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Herlick, California Workers’ Compensation Handbook: 2024 Developments

October 22, 2024 (15 min read)

By Julius Young, Richard Jacobsmeyer, Barry Bloom, Editors-in-Chief for Herlick, California Workers’ Compensation Handbook

[Note: This article is excerpted from the upcoming 2025 edition of Herlick, California Workers’ Compensation Handbook. Sections below refer to the Handbook.]

The after-effects of the COVID epidemic are still evident in the California system. Since 2020, many workers’ compensation stakeholders have changed their operational models. Large numbers of insurance brokers, employer HR departments, insurance and TPA claims departments, attorneys, and other companies servicing the workers’ compensation industry shifted to a remote work model.

Depositions now frequently take place over Zoom or other video platforms. Video and telephonic medical appointments became common, although in person treatment has seen a resurgence. Some QME and AME appointments continue to be done via telehealth.

For the last several years, most conferences and some hearings were conducted by the Appeals Board over the phone. More recently, in person trials have resumed at some boards.

Whether the changes wrought by the pandemic are just temporary or permanent is still unclear.

The AI revolution is starting to come to workers’ compensation. Some stakeholders are now using AI software for tasks such as claim triage, legal research, medical bill processing, medical report review and analysis, legal bill review, and physical therapy care management. Various vendors are touting how AI helps with their software.

What follows is a recap of important legislative, regulatory and case law developments since the 2024 edition.

I. Legislation

Legislation signed by Governor Newsom in 2024 included the following:

  • AB 1870 (an amendment to Labor Code § 3550 requiring that posted notices to employees must include a statement that an employee may consult a licensed attorney to advise them of rights under workers’ compensation laws)
  • AB 2337 (a bill allowing electronic signatures in California’s workers’ compensation system
  • AB 224 (extends a sunset date from January 1, 2025 to January 1, 2030 of an exemption from application of the ABC employment test to newspaper distributors and carriers)
  • SB 1455 (modifies a provision enacted in 2022 and postpones a workers’ compensation coverage requirement for all contractors until January 1, 2028)

Governor Newsom vetoed the following workers’ compensation bills:

  • SB 636 (a bill that would have required utilization review decisions to delay or deny medical treatment be performed by California-licensed medical professionals
  • SB 1058 (a bill that would have made park rangers employed by cities and counties and special districts eligible for Labor Code § 4850 time)
  • SB 1299 (a bill that would have created a rebuttable presumption of industrial causation of illness or injury for agricultural workers where the employer violated state heat illness prevention standards)
  • AB 2872 (a bill to raise pay for California Department of Insurance fraud investigators)

II. Regulations

Workers’ compensation system stakeholders always need to keep abreast of regulatory changes. In addition to periodic changes to the Medical Treatment Utilization Schedule and periodic adjustments to the Official Medical Fee Schedule, the DWC promulgated some rule changes as follows:

  • Appointment of Qualified Medical Evaluators. After multiple comment periods, effective February 24, 2024, the Department of Industrial Relations adopted new QME process regulations dealing with, inter alia, QME appointment rules, reappointment denial criteria, continuing education requirements, and report writing requirements. One important change: Cal. Code Regs., tit. 8, § 33 was amended to change from 60 days to 90 days the time allowed for scheduling the initial appointment after a request for an appointment is made [see § 1.02].
  • Heat Illness Prevention in Indoor Places of Employment. On June 20, 2024, the Occupational Safety and Health Standards Board approved California Code of Regulations, Title 8, section 3396 [Heat Illness Prevention in Indoor Places of Employment] and requested that the regulation take effect immediately after approval by the Office of Administrative Law (OAL). On July 23, 2024, the OAL approved the regulation and its immediate application to California employers [see § 1.10].
  • Official Medical Fee Schedule Updated. In 2024, revised MediCare updates were incorporated into the Official Medical Fee Schedule in 8 Cal. Code Reg. 9789.12.2, et seq. [see § 4.17].
  • Updated ACOEM Guidelines Added to MTUS. The AD has adopted and incorporated the ACOEM Opioids Guidelines of December 12, 2023 into the Medical Treatment Utilization Schedule [see § 4.01].
  • SJDB Dispute Resolution Regs Repealed. Based upon Dennis, Form DWC-AD 10133.25 and the regulations that formerly governed Supplemental Job Displacement Benefit (SJDB) dispute resolution by the DWC AD have been repealed [see § 1.01].
  • Utilization Review Regs Under Consideration. After a July 25, 2024 public hearing, the DWC proposed Utilization Review regulations which were undergoing public comment at the time this foreword went to press: https://www.dir.ca.gov/dwc/DWCPropRegs/2024/Utilization-Review/Index.htm

