Workers’ Compensation Lien Process

After an employee sustains a work-related injury, there are a number of processes which must be set in motion. The injury must be properly documented, witness statements need to be taken and filed, notice needs to be sent to insurance companies, and a variety of other procedures. Many of these procedures, such as medical appointments, attorneys, and living expenses involve the exchange of funds on behalf of the injured worker or his or her family. In some cases, a lien may be filed against the worker’s compensation claim in order to obtain reimbursement for these expenses.
Not every type of expense associated with a workers’ compensation case is eligible to file a lien against a claim. The expenses eligible are: attorney fees, burial expenses, living expenses for the spouse of the injured employee and minor children, unemployment disability benefits paid while waiting on a determination of the work-related injury, unemployment benefits paid to the extent that the payments overlap the time period that an employee is entitled to temporary total disability, indemnification granted by the California Victims of Crime Program, and reasonable expenses incurred by or on behalf of the injured worker for medical treatment, unless those treatments are subject to a dispute involving an independent medical or bill review.
Medical treatment expenses are typically the most common liens filed against a workers’ compensation pay out. In order to file a lien, a filing fee of $150 must be paid, although there are certain types of claims that are exempt from the fee. Other types of liens, such as burial fees, attorney fees, spousal expenses and several others also are not required to pay a filing fee. If a filing fee is required for a lien and the fee is not paid, the lien will be considered invalid and it will be as if the lien was never filed. Liens must be filed electronically, using one of two methods, called E-Form or Jet File. All liens must be reviewed by and approved by the Workers’ Compensation Appeals Board. A lien is only payable once the WCAB has issued an order allowing payment of the expense.
Liens are an effective method to make sure that those associated with a workers’ compensation case receive compensation for services rendered, and also to ensure that a worker does not receive double payments from both the disability system and the workers’ compensation system. If you have a question about liens in workers’ compensation cases, contact me today at (714) 516-8188. We can discuss your business and the lien process

Social Security and Workers’ Compensation

In California, as well as across the nation, employees sustain work-related injury every day. When this happens, employees may be eligible to file a claim for workers’ compensation against their employer in order to pay for the medical costs associated with their injury, as well as some other stipends in some situations. California employers are required by law to carry workers’ compensation insurance in order to make sure that workers are adequately compensated when they sustain qualifying work-related injuries. Workers’ compensation provides an alternative to litigation and help to streamline the process, and by operating outside of the traditional court system, prevents the courts from having dockets clogged with workers’ compensation issues.

Social Security disability is a separate system, although it also is designed to assist people who are unable to work. The essential difference between Social Security disability benefits and worker’ compensation is that workers’ compensation is designed to provide compensation for work-related injuries. An individual who is injured outside of his or her employment may not receive compensation under workers’ compensation. Conversely, Social Security disability may allow an individual to seek to make up for lost income when he or she has an injury or illness that occurred outside of employment but still prevents the individual from working.

There are some occasions wherein a person may apply for and receive both workers’ compensation benefits and Social Security disability benefits. The first requirement is that you must be injured or expect to be injured for at least a year plus a day. A worker who has a terminal illness could also qualify. An injured worker must also have paid in to the Social Security system for a minimum amount of time, which is typically at least ten years. In such a situation, an injured worker could potentially receive both types of benefits at the same time. It should be noted, however, that the amount an injured employee receives through Social Security may be at least partially reduced by the amount received through workers’ compensation. This is different than unemployment benefits, as typically an injured worker may not draw both unemployment benefits and workers’ compensation at the same time.

 If you have questions about how to make your workplace safer and safety committees, contact me today at (714) 516-8188. We can talk about protecting your employees from injury, and your business from future litigation.

Home Healthcare and Workers’ Compensation

For obvious reasons, workers’ compensation is intricately intertwined with the health care industry. This may include hospital stays, physical therapy, chiropractic services, psychological treatment, or an enormous variety of other services, depending on the nature of the work-related injury. With respect to home healthcare, employers need to be aware of two different potential issues that are related to workers’ compensation.

