When Does the Subsequent Injuries Fund Pay On a Claim?

California law requires that the majority of employers carry workers’ compensation insurance to provide for their workers in the event that they sustain a work-related injury during the course and scope of their employment.  Unfortunately, some employers either do not carry this insurance or even do not realize that they are required to do so.  California Labor Code § 3351 defines “employee,” and the definition is broader than most people realize, including even workers such as handymen, nannies, and minors.  In the event an employee sustains an injury, the Uninsured Employers Benefit Trust Fund (UEBTF) may provide funding for the employee.  If the employer is illegally uninsured and fails to pay the compensation awarded to the employee by the Workers’ Compensation Appeals Board, the employee may submit a claim to the UEBTF for payment of his or her claims.

The Subsequent Injuries Benefits Trust Fund (SIBTF) is another source of compensation for injured workers.  Under California Labor Code § 4751, employees who had a previous permanent disability or impairment at the time he or she sustained another injury in the work place can apply to the SIBTF for compensation.  To be eligible for compensation from the SIBTF, the injury from the current employment combined with the previous disability or employment must have the combined effect of at least a seventy percent permanent disability for the worker.  Moreover, the new injury must cause at least thirty-five percent of the permanent disability.

Note that an employer does not have to be illegally uninsured for an injured employee to be eligible to receive benefits through the SIBTF.  The SIBTF is meant to help pay a portion of the permanent disability compensation for permanently disabled workers for qualifying workers, as described above.  If an employee qualifies to receive benefits through the SIBTF, the employer will pay only the portion of permanent disability that is attributable to the injury received through the current employer.  The SIBTF will pay the remainder of the benefits owed to the employee.  The purpose of the SIBTF is to encourage employers to hire workers who are already permanently disabled without fear that they will be held responsible to pay benefits that are attributable to a permanent disability incurred through previous employment.

We have extensive experience in assisting our clients understand the repercussions of all types of workers’ compensation claims on their business.  Call us today so we can talk with you about your business and its responsibilities.

Do I Have to Pay for My Worker’s Prior Disability if He Gets Injured? (Apportionment)

As an employer, you know that making sure you provide workers’ compensation benefits for your employees is important and in most circumstances is required by California law.  Workers’ compensation provides protection for the employee because it establishes a no-fault system under which an injured worker can receive compensation for his or her work related injuries.  It also provides protection for the employers, as this no fault system means that the employer does not have to worry about being sued by their employees for recovery for injuries sustained during the course and scope of employment.  Although you certainly understand that workers’ compensation is designed to compensate your injured employee for injuries sustained at your business, it is also important to understand your potential responsibility if the employee had sustained an injury previously at a different business.

Apportionment is designed to allow disability percentages to be assigned to previous injuries to the same body part injured and at issue in the current workers’ compensation case.  California Labor Code § 4664(a) states “The employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment.”  The law goes on to provide that if there is a pervious determination of permanent disability, then it is presumed that the permanent disability still exists at the time the next workers’ compensation claim is made.  If the request for apportionment is successful, the amount of workers’ disability benefits received by your employee in the current case will be reduced.  To successfully show apportionment, there are specific requirements concerning the doctor’s assessment.  First, a doctor must make a specific determination of apportionment.  This determination must be done using percentages of what existed at the time of the injury.  The doctor must also analyze the permanent disability based on the causation of the disability, not causation of the injury itself.  Third, the opinion must be based on facts and not on speculation.  Fourth, the opinion must be based on a “reasonable medical probability.”  Finally, the doctor must explain how and why he or she reached the particular conclusion.  There are other requirements for a successful claim such as showing the employee was actually compensated for the previous injury and the injury continued to be a source of disability after the accident.

We have extensive experience helping our clients understand apportionment and how to protect their business.  Contact us today for an appointment.

What Is Permanent Disability?

As a business owner, you take every measure possible to reduce the chance of injury to your employees as much as possible.  Unfortunately, no matter how much you strive for an injury-free work place, it is overwhelmingly likely that an injury will eventually occur.  If during the course and scope of employment, your employee sustains an injury, he or she will likely be entitled to receive workers’ compensation benefits.  The type and percentage of disability is a central component of disability claims.

