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The Beginning and Ending of Temporary Disability

By A.J. Driscoll

 

I.  Beginning Temporary Disability

 

Temporary disability benefits are created within the workers’compensation system for the purpose of helping to alleviate the consequences of the temporary inability to work by providing biweekly payments to replace, at least in part, lost wages. Temporary disability is not specifically defined within the Labor Code; however it is described as the incapacity to work that is reasonably expected to be cured or materially improved with proper medical treatment. There are two elements to the term “disability.” First, is the actual incapacity to perform the tasks which are usually encountered in one’s employment and the wage loss resulting from that incapacity. Secondly, physical impairment on the body that may or may not be incapacitating.

 

In order for an applicant to receive temporary disability benefits, he or she must meet the qualifying criteria under Labor Code §3600:

 

  1. Employee must have a medical disability that precludes him or her from working;
  2. Disability must be of a temporary, rather than a permanent nature;
  3. Disability must be a result of a compensable industrial injury;
  4. Employee must sustain wage loss;
  5. Wage loss must result from work related disability.

 

The totality of these elements, as to whether an employee is temporarily disabled, is a question of fact to be determined by the Workers’ Compensation Appeals Board by a preponderance of the evidence.

 

Determination of Whether an Applicant is Temporarily Disabled

 

Generally the determination of whether an employee is temporarily disabled must be based on “substantial medical evidence,” which is documented by a practicing physician and interpreted by a workers’ compensation judge.

 

Wage Loss

 

Under the Labor Code, wage loss, for the purposes of temporary disability, necessarily requires an actual loss of earnings. This is to be determined by a preponderance of the evidence.

 

Temporary Total Disability v. Temporary Partial Disability

 

There are two forms of disability which are available to an applicant attempting to secure temporary disability. Total Temporary Disability is available when the employee is incapable of performing any kind of work at all, and precludes the applicant from being able to produce any weekly earnings. This type of disability is subjected to clear statutory maximums and minimums at which it will be paid.

 

Partial Temporary Disability occurs where an employee is capable of performing a degree of work, but not full or normal duties during the period of disability. This is sometimes considered light duty or modified duty. This produces only a partial, rather than a total loss of wages, and thus, the employee is only entitled to the amount of wage that has been lost.

 

II. Termination of Temporary Disability

 

Statutory Limitation on Amount of Weeks to be Paid

 

Labor Code sec 4656(c)(1) states that temporary disability payments should not extend for more than 104 total weeks within a period of  two (2) years. Where an injury has occurred on or after January 1, 2008, the period has increased to five (5) years. However, there are certain injuries (hepatitis a/c, amputations, severe burns, HIV, high velocity eye injuries, chemical burns to the eyes, pulmonary fibrosis and chronic lung disease) which extend the amount of total weeks allowed to 240 from 104 (4656(c)(1)).

 

Termination of Liability for Payments

 

Generally, as described above, liability for payments will terminate automatically at the end of the statutorily set time period. However, there are certain instances where liability for payments may end soon, based on the actions of one of the parties, usually the applicant. There are five general situations where liability for payments will end:

 

  1. The applicant has been determined to be permanent and stationary;
  2. The applicant has returned to work;
  3. The applicant has been deemed able to return to work;
  4. There has been an unreasonable refusal of medical treatment by the applicant;
  5. Death of the applicant.

 

1. Applicant has been Determined to be Permanent and Stationary

 

Permanent and stationary is defined under CCR 9785(a)(8) as “…the point when the employee has reached maximum medical improvement, meaning his or her condition is well stabilized, and unlikely to change substantially in the next year with or without medical treatment.”

 

The determination as to if an applicant is permanent and stationary is a question of fact. As a matter of course, the applicant’s primary treating physician can declare the applicant’s condition permanent and stationary. However, an evaluation by a medical-legal examiner may be necessary to resolve any disputes.

 

Where an applicant has reached maximum medical improvement level (new term for permanent and stationary), the applicant’s rights to temporary disability are terminated. Typically, when an applicant is found to be permanent and stationary, the applicant will have a permanent disability, and it is at this time that the employer will begin to start payments of permanent disability benefits rather than temporary disability benefits.

 

As stated above, the determination of permanent and stationary is a question of fact, and the burden of fact is on the defense.

 

a.) Further Medical Care

 

 An employee’s condition may be found to be permanent and stationery even though his physical condition may be subject to change for the worse or to slight periodic improvement. An applicant may even be permanent and stationary if he is still in need of medical treatment (Whitt v. WCAB (1994) 59 CCC 557.) However, in the case that the applicant was declared to be permanent and stationary and subsequently deteriorates, the applicant may be entitled to a new period of temporary disability.

