BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: April 29, 2009 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: SB 3
Author: Cedillo
Version: As introduced December 1, 2008
SUBJECT
Workers' compensation: permanent disability benefits.
KEY ISSUES
Should the Legislature change the benefits under the
supplemental job displacement benefit program to be more uniform
regardless of the level of the workers injury?
Should injured workers be able to receive their supplemental job
displacement benefit vouchers as soon as it is found that the
disability has become permanent and stationary without having to
wait for the actual permanent disability rating to be official?
Should injured workers be given more freedom in the use of the
supplemental job displacement benefit vouchers, including the
freedom to use the voucher for a computer and miscellaneous
expenses?
PURPOSE
To accelerate the date of eligibility and improve the timing of
providing supplemental job displacement benefits to injured
workers once it is determined that disability has become
permanent and stationary.
ANALYSIS
Existing law requires employers to secure the payment of
workers' compensation for injuries incurred by their employees
that arise out of, or in the course of, employment. Workers'
compensation insurance provides six basic benefits which include
medical care, temporary disability benefits, permanent
disability benefits, supplemental job displacement benefits or
vocational rehabilitation and death benefits.
Existing law provides that, for injuries occurring on or after
January 1, 2004, when an occupational injury causes permanent
partial disability and the injured employee does not return to
work for the employer within 60 days of the termination of
temporary disability (TD), the injured employee is eligible for
a supplemental job displacement benefit in the form of a
nontransferable voucher for education-related retraining or
skill enhancement, or both, at state-approved or accredited
schools.
Under existing law , if a worker is eligible to receive
supplemental job displacement benefits, the voucher is
distributed as follows:
Up to $4,000 for permanent partial disability awards of
less than 15%;
Up to $6,000 for permanent partial disability awards
between 15% and 25%;
Up to $8,000 for permanent partial disability awards
between 26% and 49%; and
Up to $10,000 for permanent partial disability awards
between 50% and 99%.
The vouchers are dependent on the permanent partial disability
award and are, in effect, not available to the injured worker
until their permanent disability rating has been officially
determined. The voucher can be used for paying tuition, fees,
books, and other expenses required by the school for retraining
or skill enhancement. No more than 10 percent of the voucher
moneys may be used for vocational or return-to-work counseling.
Existing law specifies that an employer shall not be liable for
the supplemental job displacement benefits if, within 30 days of
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the termination of temporary disability indemnity payments, the
employer offers, and the employee rejects, or fails to accept,
as specified, either of the following: the employer meets either
of the following conditions:
Modified work, accommodating the employee's work
restrictions, lasting at least 12 months.
Alternative work that allows the employee to perform the
essential functions of the job, that is located within
reasonable commuting distance of the employee's residence
at the time of injury, and that lasts at least 12 months.
In addition, the job provided must offer wages and
compensation that are within 15 percent of those paid to
the employee at the time of the injury.
This Bill would specify that current supplemental job
displacement benefit provisions apply to workers whose injuries
occurred on or after January 1, 2004, and before January 1,
2010. For injuries occurring on or after January 1, 2010, this
bill would provide for a supplemental job displacement benefit
(SJDB) in the form of a voucher for up to $6,000 to cover
various reeducation and skill enhancement expenses.
Specifically, this bill:
Provides that if an injury causes permanent partial
disability (PPD), the injured employee is entitled to a
SJDB unless the employer makes an offer of reemployment or
continued employment meeting the following criteria:
o The offer is made no later than 60 days after
the receipt by the claims administrator of the first
admissible report, received from and evaluated as
specified, finding that the disability has become
permanent and stationary and that the injury has
caused PPD.
o The offer is for regular work, modified work,
or alternative work in a position expected to last for
at least 12 months.
Requires that the SJDB be furnished to the employee
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within 20 days after the expiration of the time for
determining the employee's entitlement, as specified.
Provides that the voucher may be applied, at the choice
of the injured employee, for expenses that include:
o Payment for education-related retraining or
skill enhancement, or both, at state-approved or
accredited schools including the payment of tuition,
fees, books and other expenses required by the school.
o Payment for occupational licensing or
professional certification fees, related examination
fees, and examination preparation course fees.
o Payment for the services of licensed placement
agencies, vocational or return-to-work counseling, and
r?sum? preparation, all up to a combined limit of 10
percent of the amount of the voucher.
o Purchase of tools required by a training or
educational program.
o Purchase of computer equipment, up to $1,000.
o Up to $500 as a miscellaneous expense
reimbursement or advance, payable upon request and
without need for itemized documentation or accounting.
