HR Management & Compliance

Workers’ Compensation: California Supreme Court Makes It Easier for You to Avoid Injured Workers’ Discrimination Claims

In a new opinion, the California Supreme Court has made it more difficult for employees to prove they were discriminated against for filing a workers’ comp claim. We’ll explain the court’s ruling.

Agreement to Permanent Disability Benefits

Ronald Lauher, a counselor for the California Department of Rehabilitation, suffered from work-related stress and depression. Eventually, Lauher, the department, and the department’s workers’ comp carrier agreed his stress and depression were an industrial injury causing a permanent disability of 23 percent. He received $140 a week in permanent disability benefits. The agreement specified that Lauher still needed medical treatment for the condition.

Pay Docked for Medical Visits

Lauher returned to work once the stipulation was signed, and he continued to see his doctor, who only made appointments during regular business hours. The round-trip from Lauher’s office to the doctor’s office took between 2 and 4 hours. The department informed Lauher that his salary would be docked for this time off unless he used accrued sick leave or vacation. All told, Lauher used about 200 hours of sick leave or vacation to cover his medical visits.

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Lauher went to the Labor Commissioner claiming he was entitled to receive temporary total disability indemnity benefits (TDI) to reimburse him for sick and vacation leave docked to cover his medical visits. Plus, he argued, the department violated section 132a of the Labor Code—which prohibits discrimination against employees who file workers’ comp claims—by requiring him to use up paid leave for the doctor visits. A workers’ compensation judge ruled in Lauher’s favor, and the Workers’ Compensation Appeals Board agreed. A California court of appeal, however, annulled the WCAB decision.

No Temporary Benefits After Maximum Recovery

Now the California Supreme Court has ruled in the employer’s favor. Rejecting Lauher’s argument that he was entitled to TDI for his medical visits, the court explained that TDI replaces wages during an injured worker’s healing period. Permanent disability indemnity, which Lauher was receiving, compensates for any residual handicap or effects of the injury after maximum recovery has been attained. Thus, once an employee’s injury becomes “permanent and stationary,” meaning the employee’s position isn’t expected to change and the employee returns to work—as in Lauher’s case—the employee is no longer entitled to receive TDI to reimburse lost wages. This is true even if the employee needs more time off because of the industrial injury or illness.

Sick and Vacation Docking Not Discriminatory

The court also considered Lauher’s claim that the department violated California law by requiring him to use his accumulated sick and vacation leave. Previous rulings stated that an employee could prove discrimination by merely showing an employer’s action caused some detriment to the injured worker. But the court ruled this standard was too broad. The important thing, the court said, is whether the employer treated the injured worker differently from other employees because of the industrial injury or claim.

The court concluded that Lauher was not the victim of discrimination because the employer treated him the same way it treated other workers who had injuries that were not work-related.

Impact of Ruling

To establish discrimination under section 132a of the California labor code, a worker will now have to prove they were treated differently from other employees because of an occupational injury or workers’ comp claim. To avoid trouble, it is critical to ensure that you apply your workplace policies evenhandedly, treating industrially injured workers the same as workers with a non-industrial injury or illness. Note that you can be charged with a misdemeanor if a court decides that this rule was violated. Plus, the employee’s workers’ compensation benefits can be increased by 50 percent (to a maximum of $10,000). If a violation is found, the employee is also entitled to reinstatement and reimbursement of lost wages and work benefits.

Also, keep in mind this important wage-and-hour point: If the employee is exempt from overtime, requiring accrued paid time off to be used for medical visits could be a problem under state wage-and-hour regulations.