Category: Daily News

Each year the California Chamber of Commerce releases a list of “job killer” bills to identify legislation that will decimate economic and job growth in California. The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state. The 2015 session will soon close, so what remains of the 2015 “job killer” list of proposed legislation.

As of July 17, the deadline for bills to pass policy committees and move to the floor, seven Senate job killer bills and two Assembly job killer bills remain active. One “job killer” bill is already on its way to the Governor. Surprisingly, none of them pertain to workers’ compensation.

AB 359 has been sent to the Governor for signature. The proposed law alters the employment relationship by requiring any successor grocery employer to retain employees of the former grocery employer for 90 days and continue to offer continued employment unless the employees’ performance during the 90-day period was unsatisfactory. The law was supported in part by A 2014 study by the Food Labor Research Center at U.C. Berkeley (commissioned by the United Food and Commercial Workers) titled, “Shelved: How Wages and Working Conditions for California’s Food Retail Workers Have Declined as the Industry has Thrived,”

Other labor related bills that are still alive, but not passed include SB 3 which would increase the minimum wage by $3.00 over the next two and a half years with automatic increases tied to inflation.

Also pending is SB 406 which would significantly expand the California Family Rights Act by reducing the employee threshold from 50 to at least 25 employees and expanding the family members for whom leave may be taken, which will provide a California-only, separate 12 week protected leave of absence for both small and large employers to administer.

AB 465 would preclude mandatory employment arbitration agreements. The CalChamber says the proposed law is likely pre-empted by the Federal Arbitration Act even if passed.

The remaining seven “job killer bills” are not directly related to employment law issues, but nonetheless are targeted by the CalChamber for driving up costs. There should be no workers’ compensation surprises as was the case in August 2013 with SB 863. But then again, the industry did not know SB 863 was in the pipeline until the very last week.

The DWC has posted a new report this month on progress implementing SB 863. “This report confirms that the reforms are on track. Employer costs are under control and injured worker benefits are increasing,” said Labor and Workforce Development Secretary David M. Lanier. “While there is ongoing work to reduce delays and improve the system – overall the progress is impressive.”

The report concludes that workers’ compensation costs for employers have dropped. In May 2015, the Department of Insurance adopted advisory pure premium rates for July 1, 2015, which on average are five percent less than the industry average for filed pure premium rates as of Jan. 1, 2015, and 10.2 percent less than the average of the approved Jan. 1, 2015 rates.

Benefits for injured workers have also increased. Prior to the reform legislation, the minimum weekly benefit payment for people with permanent disabilities was $130, and the maximum was $270. The new minimum weekly PD benefit is $160, and the maximum is $290. Also, the Return-to-Work-Supplement Program – which provides a one-time $5,000 supplement to eligible injured workers – became effective in April 2015. As of June 30th, DIR had issued 434 checks totaling over $2 million.

SB 863 also created an Independent Medical Review (IMR) program, in which physicians use evidence to determine the necessity of requested treatments. “The progress made since the passage of SB 863, which allows medical – rather than legal – experts to make medical decisions, is very encouraging,” said DIR Director Christine Baker. Additional key findings of the report include:

1) IMR decisions are being issued well within the 30-day statutory time frame from receipt of medical records.
2) Lien filings are a big factor in the reduction in overall costs. The report shows that lien filings have decreased by approximately 60 percent since the passage of SB 863. A retrospective evaluation report of SB 863 cost monitoring completed last November by the WCIRB estimated savings of $690 million due to the reduction in lien filings.
3) Commitment to evidence-based medicine is also demonstrated through recent adjustments to the Medical Treatment Utilization Schedule (MTUS). The MTUS is a set of guidelines for appropriate medical care based on high-quality, unbiased scientific studies. However, the system allows for exceptions when treatment can be based on guidance other than the MTUS.

SB 863’s revisions to the MPN program went into effect on August 27, 2014. More of these networks have been approved, and they are also now more accountable to DWC. Physician listings must be updated quarterly, and if a provider leaves the network, they are required to give 45 days’ notice. Furthermore, the revised access standards require an MPN to have at least three available physicians from which injured workers can choose.

On April 13, 2015, DIR launched the Return-to-Work Supplement Program (RTWSP) for injured workers. This $120 million per year fund, which provides an additional $5,000 to each eligible injured worker who has a disproportionate loss of earnings, is an important component of the workers’ compensation reforms in SB 863. As of June 30, 2015, DIR made supplemental payments totaling $2,170,000 to injured workers. DIR received 508 applications for the one-time payment of $5,000 by that date, with 454 application reviews completed, and the remaining 54 applications under review. Of the 454 applications reviewed, 388 applications were deemed eligible, and 66 were denied, either because the person was injured before Jan. 1, 2013, or the application filed was incomplete or a duplicate.

A criminal complaint has been filed by the Orange County District attorney against a Costa Mesa Police Department (CMPD) officer for allegedly committing insurance fraud by presenting a false insurance claim and making false material statements related to the claim.