However, the employee shall not be entitled to any
other voucher payment for transportation, travel
expenses, telephone or internet access, clothing or
uniforms, or incidental expenses.
Specifies that the voucher expires two years after the
date it is furnished to the employee or five years after
the date of injury, whichever is later. The employee shall
not be entitled to payment or reimbursement of any expenses
that have not been incurred and appropriately submitted to
the employer prior to the expiration date.
Provides that an agreement to settle or release a claim
for the SJDB shall be valid and enforceable only if
approved by worker's compensation administrative law judge.
Requires the administrative director of the Division of
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Workers' Compensation to adopt regulations for the
administration of the SJDB program, as specified.
COMMENTS
1. Need for this bill?
Under the current SJDB program provisions, the amount of the
voucher an injured worker receives is based on the level of
the worker's PD. Currently, an injured worker who suffers
permanent injury becomes eligible for retraining vouchers if
he/she does not return to work within 60 days of the
termination of TD. An employer must make a decision about
whether or not to offer the injured worker modified or
alternative work within 30 days of the termination of
temporary disability payments. A determination of an injured
workers' longer-term level of disability or permanent
disability rating, however, may not be reached until a
considerable amount of time after the termination of TD
benefits. Unfortunately, because the vouchers are dependent
upon this rating, the vouchers are, in effect, not available
to injured workers for some time.
Additionally, TD payments end when an employee returns to
work, which may include regular work or transitional work, and
this frequently occurs before the disability becomes
permanent. Early return to appropriate work is usually in the
best interest of both the employer and employee. According to
the Commission on Safety and Health and Workers' Compensation
(CSHWC), an injured worker in California is more likely to be
out of work three years after their injury than workers
anywhere else in the country.
This bill could help workers get back to work faster by
improving access to SJDB vouchers once the doctor determines
that the injury has become permanent and stationary, rather
than forcing the worker to wait until a final disability
rating determination. Additionally, the bill would create a
flat $6000 voucher amount, instead of the current method which
awards a voucher based on the final PD rating. According to
the CHSWC, the average voucher amount currently awarded is for
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$5900. And finally, the bill would expand allowable uses of
the voucher for tools needed for educational and training
programs, such as computer equipment, which can help workers
get the retraining they need in order for them to be able to
return to work faster and with stronger work skills.
2. Staff Comment :
In the veto messages from the Governor for both AB 1636
(Mendoza) and SB 942 (Migden) in 2007, the Governor encouraged
the proponents of the measures to work with employers,
insurers, and the Division of Workers' Compensation (DWC) to
find a more appropriate solution to the problems with current
law regarding the supplemental job displacement benefit
voucher program. Interested parties held several meetings,
sponsored by the Commission on Health and Safety and Worker's
Compensation, throughout last year to address concerns with
the operation of the SJDB voucher program and the need to
facilitate faster return to work by injured workers. Although
some agreed about many of the problems, including that the
current trigger for eligibility for SJDB effectively deprives
some injured workers of the right to retraining benefits, they
were unable to agree on a solution. According to the author,
this bill includes some of the provisions advanced by
opponents in these discussions.
3. Suggested Amendment :
The author may wish to take an amendment to correct a spelling
error in the bill. On page 4, line 32 of the bill; replace
the word "resume" with "r?sum?."
4. Proponent Arguments :
According to proponents of the measure, after a workplace
injury, the best possible outcome for workers, employers and
the economy is to have the worker return to his or her job as
soon as possible. Although the SJDB program is meant to
assist in reintegrating injured workers into the workforce, a
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worker may not receive the voucher until his or her permanent
disability rating has been officially determined, which can be
years after the termination of temporary disability benefits.
Proponents argue that this bill is necessary to help workers
get back to work faster by improving access to and the timing
of the SJDB.
Proponents argue that this bill will allow an injured worker
to access the benefit voucher once his/her doctor determines
that his/her injury has become permanent and stationary,
rather than forcing him/her to wait until a final disability
rating determination. They argue that speeding up this
process, as well as expanding allowable uses of the voucher
for tools needed for educational and training programs and for
computer equipment, will allow workers to get the retraining
they need more quickly, allowing them to re-enter the work
force faster and with stronger work skills.
