Layoffs and Labor Code §4658 Decreases
By
David H. Parker
What happens if an employer has properly taken the
Labor Code section 4658 15% reduction but is forced
to lay off the injured worker prior to the 12 months
but after the Permanent Disability has been paid in
full? Is the 15% reimbursed and then does the 15 %
increase apply? Is there a penalty for not
completely complying with the one year requirement?
I personally read Labor Code section 4658 exactly
as written given the WCAB panel decision of
Monica Mansfield v. County of Los Angeles/Tristar
Risk Management (ADJ3640151/MON0347448 issued
January 27, 2010).
The WCAB applies statutes as written whenever
they are not vague, ambiguous, or unintelligible. I
think this is the right approach. I encourage my
colleagues and clients to do the same. If the letter
of the procedure is not met, an employer does not
benefit from the reduction.
Should the employer fail strict compliance as
well as subsequently fail to increase permanent
disability payments when statutorily mandated there
are two obvious potential penalty exposures: Labor
Code section 4650 (self-assessed penalty for
untimely issuance of permanent disability payments)
as well as Labor Code section 5814 (based on
unreasonable delay of benefits without genuine
medical or legal doubt). Further there might be
additional arguments of administrative or other
applicable penalties for failure to pay benefits
under these circumstances.
In the instance of a position that is offered in
anticipation of but subsequently not lasting 12
months, I find the answer in Labor Code section
4658(d)(3)(B) which reads as follows:
"...(B) If the regular work, modified
work or alternative work is terminated by
the employer before the end of the period
for which disability payments are due the
injured employee, the amount of each of the
remaining disability payments shall be paid
in accordance with paragraph (1) and
increased by 15 percent. An employee who
voluntarily terminates employment shall not
be eligible for payment under the
subparagraph..."
My reading of the statute suggests that the
employer would still be entitled to the full
reduction under a strict reading of this subsection.
The employer may assert the reduction up until the
payments run out or the position is terminated short
of 12 months, whichever is earlier.
It appears the statute allows a reduction
whenever the employer "offers..." but does not
guarantee "...the injured worker...work...in the
form and manner prescribed...for a period of at
least 12 months..." in accordance with Labor Code
section 4658(d)(3(A). I read the statute as decrease
applying even if the position does not actually last
12 months. This makes some sense for instance where
an employer must cease all operations due to
economic conditions wholly unrelated to a
work-related injury but before the 12 month
requirement has been met.
Here is my caveat: I am of the opinion that if
the employer is found to have made the initial offer
in bad faith, for instance knowing the position
would not last 12 months at the time the offer is
tendered, there might be a judicial exception to a
black and white application of the law carved-out.
There might be remedies beyond the obvious penalty
statutes such as Labor Code sections 132(a) and 5812
where a known misrepresentation is made when the
offer is tendered. However, generally it appears
that an employer offering a 12 month position in
good-faith and in accordance with mandated procedure
does benefit from the reduction even on occasions
where the position offered does not actually last 12
months.
I always offer a caveat: this is my position
only, so I expect "reasonable minds may differ." I
think this is a fair analysis of these situations
given the WCAB's confirmation that it will read
these statutes as written whenever possible.
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