BILL ANALYSIS
AB 1227
Page 1
Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON INSURANCE
Joe Coto, Chair
AB 1227 (Feuer) - As Introduced: February 27, 2009
SUBJECT : Workers' compensation: "4850" time
SUMMARY : Extends "4850" leave of absence benefits to a broader
range of safety officers. Specifically, this bill :
1)Repeals the restriction in Labor Code Section 4850 that limits
"4850" time - time off with pay that is afforded certain
safety officers in lieu of temporary disability benefits -- to
safety officers who are members of the Public Employees
Retirement System, the Los Angeles City Employees Retirement
System, or subject to the County Employees Retirement Law of
1937.
2)Adds local park rangers, as defined by the Penal Code,
California Community College police, as defined by the Penal
Code, and school district police, as defined by the Penal
Code, to the list of safety officers who are entitled to 4850
time.
3)Limits 4850 time to safety officers who are employed on a
regular, full-time basis.
4)Specifies that the bill does not establish 4850 benefits for
employees otherwise covered by the bill who are employed by
the City and County of San Francisco.
EXISTING LAW :
1)Establishes a comprehensive system of workers' compensation
that provides a range of benefits for employees who are
injured on the job. These benefits include temporary
disability payments, which are designed to be wage replacement
payments for the period the injured employee is temporarily
unable to work due to the on-the-job injury. Temporary
disability benefits are intended to replace two-thirds of the
employee's regular wages, subject to a maximum cap.
2)Provides that certain safety officers who are members of the
Public Employees Retirement System, the Los Angeles City
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Employees Retirement System, or subject to the County
Employees Retirement Law of 1937, who are injured on the job
are entitled to a "leave of absence" of up to one year with
full pay in lieu of temporary disability payments. This
benefit, established by Labor Code Section 4850, is commonly
referred to as "4850" time.
3)Lists the following safety officers as being eligible for 4850
time: city police officers, county sheriffs and sheriffs'
deputies, city, county or district firefighters, district
attorney investigators, probation officers, certain special
district police officers, and certain lifeguards.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Measure intended to cure an inequity. According to the
author, this bill rectifies an inequity in current law whereby
most safety officers receive the benefits of 4850 time when
they are injured on the job, but other similar safety officers
who are not members of the three listed retirement systems do
not receive this benefit. The author, and the sponsor Police
Officers Research Association of California (PORAC), assert
that it was an oversight that left these safety officers out
of Section 4850 when existing law was enacted.
2)Purpose of 4850 time. As a general rule, injured employees
are entitled to temporary disability benefits equal to 2/3 of
their regular wages. This target of replacing 2/3 of wages
during the period an employee is off work is designed to make
the employee whole, since workers' compensation benefits are
not subject to social security or income taxes. Thus, the 2/3
rate is designed to approximate full take home pay. However,
for safety officers, in recognition of the dangers they
inherently face on the job, a more generous benefit was
created. As interpreted by the courts, the safety officer
receives his or her full pay, tax-free, for up to one year
after the injury. Subsequent to the one-year period, if the
officer is still temporarily disabled, he or she would receive
the same temporary disability benefits as any other injured
worker.
3)Opposition disputes that current law was an oversight. The
opposition, representatives of cities, counties and other
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public agencies such as fire and school districts, that employ
safety officers contend that existing law was intentionally
applied only to those safety officers who are members of the
three specified retirement systems. They argue that local
agencies that are part of other retirement systems provide
local benefits, often comparable to what state law provides in
Section 4850.
Opponents also point out some of the difficulties that local
agencies face when their employees are out on 4850 time. They
cite studies that show "it takes approximately twice as long
for an injury that qualifies for Labor Code 4850 benefits to
heal as does an injury for a non-Labor Code 4850" case. They
argue that this is at least partly due to the perverse
incentive that an officer on 4850 time is making more than
their usual take home pay. Opponents also argue that since
they cannot yet replace the officer who is on the 4850 leave,
they end up paying other officers time and a half to cover the
shifts of the injured officer, thus imposing even more costs
on the local agency. For those local agencies that are not
covered by 4850, but that have crafted appropriate local
benefit programs, extending 4850 to them would increase their
costs.
4)Prior legislation. Last session, AB 419 (Lieber) was passed
by this Committee in 2007. It was later amended in the
Senate, and ultimately sent to the Governor in 2008 in the
same form as AB 1227 as introduced. The Governor vetoed AB
419. The veto message from the Governor provides:
To the Members of the California State Assembly:
I am returning Assembly Bill 419 without my signature.
This bill would increase workers' compensation costs to
some cities
and counties by requiring them to provide certain injured
workers a
leave of absence without loss of salary in lieu of regular
temporary
disability payments. While this benefit is currently
conferred on
some sworn peace officers, this bill would expand it to
park rangers,
community college police, and many others. Eligibility
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for this
benefit is best left to locals, not the state, to
determine.
Sincerely,
Arnold Schwarzenegger
Support
Police Officers Research Association of California (sponsor)
California Professional Firefighters (sponsor)
California State Employees Association (CSEA)
Opposition
League of California Cities
California Coalition on Workers' Compensation
California Association of Joint Powers Authorities
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086