BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2378 (Perea) - Workers Compensation: Temporary Disability
Payments
Amended: May 23, 2014 Policy Vote: L&IR 5-0
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2378 would provide that specified peace
officers and firefighters are eligible for up to three years of
tax-free disability leave in the event of disability due to an
occupational injury. In doing so, the bill would abrogate a
recent court decision.
Fiscal Impact: Available workers compensation data indicate that
this bill could result in annual costs to the State, likely in
the hundreds of thousands of dollars (various funds, See Staff
Comments).
Background: Current 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. Generally speaking, under
current law an injured worker who is unable to work is entitled
to two years of temporary disability benefits. These benefits
are designed to partially offset the loss of wages for workers
unable to work in the aftermath of an injury. The benefit amount
is 67 percent of a worker's average weekly wage during the past
12 months.
Current law grant special benefits to Department of Justice,
California Highway Patrol, and Department of Fish and Wildlife
(Labor Code 4800 and 4800.5) and local public safety and
firefighters (section 4850). These sections provide for one
year of leave at full salary if the individual is injured or
becomes ill on the job before temporary disability takes effect.
Current law limits temporary disability payments to a maximum of
104 weeks (2 years), with exceptions for certain injuries that
extend for up to 240 weeks. This bill addresses whether the one
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year at full salary (the 4800 and 4850 time) should count
towards the maximum period of TD.
Prior to the passage of AB 338 (Coto, Chapter 595, Statutes of
2007), the one-year in-lieu payments were not considered
temporary disability payments and thus were not counted toward
the cap. In January 2013, California's First Appellate District
issued a decision in Alameda v. Workers' Compensation Appeals
Board (Knittel) (2013) 213 Cal.App.4th 278. This decision found
that "4850 leave" does count towards a year of leave as per
temporary disability, which again is capped at two years. The
end result of this court decision is that peace officers and
firefighters would receive two years of benefits like all other
injured workers, with the first year being full salary
replacement under "4850 leave". The court attributed its
finding, in part, to language contained in AB 338, which does
not appear to be intended to alter, or in any way affect,
Section 4800 and 4850 benefits for public safety employees.
Proposed Law: This bill would (1) specify that paid leaves of
absences for peace officers and firefighters discussed above are
in addition to the 104 weeks of temporary disability benefits,
(2) declare the intent of the legislature to abrogate the
holding in County of Alameda v. Workers' Compensation Appeals
Board (Knittel) (2013) 213 Cal.App.4th 278, and (3) find and
declare that the Court of Appeal issued a decision in 2013 that
wrongly interprets existing law, and AB 338, with the
consequence of wrongfully denying these fire and peace officer
employees the full benefits that the statues intended to provide
to them.
Related Legislation: SB 1234 (Block) of 2014 would have extended
"4850 leave" to additional classes of peace officers. SB 1234
was held under submission by the Senate Committee on
Appropriations.
Staff Comments: The State of California, as an employer, and
many cities and counties are self-insured for workers'
compensation claims. Payments are treated in a pay-as-you-go
manner. Therefore, any increase in costs has a direct impact on
state and local funds. For non-self-insured employers, premiums
are paid through a private insurer or the State Compensation
Insurance Fund (SCIF). Increased costs for these employers would
be evidenced through potentially higher premiums.
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Available data indicate that disability payments totaling
roughly $4 million were made to peace officers in state
departments in 2012-13 (before the court change took effect).
Less than ten percent of the affected peace officers incurred
disability payments that extended beyond 104 weeks. As an order
of magnitude, the impact to the impacted state departments
(funded by both the General Fund and special funds) totaled
approximately $225,000 a year.