Ryan Patrick Natividad, 30, Corona, is charged with one felony count of insurance fraud and one felony count of making a fraudulent statement. If convicted, Natividad faces a maximum sentence of six years in jail. He was expected to be arraigned last Friday in Department C-55, Central Justice Center, Santa Ana.

On Sept. 23, 2014, Natividad is accused of reporting a work-related injury to his employer CMPD. Natividad is accused of falsely claiming earlier in the day, he had struck his fist against a wall when attempting to prevent an arrestee from stumbling into the wall while escorting the arrestee from the patrol vehicle into jail. Natividad is accused of filing a fraudulent workers’ compensation claim. He was subsequently directed by CMPD to seek immediate medical attention.

The City of Costa Mesa internally investigated Natividad’s workers’ compensation claim and uncovered evidence contradicting Natividad’s account of how and when the injury occurred.

Deputy District Attorney Noor Hasan of the Insurance Fraud Unit is prosecuting this case.

In 2011 Gregory Thompson, was working at High Desert State Prison as a guard. An inmate stabbed him eight times. He was awarded workers compensation benefits. As a result of his injuries, he accepted a medical demotion to an entry-level computer analyst position in the information technology department of the prison’s medical unit, forfeiting his peace officer status. He had a troubled relationship with his supervisor, who told him he was not passing probation.

In March 2013, he committed suicide by means of a self-inflicted gunshot wound. The widow filed her application for workers’ compensation death benefits in April 2013. The Department did not contest the finding that the death of Gregory Thompson was causally related to the industrial injury.

In August 2013, she petitioned for a finding of fact pursuant to GC 21537 that the death was industrial, qualifying her for a PERS special death benefit for peace officers. Labor Code section 4708 expressly provides that the PERS Board “shall be joined as a defendant, and the [WCAB] shall determine whether the death resulted from injury.A surviving dependent is precluded from seeking the workers’ compensation death benefit in lieu of the PERS special death benefit. (Gov. Code, § 21542). Nevertheless, the WCJ never joined the PERS Board as a defendant.

At the conclusion of the WCAB trial, the widow testified she was indeed receiving PERS death benefits. Yet the decision did not include any findings on the petition for finding of fact pursuant to section 21537. It simply awarded a workers’ compensation death benefit of $250,000 and set legal fees at $30,000. The employer’s petition for reconsideration was denied with the WCAB simply saying the PERS issue “is not before us on reconsideration. CalPERS will determine the issue of any duplicate payments.”

The Court of Appeal had a difficult time determining from the WCAB record exactly what happened to the PERS issue. It nonetheless reversed in the published opinion of Department of Corrections and Rehabilitation v WCAB (Thompson).

The Court of Appeal concluded “These statutory directives would seem to be straightforward. Indeed, we have not found a case, treatise, or encyclopedia on this issue that suggests there is any alternative procedure to the two boards making a joint calculation of workers’ compensation and PERS death benefits in a single proceeding after the WCAB resolves the issue of industrial causation for a death.”

“As a result of the WCAB’s insouciant deferral of the computation issue to the PERS Board, its order awarding the full workers’ compensation death benefit to the widow – without crediting the PERS special death benefit against it – is accordingly unauthorized under Labor Code section 4707 and cannot stand.”

The Department of Justice Office of the Inspector General is conducting an audit of the Drug Enforcement Administration’s Confidential Source Program. The OIG initiated the audit as a result of the OIG’s receipt of numerous allegations regarding the DEA’s handling and use of confidential sources. Its audit work thus far has been seriously delayed by numerous instances of uncooperativeness from the DEA. Nevertheless, it has uncovered several significant issues.

Among other matters, the audit learned that the DEA was providing Federal Employees’ Compensation Act (FECA) benefits to confidential informants, yet had not established a process or any controls regarding the awarding of them. The DEA lacked a process for thoroughly reviewing FECA claims for confidential sources or determining eligibility for these benefits. In addition, the DEA did not oversee and ensure that the established pay rate for these sources was proper and inappropriately continued using and paying confidential sources who were also receiving full disability payments through FECA.

In one case, the Inspector General wrote, the DEA paid out more than $1.3 million between 1989 and 2012 to the widow of a killed informant. Payments have been ongoing in other cases since 1974.

In addition, the Inspector General says there is no legal basis for extending compensation benefits intended for federal employees to confidential informants. The law cited by the DEA as justification for the payments, the Inspector General wrote, “does not provide a legal basis for the DEA’s position that its confidential sources were appropriately categorized as non-federal law enforcement officers eligible for FECA benefits.”

In a statement, a Justice Department spokesperson said the DEA “has placed a moratorium on submitting new FECA claims for confidential sources to the Department of Labor.” “DEA has also determined that, although a determination should be based on the facts of each individual case, the presumption should be confidential sources are not ‘employees’ pursuant to FECA and should not be eligible for benefits,” the spokesperson said.