Structured Settlements and Workers’ Compensation

The legal system is often thought of by lay people as being complicated, and legal cases may take months or even years to resolve a case.  Unfortunately, workers’ compensation is not always an exception to this, as the nature of the cases often include injuries that take time to heal before it can be determined whether a worker is permanently or temporarily disabled, the type of accommodation the worker requires, or whether the worker can even return to work at all.  Both sides are often looking for ways to shorten the process and come to a settlement.  With a settlement, the parties can avoid the time and expense of a court case that drags out and costs both sides dearly.  One way to complete this in a workers’ compensation case is a structured settlement.

A structured settlement is a settlement agreement wherein the employer or its insurance provider agrees to make a series of periodic payments to the injured worker (or the surviving family) over a period of time.  Some structured settlements provide that each payment amount will be exactly the same, but other settlements can provide additional flexibility.  In some cases, the settlement may provide for a lump sum to be paid up front before the regular payments start.  This lump sum may be to assist with housing, transportation, or medical needs.  In addition, the settlement can take future cost of living expenses increase or inflation rates into account, and provide for future increases at specific times.  It should be noted that a separate account is often set up to handle the injured workers’ future medical expenses, and that the periodic payments are meant to represent the lost wages.

One advantage for the employee in accepting a structured settlement is that the periodic payments are not subject to federal income taxes.  An employer will often benefit from a structured settlement in cases where there has been a catastrophic injury that is likely to result in a finding of permanent partial or total disability, especially where the injury is so severe that the worker is unlikely to be able to return to meaningful employment.

We have extensive experience helping our clients understand what types of settleemnts may be best for their business.  Call us today to talk about what we can do to help you.

Global Assessment of Function Score

The workers’ compensation system is designed to help workers get medical treatment and get back to work as soon as possible after they sustain a work-related injury.  The system also provides protection for employers, as the workers’ compensation system provides that the worker is typically required to seek compensation through this system and cannot sue the employer in civil court.  A worker can seek recovery for a large variety of injuries, including psychiatric injuries.  As with a physical injury, workers who have sustained work-related psychiatric injuries will need to undergo examination by a medical professional.  Part of the examination will result in a Global Assessment Function Score.

A Global Assessment Function (GAF) score must be obtained by any injured worker who is seeking to obtain permanent disability benefits through workers’ compensation.  In the workers’ compensation system, only psychiatrists or psychologists can evaluate an injured worker and make this evaluation.  The GAF score will be based on whether there is a permanent psychiatric disability and the degree or amount of that disability.  The GAF score is a numeric scale used by appropriate mental health practitioners.  The practitioner will provide a subjective rating for the social, occupational, and psychological functioning of the injured worker.  For this rating, the lower the number, the greater the degree of permanent disability.  For example, someone with a GAF score of 1 would be considered not disabled at all, and fully functioning, whereas someone with a score of 1 would be highly impaired.

There are a variety of issues used to evaluate psychiatric functioning.  These include:

–          Participating in activities including keeping a job, completing hygiene related tasks, and socializing with friends;

–          Social effectiveness, including whether the worker can make and keep friendships and other community contacts;

–          Family interactions, such as whether the injured worker neglects family relationships, has issues with domestic violence or frequent arguments;

–          School performance, including grades and truancy; and

–          Performance at work, including whether the worker can interact effectively with clients and coworkers, regularly attend work, and complete appropriate tasks.

The mental health professional will also look at different issues when evaluating symptom severity.  These include anxiety, insomnia, suicidal ideations, or depression, just to name a few.

We have experience assisting our clients understand the role of GAF scores in workers’ compensation cases.  Call us today to talk about your business.

Communications Between an Injured Worker and Their Physician

The confidentiality between a patient and doctor is well established in the United States, and California is no exception.  Confidentiality is strict to make sure that the patients can fully disclose all symptoms and potential sources of illness or injury without fear that embarrassing conditions will be on display for others to read.  Although employees can typically be secure in the knowledge that their medical conditions are private and protected from their employers, this can change in the case of a workers’ compensation case.

