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WCAB and DWC Allow for Limited Email Filing

WorkCompAcademy

On April 6, 2020 the Workers’ Compensation Appeals Board issued an en banc Order allowing limited filing of specified documents via email directly to the Appeals Board and to the Division of Workers’ Compensation’s district offices. To assist the workers’ compensation community the Appeals Board and the Division offer the following guidance on emailing documents to the appeals board and the district offices.

Emailing documents directly to the Appeals Board

— Documents relating to any matter currently pending before the Appeals Board, including but not limited to cases in which a petition for reconsideration has been granted for further study may be filed by emailing to WCABEmergencyBox@dir.ca.gov. Documents sent by email should include the information required for pleadings by WCAB Rule 10520 and an email address for the sending party. (Cal. Code Regs., title 8, former § 10498, now § 10520 (eff. Jan. 1, 2020).) Documents sent by email should otherwise comply with the WCAB’s Rules.

— Do not email petitions for reconsideration, removal, or disqualification and answers to the Appeals Board’s emergency email box. Those documents should still be filed electronically in EAMS or JET File or by email with the DWC district office having venue pursuant to WCAB Rule 10940(a). (See Cal. Code Regs., title 8, former § 10840(a), now § 10940(a) (eff. Jan. 1, 2020).)

Emailing documents to the DWC district offices where the filing party cannot e-file, JET file or file by U.S. mail

— Documents that must be filed with DWC and which are subject to statutory time limits, such as petitions for reconsideration, removal, disqualification, applications for adjudication of claim, and petitions to reopen, may be filed via email directly to the district office having venue. Documents that are not subject to statutory time limits may not be filed via email. If such documents cannot be e-filed or JET filed, they must be filed via U.S. mail. The division will reject documents that are improperly filed via email. DWC reminds parties to only use this alternative filing option for these limited documents.

— Email addresses for the 24 district offices may be found at the office locations page on the DWC website.

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Business Groups Push Back at Newsom’s Expansion of Comp

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Labor and business leaders in California are furiously lobbying the governor’s office over a sweeping change the administration is said to be considering to the state workers’ compensation system for health care workers and others on the front lines of the Covid-19 pandemic.

According to Politico’s report, Gov. Gavin Newsom’s office did not provide a response Monday nor confirm that a proposal is in the works. But those familiar with the discussions, as well as letters sent to the governor in recent weeks by high-profile groups, suggest the change would create a presumption that certain “essential workers” who contract the disease were exposed on the job — and, therefore, entitled to workers’ compensation benefits.

Such a shift could cost employers between $2.2 billion and $33.6 billion per year, the Workers’ Compensation Insurance Rating Bureau of California estimated on Monday. The bureau’s mid-range estimate of $11.2 billion amounted to 61 percent of the system’s typical costs per year.

A bill amended in the state Senate last week would have a similar effect, though possibly with fewer types of workers. CA AB664 (19R) would extend to “certain state and local firefighting personnel, peace officers, certain hospital employees, and certain fire and rescue services coordinators.” Assemblymembers Jim Cooper (D-Elk Grove), a former Sacramento County Sheriff’s Department captain, and labor champion Lorena Gonzalez (D-San Diego) are its main authors.

Business leaders argue that shift could strain the system and cost employers billions of dollars in increased premiums at a time when many are laying off workers and trying to stay afloat.

“Many businesses and their owners are casualties of the necessary economic shutdown,” wrote California Chamber of Commerce President Allan Zaremberg to Newsom and his staff in a letter dated April 7. “They cannot be expected to shoulder a new employer-financed social safety net, with expensive new mandates, at precisely the moment when small businesses are shuttering, employee hours are cut, and uncertainty about the future is the new normal.”

In a statement Monday, CalChamber pointed to the new cost estimate and noted that the association had expressed concern to Newsom about “an overly broad executive order because it would create an enormous and unnecessary burden on the worker’s compensation system.”

But a prominent labor leader has argued that it is the right thing for the state to do.

“Workers on the frontlines of the COVID-19 pandemic put their lives at risk just doing their jobs,” wrote Art Pulaski, head of the California Labor Federation, in a late March letter to Newsom. “If they are infected with COVID-19, the workers’ compensation system must quickly provide medical and indemnity benefits — such workers should not have to fight denials and delays while fighting for their lives.”

