BILL ANALYSIS                                                                                                                                                                                                    


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                                 THIRD READING

          Bill No:  SB 1115
          Author:   Migden (D)
          Amended:  As introduced
          Vote:     21

           SENATE LABOR & INDUSTRIAL RELATIONS COM.  :  3-2, 2/27/08
          AYES:  Migden, Kuehl, Padilla
          NOES:  Wyland, Ackerman

           SUBJECT  :    Workers compensation:  permanent disability  

           SOURCE  :     California Applicant Attorneys Association

           DIGEST  :    This bill adds to the Labor Code language  
          prohibiting various forms of discrimination in the  
          apportionment of industrial disabilities.  The bill bars  
          the consideration of race, national origin, gender, sex,  
          genetic predisposition, and certain other factors in the  
          determination of an apportionment of the causes of an  
          industrial disability.

           ANALYSIS  :    

          Existing law:

          1.Generally requires employers to secure the payment of  
            workers' compensation for injuries incurred by their  
            employees that arise out of, and in the course of,  
            employment.  Benefits to which an injured worker may be  


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            entitled include permanent disability indemnity (payment  
            for loss) benefit payments for long-term permanent  
            injuries.  The amount and duration of such payments are  
            determined by a schedule in law that is in turn dependent  
            upon a permanent disability rating reached through an  
            evaluation by a physician of the injured worker's bodily  
            impairment.  (The impairment rating is converted into a  
            disability rating through a formula devised by  

          2.Requires that a physician make an "apportionment  
            determination" with respect to the permanent disability.   
            That is, the physician must find (a) what approximate  
            percentage of the permanent disability is caused by the  
            direct result of the injury arising out of and in the  
            course of employment, and (b) what approximate percentage  
            of the permanent disability is caused by other factors  
            both before and subsequent to the industrial injury.  If  
            the physician determines that the disability is partially  
            the result of these "other factors" the (degree of)  
            impairment rating must be reduced by the relevant  
            percentage, ultimately resulting in a lower permanent  
            disability rating and reduced permanent disability  
            indemnity payments.

          3.Provides that no person in the State of California shall,  
            on the basis of race, national origin, ethnic group  
            identification, religion, age, sex, sexual orientation,  
            color, or disability, be unlawfully denied full and equal  
            access to the benefits of, or be unlawfully subjected to  
            discrimination under, any program or activity that is  
            conducted, operated, or administered by the state or by  
            any state agency, is funded directly by the state, or  
            receives any financial assistance from the state.

          This bill provides that race, religious creed, color,  
          national origin, age, gender, marital status, sex, or  
          genetic predisposition shall not be considered a cause or  
          other factor of disability with regard to any workers'  
          compensation apportionment determination.  This language  
          would, if the bill is approved, be placed in the Labor  



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           What is going wrong with apportionments  ?  Since the passage  
          of SB 899 (Poochigian), Chapter 34, Statutes of 2004, there  
          have been increasing reports that physicians, reading the  
          law as requiring apportionment in all workers' compensation  
          cases, have been apportioning disabilities on the basis of  
          "risk factors" such as age, race, sex, and genetic  
          predisposition - rather than basing the apportionment on  
          actual documented and evaluated evidence of pre-existing  
          medical condition.  In a recent State Court of Appeals case  
          (  Vaira v Workers Comp. Appeals Board  ), for example, which  
          was widely reported in the public media, the court sent the  
          case back to the Workers' Compensation Appeals Board,  
          stating that the physician who had done the apportionment  
          failed to base the apportionment on actual medical  
          evidence.  The physician based the apportionment to the  
          "other factors" on the grounds that the individual in the  
          case was an elderly woman at high risk of osteoporosis and  
          showing some evidence of the condition.  However, the  
          physician did not demonstrate, with substantial medical  
          evidence, the link between any actual condition and the  

          Dean Calbreath, in a February 17 article in the San Diego  
          Union Tribune, cited a number of similar instances of  
          improper apportionment procedures.  He highlighted one case  
          where a medical examiner cut a man's workers' compensation  
          payments in half because, as an African-American, he had a  
          "genetic" predisposition to high blood pressure or  
          hypertension.  There are numerous additional examples.

