BILL ANALYSIS
SB 942
Page 1
Date of Hearing: June 27, 2007
ASSEMBLY COMMITTEE ON INSURANCE
Joe Coto, Chair
SB 942 (Migden) - As Amended: May 8, 2007
SUBJECT : Workers' Compensation
SUMMARY : Provides a financial incentive for injured employees
to obtain education and career retraining, and requires
employers to return employees to work within five days of
receiving notice that the employee is able to return to work.
Specifically, this bill :
1)Entitles employees injured after January 1, 2008, to
supplemental job displacement benefits in the form of a
voucher for education-related retraining and/or skill
enhancement at state accredited schools if the employee
experiences permanent partial disability and the injured
employee does not return to work within 60 days after the
disability becomes permanent and stationary, with specified
exceptions. The exceptions are that the employer would not be
liable for these supplemental job displacement benefits if the
employer offers the injured employee regular work, modified
work, or alternative work in the manner prescribed by the
Administrative Director of the Division of Workers'
Compensation, and the work lasts for a period of at least 12
months.
2) Sets $10,000 as the maximum amount for this education and
skill-related voucher, and further specifies that the maximum
amount of the voucher for tuition, fees, books, and other
expenses for a school shall not exceed $5,000 per year.
3)Requires an employer to reinstate an employee to his or her
pre-injury job within five working days after receipt of a
written statement by the treating physician that the employee
is able to perform the essential functions of the employee's
regular position. This would be notwithstanding the risks
inherent in the position, without a risk of further injury to
the employee being increased due to the effects of the injury
or illness, and where the employee is willing and available to
return to work. This type of medical release is referred to
as a "full release without restrictions."
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4)Requires the employer to reimburse the employee (see 1, above)
for lost wages and work benefits if the employer refuses to
reinstate the employee to his or her pre-injury job.
5)Prohibits an employer from requiring an employee to perform
additional physical duties that the employee was not required
to perform prior to the injuries or illness as a condition of
returning to work, unless the additional physical duties are
reasonably required to accommodate the employee's
disabilities.
6)Requires the employer to reimburse the employee (see 3, above)
for lost wages and work benefits for any time that the
employee is unable to work due to the imposition of additional
physical duties that are not reasonably required to
accommodate the employee's disability.
7)Requires any employer that refuses to reinstate an employee to
his or her pre-injury job to pay a civil penalty of $100 per
day, and the employee shall be entitled to reimbursement for
lost wages and work benefits.
8)Provides that this bill shall not preclude an employer from
objecting to the opinion of the treating physician or from
obtaining an opinion from an agreed medical evaluator or
qualified medical evaluator. However, the employee shall
continue to be entitled to reimbursement for lost wages and
work benefits during the time an employer is objecting to the
opinion or obtaining another opinion.
9)Specifies that the report of the agreed medical evaluator or
qualified medical evaluator shall be based on an in-person
physical examination of the employee.
10)Specifies that if the report of the agreed medical evaluator
or the qualified medical evaluator states that the employee is
unable to perform the essential functions of the employee's
regular position, or is unable to perform the essential
functions of the employee's regular position without the risk
of further injury or illness to the employee being increased
due to the effects of the injury or illness, then the employer
shall have no further obligation to pay the employee full
wages and benefits for any period after the date of service of
the report, and the employer shall not be liable for lost
wages and work benefits (see 5 above).
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11)Makes it a misdemeanor for an insurer to advise or threaten
an insured employer to cancel or raise a premium or otherwise
discriminate against an employee because the employer
testified in another employee's case before the Workers'
Compensation Appeal Board.
12)Creates a presumption that an employer has unlawfully
discriminated against an employee if the employer denies an
employee the right to predesignate a treating physician prior
to injury or illness or denies an employee the right to see
his or her properly predesignated physician or a medical
provider to whom the predesignated physician has referred the
employee after the injury or illness.
13) Provides that nothing stated above is intended to limit any
rights or remedies otherwise provided by law.
