Hey there dear readers, how is your week going? Shall your humble blogger sweeten it with some good news?
A while back, your humble blogger had the pleasure to discuss the poison AB1213 with you because Sacramento was intent on squeezing even more out of California’s battered and besieged employers. What AB1213 intended to do was extend temporary disability for the period between Utilization Review denial and IMR reversal. In other words, if applicant was on TD for two months between the UR denial and the ultimate IMR reversal, those two months of TD would not count towards the 104-week TD cap, and applicant could potential received 2 years and 2 months of TD.
AB1213 passed in the in the Senate 62 to 8 on May 26, 2023, and then in the Assembly 30 to 9 on September 11, 2023.
Now, dear readers, you might be asking yourself… where’s the good news? Well, the good news is that on October 8, 2023, Governor Newsom vetoed AB1213, which means that, despite all the effort, it will NOT become law any time soon.
Now that I’ve lured you in with the good news, not unlike Pennywise with a paper boat, let’s take a look at some unfortunate realities. The California Legislature overwhelmingly passed this monstrosity of a bill and will likely do so again in the near future. When it does, will Governor Newsome’s resolve remain firm?
And it’s Friday again, dear readers! We made it through yet another week and yet another weekend. So what can your humble blogger do to send you on your way into the embrace of Saturday and Sunday? Why not a blog post about TTD overpayment credit?
Unfortunately, there is typically a delay between applicant being permanent and stationary and defendant being advised of this fact. So, when applicant attends a QME examination and a report does not issue until 30 days later, it’s fairly typical for the defendant to continue paying TTD for those 30 days.
What’s more, even when the report is received, it is not atypical for it take time to review and process the report and take the necessary actions. So, if applicant was found P&S at a June 1, 2023 examination, but the report was not signed and served until July 1, 2023, and not reviewed by the defense attorney or the adjuster until July 5, 2023, TD could well have been paid for that entire period.
The recent panel decision of Newkirk v. Regents of University of California had just such a situation. Defendant filed a petition for TTD overpayment credit in the amount of $6,587.79. The WCJ awarded this credit and applicant appealed, which the WCAB rejected. Just as an aside, dear readers, Mr. Newkirk received two separate awards of 34% PD each related to two specific dates of injury.
There may be a restaurant somewhere, dear readers, in which the hosts have nailed slabs of grilled beef to the vaulted ceiling. That would be a situation where the “stakes steaks are high” and the Newkirk case probably would not be.
No, this isn’t a case about 100% PD, but it’s still an excellent panel decision to read as the WCAB lays out situations in which awarding TTD credit against PD benefits is appropriate, and cases in which it is not. For example, the Newkirk panel made repeated reference that when a TTD overpayment credit “would have totally exhausted the applicant’s permanent disability indemnity” such an award may be inappropriate.
Other factors the panel decision considered were the cause of the overpayment (defendant’s inadvertence, applicant’s calculated actions, or neither). In the Newkirk case, it was truly neither.
Your humble blogger is happy the defense was awarded a TTD overpayment in this case, of course, but let’s look at the downsides. The time of the WCJ and the WCAB was taken up by this dispute, both applicant and defense counsel invested time and energy to this issue, and, of course, there are the monetary costs involved. Presumably, if defendant had known applicant is P&S on the date of the exam, it would have stopped TD payments, started PDAs, and this issue would not have existed at all.
Surely, there must be some way for the QME to provide a “check-the-box” cover page to the parties on the date of the exam on such issues! Treating physicians have no difficulty providing a work status/work restrictions slip to applicant and defendant on the date of the appointment, why not the same for a QME on such issues?
Perhaps the next round of “reforms” or new regulations pertaining to QME should include directions with a 24-48 hour requirement to provide a cover page to the parties? Such litigation could be avoided, no doubt.
I know how much you like the humble blogger’s pop quizzes, and you know how much your humble blogger loves to make his readers happy, so what else could we start today’s blog post with other than a pop quiz?
What’s significant about July 1, 2023? If you said it is the first day of the second half of the year, you are correct. If you say it is day two of a five-day weekend ending on Independence Day, then I envy your working conditions. If you say it’s time to check our TTD rates, then you have won yourself the nodding approval of the humble blogger.
