BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 559


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          Date of Hearing:  July 8, 2015


                           ASSEMBLY COMMITTEE ON INSURANCE


                                   Tom Daly, Chair


          SB  
          559 (Block) - As Introduced February 26, 2015


          SENATE VOTE:  28-3


          SUBJECT:  Workers' compensation: public employees.


          SUMMARY:  Authorizes enhanced temporary disability benefits  
          (known as "4850 time") for specified lifeguards employed by the  
          City of Imperial Beach.  Specifically,  this bill  :   


          1)Adds lifeguards employed by the City of Imperial Beach 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.








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          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  
            may receive, which is adjusted annually to reflect rising wage  
            levels.  Currently the minimum benefit is $165 per week, and  
            the maximum benefit is $1103.  The benefit is calculated based  
            on 2/3 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 and the City of San Diego 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 Imperial Beach.





           


          COMMENTS  :   








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           1)Purpose  .  According to the author, the bill is intended to  
            provide temporary disability benefits that are the same as  
            lifeguards in Los Angeles and San Diego receive, because  
            "their profession exposes them to dangers and threats similar  
            to that of police officers and firefighters as they regularly  
            perform water rescues, operate fire boats, assist in  
            underwater diving searches, and deliver emergency medical  
            aid."

           2)Collective bargaining  ?  If a local public agency wants to  
            grant employees certain benefits of employment, it is able to  
            accomplish that goal without need for a statutory change.  In  
            fact, the City of Los Angeles has provided "4850-like"  
            benefits to a range of employees without need of a statute  
            mandating the benefit for those employees.  The collective  
            bargaining process, and not legislation, may be the better  
            approach to enhancing the benefits of this class of employee.

           3)Temporary disability benefits  .  The goal of TD is to  
            approximate an employee's take home pay during the period  
            after injury when the employee is temporarily unable to work.  
            This goal is implemented by basing the weekly TD benefit on  
            2/3 of the employee's average weekly wages.  Because there is  
            a cap, employees who make more than approximately $1600 per  
            week do not reach this 2/3 goal, but because the benefit is  
            tax free, most employees receive an adequate TD benefit while  
            they are recovering.  One alternative to adding more classes  
            of employees entitled to 4850 time (which pays substantially  
            more than normal take home pay - see tax discussion, below)  
            would be to simply eliminate the cap on TD benefits for those  
            employees who are deemed entitled to special benefits.

           4)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  








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            certain illnesses or injuries are automatically deemed to be  
            work related.  All 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.  The  
            author asserts that these lifeguards are sufficiently like  
            other peace officers as to justify awarding them the special  
            disability leave benefits.

           5)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 - the 2/3 of  
            regular wages formula used to calculate TD benefits is  
            designed to approximate actual take home pay -- 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 have been paid in taxes.  Public  
            employers have long complained that this creates a  
            disincentive in getting injured public safety officers to  
            return to work, even if they are able, due to the financial  
            loss they would suffer when they return.  The extent of the  
            return to work disincentive may be unclear with respect to  
            these particular employees, but factually, they make more  
            money while off duty than when they return.
           6)Lifeguards  .  It appears that the year round, full-time  
            lifeguards employed by Los Angeles County 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, City of Imperial Beach or the City of Oceanside  
            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.  









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          In addition, if there is a class of employee - lifeguards  
            employed by various city, county, state park, or special  
            district employers -- it is not clear why a "special law" is  
            an appropriate vehicle to provide this class of employees with  
            safety officer special benefits.  A general law, applicable to  
            the whole class of employees, may be more appropriate if, in  
            fact, these employees perform comparable peace officer duties  
            as the broader class of peace officers who receive this  
            benefit.

           7)Related legislation  .  AB 1451 (Chavez) proposes the same  
            expansion of 4850 time as proposed by this SB 559, but would  
            apply the rule to lifeguards employed by the City of  
            Oceanside.  The Assembly Insurance Committee passed AB 1451  
            earlier this year on the author's commitment that he would not  
            present the bill on the Assembly Floor unless there was an  
            affirmative expression from the City of Oceanside in support  
            of the bill.  In early June, the City of Oceanside City  
            Council voted to support AB 1451.  Should a similar expression  
            of support be presented from the City of Imperial Beach before  
            the Committee passes SB 559?

          Should AB 1451 and SB 559 both pass the Legislature, they would  
            be in conflict with each other, and the earlier signed measure  
            would be at risk of being chaptered out.  The author should,  
            in the event SB 559 is passed by the Insurance Committee,  
            consult Legislative Counsel and AB 1451's author about  
            double-jointing language.

             
           REGISTERED SUPPORT / OPPOSITION:


          Support


          California State Council of the Service Employees International  
          Union (SEIU)









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          Service Employees International Union (SEIU) Local 221




          Opposition


          None received




          Analysis Prepared by:Mark Rakich / INS. / (916)  
          319-2086