Sean Walsh, who runs a consulting firm with former Gov. Pete Wilson and was a senior policy adviser to former Gov. Arnold Schwarzenegger, said he had briefings from four business groups on Monday about an executive order Newsom is contemplating that would alter the workers’ compensation system for those affected by the pandemic.

The California Farm Bureau Federation is a nonprofit organization of farmers and ranchers consisting of county Farm Bureaus from nearly every county in California, established in 1919 to work for the betterment of family farmers and ranchers in California.

“The problem is that it puts in the pockets of employers the responsibility for the costs of COVID-19 illnesses where the exposure and infection could have just as easily happened off the job as on the job,” said Bryan Little, Director of Employment Policy for California Farm Bureau Federation (CFBF).

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Penalty for Failure to Carry Comp Insurance Affirmed

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Yang Li was “the sole owner” of Imperial Foot Spa, which was identified on her City of San Jose business license as “a massage parlor.”

Deputy Labor Commissioner Margaret Flanders and her partner conducted an inspection of Imperial Foot Spa on August 20, 2015. They were directed to see Li, the owner.

Flanders asked Li for her workers’ compensation insurance information. Since Li could not show that she had a valid workers’ compensation insurance policy, Flanders issued a “Stop Order, Penalty Assessment . . . in the amount of $9,000 for having six employees working without a valid workers’ compensation insurance policy.” Flanders also gave Li a “Notice to Discontinue Labor Law Violations.”

Li appealed the order and assessment the following day.

On August 23, 2015, Flanders paid a follow-up visit to Imperial Foot Spa, and observed the business was open at 9:23 a.m. and a woman was working folding towels in a massage room.

The hearing on Li’s appeal was held on August 26, 2015. The only witnesses who testified at the hearing were Li and Flanders. Li testified that the workers at her business were not her “employees” but her “co-collaborators.” She explained that she had “written collaboration agreement[s] with those people who work there where collaborators were not employer-employee kind of relationship.”

Li submitted into evidence contracts between her and Helen, Judy, Jenny, and James. Each of these contracts provided that Li and the worker “belong to collaborative, not employment relationship.”

The hearing officer found that Li had six employees working for her. The written findings expressly applied the multi-factor test set forth in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello).

Li filed a petition for mandate with the Court of Appeal. The hearing officer was affirmed in the unpublished case of Li v. Cal. Dept. of Industrial Relations.

Generally, . . . the individual factors cannot be applied mechanically as separate tests; they are intertwined and their weight depends often on particular combinations. (Borello, supra, 48 Cal.3d at p. 351.)

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L.A. Class Actions Claims Banks Defrauded Employers

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Four class-action lawsuits have been filed in California federal court on behalf of small business owners who are feeling hopeless and terrified after four major banks rejected their Paycheck Protection Program (PPP) loan applications.

Congress passed the CARES Act in response to the COVID-19 pandemic, which allocated $349 billion in emergency funds for the small business loan program known as the Paycheck Protection Program. The program, which launched on April 3, was intended to provide loans of up to two-and-a-half times a business owner’s monthly payroll.

The loan program ran out of funds on April 16, leaving most of the small business applicants empty handed.

The lawsuits claim the nation’s four largest lenders involved in the paycheck protection program, JPMorgan, Bank of America, Wells Fargo and US Bank, rigged the loan process to benefit their bottom line.

According to the complaints, instead of a “first-come, first-served basis,” the banks processed the biggest loan amounts first, because it increased the banks’ origination fees while leaving more than 90% of the small businesses owners who applied for loans out of luck once the funds depleted. An origination fee is the compensation a lender receives for processing a new application.

To make matters worse, the banks allegedly concealed from the public that they were reshuffling the PPP applications received and prioritizing the applications that would make the banks the most money.

The lawsuits allege that as a result of their deceptive lending prioritization practices, giving preference to larger “small businesses” over true small businesses, banks received nearly $6 billion in fees while hundreds of thousands of loan applicants got nothing.

The four banks have either denied the allegations, or failed to respond to media requests for a response.

A similar action is pending against Bank of America in Baltimore, for allegedly giving its lending clients a higher priority and denying or limiting access to the Paycheck Protection Program to its depository clients and other small firms. The law firm noted that the bank updated its policy on April 4 by letting depository-only customers apply for PPP loans after the filing of a class action compliant.

However, the law firm said the bank added another requirement: Depository-only clients couldn’t have a credit card or loan with another bank.