The first potential issue is if the employer’s own business is to provide home healthcare services. In California, it is required that all employers provide workers’ compensation insurance for all of their employees, with a few limited exceptions. The home healthcare industry is not one of those exceptions, in and of itself. In other words, chances are that your home healthcare business is required by California law to carry workers’ compensation insurance. Although home healthcare is not typically thought of as a “high risk” industry, there are many hazards inherent in the home healthcare business. Home healthcare providers are always inside of unfamiliar homes that may not be very clean or safe. Even if the home is completely free of typical hazards, simply being unfamiliar with surroundings can lead to more injuries. Accordingly, it is essential that home healthcare business owners not ignore the workers’ compensation insurance mandate.

The other potential issue could be whether an employer of a worker who has sustained work-related injuries is required to pay out a claim for home healthcare. This issue was addressed in a WCAB case called Hernandez v. Geneva Staffing, Inc. that was handed down in June 2014. In that case, a worker had a severely injured hand and received home healthcare services from his wife. He submitted a claim to his employer for payment for those home healthcare services. The employer denied the claim, based on the fact that the employee failed to provide a valid medical prescription for the home healthcare services. The WCAB explained that an employer may be liable to pay for home healthcare services where certain conditions are met, such as a valid medical prescription. The WCAB also explained that the amount that the employer may be liable for is limited by the Official Fee Schedule.

Employers of any industry have many responsibilities toward their employees when it comes to workers’ compensation. Call me today at (714) 516-8188 and let me review your business’s obligations with you.

Hotel Cleaning Firm Charged with Workers’ Compensation Fraud

There have been many recent attempts and moves by California lawmakers to crack down on workers’ compensation fraud. Harsher penalties, new investigatory bodies, and restrictions on who may participate in the workers’ compensation medical system are all examples of recent and important steps that legislators have taken to reduce fraud and its attendant burden on the California legal system and tax payers. Fraud can come in many forms, including failure to report all of the employees to insurance carriers. In 2015, a case occurred which really highlights the fact that addressing fraud is an essential goal for California lawmakers.

In this case, a married couple, the Kwons, owned a business called Good Neighbor Services. The business had offices in San Francisco, Santa Barbara, Los Angeles, Orange County, San Diego, as well as in Nevada and Georgia. The company was engaged in providing cleaning services to big-name hotels, such as the Ritz, Omni, Marriott, and Sheraton. However, the Kwons were not following the requirements of California workers’ compensation law. They were accused of concealing the existence of at least 800 employees. The purpose of this law was not only to avoid paying payroll taxes, but also to avoid carrying workers’ compensation insurance for all these people. They were further accused of threatening to fire any employee who was injured on the job. The grand jury ultimately indicted both of them, and they faced up to thirty one years in prison if convicted of all of the charges.

At the end of December 2015, the husband of the team pleaded guilty to seven felonies. These included insurance premium fraud, tax fraud, as well as involvement in a scheme that was constructed to avoid paying premiums and employment taxes. He stipulated to serving an eight year prison sentence, and also to paying restitution in excess of five million dollars.

In December 2016, Ms. Kwon also pleaded guilty. She pleaded guilty to two counts of premium fraud and two counts of employment tax fraud. Her prison sentence was four years and eight months. She also had to pay restitution in excess of five million dollars. This restitution went to both insurance carriers and the Employment Development Department.


Workers’ compensation fraud is a serious crime and carries justifiably heavy penalties. If you are an employer and have questions about your obligations under California law, call me today at (714) 516-8188. We can discuss your business and your future.

How the Employer Can Smooth the Claims Process

As an employer, it is important to understand your responsibilities under the California workers’ compensation system. Unfortunately, the system can be complicated and confusing. No employer wants to hear that his or her employee has suffered a work-related injury. However, if certain steps are taken before the injury has happened, then a business may smooth the claims process. These steps can help take out some of the confusion and stress that typically accompany any involvement with the workers’ compensation system.

