Despite the elimination of vocational rehabilitation in 2005, California has continued a modified system allowing injured workers to pursue retraining in the form of a vocational voucher.
Currently, if modified work is not timely offered after an applicant is found to have a permanent disability, the insurer must provide a Supplemental Job Displacement Voucher (SJDB), which the employee can use for vocational training.
However, entitlement to the voucher is often contested, particularly in situations where the applicant has left the employer where he was injured. This article discusses these and other situations that often arise in voucher disputes.
The statute governing the SJDB voucher system is Labor Code Section 4658.7, which provides that an injured employee with a permanent partial disability is entitled to SJDB benefits unless (1) the employer makes an offer of regular, modified or alternative work no later than 60 days from an employee's permanent and stationary date and (2) the offer is for regular work, modified work or alternative work lasting at least 12 months.
One question posed is what event triggers the employer’s duty to offer permanent modified work, including situations where an applicant is discharged with no permanent disability? Sometimes there are multiple permanent and stationary reports, including those from the primary treating physician and qualified medical evaluators.
The answer is that the first report finding permanent disability triggers this obligation. Labor Code 4658.7(b)(1) makes clear that the first report regarding permanent disability governs the employer’s duty to make a permanent offer of modified work. This subsection provides that the offer must be made “no later than 60 days after receipt by the claims administrator of the first report received from either the primary treating physician, an agreed medical evaluator or a qualified medical evaluator.”
The report must find that the disability from all conditions for which compensation is claimed has become permanent and stationary and that the injury has caused permanent partial disability.
Without a report finding compensable permanent disability by a primary treating physician or panel QME, there should be no requirement by the employer to offer regular, modified or alternative work, or offer the voucher. Subsequent reports after the first report finding permanent disability should have no bearing on the SJDB voucher.
Claims examiners must carefully monitor medical treatment for the first permanent and stationary report finding permanent disability to begin the return-to-work process.
The legislative history of Section 4658 appears to support this approach. Before SB 863, the prior voucher statute provided that the voucher must be issued within 60 days after the termination of temporary disability. The revised statute provides that the triggering event is the first primary treating physician or QME report finding permanent disability. Thus, if there is no permanent disability, no return-to-work offer needs to be made.
The new statute, enacted in 2012, emphasizes permanent and stationary status and permanent disability as the triggering events, rather than the termination of temporary disability. The intent of the statute is to require employers to offer modified work as soon as a condition is permanent and stationary.
A second issue that arises is when the permanent and stationary report finding permanent disability is not accompanied by the Physician’s Return to Work Questionnaire. Even if the permanent and stationary report finding permanent disability is not accompanied by the questionnaire, the employer still has the burden, if permanent disability is found, to offer permanent modified work. Therefore, if the QME fails to issue the questionnaire, the insurer must promptly act to obtain it.
The impossibility of returning to work is not a basis for releasing the employer from its obligation to provide an SJDB voucher. The Workers' Compensation Appeals Board has held that the only way to release the employer from its obligation to provide an SJDB voucher is by offering regular, modified or alternative work within 60 days of an employee's permanent and stationary date.
In Dennis v. State of California, the WCAB held that defendant was liable to provide applicant with an SJDB voucher because it failed to make a bona fide offer of regular, modified or alternative work within 60 days of applicant's permanent and stationary date even though applicant had been released from prison and could not return to prison for employment.
In Dennis, the WCAB appeared to accept the impossible situation the employer was in, stating, “We are cognizant that employment in a prison setting is unique in that inmate workers cannot return to an inmate job once they are released from prison, making it impossible for a prison employer to make a bona fide job offer.” Nevertheless, the statute mandated that unless there was an offer of modified work, the voucher was owed.
Finally, insurers should consider what constitutes regular, modified and alternative work. Section 4658.1 defines these terms as follows:
In examining what is a “reasonable commuting distance,” the employer should examine the commuting distance the applicant traveled before the injury. For example, many tradespeople, including electricians and carpenters, frequently travel to job sites far outside their area of residence, and therefore an offer of work that involves a significant commute may be reasonable.
Finally, the voucher cannot be settled on cases with dates of injury after Jan. 1, 2013. Labor Code Sec. 4658.7 (g) specifically prohibits settlement of the SJDB by compromise and release (Labor Code Sec. 5000) or commutation (Labor Code Sec. 5100). 8 CCR 10133.31 (h) also provides that “settlement or commutation of claim for supplemental job displacement is not permitted.”
One possible means of resolving the voucher is a stipulation in the settlement that the applicant is not a qualified injured worker, and no voucher will be issued. Many judges have approved settlements with this language.
The SJDB voucher may be a remnant of an earlier era in workers' compensation when applicants were more limited in their ability to find new employment, but it nevertheless remains a part of our system and will continue for the foreseeable future. Defendants should closely monitor medical reporting and make timely, bona fide offers of employment when permanent disability is found to avoid disputes about the voucher at the time of settlement.
Michael P. Burns is a partner at Bradford & Barthel’s San Jose location. This entry from Bradford & Barthel's blog appears with permission.
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