The California Department of Industrial Relations defines permanent disability as “any lasting disability from your work injury or illness that affects your ability to earn a living.”  If an employee is permanently disabled, he or she will be entitled to permanent disability benefits, regardless of whether that injury renders him or her unable to work in the future.  In most cases, permanent disability is determined through Whole Person Impairment (WPI).  This will be determined after the employee is examined by his or her doctor or a Qualified Medical Evaluator.  The doctor or QME will determine the percentage of impairment level, meaning how the injury will impact the employee in his or her ability to work.  The QME will use the standards established by the American Medical Association in making this determination.  The impairment level will then be reduced to a percentage, using a formula which also takes into account the employee’s age and occupation. In cases involving psychological injuries, the injury must either be categorized as catastrophic or the employee must have witnessed a violent crime in the course and scope of employment.  Taking all of these elements into account, the disability evaluator or the judge will then use the statutory formula and decide the amount of permanent disability the employee is entitled to receive.  The amount the employee will be entitled to receive will also be impacted by the date of the injury in addition to the wages paid to the employee before he or she was injured.  The permanent disability benefits typically begin being paid after the end of temporary benefits and the doctor indicates that the injury has “stabilized.”  This means that the injury will not heal or improve any more.

If you have questions about disability payments to your employees, contact us today.  We look forward to discussing workers’ compensation with you and what we can do to help protect you.

What Is Laches?

The workers’ compensation system is often described as a “statutory scheme.”  This is because in 1911, the California legislature was directed to create the statutes and framework to help provide compensation to workers injured in the course and scope of their employment.  Because the system is based on these statutes and those that were amended or added later, it is said to be statutory in nature.  Nevertheless, there have been some times when equitable principles have been applied to workers’ compensation cases.  One of these principles is laches.

Laches is a legal doctrine that means that an otherwise enforceable right may not be enforced if there is an unreasonable delay in asserting that right, and that delay results in injury to the opposing party.  In essence, if you wait too long to bring a suit or ask for redress under the workers’ compensation system, the court may refuse to allow you to enforce your right to recover, even if you would have been able to recover if you brought your suit sooner.  The California Supreme Court in Kaiser Foundation Hospitals v. Worker’s Comp. Appeals Board determined that laches is applicable to workers’ compensation cases.  In that case, the Supreme Court determined that a claim for a lien can be barred by a defense of laches.  Other court cases since then have also applied the doctrine of laches to workers’ compensation cases.  For example, Godbolt v. Wherehouse Entertainment and Ace Insurance Company, the issue of laches came up when a case was settled in 1988 through a compromise and release, although the agreement did not relinquish jurisdiction over potential liens.  Eight years later, the lien claimant contacted the defendant.  The claimant then contacted the defendant again in 2000, 2006, and 2007.  It was not until 2009 that the lien claimant finally hired an attorney and attempted to move forward with the lien.  The defendant asserted the defense of laches, due to the unreasonable delay in bringing the claim as well as claiming it had been prejudiced by the fact so much time had passed.  The WCAB determined that laches did not apply in this particular case because the defendant failed to make the necessary showing that it was actually prejudiced by the passage of so much time.

If you have questions about the defenses available to your business in a workers’ compensation case, we can help answer them.  Call us today for a consultation.

Do I HAVE to Buy Workers’ Compensation Insurance?

There are a variety of expenses associated with running your own business.  From inventory to lease payments to taxes, there are many expenditures included in your total overhead.  In California, workers’ compensation needs to figure into this computation.  Especially in the case of small businesses, many business owners wonder if it is necessary to purchase workers’ compensation insurance, as the cost can be extensive.  It is very important for business owners to understand the different permissible options under California law, as well as the consequences of not acting pursuant to the relevant regulations.

The option that is most common is purchasing a workers’ compensation insurance policy.  Pursuant to California Labor Code § 3700, a business must provide workers’ compensation benefits to its employees if it employs one or more employees.  Recent changes to the law provide that executive officers and directors of corporations are no longer exempt from the requirement that all employees must be covered, with some limited exceptions.  California Labor Code § 3351 defines “employee,” and it should be noted that “every person in the service of an employer under any appointment or contract of hire or apprenticeship, oral or written, whether lawfully or unlawfully employed” is included under the definition.  Moreover, other people such as minors, handymen, aliens, nannies, and several others are also included.

Self-Insurance can also be an option for some businesses.  Businesses or employers who want to be self-insured must fulfill very particular financial requirements.  In addition, the business must apply to the Office of Self-Insurance Plans for Approval.  The business or employer must provide 1) three calendar years in business in a legally authorized business form; 2) three years of a certified, independently audited financial statements; and 3) acceptable credit rating for three full calendar years leading up to the application.  Employers should note that subsidiaries must apply separately.

If you choose not to provide workers’ compensation insurance, the consequences could be severe.  Not only could you and your business face stiff fines, there is a possibility you could even face criminal prosecution.  The first offense could result in a fine of $10,000 and a year and jail, and subsequent offenses carry even stiffer penalties.

If you have questions about whether you are required to carry workers’ compensation insurance for your business, contact us today.  We can discuss your business and what we can do to protect its future.