The Baltimore firm claims that “Nothing in the CARES Act authorizes or permits defendants to pick and choose who would gain access to or benefit from the federally backed lending program,”

Senators Marco Rubio (R.-Fla.) and Ben Cardin (D.-Md.) have already chastised BOA for imposing criteria not found in the law and selectively choosing who can apply.

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Much Controversy Surrounds COVID-19 Antibody Tests

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Some blood tests being marketed to tell people if they have had the new coronavirus are a “disaster”, Roche Chief Executive Severin Schwan said on Wednesday as he prepares to launch the drugmaker’s own antibody test next month.

Countries around the world hope such blood tests – meant to show whether people exposed to the disease have developed antibodies thought to offer some immunity – will guide efforts to restart their economies and keep healthcare workers safe.

An erroneous false-positive result could lead to the mistaken conclusion that someone has immunity. In developing its test, Schwan said, Roche scrutinised some existing products for reliability before rejecting them.

“It’s a disaster. These tests are not worth anything, or have very little use,” Schwan told reporters on a conference call. “Some of these companies, I tell you, this is ethically very questionable to get out with this stuff.”

Schwan said there were about 100 such tests on offer, including finger-prick assays that offer a quick result. The Basel-based company declined to specify which rival tests it had studied, but said it was not referring to tests from established testing companies.

Roche also makes separate tests to determine if a person has an active coronavirus infection, with a sample taken via a swab from nasal passages.

By contrast, Roche’s planned antibody test relies on intravenous blood draws taken by a nurse or a doctor.

Schwan did not release figures for its test’s “specificity”, or how many false-positives can be expected, but promised it would be reliable because Roche had successfully found the antibody produced by the body after exposure to the novel virus.

Abbott Laboratories also said last week it would begin shipping a new coronavirus blood test similar to Roche’s by June. Like Roche’s test, Abbott’s assay would be launched under the U.S. Food and Drug Administration’s recently relaxed rules for coronavirus tests.

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WCAB Panel Elaborates on SIBTF Eligibility Requirements

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In the new panel decision of Harris v Numac Company, SCIF, SIBTF the WCAB went to great lengths elaborating on the requirements for SIBTF eligibility.

In 2005, George Harris fell ill with pneumonia after working on an AC unit in wet and cold weather. He was later diagnosed with stage II sarcoidosis.

On April 3, 2015, Harris filed an Application for Subsequent Injuries Fund Benefits, claiming he had a 2003 pre-existing disability to his back.

On April 23, 2015, the WCJ issued a Findings of Fact, Awards and Order finding that applicant sustained industrial injury on January 8, 2015 to his lungs/pulmonary, skin (sarcoidosis) and psyche, which caused 65% permanent disability.

The parties then went to trial on the following two issues: (1) SIBTF, and (2) the statute of limitations.

The WCJ issued a Findings and Award finding that applicant’s current injury resulted in 48% permanent disability when considered alone and without adjustment to applicant’s occupation or age. The WCJ concluded that 48% permanent disability satisfied the 35% threshold under section 4751, subdivision (b), and proceeded to add 38% from a prior permanent disability rating from applicant’s 1999 and 2003 back injuries. This addition resulted in 86% permanent disability, from which the WCJ then added 34%, which is the non-industrial portion of applicant’s current respiratory disorder that the WCJ reasoned was pre-existing.

As a result, the WCJ found that applicant’s combined pre-existing and current disabilities resulted in 100% permanent disability.

SIBTF’s Petition for Reconsideration raises three issues: (1) whether applicant’s prior 34% lung impairment is labor disabling, (2) whether the WCJ improperly added the prior disabilities to the current disability, and (3) whether applicant’s SIBTF claim is barred by the statute of limitations.

Based on Ferguson and Escobedo, the WCAB concluded that applicant’s sarcoidosis was not labor disabling prior to his industrial pneumonia. Applicant was asymptomatic and had no disability prior to the pneumonia. “This recognizes that the patient apparently had dormant sarcoidosis of non-industrial origin which was not symptomatic and causing no disability prior to the pneumonia, which had an industrial component, and that the patient had no disability prior to the reactivation of sarcoidosis precipitated by the episode of pneumonia.”

Thus, the WCJ erred in adding the 34% non-industrial dormant sarcoidosis in calculating applicant’s combined disability for purposes of SIBTF’s benefits.

However, the WCJ incorrectly determined the permanent disabilities that must be added for SIBTF benefit entitlement. It is derived by adding the 65% subsequent permanent disability, consisting of the three current impairments of respiratory disorder, contact dermatitis and arousal, and the 38% of pre-existing permanent disability in applicant’s back, resulting in 100% permanent disability.

