Tag: 2019 News

The state Senate voted in favor of the bill – dubbed Assembly Bill 5 (AB5) – that would ensure gig economy workers in companies like Uber, Lyft, and DoorDash are entitled to minimum wage, workers‘ compensation, and other benefits.

The contentious bill was passed in a 29 to 11 vote as the legislative session was about to end for the year. AB5 had passed the State Assembly on May 29 with a 53-11 vote. It is expected to be signed by California Governor Gavin Newsom, and will go into effect starting January 1, 2020.

The business models of these companies are already under severe strain. Although the extent to which AB5 could impact these platforms is unknown, it’s expected to drive their labor costs up by 30 percent, according to a report by San Francisco Chronicle.

Last month, Uber reported a record second quarter loss of $5.2 billion, its largest ever quarterly loss. The company laid off 435 employees across its engineering and product teams yesterday, on top of the 400 marketing team employees who were handed pink slips in late July in an attempt to cut costs.

Litigation is now likely to follow passage of the new law. Uber said Wednesday that it was confident that its drivers will retain their independent status when the measure goes into effect on Jan. 1. “Several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces,” said Tony West, Uber’s chief legal officer. He added that the company was “no stranger to legal battles.”

California has at least one million workers who work as contractors and are likely to be affected by the measure, including nail salon workers, janitors and construction workers. Unlike contractors, employees are covered by minimum-wage and overtime laws. Businesses must also contribute to unemployment insurance and workers’ compensation funds on their employees’ behalf.

In California, religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Winemakers and franchise owners said they were worried they could be ensnared by the law, too.

Historically, if workers thought they had been misclassified as a contractor, it was up to them to fight the classification in court. But the bill allows cities to sue companies that don’t comply.

San Francisco’s city attorney, Dennis Herrera, has indicated that he may take action. “Ensuring workers are treated fairly is one of the trademarks of this office,” he said in a statement.

And California may be only the beginning, as lawmakers elsewhere, including New York, move to embrace such policies. Legislators in Oregon and Washington State said they believed that California’s approval gave new momentum to similar bills that they had drafted.

Both Politico and now the Los Angeles Times report concerns about California’s state insurance commissioner who has stuck taxpayers with thousands of dollars in bills to cover the cost of renting an apartment in Sacramento while he maintains his primary residence in Los Angeles – a break from other statewide elected officials that is alarming ethics watchdogs.

And Lara’s decision to file for rental reimbursement breaks precedent with two previous insurance commissioners. Republican Steve Poizner, who is from the Bay Area, did not charge living expenses to the state during his tenure as insurance commissioner. Neither did Democrat Dave Jones, though he did not have to commute far as a Sacramento resident.

Gov. Arnold Schwarzenegger, whose main residence was in Southern California, lived at the Hyatt Regency while in Sacramento but had his expenses paid by an outside foundation. Gov. Gavin Newsom, a former San Francisco mayor, recently moved from the Bay Area to a Sacramento suburb with his family at his own expense.

The revelation could add another headache for Commissioner Ricardo Lara, who is already under scrutiny for his campaign fundraising and perceived coziness with the insurance industry.

The Sacramento Bee claims the California’s top regulator of insurance companies sought campaign contributions from the industry and partied with one of its lobbyists after winning his election last year, according to records and social media posts obtained by The Sacramento Bee.

Three months after taking office, Insurance Commissioner Ricardo Lara scheduled a March 12 lunch with insurance company executives with a pending matter before his department.

A memo to the commissioner said the meeting had a specific purpose: “Relationship building” for his re-election campaign.

Executives “will be joining you for a relationship-building lunch in support of your Ricardo Lara for Insurance Commissioner 2022 campaign,” fundraising consultant Dan Weitzman wrote in the memo.

Lara had pledged not to take money from the insurance industry as he ran for the post last year.

Weeks following the lunch, he broke his promise. In April, he accepted more than $50,000 in campaign donations from insurance representatives and their spouses. Some of the money came from out-of-state donors who have ties to one of the companies scheduled to be represented at the lunch.

Social media posts shared with The Bee show Lara also counts insurance lobbyists among his friends. The former state lawmaker partied with a Farmers Insurance lobbyist in London on New Year’s Eve just a week before his inauguration.

And the San Francisco Chronicle characterizes his apology about the contribution ethical problems and blame shifting on his staff as “underwhelming.”

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] pertained to an injury before SB 863 in 2013.

The case 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.

The Court of Appeal concluded that Section 4660 addresses how the determination on the facts shall be made in each case for injuries occurring before January 1, 2013. Indeed, section 4660 expressly applies to the determination of the percentages of permanent disability. A final permanent disability rating is obtained by going through the steps outlined in the 2005 Schedule.

The logic of the Fitzpatrick case would seem to equally apply to injuries after 2013, on the theory that the scheme for rating permanent disabilities is prima facie evidence to be rebutted only by more compelling evidence that it is inappropriate in a given case.

However, recent panel decisions show a willingness of the WCAB to award total disability based solely on a vocational rehabilitation report without any discussion of why the AMA Guides rating would be inappropriate. Here is a recent example.

On January 23, 2015 Rafael Sandoval suffered an admitted industrial injury to his cervical and lumbar spine while employed as an iron worker by The Conco Companies.

Dr. Mandell, the AME in orthopedics, described applicant’s injury as severe spinal stenosis and disc herniation in the cervical spine and lumbar disc disease with radiculopathy, requiring four level laminoplasty from C3-C7, with hardware implantation, as well as a subsequent cervical discectomy.

Mr. Van de Bittner, applicant’s vocational expert, evaluated applicant on December 15, 2016, and issued a report on applicant’s vocational feasibility, employability and earning capacity. Mr. Van de Bittner concluded that applicant was not capable of returning to the labor market due to his physical limitations, noting that he lacked transferrable skills without consideration of non-industrial factors, per the requirements of Ogilvie.

