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To Work or Not to Work: The 15% Solution
by Steven A. Schwartz, Esq.
When Does the 15% Increase or Decrease of Permanent Disability Apply?
It is effective now and applies to all dates of injury occurring on or after 1/1/05.
How is It Determined?
Basically, it comes down to whether the employer can provide regular, modified, or alternative work that will last at least 12 months after the employee is deemed permanent and stationary and maximum medical improvement is reached.
Within 60 days of becoming MMI, the employer must notify the injured worker as to whether work meeting the above criteria is available. If no such job is offered (and the employer has 50 or more employees), each indemnity payment remaining to be paid is increased by 15% [see Labor Code §4658(d)(2)].
If the job is offered, regardless of whether the injured worker accepts or rejects it, each disability payment remaining to be paid from the date the offer was made is decreased by 15% [see Labor Code §4658(d)(3)(A)]. Note: there is no minimum number of employees required for this decrease to be triggered.
If the offered work is terminated and any permanent disability payments remain due, each remaining PD payment is increased 15 percent. This does not apply to an employer employing fewer than 50 employees.
An employee who voluntarily terminates employment is not eligible for the 15% increase.
What if Modified Work Is Made Available before MMI Status Is Achieved?
Until an employee is MMI, the permanent restrictions and the ability of an employer to accommodate them cannot be determined. Thus, even if the employee is performing modified work, no notice is required until P&S/MMI is achieved.
Are All Payments Affected?
No, only those PD payments that remain outstanding after the employer has notified the injured worker in a timely manner. Thus, on receipt of an MMI report, PDAs at the regular rate can commence. After the employer decides whether a job can be provided, the remaining payments are adjusted.
Strategy Tip: There is an obvious economic advantage to delaying determination when it is unlikely that a permanent regular, modified, or alternative position will be available. During the 60-day inquiry, all permanent disability payments issue at the regular rate.
Is It 15% of the Amount of Each Check or an Increase of 15% Permanent Disability?
Does the $200 per week payment increase to $230 per week, or do I pay the original level of PD plus 15 more percentage points at the regular rate? The statute increases each weekly payment by 15%, payable for the established number of weeks for the percentage of PD. It does not increase (or decrease) the overall PD.
How Do I Indicate in the Settlement that the Increase/Decrease Applies?
A check box indicates whether this provision applies. Strategy tip: Include language under the comment section to reflect the change in weekly rates.
Steven A. Schwartz is a Senior Partner at Bradford & Barthel's Sacramento office
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To Work or Not to Work: The 15% Question
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This web site seeks to provide accurate, informative updates pertaining to items of interest to Bradford & Barthel, LLP's clients and friends. It is not intended to render legal advice. If legal advice or expert analysis is needed, seek an attorney's assistance. All opinions expressed in this newsletter are those of the authors and not necessarily endorsed by Bradford & Barthel, LLP, its partners, attorneys, employees or agents.
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