WHAT IS WORKERS COMPENSATION?
If you get hurt on the job, your employer is required by law to pay for workers’ compensation benefits. Workers' compensation provides the exclusive remedy for employees who suffer on-the-job injuries. Therefore, an injured worker cannot bypass the workers’ compensation system and sue their employer directly in civil court for injuries that occurred on the job, with a few rare exceptions. The workers’ compensation system allows the injured worker receipt of medical and monetary benefits regardless of fault, and the employer is shielded from civil liability and its potentially serious damages. Unlike a civil lawsuit, the purpose of workers’ compensation is to rehabilitate, not to compensate for the harm or loss. The goal is to allow the injured worker speedy restoration of their health and reentry into the labor market, with compensation for any lasting disability which affects their ability to earn a living.
HOW DO I FILE A CALIFORNIA WORKERS COMPENSATION CLAIM?
You should notify your employer as soon as you are injured or know that a work-related illness has developed. Unless you have a medical emergency, do this before seeking medical treatment, as your employer may refer you to a physician who is part of its medical provider network. If you fail to report your injury within 30 days, you might lose your right to collect benefits. Upon notice of your work injury, your employer is required to provide you with a DWC-1 claim form within 1 day of knowledge of your injury. Complete the “employee” section of the claim form and return it to your employer, who will in turn give it to its workers’ compensation insurance company.
Also, an Application for Adjudication of Claim must be filed with the Workers’ Compensation Appeals Board (WCAB). This must be done within one year of your injury, the last payment of disability, or last furnishing of medical treatment by the employer/WC insurance company. An Application is required before the WCAB can take any action on a claim, including approval of a settlement.
WHAT BENEFITS ARE AVAILABLE TO AN INJURED WORKER?
MEDICAL: California workers’ compensation insurance pays for all medical expenses related to the injury, as long as the medical expenses are authorized. Medical benefits include all medical and hospital benefits reasonably necessary to cure or relieve from the effects of the injury. This includes reimbursement for travel to and from a medical facility and pharmacy. If your employer or their insurance company has not set up a Medical Provider Network (MPN), then your employer has a right to send you to a doctor of their choice for the first 30 days of treatment but you have a to change doctors after 30 days. If your employer or their insurance company has established a MPN, you may be required to get all medical care from that network, although you will be entitled to change doctors within the network.
TEMPORARY DISABILITY BENEFITS: Temporary disability benefits (TD) are available if you are temporarily unable to work for a period of time and under active medical treatment due to an industrial injury. This includes when your treating doctor provides temporary work restrictions and your employer cannot provide a temporary work assignment that accommodates those restrictions. Temporary disability pays two-thirds of your average weekly wage while you are temporarily disabled, up to a weekly maximum. For injuries occurring January 1, 2019 or later, the minimum weekly TD rate is $187.71 and the maximum weekly TD rate is $1,251.38. You will need medical proof that you are unable to work. These benefits are usually paid bi-weekly and usually begin within 14 days of your temporary disability, if your injury claim is accepted. This benefit is limited to 104 weeks (2 years) regardless of whether you still cannot work when that time expires.
PERMANENT DISABILITY BENEFITS: If your ability to work has been permanently impaired, partially or totally, you will also be eligible for permanent disability benefits. Permanent disability benefits are based on the percentage of the permanent impairment you suffered as a result of the work-related injury. Medical professionals utilize the American Medical Association Guidelines to determine your level of impairment. The impairment is then inserted into a formula which takes into account your occupation and age on the date of injury, and then provides the permanent disability percentage. The permanent disability reflects the loss of the injured worker’s earning capacity caused by the work-related injury or health condition. This percentage equates to a dollar amount based on the year of your injury and your average weekly earnings at the time of injury. Permanent disability benefits usually become payable when temporary disability benefits end. If your permanent disability is greater than 70% but less than 100%, you are also entitled to a “life pension”. If you are one hundred percent disabled, you will receive permanent disability benefits at your temporary disability rate for life.
Permanent disability benefits (PD) for all percentages less than 100% are paid at a weekly rate which depends on the amount of disability and the date of injury. Currently, the maximum weekly PD rate for injuries occuring January 1, 2013 and later is $290 and the minimum weekly rate is $160. PD benefits are paid bi-weekly until the total dollar amount is paid, less withholding for attorney fees. If you settle your case, any PD benefits paid to date will be deducted from your final settlement amount. PD benefits should begin once TD benefits end if the insurance company knows you have, or will have, some permanent disability. Permanent disability payments are not required until your case concludes if the employer has offered you a position that pays at least 85% of the wages you were receiving at the time of injury or if you are employed in a position that pays at least 100% of the wages you were being paid at the time of injury. When the payments do begin they will be due from the time you last received temporary disability benefits or the date the your disability became permanent and stationary, whichever is earlier.