           Why does the language in this bill need to be placed in the  
          Labor Code, given that very similar language is currently  
          in Government Code 11135  ?  In the workers' compensation  
          arena, which involves thousands of persons and which is  
          governed primarily by the Labor Code, there seems to be  
          substantial misunderstanding of the proper, legal  
          procedures for apportionment.  Placing this language in the  
          Labor Code will help to clarify the law prohibiting  
          discrimination and make the specified language more evident  
          to those who look to the Labor Code for guidance in making  
          decisions relating to workers' compensation.  In addition,  
          this bill adds the term "genetic predisposition" to the  
          protected classes, a term that is not in existing code.


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           Does this bill place new responsibilities on employers,  
          making them responsible for medical conditions (with  
          associated costs) for which they are not currently  
          responsible  ?  No.  This bill prohibits discrimination on  
          the basis of generalized "risk factors," which is almost  
          certainly currently illegal under G.C. 11135.   
          Apportionments determined through an evaluation of the  
          actual medical evidence, establishing a clear, causal link  
          between the condition and the disability are, and will  
          continue to be appropriate and lawful.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :   (Verified  3/3/08)

          California Applicant Attorneys Association (source)
          American Federation of State, County, and Municipal  
          California Labor Federation, AFL-CIO
          California Professional Firefighters
          California Society of Industrial Medicine and Surgery
          California Society of Physical Medicine and Rehabilitation
          California State Conference of the National Association for  
            the Advancement of Colored People
          Gray Panthers, California
          Service Employees International Union

           OPPOSITION  :    (Verified  3/3/08)

          The following groups oppose unless amended:

          Acclimation Insurance Management Services
          Allied Managed Care
          American Insurance Association
          Association of California Insurance Companies
          California Association of Joint Power Authorities
          California Chamber of Commerce
          California Coalition on Workers' Compensation
          California Farm Bureau Federation
          California Grocers Association
          California Hospital Association
          California Hotel and Lodging Association


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          California Independent Grocers Association
          California League of Food Processors
          California Manufacturers and Technology Association
          California Restaurant Association
          League of California Cities
          National Federation of Independent Business
          Wine Institute

           ARGUMENTS IN SUPPORT  :    Supporters of this bill believe  
          that since the apportionment provisions were rewritten in  
          SB 899 (Poochigian), Chapter 34, Statutes of 2004,  
          employers, carriers, and physicians have been  
          misinterpreting and misapplying the new language to deny  
          injured workers the civil rights protections that all other  
          persons enjoy.  Supporters argue that an apportionment  
          determination that is based on supposed "risk factors" such  
          as age, gender, or genetic predisposition, rather than an  
          evaluation of the medical evidence linking actual medical  
          conditions to a disability, is patently inappropriate and  
          unfair.  Such a formula results in discriminatory  
          practices, lowering disability ratings and reducing  
          benefits for particular individuals.  The proponents state  
          further that this bill will not increase employers'  
          liability but simply clarifies and conforms the Labor Code  
          to Government Code sections that bar unfair discrimination.

           ARGUMENTS IN OPPOSITION  :    Opponents argue the bill  
          weakens the apportionment statute and allows judges to  
          overrule apportionment even when based on findings of  
          actual previous disability.  They argue the bill should be  
          "amended to prohibit the use of risk factors to defeat  
          apportionment when an injured worker has a previous  
          disability that affects the degree of disability arising  
          from the workplace injury or illness."

          Opponents argue that apportionment to pre-existing  
          disability is fundamentally an issue of fairness.  "Just as  
          an injured worker deserves to be compensated for disability  
          arising from an industrial injury, an employer deserves to  
          be protected from paying increased compensation for  
          disability that does not arise from an industrial injury."

          NC:do  3/4/08   Senate Floor Analyses 


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                         SUPPORT/OPPOSITION:  SEE ABOVE

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