TEMPORARY DISABILITY: CAN 104 REALLY BE MORE?

By: Howard Stevens - [legal]

On April 16, 2004 SB 899 went into effect. One of its provisions is just beginning to have an effect on the typical caseload: The two year limitation on the payment of temporary disability. Although the statutory language and intent of the limitation provision seems clear enough at first blush, there are hidden and (as yet) untested traps in the statutory language.
Labor Code -4656(c)(1) provides that ''aggregate disability payments for a single injury occurring on or after the effective date of (the new statute), causing temporary disability, shall not extend for more than 104 compensable weeks within a period of two years from the date of commencement of temporary disability payment.'' There are, therefore, two calendar limitations on TD payments: The two years within which TD can be paid, and the maximum number of weeks for which payment can be made.
One major problem concerns the date on which you are allowed to begin the count for the two year limitation. According to the statutory language, you can only begin counting from the ''commencement'' of temporary disability payments. Does ''commencement'' mean the issuance of the first TD check, or the date for which TD is first paid?
Notice that the statute uses two different terms that seem to have different plain meanings. ''Compensable weeks'' clearly refers to the dates for which TD is owed. ''Commencement of temporary disability payment'' would suggest that you should begin counting the two year period only as of the date the first check is sent out. Thus, if you have an applicant that (hopefully) has less than 104 weeks of compensable lost time, counting from the date the first check is mailed, once you are out 104 weeks from that date, no more TD is payable for that injury.
The philosophy and prevailing law has always placed the risk of delay on the employer. Thus, if for whatever reason, the first payment is delayed, when the TD check is finally sent out, the ''retro'' period is likely going to be held ''outside the cap'' of LC -4656(c)(1), and we will have to start marking off the 104 week period following the issuance of the first check, in order to determine the cutoff date, no matter how many weeks that first check covered. Ironically, this would seem to mean that, even where the first payment is sent timely per the controlling statutes, there will be some retrospective component (a three day waiting period and the standard practice of paying one week back and one week ahead).
Thus, in the case where an employee is certified as disabled for more than 104 weeks, in every case the cutoff date will arguably be at least slightly beyond 104 weeks after the first compensable day of disability, and the employee will be entitled to slightly more than 104 weeks of compensation, and in cases that are unsuccessfully disputed, potentially a great deal more.
While the employer may test the waters on this issue by arguing that the statute limits applicants to a maximum of total payments for TD of 104 weeks within a two years from the onset of TTD, the argument may not be successful in light of the different language the legislature used to describe the two different limitations. One possible strategy to consider is the issuance of one TD check (assuming there is medical certification) even where acceptance of a claim is going to be delayed. Provision of the benefit cannot be used as an admission of liability. LC 4909. Although there has not yet been any judicial test of the new TD limitation statute, early issuance of a check for some TD may be deemed to start the clock running on the two-year limitation.
This brings up yet another problem area: Just what constitutes the first payment? Does EDD payment count? How about salary continuation? What about a temporary partial disability payment?
Again, there has as yet been no judicial interpretation, but here are some thoughts:
As to EDD payments, the Labor Code uses the term ''aggregate disability payments.'' The term is used in a subsection of LC -4656 that is captioned ''Maximum period for temporary disability payments.'' Thus, EDD payment may not start the clock running. If EDD paid during a period of delay, and the period involved is compensable, the carrier has the obligation to reimburse EDD and this may be deemed ''outside the cap'' of LC -4656 (c)(1).
Salary continuation, according to prior cases, will mean there is no liability for TD because there is no loss of wages. Herrera v. W.C.A.B. (Goleta Lemon Assn.) (1969) 71 Cal. 2d 254, 257-259, 78 Cal. Rptr. 497, 455 P.2d 425, 34 Cal. Comp. Cases 382; Cone v. Zack's Pasta Kitchen (1988) 53 Cal. Comp. Cases 251, 256 (Appeals Board En Banc decision). However, for the same reason it is not clear whether such payments start the clock running on the 104 week TD limitation. Borrowing (out of context) a principle that has been applied by the WCAB to similar questions in a different context, the safest way to try to prevent salary payments from being deemed ''outside the cap'' is to have a written determination by the employer, in advance, that such payments are intended to represent TTD payment for such time as the employee is unable to work and certified as disabled.
As to temporary partial disability, or wage loss, LC -4656 (c)(1) also applies, as the limitation statute does not distinguish any more between temporary total and temporary partial disability. Temporary partial disability payments now have the same limitation as TTD. Either type of disability payment qualifies to start the clock running.
A client posed a question regarding the application of the exceptions to the 104 week/two year limit provided by LC -4656(c)(2), That statute lists a variety of conditions which, if applicable to the employee, extend the TD limit to 204 weeks within a period of 5 years from the date of injury (not the date of commencement of TD payment). The question posed was whether these exceptions would apply even where the condition (such as Hepatitis B) was not the subject of the industrial claim. The statute, it seems, does not have any language limiting its application to enumerated conditions that are industrial.
The fact that the statute refers to employees suffering the noted conditions (but does not say ''industrially related conditions'') should not be a blank check for those cases where there is no causal connection between the special condition and TTD status. On the other hand, if the non-industrial condition is contributing to the TD status, it is possible that the exception will be held to apply and the two year limit will vanish. This is because TD is not apportionable, and concurrent causes of TD may often be a combination of industrial and non-industrial conditions. You can anticipate future appellate law on this issue.

Written by Howard J. Stevens, Director of Training, McDermott and Clawson, LLP.

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