For injuries on or after January 1, 2005 and before January 1, 2013, your permanent disability dollar amount will vary depending on whether your employer offers you a job to return to, which is either your usual job or a modified or alternate job that pays within 85% of your usual job. If the employer has more than 50 employees and offers you a job, your PD weekly rate will be reduced by 15%, whether or not you accept the job. If the employer does not offer a job, you receive a 15% increase in your PD weekly rate.
SUPPLEMENTAL JOB DISPLACEMENT BENEFITS (SJDB voucher): A voucher helps pay for retraining or skill enhancement if you are eligible to receive permanent disability benefits, your employer doesn’t offer you work, and you don’t return to work for your employer. This benefit is available for workers injured in 2004 or later. If your injury occurred in 2013 or later and you received a Supplemental Job Displacement Benefit voucher, you may also be eligible for an additional, one-time payment of $5,000 under the Return-to-Work Supplement Program.
ARE WORKERS COMPENSATION BENEFITS TAXABLE?
Workers’ compensation benefits are not normally considered part of your taxable income. If you received benefits under a California workers’ compensation claim, you generally do not have to pay taxes on that amount. However, you may be required to pay taxes on workers’ compensation benefits if you also received benefits associated with Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). If this is applicable to you, the amount you will be liable for paying is equal to the amount by which your additional benefits offset your workers’ compensation benefits. Even though there is a chance you may be liable for these taxes in these circumstances, individuals who qualify for both types of benefits often do not have a high enough taxable income to owe taxes at the state or federal level. Therefore, it is rare to be required to pay taxes on California workers’ compensation benefits. It is advisable to discuss tax implications of a workers’ compensation settlement or Award with a tax professional.
WHAT IF MY CLAIM OF INJURY IS DENIED?
The employer’s insurance company has 90 days from the date you file a claim of injury to deny your claim. If liability is not rejected within those 90 days, the injury is presumed accepted. The denial must state a legal, factual or medical basis for denying that your injury arose out of and in the course of your employment. Otherwise, the insurance company may be penalized for making a bad-faith denial of your claim. If the insurance company denies that a particular part of body/condition was injured by your employment, but they accept that you did suffer an injury at work, they have not denied your claim; they have a disagreement as to the “nature and extent” of your injury. In these situations, you will still be entitled to workers’ compensation benefits for the parts of body/conditions that the insurance company has not denied.
A denied injury claim will likely result in the need for litigation. A hearing will be scheduled with the Workers’ Compensation Appeals Boad and the issue will be decided by the workers’ compensation administrative judge.
wHAT TYPE OF SETTLEMENT OR AWARD WILL I RECEIVE?
Once your medical condition has plateaued, it will be considered to have reached maximal medical improvement (MMI) which is also called permanent and stationary (P&S). The treating physician and/or an evaluator will determine your level of impairment. At this time, parties can either settle the case or proceed to trial.
Settlement is either in the form of a compromise and release (C&R) or a Stipulation.
COMPROMISE & RELEASE: With a C&R, both sides agree on a lump sum payment to settle the case. This settlement must be approved by the WCAB judge. Once approved, the employer is released from all responsibility for future medical care and other benefits. In other words, the case is over and the injured worker is no longer entitled to any additional benefits under this claim.
STIPULATION: When an injured worker and the workers’ compensation insurance company agree to the disability rating, a Stipulated Findings and Award settlement is another option. With a Stipulation, parties will agree to a permanent disability percentage, which parts of body were injury and thus entitled to life-time medical care, and any other issues such as penalties, credits for overpayment of benefits, and/or retroactive temporary disability benefits. The workers’ compensation judge will treat the stipulated facts as if the judge had determined those facts after listening to the evidence at a trial. The judge will use the stipulated facts to make an award based on California law. The Stipulated Findings and Award will require the payment of the permanent disability benefit every two weeks for a specified period of time. Likely, there will be an agreement that future medical care is left open for the parts of body listed within the Stipulation. With a Stipulation settlement, the injured worker can file a Petition to reopen their case within 5 years from the date of injury if they have evidence of “new or further disability” related to this injury.
If settlement cannot be reached, the case will likely proceed to trial. At trial, the judge will allow into the record evidence relating the the outstanding issues in the case. Once the trial has concluded, the judge has a statutory time limit to issue his/her decision called a Findings and Award. Their decision will decide if you have a right to workers’ compensation benefits, and if so, the amount of these benefits. As with a Stipulation, if your work-related condition worsens and you received an Award of benefits from the WCAB, you may petition to reopen your case within five years from the date of injury for new or further disability.
HOW DO I PAY ATTORNEY FEES?
It is your right to be represented by an attorney for your Workers' Compensation case. All attorneys' fees are decided by the Workers' Compensation Appeals Board (WCAB), and are paid out of the settlement or award. If there is no recovery, you do not pay an attorney fee. Fees are generally 15% of the benefits awarded. The insurance company will pay attorney fees directly to the attorney. You will pay nothing out-of-pocket to your attorney.