The first steps should be taken before an injury actually happens. Reviewing your safety procedures, implementing a safety program, and creating safety committees are all ways that you can make sure that your workers are as safe as possible. A business owner should also make sure that proper training is provided not only to new workers but also existing employees and managers. Create a written guidebook for managers to review and learn so that they all understand the steps that must be taken in the event that an employee does sustain a work-related injury.

If an employee is injured on the job, the employee should be provided immediate and appropriate medical attention. Even if an employee tries to downplay the severity of the injury, he or she should be encouraged to obtain assistance. Ignoring injuries can exacerbate the condition, leading to higher costs for the business because of aggravated injury. This is especially the case where soft-tissue injuries are concerned. Discuss possible accommodations for the worker with him or her, as well as the treating physician, where appropriate.

The claim should be immediately reported to the insurance carrier. If there are witnesses, their statements should be taken promptly, while their memories are fresh. Similarly, all the paperwork required by your insurance carrier needs to be completed promptly. Delaying this essential paperwork will only prolong the process. Business owners should be involved and diligent in this process, and review the details in the paperwork to ensure accuracy. It can also be important to stay engaged and interested with the injured employee. This can help to get a more precise idea of the nature of the injury, different accommodations that should be made, and when he or she would be likely to be able to return to work.

The workers’ compensation process can be confusing, and you need an experienced attorney to help guide you through the claims process. Contact me today at (714) 516-8188. We can review your business and make sure that you are doing all you can to smooth the claims process.

Executive Opt Out Rule

The general overarching rule in California is that employers are always required to carry workers’ compensation insurance to cover their employees in case of injury on the job. There are exceptions, however, such as if the business is self-insured. With the new year, some of the exceptions have changed. One such example is what is referred to as the “executive opt-out rule.”

Before 2017, the executive opt-out rule was that certain high-level officials in California businesses had to affirmatively opt-in to workers’ compensation coverage. In other words, they had to take action in order to be covered. The new rule expands their coverage somewhat. It reverses the previous position, and states that if an executive does not want workers’ compensation coverage, he or she must affirmatively opt-out of coverage. This rule does not include any “high level” employee. The employees covered under that rule are corporate officers or directors who are the sole shareholders of the business. It also covered working members of a limited liability company or a partnership. The new rule, which is found in AB 2883, states that as of January 1, 2017, all officers or members of boards of directors who are employees of a company must be covered by workers’ compensation insurance, as any other employee. The only exception to this is if the officer or member of the board owns at least 15% of the outstanding stock for the corporation, and also executes a sworn statement that he or she is eligible for the exemption of workers’ compensation insurance coverage. Moreover, working members of a limited liability company or partnership who receives wages from that limited liability company or partnership may also qualify for the insurance exemption. In order to be exempted, he or she must 1) be a managing member of a limited liability company or a partner in a partnership, and 2) execute a waiver, just as the members of the boards of directors. This waiver is only effective once it has been signed and received by the workers’ compensation insurance company.

The general aim of this law is to expand those who are covered under workers’ compensation insurance in the state of California. It prevents owners of small businesses from giving an employee a false title in order to avoid providing workers’ compensation insurance for those employees, as was possible under the old rule.

These rule changes could have a big impact on your business. If you have a question about your responsibilities under the new law, contact me today at (714) 516-8188. We can discuss your business and how to make sure you are in compliance.

Potential Employer Penalties for Fraud

California law requires that all employers (with a few exceptions) maintain workers’ compensation insurance.  The purpose is to make sure that any employee who sustains a work-related injury will be fairly compensated.  In recent years, the California legislature has recognized that fraud in the workers’ compensation system is an enormous problem, and is costing tax-payers and voters dearly.  Penalties for fraud for both employees and employers can be severe.  It is important to understand what penalties an employer could face if he or she is found to have committed fraud in the workers’ compensation system.