During a workers’ compensation case, the injured employee will need to seek medical attention.  Even after urgent conditions have been addressed, the worker may require ongoing treatment or physical therapy.  The worker will definitely need to be evaluated by a physician or medical professional to determine whether he or she is temporarily or permanently disabled, the degree of the disability, and whether he or she requires limitations or work restrictions upon returning to work.  Clearly, these will be medical conditions that are assessed by a medical professional.  Employers and employees alike should have an understanding of what types of communications remain privileged between the injured employee and his or her treating physician.

The Confidentiality of Medical Information Act contains strict rules and prohibitions on when a health care provider can release information.  There are exceptions, however in the workers’ compensation system.  Communications between the patient and the physician concerning the work related injury will be turned into reports that will be submitted by the physician to insurance adjusters, attorneys, and even the employer.  The employer, attorneys, or an insurance adjuster may also request copies of the actual medical records.  When the treating physician has been the worker’s treating physician for other conditions in addition to the work related injury, however, these medical records will contain information that is completely irrelevant to the work related injury.  In that situation, the physician is restricted from releasing more information than is necessary.  In other words, an employer or insurance adjuster is not entitled to receive a complete copy of the employee’s entire medical record.  The physician is required only to release the information relevant to the injury and whether the employee is able to return to work.

We have extensive experience with the workers’ compensation system and all types of associated litigation.  Contact us today for a consultation.

Ways to Protect your Business In Workers’ Compensation

Small business owners are the backbone of the American economy.  Over half a million new businesses are started every month, and there are almost 28 million small businesses in the United States.  Small business owners all take great pride in building their venture and growing their business.  Any business owner, regardless of the size of the company, wants to protect the business from threats and risks.  Business owners need to be especially aware of how to protect their business during a workers’ compensation case.

One important way to protect your business is to properly investigate every claim.  Business owners should take immediate steps to gather evidence about how the injury happened.  Clearly you will want to make sure to interview witnesses and collect written statements.  However, you should also consult another, neutral employee about the facts surrounding how the injury happened.  Another employee may be able to provide insight that will show how to keep employees safe in the future or even can show that the injury could not have happened in the way the injured employee reported.

Another essential step to protect your business is to make sure that the managers of each department are trained in the proper and immediate steps to take in the event of a work place accident.  Managers need to understand the proper notices and forms that must be provided to the employee, that they cannot refuse to accept a claim, and that it is essential to make sure an injured employee gets medical attention as soon as possible.  Failure to ensure that your staff is properly trained can result in inadvertent violations of important workers’ compensation regulations.

Third, you should be familiar with some common signs of fraud and be on the lookout for red flags.  One common red flag is when there are no witnesses to the incident, or the only witness is a close friend of the injured employee.  Another sign that the claim could be fraudulent is if the employee is inconsistent about the details of the incident that led to the injury.  If the employee refuses medical treatment or tests to confirm the injury, this could also be a sign the employee’s injury is not legitimate.

Finally, small businesses need to make sure to carry workers’’ compensation insurance in accordance with state law.  They also need to report any injuries immediately to their carrier and be truthful at all times.

We are well versed in the workers’ compensation laws in California.  Call us today to talk about how we can help you protect your business

First Steps After your Worker is Injured

It is essential for employers to take all reasonable steps to reduce the risk for injury to their employees.  Keeping your employees safe is not only the right thing to do, it will keep your business running smoothly and make sure your business does not run afoul of state and federal safety regulations.  Almost all employers with very few exceptions are required to carry workers’ compensation insurance.  Although employers have taken the precautions to prevent injuries and purchased insurance in case these measures fail, injuries will inevitably happen eventually.  It is important for business owners to know the first steps to take after a worker is injured.

A workers’ compensation claim starts when an employee notifies the employer of a work-related injury.  The employer is then required to provide the employee with a Workers’ Compensation Form, also known as DWC-1.  The employee will need to fill out the form and return it to the employer.  An employee providing verbal notice is not sufficient to trigger the employer’s obligation to start paying benefits.