Readers are advised to periodically check the DWC regulations webpage for updates on proposed and approved regulations: https://www.dir.ca.gov/dwc/Laws_Regulations.htm

III. Case Developments

Some of the cases added to this edition of Herlick Handbook seem particularly noteworthy, including the following:

Supreme Court

Castellanos v. State of California, S279622, 2024 Cal. LEXIS 3981 (July 25, 2024) [see § 2.8] (Business and Professions Code section 7451 enacted by voters in 2020 as Prop 22 held not to conflict with article XIV, section 4 of the California Constitution)

Court of Appeal

Perez v. Galt Joint Union Elementary Sch. Dist. (2023) 96 Cal. App. 5th 150, 314 Cal. Rptr. 3d 194, 88 Cal. Comp. Cases 937 [see § 2.5] (school district volunteer injured at school event was an employee under a resolution passed under Labor Code § 3364.5, making workers’ compensation the exclusive remedy)

Velasquez v. Workers' Compensation Appeals Board (2023) 97 Cal. App. 5th 844, 315 Cal. Rptr. 3d 828, 88 Cal. Comp. Cases 1137 [see § 2.5] (applicant who was injured in Salvation Army warehouse while participating in a residential program as a condition of probation was not an employee of Salvation Army under Labor Code §3301, but remanded for further proceeding on whether he was employee of the County)

Jones v. Regents of Univ. of Cal. (2023) 97 Cal. App. 5th 502, 315 Cal. Rptr. 3d 530, 88 Cal. Comp. Cases 1053 [see § 8.11] (UC employee injured in bike accident on campus while on way to her home was within course of her employment based on the premises line rule, thus barring her civil tort claim)

3 Stonedeggs, Inc. v. Workers' Comp. Appeals Bd. (2024) 101 Cal.App.5th 1136, 321 Cal. Rptr. 3d 68, 89 Cal. Comp. Cases 417 [see § 8.14] (worker’s auto accident injury while off work and away from a remote fire base camp arose out of employment and was held compensable under the commercial traveler and personal comfort doctrines)

CBRE v. Superior Court (2024) 102 Cal. App. 5th 639, 321 Cal. Rptr. 3d 697, 89 Cal. Comp. Cases 528, modified by, rehearing denied, 2024 Cal. App. LEXIS 419 (Cal. App. 4th Dist., June 28, 2024) [see § 12.12] (the retained control exception to the Privette doctrine did not apply)

Bowen v. Burns & McDonnell Engineering Company, Inc. (2024) 88 Cal.App.5th 529, 89 Cal. Comp. Cases 641 [see § 12.12] (employee failed to raise a triable issue of material fact as to whether the retained control exception to the Privette doctrine applied)

Chavez v. Alco Harvesting, LLC (2024) 102 Cal. App. 5th 866, 89 Cal. Comp. Cases 615 [see § 12.11] (civil complaint against employer alleging a worker died of COVID complications pleaded sufficient facts under the fraudulent concealment exception to workers’ compensation exclusivity)

Vann v. City and County of San Francisco (2023) 97 Cal. App. 5th 1013, 316 Cal. Rptr. 3d 105, 89 Cal. Comp. Cases 39 [see § 12.10] (San Francisco firefighter injured while responding to an emergency was barred from maintaining a personal injury action against both the City of San Francisco and a bus driver who was employed by another unit of the same municipality)

Zurich American Insurance Co. v. Workers' Comp. Appeals Bd. (2023) 97 Cal. App. 5th 1213, 316 Cal. Rptr. 3d 264, 89 Cal. Comp. Cases 1 [see § 15.4] (holding the WCAB acted in excess of its jurisdiction in granting a petition for reconsideration of an arbitrator’s ruling after the 45 day jurisdictional deadline)