So, what should you be doing in anticipation of July 1, 2023? Well, for starters, check if the county or city where your injured worker worked has a minimum wage increase going into effect on 7/1/23. If it does, check if your injured worker receiving TD was earning above the new minimum wage. Finally, if your injured worker was earning less than the new minimum wage prior to the date of injury, you may want to recalculate the TTD rate using the new minimum wage. One easy way to do that is to divide the new minimum wage by the hourly rate the applicant was earning prior to the DOI, then multiply the resulting number by the TTD rate.
So, if applicant was previously earning $15.75 per hour in Alameda, and would now be entitled to $16.52 per hour, $16.52 (new minimum wage) / $15.75 (old minimum wage) = 1.05. You would then multiply the previous TTD rate by 1.05 to get the new TTD rate reflecting the increased minimum wage.
As if you didn’t have enough to do or worry about…
Happy Monday, dear readers! It’s another beautiful week in paradise. We’ve celebrated Cinco de Mayo, and, as we are clearing away signs of those festivities, we are getting ready for Mother’s day this Sunday. In this world of uncertainty, dear readers, you cannot expect another reminder that Mother’s Day is coming up this Sunday, May 14. It might already be too late, but do try to make those lunch reservations, order those flowers, and set aside time to give your mother a call.
I think if our dear friends and family members were to visit us in California, they would expect to see certain things. If they were here for a week without Sacramento trying to crush another swath of California’s businesses, they’d feel like they missed out.
So, it only makes sense that we take a look at Assembly Bill 1213, which just passed through committee at the end of April. What does AB1213? Well, what doesn’t it do?!?
A lot, to be fair, but primarily AB1213 exempts any periods of TD pending IMR review of treatment (and eventual overturn) from the TTD cap of Labor Code section 4656.
So, let’s take a scenario. Applicant has a DOI of 1/1/2020. He goes on TD and his TD would be exhausted by 1/1/2022, as per 4656(c). Well, if applicant’s PTP submitted an RFA on 3/1/2020, and UR came back with a denial on 3/6/2020, all the periods from that 3/6/2020 denial to the IMR overturn would not count towards the 104-week cap.
What do we need to do if AB 1213 becomes law? Well, in every file, we set reserves and value cases based on a range of exposure, factoring maximum exposure of course. How can defendants adequately set reserves or value cases for settlement when there is almost a perpetual TD range?
It’s not all doom and gloom, of course – in 2021, IMR upheld 92.8% of UR denials. The ultimate impact is going to be limited. But this isn’t the only squeeze California’s employers and insurers are feeling from Sacramento. There seems to be pressure from every end to make $100 in payroll more and more expensive for businesses in California.
Now, if life was fair and California was interested in seeing justice for both employer and employees, when IMR denies a method of treatment, and the PTP has no other suggestions that are likely to change applicant’s condition substantially in the next year, as contemplated by 8 CCR 9785(a)(8), then we would also have regular findings that applicant is P&S retroactively to the date of a UR denial, once the IMR appeal has been exhausted. We would also have TTD overpayment credit as a matter of right, rather than judicial discretion.
What is good for the goose is good for the gander, after all, no?
But instead, we see a continuous stream of policies and rulings that disproportionately favor applicants at the expense of defendants in Workers’ Compensation. My beloved readers, the secret to youth, I have found, is to maintain that adolescent naivete which objects to injustice and life being unfair. That is how your humble blogger maintains feeling like a 20-year-old.
Like so many other recent results from Sacramento, AB1213 seems worthy of watching. But, likewise, we can watch the cost of doing business in California as it continues to rise.
Well… perhaps that’s not accurate. When is Wednesday Addams ever truly happy?
Never mind… let’s check up on what’s going on in Sacramento, shall we? Oh, of course… increasing costs for California’s employers. In this case, the proposal would affect the healthcare industry, with a minimum wage of $25 per hour effective January 1, 2024.
Senate Bill 525 would apply to every California healthcare employer, including urgent care, hospitals, and home health care, among others.
My beloved readers might think… well don’t doctors and registered nurses already make more than $25 per hour? Well, the same brilliance and diligence that draw you to this blog also leads you to be so well informed.
However, this bill would raise the minimum wage not just for nursing, but “caregiving, technical and ancillary services, janitorial work, housekeeping, groundskeeping, guard duties, business office clerical work, food services, laundry, medical coding and billing, call center and warehouse work, scheduling, and gift shop work” but “only where such services directly or indirectly support patient care.”
