HomeMy WebLinkAboutSB897_LtrToRoth_20160325TY
Office of the City Council
990 Palm Street, San Luis Obispo, CA 93401-3249
805.781.7114
slocity org
March 25, 2016
The Honorable Richard Roth
Member, California State Senate
State Capitol, Room 4034
Sacramento, California 95814
Fax: (916) 651-4931
RE: Senate Bill (SM -897 -Moth), Workers Compensation
Notice of OPPOSITION
Dear Senator Roth:
The City of San Luis Obispo opposes your Senate Bill (SB) 897, which would provide an
additional year of leave with full salary to certain peace officers who have been temporarily
or permanently disabled as a result of a "catastrophic injury" suffered in the course of
employment.
Adequate Benefits Currently Provided. An injured worker who cannot return to normal or
modified work duties as the result of a workplace injury or illness is entitled to two years of
temporary disability (TD) benefits under California Labor Code §4650. These benefits are
intended to serve as a wage replacement benefit for injured workers who are unable to work
following an injury and are paid at a rate of two-thirds of the average weekly wage over the
past year; the payments are based on pre-tax wages and no federal, state or income taxes are
paid on TD benefits.
TD benefits are capped at 104 weeks, but it's important to note that the injured worker may
collect these payments over a five-year period and the cap can be extended to 240 weeks in
certain cases (severe burns, amputations, pulmonary fibrosis, etc.).
Labor Code §4850 requires state and municipal governments to provide specified categories
of peace officers with a more substantial wage loss benefit. Many peace officers receive up
to one full year of their salary in lieu of the regular method of calculated TD benefits. These
payments are also not subject to taxes and the officers continue to accrue vacation leave,
sick leave and retirement benefits service credit. Following the year of fully -paid leave, this
category of public employees are then allowed one additional year of wage loss benefits in
the form of temporary disability payments.
A Misuse Of Public Resources. Many public agencies are self-insured for workers'
compensation claims, inchtdiU 175 cities. Payments are treated in a pay-as-you-go manner.
Therefore, any increase in costs has a direct impact on the same local funds that are utilized
to provide services to our residents.
A Huge Cost Driver. While employers wait to experience the full effects of promised cost
savings following the passage of the workers' compensation system reforms in 2012, it
should be noted that public agencies in California share some of the highest workers'
compensation costs in the state. We believe that the current benefits available to this class of
employees is an optimal balance between providing fair treatment and rehabilitation benefits
to injured workers and maintaining a stable fiscal situation for local governments — the
additional, unnecessary expansion of benefits in SB 897 will lead to unprecedented and
unpredictable costs to public agencies.
Defining " Catastrophic Iniury." SB 897 would entitle certain peace officers to an
additional year of leave with full salary if that officer is "...disabled, whether temporarily or
permanently, by a catastrophic injury arising out of and in the course of his or her duties. "
Currently, no definition of "catastrophic injury" exists in the California workers'
compensation system. Effectively, this lack of legal clarification would expose public
agencies to increased litigation in the area of workers' compensation, as it would be unclear
what injuries could potentially be classified as "catastrophic" and therefore trigger expanded
4850 benefits under this bill.
Overturning Recent Court Decision. SB 897 could also be construed to overturn a recent
court decision made in County of Alameda v. WCAB (Knittel) which upheld that benefits
provided under Labor Code §4850 are included in the term "aggregate disability benefits" in
Labor Code § 4656(c)(2) — therefore, the 104 week cap is reached once an injured worker
has utilized §4850 benefits and a year of TD benefits. SB 897 provides an additional year of
benefits under Labor Code §4850 "...in lieu of temporary disability payments..." It is
unclear whether this legislation's intent is for the second year of full salary to be included in
the 104 -week cap or for the specified officers to receive two years of §4850 benefits in
addition to the one year of TD benefits.
For these reasons, the City of San Luis Obispo opposes your Senate Bill (SB) 897.
Sincerely,
an Howell Marx
Mtiyor
cc: The Honorable Bill Monning, fax: (916) 651 -
The Honorable Tony Mendoza, Chair, Senate Labor and Industrial Relations
Committee, fax: (916) 651-4932
Randy Chin, Chief Consultant, Senate Labor and Industrial Relations Committee,
fax: (916)
Dave Mullinax, League of California Cities, dmullinax ii,cacities.org
Dane Hutchings, League of California Cities, dhutching_sQcacities.org
Meg Desmond, League of California Cities, mdesmond@,,cacities.org
4917
327 - 5703