The WCJ found applicant sustained 100% permanent disability. The WCAB Decision.After Reconsideration, affirmed the WCJ’s Findings, Award and Order in the case of Sandoval v The Conco Companies. Neither the Report and Recomendation on Petition for Reconsideration by the WCJ, or the Opinion and Order Granting Reconsideration report what the rating using the AMA Guides and 2005 Rating Schedule would have been, nor why it would be rejected in favor of the Vocational Rehabilitation Expert. The decision went directly to the simple metrics of a vocational evaluation seemingly unfettered by the logic of the Fitzpatrick decision by the Court of Appeal.

There is no way of knowing what steps are required, if any, to ignore the AMA Guides, the Rating Schedule, and case law in favor of another scheme of awarding total disability.

Renee Skelton sustained an injury to her ankle in July 2012, and an injury to her shoulder in July 2014, while working for the Department of Motor Vehicles. She filed separate applications for workers’ compensation benefits for her injuries.

The parties disputed whether Skelton was entitled to TDI for wage loss for time missed at work to attend medical appointments.

Skelton sought to be reimbursed for her wage loss for time missed at work for medical treatment and for medical evaluations. Skelton continued working after each injury. She missed work to attend appointments with her treating physicians and to attend two visits with the panel qualified medical evaluator (QME). Skelton’s work hours were not flexible, and she could not visit her doctors on weekends. She initially used her sick and vacation leave, but eventually her paycheck was reduced for missed time at work. Her ankle injury was not yet permanent and stationary at the time of the hearing.

SCIF contended that under Department of Rehabilitation v. Workers’ Comp. Appeals Bd. (2003) 30 Cal.4th 1281 (Department of Rehabilitation), Skelton was not entitled to TDI to compensate her for taking time off from work for medical treatment, but it acknowledged that Skelton was entitled to compensation for wage loss for attending medical-legal evaluations.

Skelton contended that under Department of Rehabilitation, an employee is entitled to TDI unless the employee has returned to work and the employee’s injury is permanent and stationary. Because her injury was not permanent and stationary, Skelton argued that she was entitled to compensation, including “full reimbursement of sick and vacation time used,” for time spent attending medical treatment with her treating physicians and medical evaluations with the QME.

The WCJ issued a joint findings and order, concluding that Skelton was not entitled to TDI to attend medical treatment based on Department of Rehabilitation. After reconsideration, a WCAB majority in a split panel decision stated that Skelton was entitled to TDI for wage loss to attend medical-legal evaluations, but that based on Department of Rehabilitation and Ward v. Workers’ Compensation Appeals Bd. (2004) 69 Cal.Comp.Cases 1179 (Ward) [writ denied], she was not entitled to TDI for wage loss to attend medical treatment following her return to work.

The Court of Appeal concluded that Skelton was not entitled to TDI after she returned to work full time in the published case of Skelton v Department of Motor Vehicles.

“Neither Skelton’s time off from work nor her wage loss was due to an incapacity to work. Rather, these circumstances were due to scheduling issues and her employer’s leave policy. Because Skelton’s injuries did not render her incapable of working during the time she took off from work and suffered wage loss, Skelton was not entitled to TDI for that time off or wage loss.”

Federal complaints have been filed against 30 Bay Area defendants, including the largest home health care agency, in a patients-for-cash kickback scheme.

The unsealed criminal complaints describe a wide-ranging patients-for-kickback scheme. At the center of the scheme are Amity Home Health Care, the largest home health care provider in the San Francisco Bay Area, and Advent Care, Inc., a provider of hospice care.

According to the complaints, all the defendants participated in the scheme whereby Amity, under the leadership of Chief Executive Officer Ridhima “Amanda” Singh, paid kickbacks to marketers, doctors, and other medical professionals in exchange for the certification or referral of patients for home health or hospice services.

Also charged are 28 people including doctors, nurses, marketers, a social worker, and additional employees of Amity. According to the complaints, every single defendant charged was recorded by law enforcement officers either offering or accepting, or approving illegal payments for patient referrals.

Title 42, United States Code, Section 1320a-7b, makes it a crime for any person to knowingly solicit, offer, or pay a kickback, bribe, or rebate for furnishing services under a Federal health care program. Because many of the patients were insured by Medicare, a taxpayer-funded insurance plan, the referral of patients through the kickback scheme violated the statute.

The criminal complaints describe how Amity and some of its employees bribed individuals associated with hospitals, skilled nursing facilities, and doctors’ offices to induce those individuals to send patients to Amity and Advent. Amity and the other defendants often disguised the kickbacks as payroll, phony medical directorships, and, at other times, as “entertainment,” reimbursements,” “gifts”, or “donations.”

Further, several of the defendants are doctors and other health care professionals who allegedly received bribes in exchange for making referrals to Amity and Advent and other home health agencies so that the companies could provide and bill for services. In the case of Amity, Singh and her employees allegedly compensated these professionals in cash for each patient referral and for making introductions to physicians, case managers, or other health care professionals who could refer patients.

In addition, some of the defendants are described as “marketers.” Marketers received from Amity and others cash and gifts, such as tickets to Warriors games, in exchange for patient referrals. Marketers had clients that consisted of case managers at hospitals, social workers at skilled nursing facilities, doctors, and office staff at doctors’ offices. Singh allegedly instructed marketers to take clients out to elaborate meals, sporting events, and purchase gifts for individuals willing to provide Amity with patients, mainly Medicare patients. When patient referrals were slow, Singh allegedly directed the marketer to incentivize clients with gifts in an effort to induce them to refer more patients to Amity.

The names and identification information on the specific individuals involved are listed on the Justice Department Website announcement.