Your humble blogger has a post for you today, dear readers, that is both serious and was drafted willfully. Let’s begin with a question – what are the benefits due under a finding of serious and willful misconduct on the part of the employer?
Under Labor code section 4553, [t]he amount of compensation otherwise recoverable shall be increased one-half, together with costs and expenses not to exceed two hundred fifty dollars ($250)…”
Easy enough, right? Well, the Supreme Court is going to be addressing this issue where it pertains to a corrections officer injured in a pre-planned attack by inmates. The most pressing issue in the case of Department of Corrections & Rehabilitation v. WCAB, Ayala, isn’t whether or not the defendant is liable for Serious and Willful Misconduct, but rather what benefits should be counted to determine exposure.
Government code sections 19871 and 19871.2 provide for industrial disability leave in some injury cases, basically equating to one year of full wages rather than temporary disability benefits. However, Labor Code section 3207 defines compensation as the benefits or payments “conferred by this division upon an injured employee.” The Government code is not part of the division of the labor code, so would those difference between temporary disability benefits and wage continuation go into the Serious an Willful exposure compensation?
Let’s play with some numbers! An employee injured on 1/1/23 would have a maximum TD rate of $1,619.15. Let’s say that employee was earning $2,700 rather than $2,428.72 per week. Well, for TD benefits for 52 weeks, that applicant would receive $84,195.63, but under the industrial leave benefits of Government Code section 19871, the employee would receive $140,400 instead, a difference of just over $56,200. Prevailing under a theory of Serious and Willful Misconduct would yield an increase of just over $28,000, if those additional benefits are calculated as part of the package.
So… should they be?
Well, in this case, the WCJ found that the additional benefits under the Government code should not be included in the calculations, while the WCAB found it should. The Court of Appeal then weighed in, siding with the trial judge and defendant, excluding the additional benefits under the Government code from the calculation.
The Court of Appeal relied on LC 3207 to come to its conclusion, but it also had a very interesting reason to reject applicant’s argument under Labor Code section 3202 (the notorious and very frustrating “liberal construction” section). To the Court of Appeal, Ayala argued that the court should “liberally construe” labor code section 3207 to include the additional benefits found in the Government code. The Court of Appeal responded that while this particular holding doesn’t help applicant, it might help applicants in other situations, such as those defendant an employer claim of the employee’s Serious and Willful Misconduct. Thus, the COA reasoned, “had Ayala’s injuries been caused by his own serious and willful misconduct, his industrial disability leave would not have been reduced by one-half for the very same reason it does not increase by one-half here.” (emphasis original).
We don’t know what the Supreme Court will do with the Ayala case, of course, but assuming it leaves the Court of Appeals decision intact, perhaps we can draw from that (1) that any benefits the employee would receive originating outside of the Labor Code are not to be calculated towards Serious and Willful Misconduct claims; and (2) if a WCJ or the WCAB uses the “liberal construction” doctrine found in Labor Code section 3202 to reach its reasoning, doesn’t this dicta militate against it if the interpretation can be applied adversely to other injured workers?
As always, dear readers, time will tell!