After the employer receives the completed claim form from the employee, the employer has fourteen days to accept, reject, or delay a decision concerning the claim.  If the employer delays a decision, it has ninety days to make a final determination.  During those ninety days, the employer must provide up to ten thousand dollars of medical care for the employee.  However, the employer does not have to pay temporary benefits during this time.

The injured employee will need to be assessed by a medical professional.  The employer has the right to select the first doctor.  However, the employee does not have to keep seeing that physician.  The employer is obligated to provide the employee with notification of the Medical Provider Network, which is a list of medical providers that the employee may choose from.  If the employer does not have a MPN, the employee can switch medical providers after thirty days, and can choose any doctor who accepts workers’ compensation insurance.

It is essential that the employer notify his or her workers’ compensation insurance provider as soon as the injury occurs.  If the employer does not have insurance, the employer needs to seek assistance from an experienced attorney, as there can be severe penalties for failure to carry the required insurance.

We have extensive experience with all types of workers’ compensation litigation.  Call us today for an appointment so we can discuss your business and what we can do to help you at the beginning of a workers’ compensation case.

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 Cumulative Trauma?

The legal system includes a variety of terminology that can seem confusing to non-lawyers, and the workers’ compensation system is no exception.  It is important to understand some of the basic terminology used in the workers’ compensation system to best defend your business.  One important different to understand is the difference between specific trauma and cumulative trauma.  Specific trauma is the kind of injury that typically comes to mind when you think of workers’ compensation, such as a broken arm in a car accident or a concussion from a fall from a ladder.  Cumulative trauma is a bit more nuanced.

Cumulative trauma, also referred to as a “repetitive stress injury,” is an injury sustained from repetitive stress or motions over time.  Carpal tunnel syndrome is the classic example of cumulative trauma, as it takes repeated motion, performed over time, in order to actually develop carpal tunnel.  Another example is the Chronic Traumatic Encephalopathy sustained by professional football players as a result of sustaining multiple concussions.  Cumulative trauma is a compensable injury under the workers’ compensation system, just like specific trauma.

Like specific trauma injuries, workers must bring a claim for cumulative trauma within a specific time frame.  Under California Labor Code § 5412, the worker must bring a claim within one year of discovering the claim or within a year of when the claim should have been discovered, had he or she been exercising reasonable diligence and care.

The California Workers’ Compensation Institute found that on average, cumulative trauma injuries were 53% more expensive than specific trauma cases.  In addition, workers claiming a cumulative trauma injury were much more likely to be independently represented by their own attorneys.  The institute also found that cumulative trauma is most prevalent in the manufacturing industry, which is attributable to the repetitive manual motions typically required of the workers.  Moreover, the study found that a worker claiming a cumulative trauma is ten times more likely to claim another injury.  With these types of statistics, it is clear that it is essential that you have a firm understanding on cumulative trauma and how to protect your business and your workers from these types of injuries and claims.

We have extensive knowledge in helping our clients understand cumulative trauma and the potential impact on their business.  Call us today for a consultation.

Borello and Independent Contractor Inquiry

California law is quite clear about an employer’s responsibility to carry workers’ compensation insurance. With very few exceptions, California employers of almost any size are required to carry workers’ compensation insurance for all employees. There can be complicating issues, however, as not everyone who works for a business is considered an “employee” for purposes of this requirement. For example, independent contractors are not employees, and therefore employers do not have to carry workers’ compensation insurance that would cover independent contractors or their work-related injuries. Employers will sometimes misclassify an employee as an independent contractor, which can result in harsh penalties for the business and its owner. Unfortunately, there is not a statutory definition of “independent contractor” that is applicable to workers’ compensation. Instead, California courts have set out a list of factors to consider. Although labor code section 3357 makes the presumption that a worker is an employee, courts will look at other realities to determine if this is accurate. The California Supreme Court adopted a test in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations that is still important law concerning how to determine if a worker is an employee or an independent contractor.

