BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Carole Migden, Chair
Date of Hearing: July 11, 2007 2007-2008 Regular
Session
Consultant: Rodger Dillon Fiscal:No
Urgency: No
Bill No: AB 338
Author: Coto
Version: As Amended June 6, 2007
SUBJECT
Workers' compensation: temporary disability payments
KEY ISSUES
Is the maximum number of weeks of temporary disability payments
for which injured workers may be eligible, and the time period
within which these payments may be received, sufficient for the
purposes of an effective workers' compensation system?
Should inmates of city or county jails or similar facilities who
are injured while assigned to a work release program be denied
temporary disability benefits if they were not employed prior to
their incarceration?
PURPOSE
To increase the maximum number of weeks of temporary disability
payments for which injured workers may be eligible and to extend
the time period of eligibility.
To deny workers' compensation temporary disability benefits to
inmates who were not employed prior to their incarceration.
ANALYSIS
Existing law :
Provides various forms of compensation to workers who sustain
injuries arising out of or during the course of employment,
including temporary disability indemnity payments (TD),
permanent disability indemnity payments (PD), retraining
vouchers, and medical treatment.
Caps temporary disability benefit payments at 104 weeks,
except that those payments may be extended for as long as 240
weeks for specified injuries/conditions of a more severe
nature.
Provides that an injured worker cannot receive temporary
disability benefits for more than two years after the date
that temporary disability payments commenced, even if the
employee has not used up the maximum 104 weeks of benefits.
The period of eligibility is five years for the specified,
more severe, injuries.
Provides certain safety officers with special "leave of
absence" benefits that pay 100% of salary for up to one year
while the officer is unable to work due to an on-the-job
injury.
This Bill increases the number of weeks that temporary
disability benefits may be paid from 104 to 156, allows these
benefits to be paid within five years of the date of injury, and
extends the number of weeks of benefits when certain delays
occur. The bill also alters certain inmate workers'
compensation rights. Specifically, this bill:
Provides that, for injuries occurring on or after January 1,
2008, an injured worker may receive up to 156 weeks of
temporary disability benefits.
Allows these benefits to be received at any time within five
years of the date of injury.
Extends the 156 weeks of potential benefits by the amount of
time when any of the following occur:
? When temporary disability benefits are due and payable
and more than 14 days late;
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Senate Committee on Labor and Industrial Relations
? When an employer's objection causes a delay in the
injured worker receiving treatment, and the review or
objection is decided in favor of the injured worker;
? When a utilization review decision is challenged by the
employee, and the issue is ultimately decided in favor of
the employee, unless the employer demonstrates that the
ultimate decision in favor of the employee was based on
information that could not have been reasonably obtained by
the employer within the time frames of the utilization
system; and,
? When a utilization review decision is not conveyed to
the employee within the time frame required by the
utilization system.
Provides that the one-year "4800" and "4850" leave of absence
time for safety officers can be extended for the same delays
noted above.
Provides that a prisoner, as defined, who would not have
qualified for temporary disability benefits prior to
incarceration due to not being employed, shall not receive
temporary disability benefits as a result of a work-related
injury that occurs during incarceration.
Provides that a prisoner, as defined, who qualified for
temporary disability benefits prior to incarceration, shall be
entitled to receive benefits based on that qualification as a
result of a work-related injury that occurs during
incarceration, but that the prisoner shall receive these
benefits only upon release.
COMMENTS
1. The section of this bill relating to inmates' worker's
compensation rights was previously rejected by this committee.
The committee may wish to consider striking this section.
AB427 (La Malfa), introduced in the immediately prior
legislative session, failed passage in this committee on June
30, 2005. The language of AB427 is repeated in AB338. In
rejecting the bill, committee members and opponents made the
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Senate Committee on Labor and Industrial Relations
following observations:
Opponents argued that this bill is both unnecessary and
mean-spirited, saying it would treat inmates who committed
minor infractions and misdemeanors with callous disregard.
They stressed that it is possible that a prisoner could be
released while still temporarily disabled and unable to work.
