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.
SB 559
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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)
SB 559
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Service Employees International Union (SEIU) Local 221
Opposition
None received
Analysis Prepared by:Mark Rakich / INS. / (916)
319-2086