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In 2005, Warren Brower sustained an industrial injury to his low back, left knee, and psyche while employed as an ironworker foreman,. The WCJ found that Brower’s injury caused temporary total disability from December 20, 2005 through October 6, 2011 and caused permanent total disability (100%). Although under Labor Code section 4656(c)(1)2 applicant’s entitlement to temporary total disability indemnity payments ceased on December 20, 2007 (i.e., after 104 weeks of payment), the WCJ awarded permanent total disability indemnity commencing October 6, 2011, which was when applicant became permanent and stationary. Accordingly, the WCJ’s award resulted in a nearly four year gap between the last payment of temporary total disability indemnity and the first payment of permanent total disability indemnity.

Applicant filed a petition for reconsideration contending that his permanent total disability payments should have commenced as of December 21, 2007 and not October 6, 2011, arguing that pursuant to section 4650(b), permanent total disability payments should commence on the day after the last payment of temporary total disability. Applicant also contends he is entitled to annual cost of living adjustments (COLAs) commencing on January 1, 2008 pursuant to section 4659.

Based on a review of the relevant statutes, regulations, and case law, the WCAB concluded in the en banc decision of Brower v SCIF that

(1) When a defendant stops paying temporary disability indemnity pursuant to LC 4656(c) before an injured worker is determined to be permanent and stationary , the defendant shall commence paying permanent disability indemnity based on a reasonable estimate of the injured worker’s level of PD.
(2) When an injured worker who is receiving PPD payments pursuant to LC 4650(b)(1) becomes permanent and stationary and is determined to be permanently totally disabled, the defendant shall pay PTD indemnity retroactive to the date its statutory obligation to pay temporary disability indemnity terminated.
(3) COLAs begin on the first day in January after an injured worker becomes entitled to receive permanent disability indemnity pursuant to LC 4650(b)(1) or (b)(2).

Effective January 1, 2013, the Legislature amended section 4650(b) in SB 863 to clarify that an employer is not required to commence permanent disability indemnity after the last payment of temporary disability if the employee has returned to work or been offered work at certain wage thresholds. If the employee is eventually awarded permanent disability, “the amount then due shall be calculated from the last date for which temporary disability indemnity was paid, or the date the employee’s disability became permanent and stationary, whichever is earlier.”

Prior to enacting SB 899, the Legislature amended section 4659 to provide that, for injuries occurring on or after January 1, 2003, permanent total disability indemnity payments are increased annually commencing January 1, 2004 in an amount equal to the percentage increase in the state average weekly wage. Prior to the passage of SB 899, the injured worker’s entitlement to temporary disability indemnity terminated when the injured worker either became permanent and stationary or improved sufficiently to return to work. Historically, permanent disability benefits were not payable until the employee had reached permanent and stationary status. SB 899 amended section 4656(c) [now, § 4656(c)(1)] to provide for a 104-week cap on temporary disability. Thus, injured workers like Mr. Brower could remain temporarily disabled after receiving 104 weeks of temporary disability payments and yet not be entitled to collect temporary disability indemnity. Concurrently, the Legislature also amended section 4650(b) [now,§ 4650(b)(1)] to require that permanent disability commence “[w]hen the last payment of temporary disability indemnity has been made pursuant to subdivision (c) of Section 4656.” As amended by SB 899, section 4650 requires a defendant to pay permanent disability indemnity to an applicant who may be temporarily disabled.