There is no statutory time limit to apply for SIBTF benefits.  It must be filed within a reasonable time after learning from the board’s findings on the issue of permanent disability that the Fund has probable liability.

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VR Expert Opinion Justifies Total Disability Award

WorkCompAcademy

Thomas Hasson sustained an industrial cumulative trauma injury to his lumbar spine and bilateral hips as a result of working 18 years as a stock clerk for Ann Taylor, a job that required repetitive strenuous lifting and bending.

The injury to his lumbar spine and bilateral hips caused marked limitations in his ability to return to the open labor market. The record establishes that applicant’s 2014 right hip arthroplasty was not successful, as applicant’s right hip pain subsequently increased. Two and a half years post arthroplasty, applicant was described by Dr. Knight as being in “moderate to severe pain in the right hip with limited range of motion,” and was “quite limited in this ability to do prolonged walking, standing or other activities.” He concluded applicant was “incapable of returning to work as a result of his ongoing pain.”

Applicant obtained a vocational evaluation from Mr. Frank Diaz, who found that as a consequence of the disability from his cumulative trauma injury, applicant was not amenable to vocational rehabilitation and had lost his ability to return to the labor market.

The WCJ determined that applicant is permanently totally disabled, based upon substantial evidence in the record that establishes that applicant is unable to benefit from vocational rehabilitation or return to full time employment in the labor market.

The WCAB affirmed the WCJ’s determination and denied defendant’s Petition for Reconsideration in the panel decision of Hasson v Ann Taylor and Travelers Insurance Co.

The issue on reconsideration is whether the vocational evidence constitutes substantial evidence to support the conclusion that applicant was permanently totally disabled due to his inability to benefit from vocational rehabilitation, per Ogilvie v. Workers’ Comp. Appeals Bd.; Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) and LeBoeuf v. Workers’ Comp. Appeals Ed.

In Dahl, the Court of Appeal held that to rebut the scheduled rating, applicant must prove that the industrial injury precludes vocational rehabilitation, writing in pertinent part as follows: The first step in any LeBoeef analysis is to determine whether a work-related injury precludes the claimant from taking advantage of vocational rehabilitation and participating in the labor force. This necessarily requires an individualized approach .. . It is this individualized assessment of whether industrial factors preclude the employee’s rehabilitation that Ogilvie approved as a method for rebutting the Schedule. (Dahl, 80 Cal.Comp.Cases at 1128.)

The vocational evidence the WCJ relied upon, the reporting of Mr. Diaz, indicates that applicant is not amenable to vocational rehabilitation and that Dr. Knight’s and Dr. Rovner’s work restrictions preclude applicant from returning to full time employment. Mr. Diaz’s “individualized assessment” of the vocational factors affecting applicant’s ability to return to work shows that the medical restrictions do preclude applicant from gainful employment. We find his analysis of applicant’s vocational limitations to constitute substantial evidence to support the WCJ’s determination.

This WCAB panel seems again to have sidestepped the Court of Appeal published decision in Department of Corrections and Rehabilitation v. Workers’ Compensation Appeals Board (Fitzpatrick (2018) 27 Cal. App. 5th 607 [238 Cal. Rptr.3d 224, 83 Cal. Comp. Cases 1680] although it was cited in the Opinion .

The Court of Appeal in Fitzpatrick rejected a 100 percent disability award that did not first rate a case using the AMA Guides, and then follow the steps outlined in the 2005 Rating Schedule, and then a rational why some other scheme should be used instead.  

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DWC Reports 1,542 COVID-19 Coded Claims – So Far

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The Claims Journal reports that data from the California Division of Workers’ Compensation as of Thursday April 16, 1,527 claims coded for COVID-19 on claims notices had been filed, according to agency spokeswoman Erika Monterroza.

Some experts say that COVID-19 claims that require admission to an intensive care unit will likely run into the six figures for medical costs alone. What’s more, employers will be taking full responsibility for whatever complications arise from a coronavirus infection far into the future.

According to Science Magazine, the lack of oxygen and widespread inflammation caused by COVID-19 can damage kidneys, liver, heart, brain and other organs. Studies show that severe pneumonia caused by other diseases sometimes lead to scarring that causes long-term breathing problems. Pneumonia also increases the risk of future illnesses, including heart attack, stroke and kidney disease.

