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“OFFERS OF ALTERNATE OR MODIFIED WORK AND THE IMPACT ON EMPLOYER
LIABILITY”
By Robert B. Hill, Esq.
Critical changes in the Labor Code implemented during the reforms of
2003 and 2004 have greatly impacted employer liability in offers of
alternate or modified work to injured workers.
Two primary concerns exist, those being the liability for the job
displacement benefit which came into effect for injuries on or after
January 1, 2004, and the adjustment of permanent disability for
injuries on or after January 1, 2005.
Prior to January 1, 2004, the offer of appropriate modified or
alternate work (as defined under Labor Code 4644(a)(5) and (6), when
incorporated into the correct format (RU-94), cut off liability for
the vocational rehabilitation maintenance allowance (VRMA) and other
liability for rehabilitation benefits under Labor Code Section
139.5.
With the 2003 amendments to Labor Code Section 139.5, vocational
rehabilitation was effectively eliminated and substituted by the
:”job displacement benefit” (or “voucher”). This has resulted in a
new approach to this issue, the offer of such appropriate alternate
or modified work cutting off the entitlement to the job displacement
benefit. The Division of Workers’ Compensation (DWC) continues to
revise proposed regulation (see Title 8 C.C.R. Sections 10001-10005,
10133.53 and 10133.55). In the last set of proposed changes, the
definition of “alternate work” has been changed to reflect that
alternate work my be offered by either the employer who employed the
injured worker at the time of injury, or by another employer, where
the previous employment was on a seasonal basis, as a daily hire, or
as a project hire, with further changes to the definition of
“seasonal worker”. Public comment on these changes will continue
through April 15, 2006.
To implement these changes, three sets of forms have been
promulgated:
• DWC-AD 10133.53 Notice of Offer of Modified or Alternative
Work
• DWC-AD 10133.55 Request for Dispute Resolution (for
injuries on or after January 1, 2004 this replaces the RU-103
Request for Dispute Resolution)
• DWC-AD 10133.57 Supplemental Job Displacement
Nontransferrable Training Voucher Form.
These forms can be downloaded and printed from the DWC website.
These same regulations and forms will be used to implement the
changes in the permanent disability indemnity for injuries on or
after January 1, 2005, with the key statutory provisions as follows:
• Increase Disability Payment by 15% - L.C.. § 4658 (d)(2)-If,
within 60 days of a disability becoming P&S, an employer
does not offer the injured
employee regular work, modified work, or alternative work, in the
form and manner prescribed by the administrative director, for a
period of at least 12 months, each disability payment remaining
to be paid to the injured employee from the date of the end of the
60-day period shall be paid in accordance with paragraph (1) and
increased by 15 percent. This paragraph does not apply to an
employer that employs fewer than 50 employees.
• Decrease Disability Payment by 15% - L.C.. § 4658
(d)(3)(A)-If, within 60 days of a disability becoming permanent
and stationary, an employer offers the injured
employee regular work, modified work, or alternative work, in the
form and manner prescribed by the administrative director, for a
period of at least 12 months, and regardless of whether the
injured employee accepts or rejects the offer, each disability
payment remaining to be paid to the injured employee from the
date the offer was made shall be paid in accordance with
paragraph (1) and decreased by 15 percent.
• Increase (Again) Disability Payment by 15% -
L.C.. § 4658 (d)(3)(A)-If the regular work, modified work, or
alternative work is terminated by the employer before the end of the
period for which disability payments are due the injured employee,
the amount of each of the remaining disability payments shall be
paid in accordance with paragraph (1) and increased by 15 percent.
An employee who voluntarily terminates employment shall not be
eligible for payment under this subparagraph. This paragraph does
not apply to an employer of fewer than 50 employees
. As was the case with injuries prior to January 1, 2004, strict
adherence to the time constraints, notice requirements to the
employee and use of the mandatory forms will be required to
eliminate the liability for the job displacement benefit and the
reduction in permanent disability. Critical in terms of the
deadlines are the notification to the employee of the need for
modified or alternative work within 30 days of the termination of
temporary disability (TD) benefits, the offer of such work within
that same time frame, and the applicant actually returning to work
60 days from the date of the last TD payment.
Contact Parker & Irwin
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