Yalung v. State of California (2023) 98 Cal. App. 5th 71, 316 Cal. Rptr. 3d 349, 89 Cal. Comp. Cases 57 [see § 2.5] (where an IHSS provider ran a stop sign and injured multiple parties in another vehicle, the appellate court held that the IHSS statutes were incompatible with a finding of joint employment nor was the State of California the IHSS provider’s employer)

U.S. Court of Appeals, Ninth Circuit

Olson v. State of California (9th Cir. 2024) 104 F.4th 66, 89 Cal. Comp. Cases 643 [see § 2.8] (holding that Prop 22’s differential treatment of app-based work arrangements for transportation and delivery workers survived rational basis review under the U.S. and California Constitutions)

Kuciemba v. Victory Woodworks, Inc. (Ninth Circuit 2023) 74 F.4th 1039, 88 Cal. Comp. Cases 792 [see § 12.11] (United States Court of Appeals for the Ninth Circuit affirmed the district court’s order dismissing civil complaint filed by wife of worker who contracted COVID that was allegedly contracted at husband’s workplace and then transmitted to the plaintiff wife)

U.S. District Court

California Trucking Association v. Bonta 2024 U.S. Dist. LEXIS 56081 (S.D. Cal., March 15, 2024) [see § 2.8] (Federal District Court denied motor carrier motions for preliminary injunction enjoining enforcement of the “ABC”test, rejecting argument that AB5 was preempted by the Federal Aviation Administration Act of 1994 and an unconstitutional violation of the commerce clause and equal protection)

WCAB En Banc Decisions

Vigil v. County of Kern (2024) 89 Cal. Comp. Cases 686 (Appeals Board en banc) [see § 6.02] (the Appeals Board clarifies the methods of rebutting the Combined Values Chart)

Ledezma v. Kareem Cart Commissary and Mfg. (2024) 89 Cal. Comp. Cases 462 (Appeals Board en banc opinion), costs and fees proceeding at, sanctions allowed by, remanded by Ledezma v. Commissary, 2024 Cal. Wrk. Comp. LEXIS 19 (Cal. Workers' Comp. App. Bd., May 16, 2024); Gonzalez v. The Bicycle Casino (2024) 89 Cal. Comp. Cases 658 (Appeals Board en banc opinion); and Hidalgo v. Roman Catholic Archbishop (2024) 89 Cal. Comp. Cases 671 (Appeals Board en banc opinion) [see § 14.42] (the Appeals Board ordered sanctions and costs against applicant counsel for bad faith and frivolous conduct in disrupting and delaying proceedings)

WCAB Writ Denieds

Garcia v. Workers' Comp. Appeals Board (2024) 89 Cal. Comp. Cases 212 (writ den.) [see § 2.5] (inmate services rendered were held voluntary rather than compulsory and inmate held to be employee under the circumstances)

Ross Stores v. Workers' Comp. Appeals Bd. (Herrera) (2024) 89 Cal. Comp. Cases 483 (writ den.) [see § 8.17] (retail clerk injured at work premises immediately after work shift while taking advantage of employer-sponsored discount was in course of employment under personal comfort doctrine)

4Leaf, Inc. v. Workers' Comp. Appeals Bd. (Sanchez) (2023) 88 Cal. Comp. Cases 1164 (writ den.) [see § 8.22] (applicant met burden of proving industrial causation of COVID infection)

Sabert Corporation v. Workers’ Comp. Appeals Bd. (Vasquez) (2024) 89 Cal. Comp. Cases 489 (writ den.) [see § 9.6] (applicant’s amputation was found the result of employer’s serious and willful violation of safety procedures)

The Cincinnati Reds, LLC v. Workers' Comp. Appeals Board (Fonceca) (2024) 89 Cal. Comp. Cases 698 (writ den.) [see § 13.2] (WCAB had personal jurisdiction over the Cincinnati Reds based on certain contacts even though applicant did not actually play ball in California for the team)

Significant Panel Decision

Ja'Chim Scheuing v. Lawrence Livermore National Laboratory (2024) 89 Cal. Comp. Cases 325 (Appeals Board significant panel decision) [see § 15.4] (the Appeals Board discussed its approach to cases where a petition for reconsideration is timely filed but the case is not timely received by the Appeals Board)

CAUTION

California workers’ compensation law is very complex. Practitioners must navigate a maze of statutes, case law and extensive administrative regulations.

