What is Permanent Disability?

When an employee sustains a work-related injury, he or she may be entitled to receive payment from his or her employer through the workers’ compensation system.  In California, the workers’ compensation system is a no-fault system.  This means that the employee does not have to prove that the injury was the fault of the employer before being entitled to compensation.  The type, amount, and duration of workers’ compensation benefits that an employee may be entitled to is partly governed by whether the injury results in a permanent disability.

A permanent disability is defined as any lasting disability from an employee’s work-related injury or illness that affects the employee’s ability to earn a living.  In the event an employee sustains a permanent disability, he or she will be entitled to permanent disability benefits even if he or she can return to work.  In order to be determined to have a permanent disability, the employee must submit to a medical examination.  The doctor will decide if the employee has a permanent disability.  The doctor will wait until your injury has stabilized and is not likely to worsen or improve before evaluating the permanent disability.  The term for this state is either “permanent and stationary” or “maximal medical improvement.”  Once the employee’s injury reaches this state, the doctor will send a report to the insurance claim administrator reporting whether the employee has a permanent disability, and whether that disability is, in fact, work-related.  The doctor will decide how much of the permanent disability is attributable to the work-related incident, and how much is attributable to any pre-existing conditions.  The doctor will also write a report about the employee’s impairment, which refers to how much the injury actually affects the day-to-day activities of the employee.  The doctor will assign a number to the impairment, which is then plugged into a special calculation in order to calculate the percentage of disability.   Whole Person Impairment generally means how much the impairment will affect the employee’s ability to function in the future.  The employee’s age and occupation will also affect the calculation, as well as diminished future earning capacity, for injuries incurred after January 1, 2013.  The disability will be stated as a percentage, which will determine a specific dollar amount the employee will receive.  After the amount is calculated, an award of benefits will be granted, but must first be approved by a workers’ compensation judge.

Calculating and awarding permanent disability is complicated, and you need an experienced attorney working with your business through this process.  If one of your employees may be permanent disabled as a result of a work-related injury, contact us today at (714) 516-8188 to discuss it.

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