Labor Code § 4660.1 was enacted as a part of SB 863 to further the Legislature's effort to reduce workers' compensation costs. Under § 4660.1(c), "[T]here shall be no increases in impairment ratings for sleep dysfunction, sexual dysfunction, or psychiatric disorder, or any combination thereof, arising out of a compensable physical injury." Section 1 of SB 863 explains that "in enacting subdivision (c) of Section 4660.1 of the Labor Code, the Legislature intends to eliminate questionable claims of disability when alleged to be caused by a disabling physical injury arising out of and in the course of employment …"
As a result, in the years after SB 863 took effect in 2013, practitioners saw fewer filings of add-on claims for psychiatric disability. SB 863, however, did not eliminate add-on psychiatric claims entirely. It was intended only to "eliminate questionable claims of disability." The WCAB has increasingly limited the psychiatric claims barred by § 4660.1(c).
First, the WCAB has held that § 4660.1(c) bars add-on claims of permanent impairment only when they arise out of a compensable physical injury. That is, a psychiatric impairment is barred by § 4660.1(c) only if it is a compensable consequence of a physical injury. If the psychiatric impairment arises directly from an accident, as opposed to physical injuries from the accident, § 4660.1(c) is inapplicable. (See Allen v. Carmax, 2017 Cal. Wrk. Comp. P.D. LEXIS 303.)
Second, even if a psychiatric impairment flows from a physical injury, under § 4660.1(c)(2), the impairment may be compensable if it resulted from either: (A) being a victim of a violent act or being directly exposed to a significant violent act within the meaning of § 3208.3; or (B) a catastrophic injury, including, but not limited to, loss of limb, paralysis, severe burn or severe head injury.
With respect to the violent act exception, the WCAB has adopted a broad definition of the term. It has held that a violent act is not limited to criminal or quasi-criminal activity, and may include other acts characterized by strong physical force, extreme or intense force or are vehemently or passionately threatening. So the WCAB has applied the exception to motor vehicle accidents (Larsen v. Securitas Security Services (2016) 81 CCC 770; Madson v. Michael J. Cavaletto Ranches, 2017 Cal. Wrk. Comp. P.D. LEXIS 165) and a tree trimmer's fall from a 20-foot tree (Torres v. Greenbrae Management, 2017 Cal. Wrk. Comp. P.D. LEXIS 230).
As for a catastrophic injury, the WCAB has recognized that there is no easy definition of the term. But it will apply the exception on a case-by-case basis when appropriate. In one case, a worker’s hand was crushed in a hydraulic press, causing a “severe, mangling injury” that resulted in partial amputation. The WCAB found that the accident qualified as a catastrophic injury (Guerrero v. Ramcast Steel Fabrication, 2017 Cal. Wrk. Comp. P.D. LEXIS 285).
An injured employee, then, has two paths toward obtaining permanent disability for a psychiatric injury. Psychiatric impairment may be compensable either because it arises directly from an injury or employment events, or because it satisfies the WCAB's broad definitions of a violent act or catastrophic injury.
In addition, the WCAB has explained that § 4660.1(c) governs only the collection of permanent disability benefits. That section expressly allows injured workers to receive medical treatment for psychiatric injury that flows from a physical injury. It does not preclude an employee from collecting temporary disability benefits from an add-on psychiatric injury (Lopez v. General Wax Co., Inc., 2017 Cal. Wrk. Comp. P.D. LEXIS 291). Also, it does not preclude an employee from requesting a psychiatric QME panel to assess whether he or she requires medical care or temporary disability indemnity on a psychiatric basis (Hernandez v. Fremont Bank, 2015 Cal. Wrk. Comp. P.D. LEXIS 470).
So, although § 4660.1(c) has and will continue to limit the number and types of psychiatric claims that may be filed, it was never intended to eliminate psychiatric claims entirely. The WCAB retains significant authority to determine whether an employee is entitled to disability benefits and medical treatment as a result of a psychiatric condition.