Important developments and issues to watch in 2025 include the following:

  • Whether negotiations between labor and employer interests lead to a reform package that might include a permanent disability benefit increase and some procedural reforms
  • Possible DWC regulatory activity on various topics, including changes to utilization review procedures, MTUS updates, formulary updates, QME reg updates, potential changes to the Medical-Legal Fee Schedule, interpreter fees, and home health care fees
  • Under what circumstances a workers’ compensation judge can determine that a worker is 100% disabled under Labor Code § 4662 where the rating would otherwise be less than 100% with or without vocational expert evidence to establish the worker was not amenable to rehabilitation
  • Whether there is a long-rumored legislative push to change the law and rules pertaining to cumulative trauma claims
  • Whether the WCAB will continue to issue en banc decisions focusing on abusive and manipulative attorney behavior
  • How the WCAB and courts will define the employment relationship for workers’ compensation purposes, and what additional exemptions the legislature may make allow to shield certain employers and industries from application of the “ABC” employment test
  • How the California workers’ compensation system will deal with medical marijuana issues
  • How AI software will affect workers’ compensation claim processing, legal research, case management, bill review and other stakeholder tasks
  • How the 2021 revision of the Medical-Legal Fee Schedule affects the number of doctors serving as QMEs or AMEs, the costs of Medical-Legal evaluations in the system, and report quality
  • How treatment guidelines for chronic pain and opioid prescribing adopted in the last few years will affect the care of workers
  • Whether there will be changes to how the $120 million Supplemental Return to Work Fund is administered and legislative changes to the SIBTF
  • How the COVID-19 pandemic and the shift to telecommuting affects workers’ compensation claim frequency, claim severity, claims handling costs, workers’ compensation rates, and the culture of the workers’ compensation community generally
  • The degree to which future COVID-19 variants and outbreaks disrupt operation of the California system and whether stakeholders creatively adapt to changes wrought by the pandemic
  • Whether the shift to telemedicine is temporary, or a long-term trend
  • Whether the DWC will move forward with a revision to its EAMS system
  • Whether additional governmental worker presumptions are enacted and presumptions are enacted for certain groups of employees in private industry
  • Whether there is regulatory or legislative change to California’s Medical Provider Networks
  • Whether stakeholders and researchers identify gender bias in the California system, and proposed remedies for such gender bias
  • Whether the appellate courts weigh in on the concept of vocational apportionment after the concept was rejected by the Appeals Board in the 2023 Nunes v. State of California, Dept. of Motor Vehicles en banc decisions

KEEPING INFORMED

One good way to keep abreast of developments about California workers’ compensation is to read the LexisNexis California Workers’ Compensation e-Newsletter (free signup at www.lexisnexis.com/wcnews).

WorkersCompZone, a blog written by Herlick Handbook co-editor Julius Young, covers important case and legislative developments: https://www.boxerlaw.com/workerscompzone/

The California Division of Workers’ Compensation website, www.dir.ca.gov has subsections on regulations and current public forums.

An excellent overview of the California workers’ compensation system is the 2024 State of the System report prepared by the California Workers’ Compensation Rating Bureau (WCIRB):

https://www.wcirb.com/sites/default/files/2024-08/wcirb_2024_report_on_the_state_of_the_california_workers_compensation_insurance_system-2024-07-17.pdf

Also useful as a system summary is the annual report prepared by the California Commission on Health, Safety and Workers’ Compensation (CHSWC):

https://www.dir.ca.gov/chswc/Reports/2023/CHSWC_AnnualReport2023.pdf

On the CHSWC website there are links to various current and past reports commissioned by CHSWC, listed by year and by topic:

https://www.dir.ca.gov/chswc/chswc.html

Studies and reports often affect policy decisions, so stakeholders ignore them at their peril. Here are a few notable 2024 reports:

Keeping track of recent Appeals Board panel decisions can be very important. The best way to do this is to subscribe to the California WCAB Noteworthy Panel Decisions Reporter (LexisNexis), which publishes brief summaries of Appeals Board panel decisions. It can be ordered at http://store.lexisnexis.com/.