SB 335: Workers’ Compensation Payment Penalties

On March 10, 2021, State Senator David Cortese (D-Santa Clara) amended his Senate Bill 335 related to workers’ compensation payment penalties. The bill previously made non-substantive changes to Section 5814. This bill would amend Sections 3212.86, 3212.87, 3212.88, 3761, and 5402, and add Section 5814.3 to the Labor Code.

Section One of the bill would amend Labor Code Section 3212.86 to make technical changes. This section deals with employees with a COVID-19-related illness. Section Two of the bill would amend Labor Code Section 3212.87 to make technical changes. This section deals with firefighting employees. Section Three of the bill would amend Labor Code Section 3212.88 to make technical changes. This section deals with employees who are not described elsewhere and who test positive during an outbreak at a place of employment.

Section Four of the bill would amend Labor Code Section 3761 to make technical changes. This section deals with an insurer securing an employer’s liability. Section Five of the bill would amend Labor Code Section 5402 to make several changes to this section dealing with employer liability for claims of injury, including:

• Cut in half the number of days from 90 days to 45 days for when liability is not rejected after the date the claim form Is filed, the injury is presumed compensable under the law. The presumption is rebuttable only by evidence discovered subsequent to the 45-day period (reduced from the current law of 90 days).
• Add a new subdivision that, notwithstanding the prior clause, for specified injuries or illnesses (related to including hernia, heart trouble, pneumonia, or tuberculosis, among others, sustained in the course of employment of a specified member of law enforcement or a specified first responder), if the liability is not rejected within 30 days after the date the claim form is filed, then the injury is presumed compensable. The presumption would be rebuttable only by evidence discovered subsequent to the 30-day period.
• Increase from $10,000 to $17,000 the limit on liability for medical treatment from one working day after an employee files a claim form until the date the claim for alleged injury is accepted or rejected.

Section Six of the bill would add Labor Code Section 5814.3 to provide:

Notwithstanding Labor Code Section 5814 (which deals with when payment of compensation has been unreasonably delayed or refused), if payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award for claims of injury or illness covered under specified sections (including hernia, heart trouble, pneumonia, or tuberculosis, among others), the full amount of the order, decision, or award would be increased by 10 percent.

However, multiple increases would not be awarded for repeated delays in making a series of payments due for the same type or specie of benefit, unless there has been a legally significant event between the delay and the subsequent delay in payments of the same type or specie of benefit that establishes the employer’s or insurance carrier’s liability.

In addition, the question of delay and the reasonableness of the cause would be determined by the Workers Compensation Appeals Board in accordance with the facts. This delay or refusal would constitute good cause to rescind, alter, or amend the order, decision, or award for the purpose of making the increase provided for in this section. Finally, this section would apply to all injuries, without regard to whether the injury occurs before, on, or after the operative date of this section.

This bill is expected to be heard in April in its first policy committee.