BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 13, 2012 2011-2012 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: AB 1145
Author: Cedillo
As Introduced/Amended: January 4, 2012
SUBJECT
Workers' compensation: permanent disability benefits.
KEY ISSUE
Should the Legislature restructure the supplemental job
displacement benefit (SJDB) to ensure that the voucher is
received by the injured worker in a timely manner and with an
increased number of uses?
PURPOSE
To restructure the SJDB to a $6,000 benefit tied to the injured
worker becoming permanent and stationary, rather than the
conclusion of temporary disability.
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law provides for the payment of indemnity benefits if
the occupational injury causes temporary or permanent disability
which prevents the worker from returning to his or her job. In
the case of temporary disability payments, the benefit is
two-thirds of the weekly loss in wages due to disability for up
to 104 weeks within a 5 year period (Labor Code ��4650, 4653,
4654 and 4656).
Existing law provides that, except for certain circumstances,
when an injury causes permanent partial disability and the
injured employee does not return to work for the employer within
60 days of the termination of the temporary disability (TD), the
injured employee shall be eligible for a supplemental job
displacement benefit (SJDB). The voucher amounts are as
follows:
i. Up to $4000 for permanent partial disability (PPD)
awards of less than 15%
ii. Up to $6000 for PPD awards between 15% and 25%
iii. Up to $8000 for PPD awards between 26% and 49%
iv. Up to $10,000 for PPD awards between 50% and 99%
The voucher must be used for education-related retraining or
skill enhancement at state-approved or accredited schools, and
uses include tuition, fees, books, and other expenses required
by the school. No more than 10% of the voucher can be spent on
vocational or return-to-work counseling. (Labor Code �4658.5)
Existing law provides that an employer is not liable for the
supplemental job displacement benefit (SJDB) for the injured
worker if, within 30 days of the end of temporary disability
indemnity payments, the employer offers the employee alternative
or modified work and the employee rejects or fails to accept
this work. (Labor Code �4658.6)
This bill would, starting January 1, 2013, create a new process
for the Supplemental Job Displacement Benefit. Specifically,
this bill would:
1) Specifies that the supplemental job displacement benefit
shall be in the form of a voucher worth $6,000 for
Hearing Date: June 13, 2012 AB 1145
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
qualified expenses, irrespective of level of permanent
partial disability;
2) Expands the purposes for which the voucher may be used
to include up to $1,000 for the purchase of computer
equipment, payment of occupational licensing,
certification, or examination fees, the purchase of
necessary tools, and up to $500 for miscellaneous expenses
that would not require documentation.
3) Provides that an employer is not liable for the
supplemental job displacement benefit if an offer of
qualifying employment is made no later than 60 days after
the first report by a treating physician, qualified medical
evaluator, or an agreed medical evaluator that indicates
there will be partial permanent disability and the injury
is permanent and stationary.
4) Provides that if the employer or claims administrator
has provided the physician with a job description for the
employee's regular work, proposed modified work, or
proposed alternative work, the physician shall evaluate
whether the work limitations are compatible with the
physical requirements set forth in that job description.
5) Requires the employer to provide the supplemental job
displacement voucher no later than 20 days after the time
to make a qualifying job offer has expired.
6) Specifies that the voucher shall be valid for two years.
7) Provides that an agreement to settle or release a claim
for the supplemental job displacement benefit is valid only
if approved by a workers' compensation judge.
COMMENTS
1. Need for this bill?
Starting in 2006, both employers and advocates of injured
Hearing Date: June 13, 2012 AB 1145
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
workers began sitting down and discussing the challenges of
return to work and the shortcomings of the supplemental job
displacement voucher. This bill is the most recent attempt to
address these concerns and create a voucher system that is
better for both employers and injured workers.
Currently, an injured worker who suffers permanent injury
becomes eligible for retraining vouchers if he or she does not
return to work within 60 days of the termination of temporary
disability. 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 significant period of time after
the termination of TD benefits.
Neither injured worker nor employer may know enough about the
lasting medical condition of the injured worker at the time of
the termination of TD to make a decision about a return to
work or whether the employee should contemplate accessing
retraining benefits in order to prepare for a change of
employment. Also, retraining benefits may not currently be
disbursed until there is an actual PD rating award. This
creates a situation where it is known that the injured worker
is due to receive some kind of benefit, but the exact amount
isn't clear, preventing the use of retraining funds when they
are most needed.
AB 1145 seeks to address these issues in several ways. For
one, the clock on eligibility for the SJDB does not begin
until the employer has received the medical report of
disability, rather than the termination of TD benefits. If
the employer makes an offer of employment, this bill would
ensure that the relevant physician for the injured worker is
involved with the decision. The voucher amount is also flat,
irrespective of the amount of disability, and the bill also
opens up the voucher for additional uses. Finally, AB 1145
protects the injured worker's benefit by requiring that
settling the voucher can only be done in front of a workers'
compensation judge.
Hearing Date: June 13, 2012 AB 1145
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations
2. Proponent Arguments :
Proponents argue that AB 1145 will allow an injured worker to
access the benefit voucher once his or her doctor determines
that his or 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.
3. Opponent Arguments :
Opponents, such as the California Chamber of Commerce and
California Coalition on Workers' Compensation believe that AB
1145 tackles an important issue in California's system of
workers' compensation benefits. The SJDB is important because
it provides injured workers who cannot return to their
at-injury employer with an opportunity to receive retraining
in order to move into another occupation. However, opponents
believe that AB 1145 needs to be amended to ensure that new
problems are not created with respect to the administration of
the benefit. Furthermore, the opponents note and agree with
Governor Brown's veto message of AB 211, which was nearly
identical to this bill arguing that there's a need for a
systemic reform of the workers' compensation and that this
bill is only piecemeal reform.
4. Prior Legislation :
AB 211 (Cedillo) of 2011 was nearly identical to this bill.
It was vetoed by Governor Brown.
SB 3 (Cedillo) of 2009 was nearly identical to AB 211. It was
held in Senate Appropriations Committee.
SB 1189 (Cedillo) of 2008 sought to establish a time limit
Hearing Date: June 13, 2012 AB 1145
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations
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 942 (Migden) of 2007 sought to clarify when an injured
worker could receive supplemental job displacement benefits to
improve return to work rates. SB 942 was vetoed by Governor
Schwarzenegger.
SUPPORT
California Chiropractic Association
California Labor Federation, AFL-CIO
State Building and Construction Trades Council of California
OPPOSITION
Acclamation Insurance Management Services (unless amended)
Allied Managed Care (unless amended)
California Association of Joint Powers Authorities (CAJPA)
California Chamber of Commerce
California Coalition on Workers' Compensation
Hearing Date: June 13, 2012 AB 1145
Consultant: Gideon L. Baum Page 6
Senate Committee on Labor and Industrial Relations