First, it is important to understand that fraud is a criminal act.  Fraud in this context is a person that receives, accepts, offers, or delivers benefits he or she is not entitled to may be guilty of fraud.  These benefits may be in several forms, including commissions, refunds, preferential treatment, discounts, or other profit.  The penalty could be a fine of up to $10,000 and incarceration for up to a year.  These fines and jail sentences may all stack up, resulting in fines that can easily run into the six figures.  Moreover, some employers convicted of certain types of fraud, such as insurance premium fraud, could find their information publically published on the California Department of Insurance website.

Fraud can include several different acts for an employer.  These could include making false representations to the workers’ compensation insurance company, done with the intention of obtaining cheaper insurance coverage.  It could also include presenting false information with the intention of denying benefits to an employee with a work-related injury.  A third way it could occur would be to knowingly aid someone in engaging in fraud.  An example of that could be sending referrals to a medical provider the employer knows will be engaging in some sort of medical provider fraud.  Other common examples of employer fraud would be misreporting payroll or underreporting the number of employees.

Anyone who believes that fraud is occurring must report this suspicion to the DWC.  The reporting individual is not liable for defamation or slander suits, as long as the report is made with a good faith belief that fraud is actually occurring, and acts without malice.  The purpose of this is to make sure that fraud does not go unreported simply because the reporter is concerned about potential civil liability in the form of a lawsuit.

Workers’ compensation fraud can result in serious and sometimes ruinous consequences.  If you have questions about fraud and workers’ compensation, contact us today at (714) 252-7078 to discuss your business and how to protect it.

Short-Term Employees and Psychiatric Injury

Workers’ compensation laws cover a wide variety of work-related injuries to employees in the state of California.  Among the types of injuries that are covered by the California Labor Code are psychiatric injuries.  California Labor Code Section 3208.3 states that a psychiatric injury sustained at work may be compensable under workers’ compensation claims.  However, subsection (d) of the statute provides that in order to eligible for compensation of a psychiatric work-related injury, the employee must have been employed by the business for at least six months.  An exception to that rule is if the injury was the result of “a sudden and extraordinary employment condition.”  The purpose of the six month requirement is to prevent questionable claims for psychiatric injury by brand new employees when the psychiatric injury is a result of stressors common to that profession.

In Travelers Casualty & Surety Company, et al. v. Workers’ Compensation Appeals Board and Mark Dreher, the court of appeals addressed a case involving both physical and psychiatric injuries.  In that case, Mr. Dreher had been working for his employer for 74 days when he slipped and fell, sustaining numerous physical injuries.  He also stated he had psychiatric injuries, in the form of depression and panic attacks.  The WCJ denied his claim for psychiatric injury.  It held that § 3208.3(d) prevented him from recovering for his psychiatric injuries because the injury was not the result of an “extraordinary employment condition.”  The Court of Appeals recited that other cases have found that extraordinary employment conditions may include such incidents as a gas explosion or workplace violence.  These are not routine stressors or employment events, and therefore do not qualify as extraordinary conditions for the purposes of the statute.  Mr. Dreher argued that his injury was extraordinary due to the catastrophic and serious nature of his injuries.  Mr. Dreher suffered a fractured pelvis, in addition to neck, shoulder, leg, and knee injuries.  He had a sleep disorder, gait derangement, and headaches.  He required many surgeries, including to repair pelvic fractures and a torn meniscus.  Despite this extensive treatment list, his pain and disabilities were not totally cured.  Even though the Court recognized that Mr. Dreher had been severely injured, it held that this did not support a finding of extraordinary employment conditions.  The Court stated that the severity of the injury was not a component of whether or not the employment conditions were extraordinary.  His psychiatric claims were accordingly denied.