Opponents pointed out that without TD benefits the individual
would then have nothing to live on. They believe prisoners
who are released are assumed to be rehabilitated and that they
face extreme challenges in developing their self-sufficiency.
If former prisoners are not fairly compensated for their
work-related injury there is little chance they can get back
on their feet, they add. Nor will it save cities and counties
any significant amount of money.
2. Discussion of "4800" and "4850" time.
Certain defined safety officers receive a one-year leave of
absence at full pay in lieu of temporary disability benefits.
(The sections defining these rights are located in Labor Code
Sections 4800 & 4850.) After this one-year period, these
safety officers then are eligible to receive the regular
temporary disability benefits. Because the sponsors view 4850
time off as comparable to temporary disability benefits, they
argue that these benefits should be subject to extension just
like the bill proposes for regular temporary disability
benefits.
3. Proponent Arguments :
Supporters argue that the current structure for temporary
disability benefits not only disenfranchises the small number
of more severely-injured workers who justifiably need to stay
on TD benefits for longer than 104 weeks but it also creates
disincentives for injured workers to return to work. A worker
may draw TD benefits for a few weeks, return to light duty
while awaiting surgery, and then need some time off and
assistance to recover from surgery. Under current law, the TD
time limit begins when the first TD payment is made. The time
that they have returned to work continues to count against
their 2-year TD cap, taking away the incentive to return to
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Senate Committee on Labor and Industrial Relations
light duty. Supporters argue also that injured workers who
face delayed or denied medical treatment also suffer under
this TD structure. Their recovery is delayed when insurance
companies review doctors' decisions. During this time, the TD
time limit continues to tick. Injured workers should not be
punished while insurance companies fight doctors' decisions.
4. Opponent Arguments :
Opponents acknowledge that there are problems with the
temporary disability system, but object to the increased costs
from extending benefits the additional 52 weeks from 104 to
156. Opponents stress that a prompt return to employment
after an injury reduces an injured workers long-term wage
loss. The newest data from the Division of Workers'
Compensation shows a 5% increase in return-to-work rates. The
104-week cap, in conjunction with other reforms is having the
desired effect. In addition, opponents believe that the
provisions of the bill that extend the number of weeks of
benefits when treatment is disputed acts as a penalty on
employers when there are good faith disagreements about
medical care. The bill unreasonably grants an extension to
workers when the employer is doing exactly what the Labor Code
says they are supposed to do - seeking utilization review of
medical treatment. They further argue that these proposed
extensions will actually act as a disincentive for employees
to return to work by creating the opportunity to obtain more
weeks of benefits by seeking unnecessary treatment. Finally,
public sector employers make similar arguments with respect to
the related extension of 4850 benefits.
5. Prior legislation.
SB154 (Cedillo), approved earlier this year by this committee,
would exempt police officers and firefighters from the 104
week cap.
SUPPORT
California Labor Federation, AFL-CIO -Sponsor
California Professional Firefighters - Sponsor
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Senate Committee on Labor and Industrial Relations
Amalgamated Transit Union
American Federation of State, County and Municipal Employees,
AFL-CIO
California Applicants' Attorneys Association
California Conference of Machinists
California Federation of Teachers
California School Employees Association, AFL-CIO
California State Employees Association
California Teamsters Public Affairs Council
Engineers and Scientists of California, Local 20, IFPTE
Independent Employees of Merced County
Local 21, IFPTE
Organization of SMUD Employees
Peace Officers Research Association of California
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
Service Employees International Union
Strategic Committee of Public Employees, Laborers' Int'l Union
of N. America
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
WORKSAFE!
OPPOSITION
American Electronics Association
American Insurance Association
Association of California Insurance Companies
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers' Compensation
California Manufacturers and Technology Association
California Restaurant Association
California State Association of Counties
CSAC Excess Insurance Authority
Greater Riverside Chambers of Commerce
League of California Cities
Redondo Beach Chamber of Commerce & Visitor's Bureau
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Senate Committee on Labor and Industrial Relations
Regional Council of Rural Counties
San Diego County Schools JPA
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Hearing Date: July 11, 2007 AB 338
Consultant: Rodger Dillon Page 7
Senate Committee on Labor and Industrial Relations