According to the author, California has one of the worst
return to work rates in the country and improving the timing
of the SJDB would help improve return to work outcomes for
permanently disabled workers by allowing these workers to
receive the education and training they need to reintegrate
into the workforce.
5. Opponent Arguments :
Opponents of the measure argue that this bill will provide
potentially unnecessary monetary allowances to injured workers
through the use of the supplemental job displacement benefit
voucher. Opponents find the $500 miscellaneous allowance and
the $1,000 for computer equipment particularly problematic.
They argue that all expenses related to vocational
rehabilitation benefits should be documented and that any
money for equipment should include stipulations that such
equipment is necessary for the employee to obtain new
employment or successfully complete any training associated
with the SJDV. The sum of these two allowances, they argue,
comprises up to 25% of the value of the voucher, thus reducing
the amount available for training.
According to some opponents, although current law provides
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retraining benefits to injured workers, it is done late in the
process, puts a premium on returning to the at-injury employer
as opposed to any suitable employment, and has not proven
beneficial to either injured workers or employers. Some
believe that this bill, if amended, could provide short-term
relief to both injured workers and their employers. Suggested
amendments include reducing the SJDB voucher to $5,000,
arguing that the average voucher paid since the 2004 reforms
is close to that amount; restricting the $1,000 expenditure
to computer equipment required for retraining purposes only
and require that the employee be enrolled in a training
program prior to receiving the $500 miscellaneous allowance;
adding provisions to the bill that relieves employers of their
responsibility to furnish a SJDB voucher if the injured worker
has quit his/her job or has been terminated for cause; among
others.
According to opponents, this bill could provide a short term
fix to the SJDB voucher program by making the benefit more
useful to employees, reducing administrative burdens for
employers, and strengthening the RTW process until
stakeholders can come to an agreement on change that is more
substantial to get more injured workers back to gainful
employment following workplace injuries and to reduce
litigation and administrative burdens on employers.
6. Prior/Related Legislation :
SB 942 (Migden) of 2007: Vetoed by the Governor
This bill, among other things, sought to clarify when an
injured worker could receive supplemental job displacement
benefits to improve return to work rates. Governor
Schwarzenegger vetoed SB 942, as he felt that the issuance of
vouchers were vague and could encourage unnecessary litigation
over when the vouchers are to be issued and in what amount.
AB 1636 (Mendoza) of 2007: Vetoed by the Governor
This bill, similarly to SB 942, sought to limit delays in the
provision of training/retraining services to permanently
injured workers who do not receive a timely offer to return to
work by their employer. In his veto message, the Governor
again felt that the issuance of vouchers was vague and could
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encourage unnecessary litigation.
SB 1189 (Cedillo) of 2008: Held in Senate Appropriations
Committee
This bill sought to establish a time limit within which
eligible injured workers had to be granted supplemental job
displacement benefits and would have created a procedure for
estimating and delivering earlier retraining benefits in
specified circumstances. The bill was held under submission
by the Senate Appropriations Committee.
SB 2987 (Benoit) of 2008: Senate Inactive File
This bill, similar to the previous bill, attempted to advance
the point in time that an injured worker's right to receive
the supplemental job displacement benefit was triggered. The
bill was held in the Senate Inactive File.
SUPPORT
Voters Injured at Work (Sponsor)
Amalgamated Transit Union
American Federation of State, County and Municipal Employees
(AFSCME)
Association of California Insurance Companies - support if
amended
California Applicants' Attorneys Association (CAAA)
California Conference of Machinists
California Fence Contractors' Association
California Labor Federation, AFL-CIO
California Nurses Association/National Nurses Organizing
Committee
California Professional Firefighters (CPF)
California State Employees Association (CSEA)
California Teamsters Public Affairs Council
Engineering Contractors' Association
Engineers and Scientists of California
Flasher/Barricade Association
Glendale City Employees Association
IFPTE Local 21
International Longshore and Warehouse Union
Marin Builders' Association
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Senate Committee on Labor and Industrial Relations
Organization of SMUD Employees
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
Strategic Committee on Public Employees, Laborers' International
Union of North America
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
OPPOSITION
California Association of Joint Powers Authorities (CAJPA) -
Unless amended
CSAC Excess Insurance Authority (CSAC-EIA)
* * *
Hearing Date: April 29, 2009 SB 3
Consultant: Alma Perez Page 10
Senate Committee on Labor and Industrial Relations