What Is the Workers’ Compensation Appeals Board?

As a business owner, you know that taking the right steps for planning, financing, expanding, licensing, and other related activities is essential.  Understanding the right procedures can be the difference between your business’ success and failure.  This is just as true with the workers’ compensation system.  The procedure your business will go through during this process is important to understand in order to protect it and its future.  When a claim is made against your business for workers’ compensation benefits by an injured worker, the claims are usually informally resolved between the injured worker and the insurance adjusted.  If the claims cannot be informally resolved, the issues will be resolved by the workers’ compensation judge (WCJ).  There are a wide variety of issues the WCJ may be asked to decide, ranging from the level of injury sustained by the employee to the authorization for medical treatment.

If either party disagrees with the decision made by the WCJ, that party may appeal that decision to the Workers’ Compensation Appeals Board (WCAB).  The WCAB is made up of seven judges, called “Commissioners,” that are appointed by the governor, and then confirmed by the state senate.  The Commissioners serve in terms of six years.  Out of the seven, three will preside over an appeal.   The appeal is called a Petition for Reconsideration.  As with any appeal, there are strict deadlines, so having an experienced attorney for your Petition for Reconsideration is essential.  Missing a deadline could mean that you waive your right to request reconsideration of the WCJ’s decision.

After the Petition for Reconsideration is filed, each of the three Commissioners assigned to the case will review the petition.  Note that filing a Petition for Reconsideration with the WCAB does not mean that you have a full trial in front of the WCAB; rather, it means that your attorney will file particular documents with the WCAB explaining why the petition has merit.  There are several possible outcomes for the Petition.  First, it is possible the WCAB will simply dismiss the request.  Second, they could affirm the decision of the WCJ and deny the request for reconsideration.  Third, they could grant the request for reconsideration and return the case to the WCJ for additional proceedings.  Finally, they could grant the request for reconsideration and render their own decision.

If you have questions about the workers’ compensation process, you need an experienced team on your side.  Contact us today and we can discuss the procedure and how they will impact your business.

What Is Subrogation?

The workers’ compensation system was established in 1911 by the California legislature to help provide relief for workers who were injured in the course and scope of their employment.  The system is what is called a “no fault” system, which means that the employee is not required to prove that the injury was the fault of the employer in order to recover for his or her injuries and ongoing disabilities.  In some cases, however, a third party’s actions or inactions may have contributed to the employee’s injury.  Under California Labor Code § 3850, et seq., an employer or the employer’s insurance company may exercise their right to subrogation in this instance.  Subrogation is the right of the employer and/or the insurance company to recover the amount paid under the workers’ compensation suit against a third party.  There are several ways that an employer may use subrogation to recover these expenses.

An employee may seek to recover against a third party whose negligent or even intentional conduct contributed to the accident causing the injury.  An employee may seek to recover, for example, from the equipment manufacturer for faulty safety systems or may sue a negligent driver for a car accident occurring during the course of the employee’s work.  If an employee files his or her own lawsuit against such a third party, an employer has a couple of options.  One option is to serve a Notice of Lien on all of the parties in the lawsuit.  This type of lien is considered a first lien against any recovery obtained by the injured employee.  This means that if the employee obtains a judgment from the lawsuit against the third party, the lien will be paid right after the employee’s attorney fees and legal expenses are paid.  Another option is to intervene in the law suit.  This means that your business will become a party to the lawsuit and will participate in the litigation.

If the employee does not decide to file his or her own lawsuit, your business or your workers’ compensation insurance company still have the independent right to file a lawsuit against a third party.  You should note that the statute of limitations will apply to your business, just as it would apply to the right of the employee to bring his or her own law suit.

If you have questions about subrogation or workers’ compensation, let us answer them.  Call us today for a consultation.

Schnore v. Progress Rail Services – Death Benefits and Workers’ Compensation

Work-related injuries are an unfortunate reality of owning your own business. No matter how careful you try to be and how many safety measures you implement to help protect your workers, a work-related injury is bound to happen eventually. Hopefully, when it does occur, the injury will be minor and the employee’s recovery quick and relatively painless. Unfortunately, in some tragic cases, a work-related injury could result in the death of the employee. When this occurs, the surviving spouse or dependents will still be eligible for workers’ compensation benefits. The California workers’ compensation system requires almost all employers to purchase workers’ compensation insurance to cover this very sort of scenario. However, the system is only set up to cover the employees of the business. Independent contractors are not covered under workers’ compensation insurance or benefits. However, the California labor code does not specifically define what it means to be an independent contractor. In a recent case, the California Court of Appeals was faced with a case involving the death of a worker and the classification of independent contractor versus worker.

