BILL ANALYSIS Ó SB 527 Page 1 SENATE THIRD READING SB 527 (Block) As Introduced February 21, 2013 Majority vote SENATE VOTE :31-5 INSURANCE 8-3 ----------------------------------------------------------------- |Ayes:|Perea, Bradford, Ian | | | | |Calderon, Cooley, | | | | |Frazier, Gonzalez, | | | | |Mitchell, Wieckowski | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Hagman, Beth Gaines, | | | | |Olsen | | | | | | | | ----------------------------------------------------------------- SUMMARY : Authorizes "4850 benefits" for specified lifeguards employed by the City of San Diego. Specifically, this bill : 1)Adds lifeguards employed by the City of San Diego on a full-time, year-round basis to the class of public safety employees who receive special, enhanced temporary disability benefits when they are unable to work due to illness or injury that arose out of, or in the course of, employment. 2)Includes legislative findings that a special law is necessary within the meaning of Section 16 of Article IV of the California Constitution. EXISTING LAW : 1)Provides for a comprehensive system of benefits paid for by employers to employees who suffer illness or injury that arises out of, or in the course of, employment. 2)Includes temporary disability benefits (TD) for up to 104 weeks if an employee is temporarily unable to work during recuperation from the workplace illness or injury. 3)Establishes a minimum and a maximum amount that an employee SB 527 Page 2 may receive, which is adjusted annually to reflect rising wage levels. Currently the minimum benefit is $160 per week, and the maximum benefit is $1066.72. The benefit is calculated based on two-thirds of an employee's average weekly wages, subject to the maximum cap. 4)Provides specified public safety officers with an enhanced temporary disability benefit for up to the first year of temporary disability. These safety officers receive their full salary (tax free) during the first year of temporary disability. 5)Includes lifeguards who are full-time, year-round employees of the County of Los Angeles among the safety officers who are entitled to this special enhanced temporary disability benefit. 6)Provides that a special statute is invalid if a general statute could be made applicable. FISCAL EFFECT : Undetermined increased workers' compensation costs to the City of San Diego. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS : 1)Purpose . According to the author, the approximately 90 year round, full-time lifeguards employed by the City of San Diego are peace officers within the definitions of the Penal Code, are trained as emergency medical technicians and as firefighters, have the authority to enforce the law and make arrests, and as a result should be entitled to the same benefits as other public safety officers. The author also states that this class of employee is regularly engaged in dangerous activities involving rescues both from cliffs and on the water, and in firefighting on and from boats. The author states that these employees have a higher serious injury rate than the city's fire and police employees. 2)Temporary disability benefits . The goal of TD is to approximate an employee's take home pay, and this goal is implemented by basing the weekly TD benefit on two-thirds of the employee's average weekly wages. Because there is a cap, employees who make more than $1,600 per week do not reach this SB 527 Page 3 two-thirds goal, but because the benefit is tax free, most employees receive an adequate TD benefit that approximates their normal take-home pay while they are recovering. 3)Special public safety benefits . Public safety officers (police, sheriff, and firefighter employees generally) receive certain special workers' compensation benefits that other employees do not receive. Most notably, this class of employee has the benefit of a range of "presumptions" that certain illnesses or injuries are automatically deemed to be work related. Other employees are required to prove that their condition is work related. The second significant special workers' compensation benefit is granted by Labor Code Section 4850 - commonly referred to as "4850 time" - and this law grants defined employees up to one year of full salary in lieu of the regular method for calculating TD benefits. 4)Tax advantages . Because these benefits are paid due to disability, they are not subject to either state or federal taxes. This applies to regular TD benefits, and to 4850 benefits. Because of the tax-free status of this benefit, a public safety officer takes home substantially more in weekly benefits than they normally earn while working - i.e., normal take home pay plus what would normally have been paid in taxes. Public employers have long complained that there is a disincentive in getting injured public safety officers to return to work even if they are able due to the financial disincentive they would suffer when they return. 5)Lifeguards . It appears that the full-time, year-round lifeguards employed by the County of Los Angeles were included in the original legislation in 1983 that established Labor Code Section 4850. It is not clear why those employees were included, nor whether they perform substantially public safety and law enforcement duties, as is claimed by the City of San Diego lifeguards. However, if the expansion of public safety officer benefits to other classes of employee is appropriate, the legislation should be clear that the employees must be public safety officers, as these San Diego employees assert that they are. Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086 FN: 0001352 SB 527 Page 4