by Sam S. Brar –
Labor Code (LC) 4850 provides wage loss benefits at the full rate without reduction as is the case with temporary total disability benefits for certain peace officer employees. A general overview of LC 4850 can be found by reading the companion B&B blog article “What is 4850 time” which can be found here. This article will go beyond the basic definition and workings of 4850 to discuss supplemental issues that inevitably arise given 4850’s parallel nature to TTD benefits as a wage loss replacement benefit.
104 Week Cap
The article previously linked discusses the impact payment 4850 benefits have on the 104 week TTD cap imposed by LC 4656. I will briefly discuss subsequent judicial and legislative activity with regards to what has been a dispute over whether the 104 week cap includes benefits paid under LC 4850.
The WCAB in Waston v. City of Oakland (2006) had found that 4850 benefits were not TTD and thus not included in the 104 week cap. The court in County of Alameda v. WCAB (Knittel) (2013) later found that 4850 were part of “aggregate benefits” per LC 4656(c)(1) and relied on earlier precedent that 4850 benefits were not salary replacement but worker’s compensation benefits. Thus, the 104 week cap applied. The writ petition was later denied by the Supreme Court.
In an attempt to override the standing decision in Knittel, Assemblyman Henry Perea proposed a bill, AB 2378, that would have explicitly carved 4850 benefits out of the 104 week TTD cap. The bill passed but was later vetoed by Gov. Jerry Brown.
As such the Knittel decision stands as current law with respect to the 104 week cap and the qualifying applicant is entitled to a maximum of 52 weeks of wage loss at the 4850 rate with an additional potential 52 weeks at the ordinary TTD rate.
A more complex situation arises when a terminated applicant would otherwise have been entitled to 4850 benefits. A string of cases over the years have addressed the issue of entitlement to 4850 post-termination or resignation (voluntary or involuntary), in a variety of ways.
In Boyd v. Santa Ana (1971), a police officer was terminated because he could no longer perform the required usual and customary duties. Mr. Clarence Boyd suffered from ulcers that, although due to a genetic predisposition, were aggravated by his employment. As long as he refrained from work as a police officer, the ulcers healed and remained controlled. Boyd was later terminated for being physically unfit. The court held that the city was unable to avoid liability for payment of 4850 benefits where the injured worker had been terminated for AOE/COE disability.
In Collins v. County of Los Angeles (1976) a deputy sheriff resigned but deferred his retirement and was awarded TTD benefits from the date of his resignation. The court discussed what a “leave of absence,” as referenced in LC 4850, was and whether it implies an eventual return on the part of the injured worker. Finding in the affirmative, the court reasoned that after a voluntary resignation has been made, the employee would not be entitled to a “leave of absence” per LC 4850. It should be noted that the applicable “leave of absence” period in Collins began on the date that applicant resigned and not before.
In County of San Mateo v. WCAB (Warren) (1982), a deputy sheriff was not terminated for reasons related to her injury, as in Boyd, nor did she terminate voluntarily, as in Collins. Rather, she was terminated involuntarily for cause. Therefore, Boyd did not provide a basis for awarding benefits while Collins provided no basis for denying them.
The court distinguished Warren from another appellate decision, City of California v. WCAB (Finklea) (1979), where an applicant was terminated involuntarily from his administrative position after the position was eliminated for financial/budgetary reasons but was still found to be entitled to 4850 benefits. At first glance the termination of the applicant seemed to be unrelated to his injury thereby barring recovery of 4850 benefits per Boyd. However, the administrative position was given to the applicant to accommodate restrictions due to his industrial injury. As such, the court found that, but for the injury, the applicant could have returned to his previous position as a firefighter, which had not been eliminated.
In Warren the court distinguished from Finklea in that the termination of the injured worker had no relation to her injury and found that there cannot be a “leave of absence” per LC 4850 when the “employee has resigned for nonmedical reasons, whether the resignation was voluntary or involuntary.” There is also a lengthy discussion of legislative intent and whether an amendment of LC 4800, a code section similar to LC 4850, written specifically for DOJ and CHP employees, made in 1980 addressing a bar to entitlement of 4800 benefits post-termination implies that the legislature intended different operation of LC 4850 by omitting a similar amendment to LC 4850. The court concludes that not to be the case, thereby re-affirming their finding for nonmedical terminations.
A different outcome is possible where the employee is entitled to and receiving benefits per LC 4850 prior to the termination. In City and County of San Francisco v. WCAB (Ford) (1990) (petition for reconsideration and writ denied), the WCJ found “that issue was not whether Ford was employed during the entire year period or contemplated return to employment during that period, but whether he was an employee in good standing at the commencement of his period of temporary disability.” The judge relied primarily on public policy considerations, namely that mid-benefit year termination of benefits may give employers an incentive to seek out reasons for terminating employees receiving those benefits. This case is troubling and raises more questions than it answers, but does seem to be an extension of Collins where the employee had resigned in step with the initiation of 4850 benefits.
Overall, determining liability for LC 4850 benefits after termination requires careful evaluation of the basis for severance of employment and a determination if there is any direct (Boyd) or indirect (Finklea) relation of that severance, whether by voluntary resignation or otherwise, to the underlying injury or resulting disability. The Collins and Ford decisions also require construction of a timeline to analyze when the employee’s disability arose in relation to their termination date.
How will your judge decide? That determination will be highly fact dependent so be sure to have all relevant information at your fingertips before heading down to your local WCAB District office.
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