hour from $15 per hour.  Aside from the fact that the employer is being squeezed without any respect for its own rights, a full-time employee working at $15 per hour has an average weekly wage of $600, but an employee making $22 per hour for those hours has an AWW of $880 per hour.  The $280 difference per week yields an additional $186.67 per week in TD benefits.

Adjusters should keep this in mind as applicants out on TD can very well be awarded increases based on a raise in base-wage by operation of AB 257.   

Likewise, employers and supervisors should keep a regular and open line of communication with their claims adjusters to advise them when a particular location is struck by this council, so that the defense can avoid penalties and interest and, of course, audits by California.

Until next time, dear readers!

Happy Wednesday dear readers!

Ok, dear readers, pop quiz.  How do you calculate temporary disability benefits in a full time, regular employee?  You’d typically take the average weekly wage for the 52 weeks prior to the date of injury and then divide that sum by 1.5, right?  Sometimes you might adjust for increased wages (such as a Union raise) or you might make sure the rate is not below or above the statutory minimum and maximum.

Well, if Sacramento has its way, that won’t be the end of it.  Allow me to bring to your attention SB1458, introduced by Senator Monique Limon of California’s 19th Senate District. 

Senator Limon’s bill would add Labor Code 4453.1 to the labor code, which would increase the average weekly wage calculation “by the percentage of disparity in earnings between genders as reported by the applicant’s employer in it spay data report to the Department of Fair Employment and Housing…” if the applicant’s average weekly wage is less than the average weekly wage of the opposite gender.

If the employer made no such report to DFEH, SB1458 would require an increase based on the United States Department of Labor Statistics.

Of course, this added temporary and permanent disability benefit is not going to come out of Senator Limon’s pocket – the legislation would make the employer not only bear the cost of these calculations and open the door for further litigation on the proper TD and PD calculation, but would also make the employer pay the burden of the added benefit. 

This legislation, of course, flies in the face of the history of case law that bases average weekly wages on earning capacity.  Would a worker injured on his first day on the job be expected to make the same wage as employees who had been at a particular company for several years? 

Your humble blogger hopes with all his heart that SB1458 never becomes law, but if it does, the additional burden on claims administration will be significant.  Claims adjusters will have to determine the following:

1. The gender of the injured worker (and your humble blogger is willing to bet that we will see the case where there meaning of the word “gender” is litigated)
2. The average weekly wages for the applicant;
3. The percentage of difference between the average weekly wages for the opposite gender,
4. And the disparity between the two.

Of course, the legislation does not provide for the opposite: if a particular gender is making less than the injured worker, the employer does not get a break by reducing the TD by the disparity.

The bill for having the doors open and the lights on in California just keeps getting bigger, no?

Till next time, dear readers!