California: Labor Code Section 4656(c)(2) Includes Labor Code Section 4850 Time

In another situation where many of us thought we already knew the answer, an appellate Court has provided a confounding, but welcome and well-reasoned opinion that contradicts the common wisdom on what was considered an already decided issue. Much like the multiple writ denied cases holding the Wilkinson case to still be good law until the appellate decision in Benson v W.C.A.B., the issue in this case is one with multiple writ denied decisions which appeared to dispose of the question of whether Labor Code § 4850 benefits were included the 104 weeks of TD payments under Labor Code § 4656(c). As we now know from this decision the answer is a bit more complex than we had previously understood.

In County of Alameda v. W.C.A.B. (Knittel), the First Appellate District has issued a decision which contravenes the prevailing (and much weaker) authority on this issue, specifically determining that benefits pursuant to Labor Code § 4850 are included in the two-year limitation under Labor Code § 4656 but only for injuries on or after 1/1/08. Until now this issue had been the subject of multiple W.C.A.B. decisions which had ultimately determined the statutory salary benefit did not count towards an employee’s 104 weeks of temporary disability allowing public safety officers to receive both a year of full salary and 104 weeks of temporary disability. However the existing body of law did not distinguish between cases under the two different subparagraphs in 4656(c).

Here, the Employer, County of Alameda, asserted the two-year disability period under 4656(c)(2) included the injured worker’s public safety benefits under Labor Code § 4850. In proceedings before the W.C.A.B., the workers’ compensation trial judge awarded benefits without allowing the one year of full pay credit against the two years of temporary disability, thereby entitling the employee to an additional one year of TD. The W.C.A.B. denied the Petition for Reconsideration, adopting and incorporating the workers’ compensation judge’s report and recommendation.

The Court of Appeal, while acknowledging it is required to give substantial deference to the determinations of the Worker’s Compensation Appeals Board, noted this was an area in which there had been no published authority. The Court further noted that it was not bound by the Workers’ Compensation Appeals Board decision and was required as part of their analysis to consider the legislative history and the legislative intent in statutory provisions.

The Court framed the issue as follows:

“The question here is the meaning of ‘aggregate disability payments.’ The Labor Code does not define the phrase. The parties agree the phrase encompasses temporary disability indemnity benefits or payments. The County argues the phrase also encompasses other disability payments for injuries causing temporary disability, including the salary continuation benefit payable to the public safety officers pursuant to § 4850. The County points out our Supreme Court has unambiguously held: ‘Payments pursuant to § 4850 are not salary but workers’ compensation benefits’. [citations omitted]”

The Court of Appeal found the County’s arguments persuasive. The Court determined if Labor Code § 4850 payments are indeed workers’ compensation benefits then they are to be considered as part of the “aggregate of disability benefits” when paid for an injury causing temporary disability. The Court was also unconvinced by the workers’ compensation judge’s conclusion that 4850 benefits were not intended to be included within the aggregate disability payments. The trial judge had held a § 4850 payments are not temporary disability indemnity and should not count towards the 104-week limitation.

The County presented a creative argument to the WCJ’s decision arguing the statutory change in Labor Code § 4656(c)(2) from the preceding paragraph [Labor Code § 4656(c)(1)] should provide a different result. The County did not argue Labor Code § 4850 benefits were the same as temporary disability indemnity but merely that 4850 benefits were” disability payments” and therefore part of the aggregate total.

The Court noted the Legislature did not use the words “aggregate temporary disability” indemnity in Labor Code § 4656(c)(2) but used “aggregate disability payments” which the Court interpreted to be a broader term. The Court further took into account the changes in Labor Code § 4656 which became effective on 1/1/2008 removed the language which included the total of compensable weeks within a period of two years running from the date of commencement of temporary disability payments. The applicable section to the case under review, which was enacted in 2007, does not have the language which limits temporary disability benefits.

“We ultimately agree with the County that the legislature expressed its intent in the plain language of § 4656, Subdivision (c)(2). Given the legislature’s choice of the words ‘aggregate disability payments.’ We think it is clear that § 4850 benefits paid for an injury causing temporary disability must count towards the 104-week limit absent specific exclusion. And our conclusion is bolstered by the fact that when the legislature added Subdivision (c)(2), the case authority holding § 4850 payments or workers’ compensation benefits was longstanding and established. [Citations omitted].”

The Court’s disposition annulled the decision of the W.C.A.B. denying Reconsideration and remanding the matter back to the Board for further proceedings consistent with its opinion. In the setting, with the language in the case, credit for 4850 benefits will be applied as counted towards the 104-week limitation.

COMMENTARY:

This case presents an interesting distinction between the prior case authorities on inclusion of 4850 benefits in the temporary disability cap under 4656 which exclusively involved cases for injuries prior to 1/1/2008. In this proceeding the County, through its attorney, carefully distinguished to the Court’s satisfaction the difference in language between Subsections (c)(1) and (c)(2). The failure to include the term temporary disability in (c)(2) was considered by the Court as a clear indication the legislature intended a different result for that subsection.

This case will undoubtedly be appealed to the California Supreme Court as it has substantial implications for public safety officers. Assuming the case stands the rationale of this case would actually specifically provide for injuries between 4/19/2004 and 12/31/2007 the 104-week limitation would not include 4850 benefits whereas for injuries after 1/1/2008 Labor Code § 4850 would be included in the two-year time frame. Distinguishing the date of injury therefore become a critical issue in how one is to interpret this issue.

It is also important to recall while 4656(c)(2) has an additional limitation of five years from the date of injury Labor Code § 4656(c)(1) has no such five-year limitation. The only limitation in subsection (c)(1) is the two-year window on temporary disability. If that period of temporary disability commences close to the five year limitation or even after the five year limitation and the Appeals Board has continuing jurisdiction, the injured worker is entitled to receive continuing temporary disability benefits. There is no five-year jurisdictional limitation on TD although the W.C.A.B. can lose jurisdiction to award the benefit. However for injuries after 1/1/2008 there is again a five year jurisdictional limitation as there was prior to 1/1/1979 and for partial temporary disability between 1979 and 4/19/2004.

Kudos to Christian Kerry at Hanna Brophy for his creative appellate work in this matter. 

© Copyright 2013 Richard M. Jacobsmeyer. All rights reserved. Reprinted with permission.

Shaw Jacobsmeyer Crain Claffey LLP

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