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Rebecca Gage applied for service-connected disability retirement with the Sacramento County Employees’ Retirement System (SCERS) on March 6, 2015. She requested section 4850.4 advance disability pension payments until her pension application was processed.

On June 29, the County informed Gage that her request for advance disability pension payments had been approved and the benefits were to commence effective May 8. The next day, Gage filed a petition for penalties for an unreasonable delay, noting the County had indicated the benefit check would not be sent until July 2 and Gage would not receive it until July 3 or 4.

The matter proceeded to trial. The issue was limited to whether section 5814 penalties were an appropriate remedy if the County failed to comply with the requirements of section 4850.4.

The WCJ found section 4850.4 advanced disability pension payments were “compensation” under section 3207 and therefore section 5814 penalties applied in the case of an unreasonable delay.

The WCAB granted reconsideration and reversed the order. It found that because advance disability retirement payments were not equivalent to regular workers’ compensation benefits, but are instead obligations of the applicable retirement system, a denial or delay in the payment of these benefits was not subject to a section 5814 penalty. One board member dissented, opining that section 4850.4 benefits fell within the clear statutory definition of compensation in section 3207. The County had the obligation to pay that compensation and the WCAB had jurisdiction to enforce that payment through the penalty provision of section 5814.

The Court of Appeal annulled the Order after Reconsideration and found jurisdiction to award the requested penalties in the unpublished case of Gage v WCAB and County of Sacramento.

The Court of Appeal concluded that “the Workers’ Compensation Appeals Board (WCAB) does indeed have jurisdiction to impose penalties under Labor Code section 5814 for the unreasonable delay or denial of advance disability pension payments, available under section 4850.4 to local peace officers who are disabled on the job” because: (1) such payments qualify as compensation under section 3207; (2) section 5814 penalties are available for unreasonable delay or denial of the payment of compensation; and (3) no other provision of the Labor Code evinces a legislative intent to exclude such payments from the penalty provisions of section 5814.

In 2002, the Legislature made these advance disability retirement payments mandatory. (Stats. 2002, ch. 189, § 1.) The county “shall make advanced disability pension payments in accordance with Section 4850.3 unless” a “physician determines that there no discernible injury to, or illness of, the employee,” the “employee was incontrovertibly outside the course of his or her employment duties when the injury occurred,” or there is proof of fraud. (§ 4850.4, subd. (a)).

The employer is required to make advanced disability payments if the employee files a timely application for disability retirement and fully cooperates in providing information and with the medical examination and evaluation process. The payments shall commence no later than 30 days after the latest of the employee’s last payment of wages or salary, benefits under section 4850, or sick leave.

“Compensation” under division 4 “includes every benefit or payment conferred by this division upon an injured employee, or in the event of his or her death, upon his or her dependents, without regard to negligence.” (§ 3207.) ‘The term “compensation” is a technical one and includes all payments conferred by the act upon an injured employee.

The WCAB may impose penalties where payment of compensation is denied or unreasonably delayed.

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