Short-term employee claims can create special issues in workers’ compensation.  I have experience in guiding my clients through this type of case.  Contact me today at (714) 252-7078 to talk about your business and the issues facing you.

Medical Mileage Rate Decline in 2017

After an employee suffers a work-related injury, he or she will need to attend many appointments associated with the workers’ compensation claim and case.  Some of these appointments will, of course, be medical appointments in order to diagnose and treat the work-related injury.  The medical mileage applies to the travel that an injured worker conducts that is related to the medical treatment or evaluation of the work-related injury.  Under the California Labor Code § 4600, the claims administrators for the workers’ compensation case are required to reimburse an injured worker for the mileage expenses.  The rate to be reimbursed is to be set in accordance with the Internal Revenue Service guidelines.  On December 13, 2016, the IRS released new guidelines with respect to the reimbursement for mileage.  As of January 1, 2017, the standard mileage reimbursement rate is 53.5 cents per mile, which is a decrease of .50 cents per mile.  This new rate applies even for injuries that occurred before January 1, 2017, and even for workers’ compensation claims and cases that were already ongoing.

Employers and administrators should note that although the rate has changed for any travel occurring on January 1, 2017 or later, mileage that occurred before that date should still be reimbursed at the previous rate.  The rate for the year of 2016 is 54 cents per mile.

The reason that the IRS decided to modify the mileage reimbursement rate is the result of a study that was conducted on their behalf.  The study examined the costs of owning and operating a vehicle, and takes into account both the fixed and variable costs associated with driving a car.  Based on this study, the IRS determined that the mileage reimbursement rate of 54 cents per mile was too high, and adjusted the rate downward.

Since 2008, the rate for medical mileage reimbursement has changed many times.  As a result, in order to assist in the accurate payment of the mileage expenses, the California Department of Labor provides forms for the mileage expenses.  The forms reflect the proper rate of reimbursement, and there are forms for expenses incurred both before and after January 1, 2017.

If you have questions about the proper rate or the nature of medical mileage reimbursement, contact our team today at (714) 252-7078.  We can discuss your business and the claims you have.

Overview of the Workers’ Compensation Process

Law suits can be a long and confusing process. Workers’ compensation law and claims are no exception. The fact that the process does not typically operate like a typical lawsuit makes it even more convoluted and obscure to the typical person off the street. This can really add to the stress and confusion experienced by the people involved in a workers’ compensation suit. A basic understanding of the process can help reduce stress and help you manage the process more efficiently.

The first thing that will happen must be the initial claim. After a worker sustains a work-related injury, he or she will need to make a detailed and accurate account of the related injury. The employer should also take reasonable steps to make sure the report is truthful and complete. This includes determining if there were witnesses to the event. If there were witnesses, the employer should be meticulous about gathering and maintaining written statements, and providing all of this information to the attorney responsible for defending and managing the workers’ compensation claim on the business’s behalf.

After the insurance company receives the statement, an investigator may  be sent out to examine the circumstances of the injury. The investigation will most likely include an on-site survey of the injury site but also an inquiry into the medical records of the injured worker. The investigation will need to look into the extent of the injury and whether it is long term or short term. These issues will obviously have a large impact on the nature, amount, and duration of the benefits awarded to the injured worker.  Following an investigation, there will likely also be an exchange of documents and information that is referred to as “discovery.”  During discovery, both the employer and the employee must exchange certain requested information, including medical records, employer reports, witness lists, and other pertinent material.

After the investigation, if the claim is still disputed, it may go before the Workers’ Compensation Appeals Board. The WCAB will hear the evidence from both sides. The board can then make a decision about whether the injured worker will receive benefits and for how long. If either the employer or the employee disagrees with the results, it is possible to appeal the finding to a higher court.

If your business is facing a workers’ compensation dispute, you need an experienced attorney on your side.  Contact me today at (714) 252-7078 to discuss your business and your case.

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