 

b.) After being Declared Permanent and Stationary

 

 If an applicant has been declared permanent and stationary and returns to work, further treatment on the industrial injury is not to be covered under temporary disability. The concept here is that temporary disability is wage replacement and because the applicant has returned to work, the employer can force the employee to use vacation and/or sick days (Department of Rehabilitation v. WCAB (Lauher) (2003) 68 CCC 831.)

 

c.) Multiple Body Parts

 

Where multiple body parts have been injured in an industrial injury, the applicant may have gained stabilization at different times for different body parts. It is not until the entire disability is permanent that the applicant will reach permanent and stationary status for the injury. The permanent and stationary date will be held to be the date when the last body part becomes permanent and stationary. (American Ins. Co. v. WCAB) (Mathat) (2003) 68 CCC 926.)

 

2. Returning to Work

 

Because temporary disability is wage replacement, an employer may have the ability to terminate payments upon an applicant’s return to work. However, even though an employee has returned to work, it does not mean that they are to be deemed permanent and stationary. Where an employee has returned to work, but cannot do their full job duties or is put on modified duty for less pay, temporary disability may be granted to make up the difference in wages. An employee is only entitled to temporary disability on a wage-loss basis.

 

a.) Notification of New Employment

 

If a totally disabled employee collecting temporary disability indemnity obtains new employment, he or she must immediately notify the employer who is making the payment (Gamble v. WCAB (2006) 71 CCC 1015.)

 

3. Deemed Able to Return to Work

 

Liability for payment of disability also terminates where an employee is deemed able to return to work, even if the employee does not necessarily do so. The purpose of this is to defend employers from applicants who wish to be rewarded with temporary disability by refusing to work, despite the fact that he is otherwise capable of doing so.

 

Where an applicant has been deemed capable to return to work, the capacity to return to work is the ultimate question of fact, not if the applicant has or has not reached maximum medical improvement. The employee is expected to be willing to earn wages as he is capable of earning, and so, the wage replacement of temporary disability would no longer be warranted. This is a question of fact for the Appeals Board.

 

If an applicant is offered modified/light duty work that fits within the medical release to return to work by the doctor, the employer may then deny temporary disability based on the earnings the

employee would have received if he or she had returned to work. At this point, any loss in earnings would not be the result of a medical disability, and so, would not be compensable.

 

a.) Modified Work

 

The alternate or modified work offered by the employer must be within the employee’s work restrictions. If the modified work is beyond the limitations caused by the industrial injury, an employee’s refusal to accept the position will not result in a denial of temporary disability benefits.

 

4. Unreasonable Refusal of Medical Treatment

 

Labor Code §4056 states, “no compensation is payable when the employee’s disability is caused, continued or aggravated by an unreasonable refusal to submit to medical treatment.” So, where an employee unreasonably refuses needed medical treatment, an employer may terminate temporary disability payments.

 

However, the obvious corollary here is that the medical treatment refusal must be “unreasonable,” and this is considered in conjunction with the seriousness of the injury.

 

5. Death

 

An employee’s death terminates an employer’s liability for payments. However, if there is any retroactive temporary disability owed, it must be paid to their heirs.

 

Official Termination of Benefits

 

Where an employer wishes to terminate temporary disability, the employer must file a petition to terminate liability for temporary disability indemnity (DWC form 46), per CCR 10462 – 10466.

 

A failure to provide this paperwork can result in a loss of ability to take credit for overpayment of permanent disability.

 

Recent panel decisions regarding temporary disability (quick notes / highlights)

 

  • 2012 Cal. Wrk. Comp. P.D. LEXIS 24: An employer is not liable for temporary disability where an employee was injured, and then subsequently fired for cause. Uncontroverted evidence showed that the employer, but for the firing for cause, would have provided modified / light work for the employee.
  • 2009 Cal. Wrk. Comp. P.D. LEXIS 414: overpayment credits were not granted to a defendant where the defendant did not abide by the provisions of LC 4656 as to payment of benefits, and where the applicant would have suffered a hardship to full credit repayment because the payments were received in good faith and without fault.
  • 2011 Cal. Wrk. Comp. P.D. LEXIS 51: Applicant had admitted injuries but was not entitled to temporary disability for period following termination, because loss of wages was due to applicant stealing money for a taxi ride, not the injury, and so was fired for cause by employer. Applicant's own misconduct created lack of ability to return to modified work and that defendant established good cause for terminating applicant's employment.
  • 2007 Cal. Wrk. Comp. P.D. LEXIS 191: Applicant was not entitled to benefits beyond the determination of P/S as found by PTP and AME, notwithstanding the fact that the employer failed to file the proper paperwork for termination of benefits under the Labor Code.
  • 2010 Cal. Wrk. Comp. P.D. LEXIS 241: Defendant was not obligated to provide applicant/taper with 4/23/2009 groin injury with modified duty as applicant was terminated for cause based upon her violation of several company policies, including racial discrimination policy and violence in the workplace.

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