14) Makes a technical correction to a section of law (Section
3201.81 of the Labor Code) authorizing a labor organization
representing jockeys to negotiate a collective bargaining
agreement that establishes an alternative dispute resolution
system pursuant to labor-management agreements. A code
reference is corrected: Section 3208.1 is stricken and
replaced with Section 3201.7 of the Labor Code.
EXISTING LAW :
1)Makes an injured worker eligible for a supplemental job
displacement benefit in the form of a voucher for
education-related retraining and/or skill enhancement at
state-approved or accredited schools if the worker has
experienced a permanent partial disability and the injured
employee does not return to work for the employer within 60
days of the termination of temporary disability, with
specified exceptions .
2)Specifies the following exceptions in which an employer is not
liable for the supplemental job displacement benefit:
a) If the employer, within 30 days of the termination
of temporary disability benefits, offers and the employee
rejects or fails to accept modified work accommodating
the employee's work restrictions, and lasting at least 12
months; or
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b) If the employer, within 30 days of the termination
of temporary disability benefits, offers and the employee
rejects or fails to accept alternative work in which the
employee has the ability to perform the essential
functions, the job is in a regular position lasting at
least 12 months, the job pays wages and compensation
within 15% of those paid to the employee at the time of
injury, and the job is located within commuting distance
of the employee's residence at the time of the injury.
3)Declares that it is the policy of this state that there should
not be discrimination against workers who are injured in the
course and scope of their employment.
4)Makes it unlawful for an employer to discharge or threaten to
discharge, or in any other manner discriminates against, any
employee who files a workers' compensation claim. Violation
of this law is a misdemeanor and the employee's compensation
must be increased by one-half, but not to exceed $10,000,
together with costs and expenses not to exceed $250.
5)Specifies that the employee is entitled to reinstatement and
reimbursement for lost wages and work benefits caused by the
acts of the employer.
6)Makes it a misdemeanor for an insurer to advise or threaten an
insured employer to cancel or raise a premium or otherwise
discriminate against an employee because the employee
testified in another employee's case before the Workers'
Compensation Appeals Board.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose of Bill. According to the author, the purpose of the
bill is help formerly injured workers return to work, and gain
better compliance with workers' compensation laws from
employers.
2)Need for bill. The author states the following:
1) The best outcome of a workers' compensation case is that
an injured worker receives medical treatment, fully
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recovers, and returns to his or her work. This bill
promotes that outcome by penalizing employers for refusing
to reinstate injured workers even after they are released
to return to work by their doctor. It allows employers to
seek an alternative medical opinion and, if it contradicts
the worker's doctor, the employer is released from
liability.
2) Under current law, employers are not obligated to bring
workers back after a workers' compensation injury. In
fact, employers are using the workers' compensation system
to get rid of older, more senior employees. Current
statutory incentives to put injured workers back to work
are not working. While employers who don't take back
injured workers pay a 15% higher permanent disability (PD)
benefit, the recent cuts to the PD schedule, averaging 50%,
have slashed benefits so dramatically that these incentives
are now insufficient.
3) Support Arguments. The Sponsors, the California
Federation of Labor and the Teamsters, state the following:
a) California's workers' compensation system has
undergone dramatic changes over the past five years.
Employers have enjoyed considerable savings and insurance
companies are reaping historic profits, with injured
workers paying the price. Not only are workers receiving
greatly reduced benefits, but many are also facing
significant obstacles when they try to return to work.
b) Benefits have become so low that some employers find
it cheaper to keep a worker on permanent disability (PD)
and pay out a lower benefit than put the worker back to
work. Others have used the system to get rid of older
employees. Workers who have been on the job longer tend
to have accrued higher wages, more vacation days, and
better benefits. It can be cheaper for the employer to
replace these older workers with younger, healthier, and
lower-paid workers.
c) Some injured workers are prevented from returning to
work because the employer adds new tasks to the job to
make it impossible for that worker to accomplish the
work. Instead of reducing litigation, a stated objective
of SB 899 from a few years ago, the refusal to return
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injured workers to their jobs has forced many workers to
find employment lawyers to file anti-discrimination
lawsuits. Union members are forced to grieve and
arbitrate decisions that keep them off the job.
d) This bill would reduce conflict between employers
and employees by providing the following clear rules for
the return to work process: i) respect the
recommendation of the treating physician, ii) penalize
employers who discriminate against injured workers by
refusing to return them to work, iii) prohibit employers
from changing job requirements to prevent injured workers
from returning, and iv) prohibit discrimination against
an employee for exercising the right to pre-designate a
doctor.