In Schnore v. Progress Rail Services, a widow brought a claim for death benefits under the workers’ compensation system. Her husband died after suffering a fatal cardiac arrhythmia while driving a truck belonging to the defendant. The widow claimed that she was entitled to death benefits and her husband had been an employee. By contrast, the employer contended that the husband was an independent contractor, and therefore that the widow was not entitled to benefits under workers’ compensation. The court looked to the controlling case on the subject, S.G. Borello & Sons, Inc. v. Department of Industrial Relations. In that case, the California Supreme Court set out a specific set of factors that will assist in determining if a worker is an employee or an independent contractor. In this case, the court considered the fact that the defendant was the one who established the pick up and drop off points for the deceased’s freight loads. The court determined that this method of control was key and that it suggested the deceased was an employee. The widow’s argument was also helped by the fact the trailer used by the deceased was a specialized trailer, which also suggested employment instead of being an independent contractor. The court accordingly rejected the employer’s independent contractor defense and ruled in favor of the widow.

Making a determination about worker classification can be crucial for your business. Call me today at (714) 516-8188. We can talk about your employees and your business.

Homeowner Issues – Are My Handman And/Or Nanny Covered?

In today’s busy world, it is common for both partners in a relationship to work full time outside of the home. To help get things done around the house, it is very common for people to hire outside help. This comes in many forms, including a handyman for odd jobs or a nanny to care for the children. When a couple decides to hire outside help, they need to be careful about workers’ compensation requirements in California. California Labor Code sections 3351 and 3352 provide guidance for homeowners thinking of bringing in outside parties to assist with household tasks.

California law requires almost all employers to carry workers’ compensation insurance for their employees. Labor Code 3351 has a long list of those who are included under the definition of “employee,” and subsection (d) provides that anyone who is employed by a homeowner “whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children” is considered an employee for purposes of workers’ compensation. The statute does, however, specifically refer to a set of exceptions found in section 3352(h). These exceptions state that if the employee was employed for less than 52 hours in the 90 calendar days preceding the date of the injury or if the employee earned less than $100 from the employer during those 90 days, then the person is not an employee for purposes of workers’ compensation.

With this in mind, the homeowner needs to carefully consider the type and frequency of work being performed by a handyman or nanny. According to the definition, a person who helped put up a fence or paint a house would not fall under the definition of employee, as long as the job took 51 hours or less. Similarly, an occasional babysitter would also not fall under the definition of employee. The law is more aimed at the type of worker who is regularly and frequently inside the home, performing regular work for the homeowner. In other words, a nanny or au pair, as opposed to a babysitter, and a regular maintenance person as opposed to an occasional handyman. If you are employing someone who fits these parameters, you are likely required to carry workers’ compensation insurance.

I have extensive experience helping clients understand their obligations under California workers’ compensation, contact me today at (714) 516-8188 to talk about your options.

Violent Acts and Workers’ Compensation

Work-related injuries can happen despite any and all precautions taken by an employer. Even the most careful preparations can fail to protect all employees from all types of injuries. The workers’ compensation system has been designed such that different injuries may receive different treatment with different types of requirements. One example of narrow or particular requirements is in the case of a work-related injury resulting from violent act.

Workers’ compensation is designed to address an injured worker’s work-related injuries. However, even if the injury is sustained due to willful violence from another worker, the injury is still compensable. For example, if an employee is assaulted by another employee while at work, those injuries will fall under the category of compensable work-related injury. Similarly, if the employee is assaulted by a client or customer, those injuries are also compensable under workers’ compensation. Simply because the assault should not occur during the course of employment or does not directly involve what is an employee’s job duties does not take it out of the realm of a compensable injury. For example, in a 2015 case, the WCAB found that a violent act included a situation when an employee sustained injury after being punched in the back of the head by another co-worker. Similarly, another case found it was a violent act where an employee was injured during a store robbery.

California labor code 3208.3 is one provision that addresses work-elated violent injury. Subsection (b)(2) specifically talks about psychiatric injury that is a result of a violent act. The statute provision states that if the psychiatric injury is resulted from being the victim of a violent act, the employee “shall be required to demonstrate by a preponderance of the evidence that actual events of employment were a substantial cause of the injury.”  A recent case addressed this provision. Larsen v. Securitas Security Services involved a case where a security guard was hit by a car when she was walking through the parking lot, performing her regular duties. Among physical injuries, she also claimed psychiatric injuries arising from the violent act of being hit by the car. The WCAB agreed and pointed out that the injured employee was not required under 4660.1 to prove that the violent act was criminal in nature.

If you have questions about what qualifies as a violent act and how to protect your employees, you need to discuss it with an experienced attorney. Call me today at (714) 516-8188 and let me help you and your business.

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