In one study of 138 patients hospitalized in Wuhan, China due to pneumonia from COVID-19, 20 percent suffered acute respiratory distress syndrome.

A separate study published by the New England Journal of Medicine in 2011 found that of 109 survivors of ARDS, 51% suffered physician-diagnosed depression, anxiety or both. Perhaps more relevant to workers’ comp, that study found that just 77 percent of the 83 patients who survived throughout the study period had returned to work five years after being treated. The study found that only 39% of patients were able to walk the distance expected for their age group in six minutes five years later, suggesting a high degree of physical impairment.

The governors of Kentucky, Arkansas, North Dakota and Florida and state regulators in Illinois, Washington, Michigan and Missouri have issued executive orders or amended rules to expand eligibility for workers’ compensation.

Most of those decrees ease the path for benefits only for healthcare workers and first responders, but an emergency order by the Illinois Workers’ Compensation Commission creates a presumption that work is the cause of COVID-19 if contracted by any “frontline worker” identified in Gov. J.B. Pritzker’s March 20 stay-at-home order. That includes workers at grocery stores, laundries, banks and hardware stores, among other businesses.

Kentucky Gov. Beshear issued a similarly broad executive order that created a COVID-19 presumption for workers in grocery stores, child-care centers, domestic violence shelters and rape crisis centers, in addition to first responders and healthcare workers.

In the meantime state legislators are also pushing to expand benefits for COVID-19. Earlier this month, Alaska Gov. Mike Dunleavy (R), Wisconsin Gov. Tony Evers (D) and Minnesota Gov. Tim Walz (D) signed into law bills that create a COVID-19 presumptions for first responders and some healthcare workers.

Bills to create presumptions for COVID-19 have been introduced in the New York, New Jersey, Pennsylvania, Ohio and Utah state legislatures.

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SCIF Announces $165 Million in Additional COVID-19 Support

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State Compensation Insurance Fund announced another series of actions designed to support policyholders and workers affected by the COVID-19 crisis.

These actions include:

— Doubling the size of the Essential Business Support Fund announced earlier this week to $50 million. In the four days since the fund was announced, State Fund has received over 700 applications for COVID-19 workplace safety support funds. The first several payments, all at the maximum $10,000 reimbursement, were sent to qualified applicants today.

— Creating a new, $50-million Returning California to Work COVID-19 Safety Protocol Fund. This fund will operate in a similar way to the Essential Business Support Fund but is designed to help businesses that were not deemed essential by Governor Newsom’s executive order after he removes statewide stay-at-home restrictions. The fund will provide grants to qualified policyholders to help defray the costs of safety-related expenses, planned or already incurred, related to protecting their workforces from COVID-19. Individual grants can total up to $10,000 or two times the policyholder’s premium, whichever is less. Applications for this fund will be made available at StateFundCA.com after statewide stay-at-home restrictions are lifted.

— Effective immediately, accepting any claim by an essential worker – as defined by Governor Newsom’s Executive Order N-33-20 – for a diagnosed case of COVID-19 regardless of whether or not that worker can demonstrate the virus was contracted during the course of employment. The diagnosis must include a confirmed positive test for COVID-19 and must occur during the period of time between when the Governor issued his stay-at-home order and before that order is lifted. This action effectively replaces the Essential Worker Support Fund announced earlier this week as all employees who would have been covered under that fund are now entitled to full workers’ compensation benefits. State Fund currently estimates these added benefits will require approximately $90 million in addition to the previously committed funds for a total of $115 million. State Fund will still provide temporary disability benefits to any covered essential worker who must self-quarantine if they are not covered by another source.

“We are doing everything we can to provide our customers and injured workers with the support they need to make it through the COVID-19 crisis,” said State Fund President & CEO Vern Steiner. “We have worked hard to be in a position where we can help, and we’re proud to stand with the essential workers who are risking their lives every day to hold our communities together.” More information about State Fund’s actions in response to the COVID-19 pandemic can be found at StateFundCA.com.

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April 13, 2020 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: California Class Action Filed Against Cigna and Viant, Medicare Sues Lawfirm to Challenge Jurisdictional Issues, WCAB Orders Additional Emergency Filing Rules En Banc, COVID-19 Fraud Task Force Organizes in Arizona, OSHA Issues Respirator Interim Guidance, WCIRB Responds to COVID-19 Rating Issues, U.S. Plans to “Ease” Back to Normal.

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