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Home > News > Proposed Workers' Compenation Legislation

New Legislation Affects Workers’ Compensation Settlement Payments

By Aaron Sussman, Esq. and Steve Scardino, Esq.
Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP

When a work injury causes a permanent disability, the law allows for a monetary payment to be paid to the injured worker to compensate for the permanent injury.  These permanent disability payments are often referred to as the settlement portion of the case.  In some instances, before a final settlement has been approved, the injured worker may be entitled to “permanent disability advances.” It is important for injured workers to understand when and why they will receive these payments.  As of January 2013, as a result of new legislation (Senate Bill 863) enacted by the California Legislature and signed by Governor Jerry Brown, the law has fundamentally changed regarding when and why these permanent disability payments will be paid.

Prior to January 1, 2013, Labor Code Section 4650(b) required that permanent disability payments begin within 14 days of the last payment of temporary disability, and be paid until a “reasonable estimate of permanent disability” was paid.   This often meant that payments would be made even after an injured worker returned to work and before there was a final settlement in the case.

After January 1, 2013, for all dates of injury, the law now dictates that in some instances, permanent disability advances will not be paid until there is a final settlement in the case.  The law now states:

  1. Permanent disability “advances” do NOT have to be made IF the employer has offered the injured worker a job paying at least 85 percent of his or her earnings at the time of injury,
  2. OR the worker has obtained a job at another employer paying 100 percent of his or her earnings at the time of injury.  

However, despite this new rule, upon a final settlement, the permanent disability payments will be paid retroactive to the last payment of temporary disability benefits, or from the time the injured worker is declared permanent and stationary/maximum medical improvement (i.e., the doctor has released the worker from active care and has issued a final opinion of the worker’s level of permanent disability), whichever is earlier.  Therefore, in the end, the injured worker will still get paid, but will have to wait if he or she has returned to work.

Of course, if your employer is unable to accommodate you, or you do not have a new job within the pay scale described above, you will receive permanent disability advanced payments within 14 days of the last payment of temporary disability, if there is medical evidence to reasonably estimate some level of permanent disability.

The workers’ compensation attorneys at Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP (GEK) are educated on these new rules and are prepared to act to ensure that our current and future clients are not denied benefits that should rightfully be paid.   A skilled workers’ compensation attorney can:

  1. Identify if a termination of permanent disability advances before a final settlement is proper. 
  2. File the appropriate paperwork to put the defendant on notice of a potential penalty for an unreasonable delay in payment of this benefit if permanent disability advances are improperly terminated.
  3. Assist the injured worker in taking the necessary steps to expedite settlement to get the permanent disability payments paid if benefits are not initiated because the injured worker has returned to work as dictated by the new law.

The unfortunate delay in payment of the permanent disability advances in the new law can interfere with an injured worker recovering from the financial loss that can result after an injury. 

If you have any questions regarding when and why permanent disability payments are being paid or not being paid, feel free to contact GEK at 213-739-7000.

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