Liability for the Supplemental Job Displacement Benefit

For injuries occurring on or after Jan. 1, 2004, an employee who suffers residual effects from an injury and is unable to return to work is entitled to a supplemental job displacement benefit. The benefit comes in the form of a nontransferable voucher, and often is referred to by practitioners simply as the "voucher."

Prior to 2013, an employer was liable for the voucher if it did not offer permanent, modified or alternative work meeting certain requirements within 30 days of the termination of temporary disability indemnity payments. Because of the statutory limits on temporary disability, it was not uncommon for temporary disability payments to end even before an employee was deemed to be permanent and stationary. So, as part of SB 863, the California Legislature changed the point at which the benefit is triggered.

For injuries on or after Jan. 1, 2013, in order to avoid liability for the voucher, Labor Code 4658.7(b)(1) requires an employer to offer regular, modified or alternative work "no later than 60 days after receipt by the claims administrator of the first report received from either the primary treating physician, an agreed medical evaluator, or a qualified medical evaluator, in the form created by the administrative director ..., finding that the disability from all conditions for which compensation is claimed has become permanent and stationary and that the injury has caused permanent partial disability" (emphasis added).

The Legislature considered the "form created by the administrative director" to be a "mandatory attachment to a medical report to be forwarded to the employer ... for the purpose of fully informing the employer of work capabilities and of activity restrictions resulting from the injury that are relevant to potential regular work, modified work, or alternative work" (LC 4658.7(h)(2)).

Accordingly, the administrative director adopted California Code of Regulations, Title 8, 10133.31; subsection (b) specifies that an employer's duty to offer regular, modified or alternative work is "no later than 60 days after receipt by the claims administrator of the Physician's Return to Work & Voucher report (Form DWC-AD 10133.36) ...." The Physician's Return-to-Work & Voucher Report (RTW Report) requires a physician to specify an injured employee's work restrictions. It also allows physicians to consider a job description and specify whether an employee's work capacity is compatible with the physical requirements of the job. It is intended to make it easier for employers to determine when they should begin investigating whether work is available to an injured worker and clearly delineate the work restrictions that must be considered.

Although the RTW Report was adopted effective Jan. 1, 2014, physicians still frequently fail to complete the form. It is not uncommon for an injured worker to be declared permanent and stationary without the form being completed by any physician. Accordingly, if an employer's duty to investigate liability for the voucher is never triggered, can an employer be liable for the voucher?

In Fndkyan v. Opus One Labs, 2019 Cal. Wrk. Comp. P.D. LEXIS 51, the WCAB held that it could. The WCAB recognized that the RTW Report is described by § 4658.7(h)(2) as a "mandatory attachment" to a medical report. In that case, however, it was undisputed that the defendant received the QME report, which informed the defendant that the applicant was permanent and stationary and of the applicant's work capabilities and restrictions. The WCAB determined that because the QME report provided the information required by the RTW Report, it would "place form over substance" to require the RTW Report. So, even though it was undisputed that there was no evidence that the RTW Report was sent to or received by the defendant, the WCAB concluded that the applicant was entitled to the voucher.

The WCAB's decision can still be challenged to the extent that the Labor Code and administrative regulations specify that an employer's liability for the voucher is triggered by receipt of the RTW Report. In Honeywell v. WCAB (Wagner) (2005) 35 Cal. 4th 24, the California Supreme Court explained that when a statute is clear and unambiguous, the WCAB may not depart from it. In that case, the Supreme Court held that the 90-day investigation period starts on receipt of the filing of the claim form per § 5402(b), based on the clear statutory language, not on the employer's knowledge of the injury. Accordingly, because § 4658.7(b)(1) specifies that the 60-day period starts on receipt of the RTW Report, employers may argue that liability for the voucher also doesn't begin until they receive the RTW Report.

But it must be considered that CCR § 10109(a) requires a claims administrator to "conduct a reasonable and timely investigation upon receiving notice or knowledge of an injury or claim for workers' compensation benefits." Subsection (b) specifies, "A reasonable investigation must attempt to obtain the information needed to determine and timely provide each benefit, if any, which may be due the employee." So if an employer receives information that an employee may be entitled to the voucher, it must attempt to obtain information needed to determine whether the voucher must be provided.

Accordingly, if an employer receives a permanent and stationary report from a physician, but the physician does not complete a RTW Report, the employer may request one if it does not believe it has enough information to determine whether permanent, modified or alternative work is available. On receipt of the RTW Report, the employer would then have 60 days to make an offer of work. But, if an employer receives the necessary information to make an offer of work, even if it is not on the required form, it cannot avoid liability for the voucher by its own inaction.