Seriously… what the heck? Is the legislature on a crusade to kill the healthcare industry in California? Your humble blogger did a quick and totally unscientific search of such positions for San Francisco, where one would expect wages to be among the highest due to the cost of living, and found most of these postings are well under $25 per hour. The wages offered are significantly lower as we get to more rural areas.
If this insanity becomes law, what can we expect on the comp side?
Well, a full time security guard working for a hospital for $20 per hour, out on TTD, would go from an AWW of $800 to $1,000, with a corresponding TTD increase from $533.33 to $666.67.
Hospitals are already facing serious challenges: COVID19 was not very helpful in keeping the lights on and we are still reeling with expenses related to the COVID19 presumptions and staff shortages. Raising the minimum wage from the state-minimum of $15.50, to this monstrosity of $25 will make rendering services that much more impossible.
Hopefully, SB525 joins the pantheon of colossally bonehead ideas that never become law. But with California, you just never know.
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.
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.
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.
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:
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)
The average weekly wages for the applicant;
The percentage of difference between the average weekly wages for the opposite gender,
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?
You know, if writing blog posts about horrible proposed legislation was a full time job, your humble blogger would demand overtime pay after doing it for 32 hours per week. Does that sound like gibberish? Well, it should…
Allow me to direct your attention to Assembly Bill 2932, introduced by the California Legislature last month to cap full time at 32 hours and make overtime pay mandatory for all work done in excess of 32 hours per week. If that sounds familiar, it should – your humble blogger respectfully drew your attention to a federal proposed bill, H.R. 4728, that would have a similar effect.
The California bill would apply to those employers who have more than 500 employees, although the plain language of the bill does not appear to limit that number to California employees. Presumably, an employer with 10 employees in California but 500 employees globally would have to start paying overtime at 32 hours for its California employees.
Another bizarre component to the bill is that it prohibits employers from reducing an employee’s regular rate of pay to end up with the same weekly wage at 40 hours.
Should AB 2932 become law, much like with H.R. 4728, we can expect increased AWW calculations, including for those employees who worked more than 32 hours per week prior to going out on temporary total disability.
Your humble blogger is happy to greet you back from yet another weekend, and boy do businesses have something to look forward to in their Herculean efforts to keep the lights on!
As everyone knows, your garden variety employee can work up to 40 hours per week at a regular rate, and then gets paid overtime (1.5 the base hourly rate) for hours worked in excess of 40 per week. However, that’s not good enough for some folks in Washington, D.C., so we have a bill introduced in Congress which should be titled “The Trigger Mass Business Closures and Layoffs Bill” but instead is called the “32-Hour Workweek Act.”
Well, for one thing, this is a significant increase in the cost of productivity. The production captured in a 40-hour work week would go up in cost by 12.5%. If you’re a California business already struggling to keep the lights on, how will the 12.5% increase in labor cost impact you?
Looking at it from the employee side, of course, we can anticipate many full-time employees being reduced in their work schedules to 32 hours to avoid the imposition of mandatory overtime for a 40 hour week. So, if there were previously 4 employees working 40 hours per week, the business must now hire a 5th employee to have 5 people working 32 hours instead of 4 people working 40 hours. Unless of course, the business has the misfortune of being in a place that has an ordinance similar to San Jose’s Section 4.101.040 which forces employers to prioritize making part-time employees into full-time employees before hiring more part-time employees.
And what effect would such a law have on the workers’ compensation world? Besides the anticipated layoffs and business closures that would certainly follow the passage of such a law, any applicant who worked more than 32 hours per week prior to going out on TD, would likely claim that the law constitutes a wage increase and demand an appropriate increase in the TD rate.
And, of course, lay-offs and economic downturns always trigger massive claims for injury, whether post-term CTs or pre-term back strains.
Hopefully, after the fanfare and attention that the internet gives such things now and then, H.R.4728 will die in committee and we will never hear of it again. As for all the employers and employees who think a 32-hour work-week is a great idea, your humble blogger has a simple solution. Negotiate with your employer and only work 32 hours per week. One needs neither divine intervention nor an act of congress to negotiate a mutually agreeable arrangement.
And now, for no reason whatsoever, I offer the following meme…
The content of this web log is for information purposes only and should not be construed as legal advice. No attorney-client relationship is formed by this site. If you would like to speak to a workers’ compensation defense attorney, please contact Gregory Grinberg at 888-226-3400.