In Borello, the California Supreme Court was met with the question of whether agricultural workers who were engaged to harvest cucumbers through a “sharefarmer” agreement were independent contractors or employees. The Borello court created an “economic realities” test. Under this test, the most important issues is the control that the employer or principal may exercise over the worker. The focus on what kind of control pivots on not only the type of work that is to be done, but also the manner and way in which it is actually done. In other words, if the employer is telling a worker that he or she must perform the work during certain hours and in a certain location, it makes it more likely that worker is actually an employee, and not an independent contractor. There is  a long list of other factors to consider, including whether or not the type of work to be done is the type usually done by the employer, whether the work done requires a special skill set, and whether the worker is to be paid according to the job or the time spent.

If you have concerns or questions about properly classifying your employees, contact me today at (714) 516-8188. I look forward to answering your questions and discussing your business.

Why Do We Have Workers’ Compensation and How Does it Benefit My Business?

The workers’ compensation system is firmly entrenched in both federal and state laws in the United States. At its core, workers’ compensation is a form of protection afforded to the employee to make sure that he or she receives compensation for a work-related injury. The first employer liability laws were passed in the United States in 1855, and by 1949, every state had created and enacted its own workers’ compensation statutes. The first employer liability statutes made it possible for an employee to sue the employer for injuries resulting from the employer’s negligent or intentional conduct. Today, workers’ compensation is a “no fault” system. This means that the employee is not required to prove any negligence on the employer’s part before being entitled to workers’ compensation benefits. Although it seems at first glance like it might not be “fair” that an employee does not have to prove the injury was a result of wrongful conduct by an employer, this can actually benefit your business. Having to prove fault can make a case last much longer and make it much more complicated. Protracted litigation is not good for your business, so removing the negligence issue can greatly benefit an employer. Workers’ compensation also means that the employee relinquishes the right to sue the employer. An injured employee may file a claim for workers’ compensation to receive medical treatment and, in some cases, salary replacement. In exchange, however, the employee cannot then also file a law suit. This keeps the employee from being able to “double dip,” meaning he or she cannot get paid twice for the same injury. This provision is good for your business because, again, it will help keep you out of court. If you do end up in a workers’ compensation dispute, California has a special court system set up for workers’ compensation, which helps to speed the process. Workers’ compensation will also benefit your business because it provides a powerful incentive to make sure your employees are properly trained and safe. It also encourages the frequent review and revision of safety protocols, and hopefully reduces the number of injuries suffered by your employees.

If you have questions about workers’ compensation and your business, contact me today at (714) 516-8188. I can help walk you through the process and answer your questions about your business.

How Important Are Documents in the Workers’ Compensation Process?

Lawsuits invariably involve a large amount of paperwork. The initial complaint, the response, discovery work, and motions can all contribute to the large volume. Workers’ compensation is no exception to this rule. In fact, meticulous and detailed documentation are essential to the workers’ compensation process. Documents that carefully detail processes and injuries both before, during, and after a work-related injury can drastically alter the course of a workers’ compensation case.

Before a work-related injury ever happens at your place of business, it is vital to make sure you provide accurate information to your workers’ compensation insurance company. Providing the required paperwork to the company in terms of the number of employees and the nature of your business will help make sure that in the event a work-related injury occurs and you have to file a claim on behalf of your business, the claim will not be denied because of inaccurate or incomplete information.

When an employee actually sustains a work-related injury, it is then vital to complete paperwork related to that injury as soon as possible. This paperwork will include the Claim Forms that you must provide to the insurance company. Providing detailed information about how the injury happened, as well as when and where, will arm the insurance company with important information allowing them to identify any red flags for fraud, malingering, or a pre-existing injury. Witness statements from other employees as well as a statement from the injured employee should be secured as quickly as possible to help nail down the details of what actually happened.

Medical documents from the injured employee’s health care provider are also very obviously central to the workers’ compensation system. The medical providers will determine the percentage of an employee’s injury, necessary course of treatment, and whether the injury is temporary or permanent. All of these will be instrumental in determining the amount and length of benefits an injured worker will receive. Moreover, these medical documents will allow for careful review of whether treatment is appropriate for the injury or whether an insurance company may need to call for an independent medical review.

If you have questions about the documents your business will need during a workers’ compensation suit, contact me today at (714) 516-8188. We can talk about your business and its workers’ compensation procedures.

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