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Industry Insights

4656 and the Limitation of Temporary Disability

  • State: California
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By Michael Sullivan, Esq.

Ed. Note: This is the fifth in a series of articles. The prior four articles can be accessed by clicking on the titles in the side bar at right.

Labor Code Section 4656, which had previously provided that temporary disability (TD) could not extend for more than 240 weeks within a five-year period from the date of injury, has been modified. A new statute describes a two-year limitation to the payout of TD, and it explicitly applies only to those dates of injury which occur on or after April 19, 2004.

The Two-Year Limitation

For those dates of injury, there is a new standard for TD payments. Labor Code Section 4656(c) states that "Aggregate disability payments for a single injury occurring on or after the effective date of this subdivision, causing temporary disability shall not extend for more than 104 compensable weeks within a period of two years from the date of the commencement of temporary disability payment."

What does this language mean? Obviously, this is intended to limit payment of TD. However, it has been pointed out that this section does not limit the payment of TD from the date of injury, as had been done previously. Rather, TD is limited from the date of the first payment made. Therefore, it appears that this limitation will not begin to run until the first payment of TD has been made.

This has the potential to be a serious distinction. Usually TD begins right after the injury occurs, and in that case the two-year limitation would run smoothly. However, it is not hard to visualize a scenario where TD begins well after the date of injury -- even years after. Suppose a person who left an employer several years prior files a claim and requests back TD from more than five years from the date of injury itself. Will that person then be entitled to the back owed amounts, and going forward another two years?

We do not know for certain, but it does seem that back TD will be owed, and the two-year limit will begin only when the first payment is made.

There are two reasons to draw this conclusion. The first reason is the literal language of this statute, which speaks to what happens after TD commences and makes no reference at all to what happens before that.

Secondly, the California Workers' Compensation Institute in May 2004 published a bulletin that describes how they were asked to consider, before SB 899 was passed, the implications of limiting TD. The last item they were asked to consider was the possibility of capping TD two years after the initial payment date. In the bulletin, this is distinguished from such possibilities as beginning the cap from the date of injury, or the date that TD was actually owed.

Statistics were given describing the "lag" between when TD would be owed and when it actually commences. The legislature seems to have made a deliberate choice to start the cap from the date TD begins. Perhaps this is meant to ensure some level of fairness to an applicant who is not paid this benefit in accordance with the law.

In any case, this gives the defense an incentive not to delay TD. Once TD begins, an assurance is given that it will end in relatively short order.

Also, it is difficult to discern what is meant by "104 compensable weeks within a period of two years." Does this, along with the language describing "aggregate" payments, mean that the applicant gets 104 weeks in total, regardless if it is paid in broken periods, even exceeding two years from the initial payment of TD?

It seems not. The language of the statute is very clear. TD Payments are not to go forward following two years from the initial payment. The statute is bit confusing, as 104 weeks is two years. It may well be that this language is superfluous. The statute to be clear should have just stated that TD is not allowed two years from the commencement of payments, and left it at that. It is certain that we will eventually see case law interpreting this.

This does seem to have potential for a serious effect on Labor Code Section 4661.5. This section had codified a longstanding legal principle: that payment of temporary disability made more than two years from the date of the injury is to be paid at the rate in effect at the time of the payment. This principle will have no force for those cases with a date of injury occurring on or after April 19, 2004, when TD starts immediately after injury. It will have a significant effect on most claims. This is especially important in light of the benefit increases enacted in recent years.

Exceptions

Exceptions are made. Any employee who suffers from specified types of conditions has up to 240 aggregate weeks within a period of five years from the date of injury, as per the original law. These conditions are:

A. Acute and Chronic Hepatitis B

B. Acute and Chronic Hepatitis C

C. Amputations

D. Severe Burns

E. Human Immunodeficiency Virus (HIV)

F. High Velocity Eye Injuries

G. Chemical Burns to the Eyes

H. Pulmonary Fibrosis

I. Chronic Lung Disease

Commentary and Debate

Thus far, we have seen nothing on this from our courts. Only the most recent dates of injury would be the subject of this new rule up to this point.

However, we have had plenty of commentary. This portion of the reform has been described as one, if not the single most, harsh provisions of SB 899. It is not difficult to envision a very seriously injured applicant, perhaps one with a failed back syndrome that requires multiple surgeries, left without this benefit while still treating. It appears that the Legislature may have intended to shift the burden in these sorts of cases to the federal system; it may have been contemplated that these sorts of special cases would be in position to receive Social Security benefits. Granted, this is less money generally speaking than the typical TD benefit.

With no more vocational rehabilitation, applicants' attorneys will be looking for proof of total permanent disability on expedited basis for cases like these, and may even delay surgery to achieve this. It is not inconceivable that an applicant, faced with the end of TD, will return to work, only to have a new specific injury right away. This sort of scenario is already familiar to defense attorneys even without these new circumstances. False injuries as always should be denied.

If there is one overarching problem with the California system, it is the delays. Doctors, who in the past have often seemed to treat only to generate bills, are among the worst offenders. Applicants' attorneys often feel at their mercy. Certainly, the new medical legal system, where AMEs are likely to predominate, will not be helpful. However, this new limitation on TD is virtually certain to force treating doctors and applicants' attorneys to make sure these files are moved. This may also help to alleviate unnecessary medical care and opportunism in that area. Our perspective is that in the vast majority of cases this will be a helpful rule.

Anticipated Strategies

How will applicants' attorneys get around this? It is not hard to visualize a few tactics that will be used. Obviously if one of the explicit exceptions is available, it will be used. Also, it is likely that there will be where possible multiple dates of injury filed. The argument will then be that TD is owed for one date of injury at a time. The defense is certain in this case to argue that TD for more than one date of injury will run concurrently, especially where viable medical evidence makes it obvious that the applicant did not suddenly stop being TD for one injury and begin to need this benefit because of another.

The actual date of injury here will in some cases become even more important than it already is. As is well known, and well explained in landmark cases like Western Growers v. WCAB (1993) 58 CCC 323, Labor Code Section 5412 defines the date of injury for continuous trauma claims as the date where the applicant knew (or reasonably should have known) that the injury was work related and suffered disability as a result of the injury. This standard is easily manipulated by applicants and their lawyers, who can declare that they knew an injury was work related whenever it suits them, or declare total ignorance of the industrial nature of the problem until such time as they were informed by a physician of this fact.

Extensive case law tends to allow the defense to prove the requisite knowledge of the industrial nature of an injury only where a doctor can be shown to have informed the applicant. A leading case on this is City of Fresno v. WCAB (Johnson) (1985), 50 CCC 53. Thus, we will see this manipulated to prove a continuous trauma date of injury before April 19, 2004. Also, it will be very easy for applicants to allege small specific injuries that should really be considered part of the continuous trauma, or they may argue that there are multiple continuous trauma periods instead of just one. An expedited hearing should be sought by the defense when the applicant acts inappropriately here.

Will applicants be able to argue for an extension of TD even beyond the two years for any reason? It seems not, as the plain meaning of the statute would prohibit this. Nevertheless, it should be kept in mind that some headway has been made in the past by applicants under the former five-year limitation. There was the 1986 case of General Foundry v. WCAB (51 CCC 375), where it was held that the jurisdiction of the WCAB could be extended in the case of an insidious and progressive occupational disease (asbestosis in that case). It seems tenuous to apply this reasoning to the new standard. Also, proving the "insidious and progressive" nature of the injury seems like quite a stretch for almost all cases routinely seen. A good counter-case is the recent Finley v. WCAB (2006) 71 CCC 361.

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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.

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