Disability Payments

Article 3 of Chapter 2 of Part 2 of Division 4 of the Labor Code deals with disability payments under the workers’ compensation law.

Section 4650 provides that, if an injury causes temporary disability, the first payment of temporary disability indemnity must be made not later than 14 days after knowledge of the injury and disability, on which date all indemnity then due are to be paid, unless liability for the injury is earlier denied.

If the injury causes permanent disability, the first payment is to be made within 14 days after the date of last payment of temporary disability indemnity, except as provided. When the last payment of temporary disability indemnity has been made, and regardless of whether the extent of permanent disability can be determined at that date, the employer must commence the timely payment required by this subdivision and continue to make these payments until the employer’s reasonable estimate of permanent disability indemnity due has been paid.

Prior to an award of permanent disability indemnity, a permanent disability indemnity payment is not to be required if the employer has offered the employee a position that pays at least 85 percent of the wages and compensation paid to the employee at the time of injury or if the employee is employed in a position that pays at least 100 percent of the wages and compensation paid to the employee at the time of injury. Payment of temporary or permanent disability indemnity subsequent to the first payment is made as due every two weeks on the day designated with the first payment.

Section 4650.5 says that, in the case of state civil service employees, employees of the Regents of the University of California, and employees of the Board of Trustees of the California State University, the disability payment are made from the first day the injured employee leaves work as a result of the injury, if the injury is the result of a criminal act of violence against the employee.

Section 4651 prohibits a disability indemnity payment from being made by any written instrument unless it is immediately negotiable and payable in cash, on demand, without discount, at some established place of business in the state. This section does not prohibit an employer from depositing the disability indemnity payment in an account in any financial institution of the employee’s choice in this state, provided the employee has voluntarily authorized the deposit, nor does it prohibit an employer from electronically depositing the disability indemnity payment in an account in any financial institution, unless the employee has requested, in writing, that disability indemnity benefits not be electronically deposited in the account.

Section 4651 prohibits a disability indemnity payment from being made by any written instrument unless it is immediately negotiable and payable in cash, on demand, without discount, at some established place of business in the state. This section does not prohibit an employer from depositing the disability indemnity payment in an account in any financial institution, unless the employee has requested, in writing, that disability indemnity benefits not be electronically deposited in the account.

Section 4651.1 says that where a petition is filed with the appeals board concerning a continuing award in which it is alleged that the disability has decreased or terminated, there is a rebuttable presumption that the temporary disability continues for at least one week following the filing of such petition. In this case, payment for the week is made in accordance with the provisions of Sections 4650 and 4651.

Section 4651.2 states that no petitions filed are to be granted while the injured workman is pursuing a rehabilitation plan.

Section 4651.3 provides that, where a petition is filed with the appeals board, and is subsequently denied wholly by the appeals board, the board may determine the amount of attorney’s fees reasonably incurred by the applicant in resisting the petition and may assess reasonable attorney’s fees as a cost upon the party filing the petition to decrease or terminate the award of the appeals board.

Section 4652 specifies that no temporary disability indemnity is recoverable for the disability suffered during the first three days after the employee leaves work as a result of the injury unless temporary disability continues for more than 14 days or the employee is hospitalized as an inpatient for treatment required by the injury.

Section 4653 provides that, if the injury causes temporary total disability, the disability payment is two-thirds of the average weekly earnings during the period of disability, consideration being given to the ability of the injured employee to compete in an open labor market.

Section 4654 states that, if the injury causes temporary partial disability, the disability payment is two-thirds of the weekly loss in wages during the period of the disability. However, the disability payment is reduced by the sum of unemployment compensation benefits and extended duration benefits received by the employee during the period of temporary partial disability.

Section 4655 provides that, if the injury causes temporary disability which is at times total and at times partial, the weekly disability payment during the period of each total or partial disability is in accordance with sections 4653 and 4654 respectively.

Section 4657 explains that, in case of temporary partial disability, the weekly loss in wages consists of the difference between the average weekly earnings of the injured employee and the weekly amount which the injured employee will probably be able to earn during the disability.

Section 4658.1 defines the following terms: “regular work,” “modified work,” and “alternative work.” The wages and compensation for any increase in working hours over the average hours worked at the time of injury are not considered. Actual wages and compensation are determined without regard to the minimums and maximums.

Section 4658.6 explains that the employer is not liable for the supplemental job displacement benefit if the employer meets either of the specified conditions.

Section 4658.7 requires, if the injury causes permanent partial disability, the injured employee to receive a supplemental job displacement benefit as provided in this section unless the employer makes an offer of regular, modified, or alternative work that meets both of the specified criteria.

Section 4659 states that, if the permanent disability is at least 70 percent, but less than 100 percent, 1.5 percent of the average weekly earnings for each 1 percent of disability in excess of 60 percent is to be paid during the remainder of life, after payment for the maximum number of weeks specified in Section 4658 has been made. 

Section 4660.1 explains that, in determining the percentages of permanent partial or permanent total disability, account is taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and the employee’s age at the time of injury. The term “nature of the physical injury or disfigurement” is defined.

Section 4661 states that, where an injury causes both temporary and permanent disability, the injured employee is entitled to compensation for any permanent disability sustained by him in addition to any payment received by the injured employee for temporary disability.

Section 4661.5 provides that, when any temporary total disability indemnity payment is made two years or more from the date of injury, the amount of this payment is computed in accordance with the temporary disability indemnity average weekly earnings amount specified in Section 4453 in effect on the date each temporary total disability payment is made unless computing the payment on this basis produces a lower payment because of a reduction in the minimum average weekly earnings applicable under the law.

Section 4662 provides that any of the four specified permanent disabilities are conclusively presumed to be total in character. In all other cases, permanent total disability is determined in accordance with the facts.

Section 4663 explains that apportionment of permanent disability is based on causation. A physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury must address in that report the issue of causation of the permanent disability. In order for a physician’s report to be considered complete on the issue of permanent disability, the report must include an apportionment determination.

A physician is required to make an apportionment determination by finding what approximate percentage of the permanent disability was caused by the direct result of injury arising out of and occurring in the course of employment and what approximate percentage of the permanent disability was caused by other factors.

Section 4664 makes the employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. If the applicant has received a prior award of permanent disability, it is conclusively presumed that the prior permanent disability exists at the time of any subsequent industrial injury. This presumption is a presumption affecting the burden of proof.

The accumulation of all permanent disability awards issued with respect to any one region of the body in favor of one individual employee cannot exceed 100 percent over the employee’s lifetime unless the employee’s injury or illness is conclusively presumed to be total in character. The regions of the body are the seven specified conditions.