1) Opponents Arguments. Opponents argue that this bill
creates unreasonable requirements for employers when
bringing injured employees back to work. The bill does not
take into account many typical situations that may justify
a delay in return to work, including instances when
essential job functions change or questions over the
medical release. The Chamber of Commerce states that in
instances when an employer closes down a facility and does
not have a job for an injured worker, they would be
required to pay full salary and benefits. Also, there is
no exception for an employee who is terminated for cause
during the return period. The bill's requirement to return
to work a previously injured employee within five days or
face new monetary costs, places the employer on the
defensive, and opens the door to more claims.
2) Additional Duties. The bill would prohibit an employer
from requiring an employee to perform additional physical
duties that the employee was not required to perform prior
to the injuries or illness as a condition of returning to
work, unless the additional physical duties are reasonably
required to accommodate the employee's disabilities. In
order to also accommodate changing technologies and
operating procedures in today's workplace, should the bill
be amended to allow the change in physical duties as are
presently being required of employees in the same class or
assignment as the employee filled when he or she was
injured?
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3) $100 Fine Per Day. The bill specifies that if the
report on the agreed medical evaluator or the qualified
medical evaluator states that the employee is unable to
perform the essential functions of the employee's regular
position, or is unable to perform the essential duties
without risk of increased injury, then the employer shall
have no further obligation to pay the employee full wages
and benefits for any period after the date of the report,
and the employer shall not be liable for lost wages and
work benefits. The bill is silent, however, on whether the
employer would remain liable for the civil penalty of $100
per day. Is it the author's intent to also release this
liability as well?
4) Technical Correction. The bill would make it a
misdemeanor for an insurer to advise or threaten an insured
employer to cancel or raise a premium or otherwise
discriminate against and employee because the employer
testified in another employee's case before the Workers'
Compensation Appeals Board. The author's office and
committee staff point out that this is a drafting error
since existing law specifically uses the word employee in
this part of the code, and the context also indicates
(through the use of the words "in another employee's
case"). It is understood that the author will offer an
author's amendment to make the following technical
correction: On page 6, line 13, strike the word "employer"
and replace it with the word "employee."
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO (Sponsor)
California Teamsters Public Affairs Council (Sponsor)
California Applicants Attorneys Association
California Professional Firefighters
Peace Officers Research Association of California (PORAC)
Service Employees International Union (SEIU), CA State Council
California Conference Board of the Amalgamated Transit Union
United Food and Commercial Workers Union, Western States Council
UNITE HERE!
California Conference of Machinists
Professional & Technical Engineers, Local 21
International Longshore and Warehouse Union
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Strategic Committee of Public Employees, Laborers' International
Union of North America
California State Employees Association
American Federation of State, County and Municipal Employees
(AFSCME)
California Federation of Teachers
Opposition
California Chamber of Commerce
American Insurance Association (AIA)
Los Angeles Unified School District
County of Los Angeles
California Manufacturers and Technology Association
California Coalition on Workers Compensation
Regional Council of Rural Counties
California State Association of Counties (CSAC)
League of California Cities
CSAC Excess Insurance Authority
California Association of Joint Powers Authorities
California Special Districts Association
Association of California Insurance Companies (ACIC)
Greater Riverside Chambers of Commerce
Independent Maintenance Contractors Association
Torrance Area Chamber of Commerce
California Spa & Pool Industry Education Council
California Hospital Association (CHA)
California Grocers Association
Redondo Beach Chamber of Commerce
County of San Diego
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086