BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1145|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1145
Author: Cedillo (D)
Amended: 1/4/12 in Assembly
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM. : 5-1, 6/13/12
AYES: Lieu, DeSaulnier, Leno, Padilla, Yee
NOES: Wyland
NO VOTE RECORDED: Runner
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : 49-24, 1/26/12 - See last page for vote
SUBJECT : Workers compensation: permanent disability
benefits
SOURCE : Voters Injured at Work
DIGEST : This bill provides, for injuries that cause
permanent partial disability (PPD) and occur on or after
January 1, 2013, 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
which would expire two years after the date the voucher is
furnished to the employee or five years after the date of
injury, whichever is later.
CONTINUED
AB 1145
Page
2
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/her job. In the case of temporary disability (TD)
payments, the benefit is 2/3 of the weekly loss in wages
due to disability for up to 104 weeks within a five year
period (Labor Code (LAB) Sections 4650, 4653, 4654 and
4656).
Existing law provides that, except for certain
circumstances, when an injury causes PPD and the injured
employee does not return to work for the employer within 60
days of the termination of the TD, the injured employee
shall be eligible for a SJDB. The voucher amounts are as
follows:
1. Up to $4000 for PPD awards of less than 15%
2. Up to $6000 for PPD awards between 15% and 25%
3. Up to $8000 for PPD awards between 26% and 49%
4. 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. (LAB Section 4658.5)
Existing law provides that an employer is not liable for
the SJDB for the injured worker if, within 30 days of the
end of TD indemnity payments, the employer offers the
CONTINUED
AB 1145
Page
3
employee alternative or modified work and the employee
rejects or fails to accept this work. (LAB Section 4658.6)
This bill, starting January 1, 2013, creates a new process
for the SJDB. Specifically, this bill:
1. Specifies that the SJDB shall be in the form of a
voucher worth $6,000 for qualified expenses,
irrespective of level of PPD;
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 SJDB 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 SJDB is valid only if approved by a workers'
compensation judge.
Comments
According to the Senate Labor and Industrial Relations
CONTINUED
AB 1145
Page
4
Committee, starting in 2006, both employers and advocates
of injured 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 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 TD 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 permanent
disability 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.
This bill 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
ensures 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, this bill protects the injured worker's benefit by
requiring that settling the voucher can only be done in
front of a workers' compensation judge.
CONTINUED
AB 1145
Page
5
Prior Legislation
AB 211 (Cedillo, 2011) was nearly identical to this bill.
It was vetoed by Governor Brown with the following message,
"This bill represents an effort to improve benefits for
workers by providing vouchers for those who need additional
training in order to return to employment after permanently
disabling injuries. I am, however, reluctant to enact
piecemeal changes to the Workers' Compensation system in
the absence of more comprehensive reform that addresses
both the cost and benefits under the system."
SB 3 (Cedillo, 2009) was nearly identical to AB 211. It
was held in the Senate Appropriations Committee.
SB 1189 (Cedillo, 2008) would have established a time limit
within which eligible injured workers had to be granted
SJDB 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, 2007) would have clarified when an injured
worker could receive SJDB to improve return to work rates.
SB 942 was vetoed by Governor Schwarzenegger.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, unknown
potentially significant increase or decrease in benefit
level payments over current tiered levels from the General
Fund and special funds ongoing.
One time, minor absorbable cost to adopt regulations.
First payments of up to $6,000 beginning after January 1,
2013 and generally when the employee is able to return to
work doing modified duties and within two years of the
injury.
In 2005-06, $12,000 in SJDBs were paid to state
employees.
CONTINUED
AB 1145
Page
6
In 2006-07, $135,000 in SJDBs were paid to state
employees.
In 2007-08, $291,000 in SJDBs were paid to state
employees.
In 2008-09, $276,000 in SJDBs were paid to state
employees.
In 2009-10, $358,000 (30% increase) in SJDBs were paid
to state employees 2010-11 pending.
SUPPORT : (Verified 8/20/12)
Voters Injured at Work (source)
California Chiropractic Association
California Labor Federation, AFL-CIO
State Building and Construction Trades Council of
California
OPPOSITION : (Verified 8/20/12)
California Association of Joint Powers Authorities
California Chamber of Commerce
Kern County Superintendent of Schools
Union Roofing Contractors Association
ARGUMENTS IN SUPPORT : 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.
ARGUMENTS IN OPPOSITION : Opponents, such as the
California Chamber of Commerce, believe that this bill
tackles an important issue in California's system of
CONTINUED
AB 1145
Page
7
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 this bill 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.
ASSEMBLY FLOOR : 49-24, 1/26/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Campos, Carter, Cedillo, Chesbro, Dickinson, Eng,
Feuer, Fletcher, Fong, Fuentes, Gatto, Gordon, Hall,
Hayashi, Roger Hern�ndez, Hill, Huber, Hueso, Huffman,
Lara, Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning,
Pan, Perea, V. Manuel P�rez, Portantino, Skinner,
Solorio, Swanson, Torres, Wieckowski, Williams, Yamada,
John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Beth Gaines, Garrick, Grove, Hagman, Harkey, Jeffries,
Jones, Knight, Logue, Mansoor, Miller, Morrell, Nestande,
Nielsen, Norby, Olsen, Silva, Valadao, Wagner
NO VOTE RECORDED: Charles Calderon, Davis, Furutani,
Galgiani, Gorell, Halderman, Smyth
PQ:k 8/20/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED