Top Developments of Calif. Workers' Compensation in the First Half of 2022

At mid-2022 it’s time to take a look at the top developments in California workers’ comp during the first half.

To date 2022 has been a rather quiet year for California’ workers’ comp. Yet, here below, in no particular order, are some of the themes and events that stood out in the California system so far. In some instances I’ve included links to blog posts on those topics.

1. There were huge swings in the number of California COVID-19 workers’ comp claims as waves of COVID infection crested and receded.

According to a COVID claims tracker maintained by the CWCI, as Omicron peaked, 56% of total claims in January 2022 were COVID claims (55,248 reported COVID claims). According to the WCIRB, 41% of indemnity claims filed in January 2022 were COVID claims.

But that dropped quickly.  COVID claims were 2.4% of total claims by March 2022.

And then they began to rise again. As of late June 2022 6,704 COVID claims had been reported in June 2022, triple the numbers for April 2022. With the easily transmissible BA.5 variant, it is likely the numbers of claims will spike again in the summer of 2022. As COVID becomes endemic, we’ll see waves of COVID claims.

In evaluating the financial impact of COVID claims, the WCIRB looked at several think-tank models of the evolution of the pandemic. Using a range analysis, the WCIRB estimated the cost of future COVID claims as 0.5% of total losses and loss expenses. 

As noted below, RAND did a study on the California COVID presumption statutes, And at mid-year, legislative negotiations to extend the presumptions were underway.

2. Important new regulations were issued in the first half of 2022.

Copy services have been begging for an increase in their fees. After years of studies and stakeholder meetings, the DWC adopted a new copy service fee schedule effective July 15, 2022. The background on the copy service fee schedule issue was covered in a 2021 post, “A Copy Service Fee Update?”: https://www.boxerlaw.com/workerscompzone/a-copy-service-fee-update/

New regs providing for electronic service of QME reports went into effect on April 12, 2022: https://www.dir.ca.gov/dwc/DWCPropRegs/2020/QME-Regulations/QME_Regs.htm

And amendments to the WCAB Rules of Practice and Procedure went into effect on January 1, 2022: https://www.dir.ca.gov/WCAB/WCABProposedRegulations/2021/WCAB-Rulemaking/Index.htm

3. Workers’ comp rates appeared to be stable

In April 2022 the WCIRB Governing Committee voted for an advisory rate increase, rejecting the proposal of its public members for a lower advisory rate, a move outlined in my blog post “The Next WCIRB Rate Recommendation”: https://www.boxerlaw.com/workerscompzone/the-next-wcirb-rate-recommendation/

The actual WCIRB rate filing with Insurance Commissioner Ricardo Lara, dated April 29, 2022, can be seen here: https://www.wcirb.com/sites/default/files/documents/20220901_ppr_filing-complete.pdf

The slides presented at the June 14 public hearing by the WCIRB in support of its rate recommendation are here: https://www.wcirb.com/sites/default/files/documents/wcirb-20220614_cdi_hearing-execsummary-ar.pdf

But a July 2022 ruling by Insurance Commissioner Ricardo Lara adopted an advisory rate of $1.45 per $100 of payroll, the same advisory rate approved in 2021. A link to his rate finding is found in my blog post “Ricardo Lara Keeps Benchmark Rate at $1.45”: https://www.boxerlaw.com/workerscompzone/ricardo-lara-keeps-benchmark-rate-at-1-45/

4. An effort by the California trucking industry to avoid application of AB-5 its “ABC”/Dynamex employment test failed. 

The California Trucking Association and several independent owner-operator truckers had pursued a federal court strategy, arguing that federal law pre-empted application of AB-5 to their trucking operations. On June 30, the U.S. Supreme Court refused to review a U.S. Court of Appeals, 9th Circuit ruling holding that AB-5 was not pre-empted by federal law. This issue has particular imprortance for tucking operations at the major California ports of LA/Long Beach and Oakland, as detailed in my blog post “AB-5, California Truckers and the Ports”: https://www.boxerlaw.com/workerscompzone/ab-5-california-truckers-and-the-ports/

5.At midyear, some workers compensation bills were still in play, but no major reforms had surfaced.

Although there have been persistent but vague rumors about quiet background comp reform talks between labor and employers, nothing surfaced by mid-2022. A possible reform placeholder bill, AB 2848 (Santiago), currently is a study bill that expands the scope and timing of a study of medical treatment during the first 30 days of an injury.

A bill to extend the sunset date of a program to allow indemnity payments by a prepaid debit card (AB 2148) (Calderon) was on its way to the governor, and a bill to allow licensed clinical social workers to treat in comp cases (SB 1002) (Portantino) was still in play (see my blog post “More Needed”: https://www.boxerlaw.com/workerscompzone/more-needed

SB 1458 (Limon), a bill to address gender pay disparity through the workers’ comp system, did not advance (see my comments here: https://www.boxerlaw.com/workerscompzone/sb-1458-and-gender-pay-disparity/ )

A bill to create a single payer healthcare system in California (AB 1400 (Kalra) did not advance. Nor did Kalra’s “Workplace Technology Accountability Act” (AB 1651). A bill to reform Independent Bill Review procedures (AB 399) (Salas) passed the California Assembly but remains in the California Senate.

The most contentious bills under consideration in 2022 so far were SB 1127 (Atkins) and SB 213 (Cortese). SB 213 proposes to create rebuttable injury presumptions for hospital employees providing direct care, thereby creating presumptions for a number of musculoskeletal and other ailments. Current California presumption statutes deal with public safety employees but SB 213 proposed to expand presumptions to non-public entity employees. The bill failed a legislative vote in 2021 but came back and was in committee in June 2022.

SB 1127 (Atkins) originally included a provision to shorten the time to evaluate all claims from 90 to 60 days, and in presumption cases to 30 days as well as some substantial penalties for delays. As of mid-June SB 1127 was scaled back, as outlined in my recent post: https://www.boxerlaw.com/workerscompzone/scaling-back/

AB 1751 (Daly), a bill to extend the COVID-19 presumptions, remains in play at mid year.

6. There were some noteworthy workers’ comp case activity at the appellate level.

Some of the most notable cases are tort cases arising out of a workplace situation.

In April 2022 the U.S. Court of Appeals 9th Circuit issued an order certifying questions to the California Supreme Court. The case is Kuciemba v. Victory Woodworks, Inc. The 9th Circuit is asking whether under California law workers’ comp is the exclusive remedy where a family member claims a derivative injury from allegedly contracting COVID through a family member’s workplace exposure. Also, they asked the California Supreme Court to clarify whether under California law the employer owes a duty to the household of the employee to exercise reasonable care to prevent the spread of COVID.

In a case decided by the California Court of Appeal, 2nd District in December 2021 (Sees’s Candies Inc. v. Superior Court) (Matilde Ek) (87 CCC 21)  the Court of Appeal had denied a petition for writ of mandate, ruling that the derivative injury doctrine didn’t bar a spouse tort claim for infection from COVID due to alleged workplace exposure. However, in the Ek case the Court of Appeal made it clear they were not deciding whether the employer owed the spouse a duty of care nor whether the employer had been negligent in handling COVID protocols.

In the context of asbestos exposures, derivative tort lawsuits have been allowed (see Kesner v. Superior Court 81 CCC 1095). The California Supreme Court will now be entertaining this issue in the context of COVID exposure.

Other cases in the first half of 2022 that appeared significant included:

•  Lawson v. PPG Architectural Finishes Inc. (California Supreme Court) (January 27,2022) (12 C5th 703). In Lawson, the California Supreme Court, deciding a case at the request of the U.S. Court of Appeals, 9th Circuit, ruled that whistleblower retaliation claims are to be governed by Labor Code section 1102.5 and not by a U.S. Supreme Court burden-shifting standard).

• Scheer v. Regents of UC (California Court of Appeal 2nd District) (2022) Following Lawson, holding that in whistleblower retaliation a showing of pretextual reasons was not required. Lawson and Scheer may make it easier for some whistleblower retaliation claims to get to a jury. Defendant has petitioned for review by the California Supreme Court.

•Trigueros v. WCAB (California Court of Appeal 5th District) (March 22, 2022) (not published) (deals with effect of service by mail on timing of QME panel requests)

•California Correctional Peace Officers Association v. WCAB (Martin) (Court of Appeal) (January 2022) (withdrawal of lien did not excuse requirement to appear at hearing on sanctions)

As you can see there was little that was earth shaking in the appellate courts on “normal” workers’ comp issues.

But as always there was plenty of activity at the WCAB panel level. Issues of note that were addressed in panels included the QME process (such as striking QMEs, telehealth evals, and replacement panels), apportionment, psyche injury causation and good faith personnel actions, the neutral risk doctrine, the going and coming rule, cumulative trauma date of injury, the application of LC 4662(a)(2), use of diminished future earning capacity testimony in post1/1/13 cases, application of the Kite doctrine, cancer latency periods, SIBTF, etc.

7.The comp system continued to adapt to the challenges of COVID and a cultural shift among many in the comp industry to a remote work model.

In January 2022 the WCAB returned to virtual hearings. But with COVID seeming to ease, on March 9, 2022 the DWC issued a newsline announcing a return to in-person trials (but not conferences) effective March 21, 2022. But conferences continue to be done remotely. And in person depositions appear to be the exception at mid 2022. Many work comp stakeholders are either working remotely or in a hybrid format.

At the June 2022 employer-side CCWC conference at Disneyland, some speakers expressed concern about an aging claims industry and difficulties attracting and retaining workers to the workers’ comp claims field.

8. As usual, studies on the comp system dropped.

RAND unveiled a draft of its COVID study, “COVID-19 in the California Workers’ Compensation System. A Study of COVID-19 Claims and Presumptions Under Senate Bill 1159”: https://www.dir.ca.gov/chswc/Reports/2022/RAND_RRA1430-1.pdf

The California Workers’ Compensation Institute prepared several studies, one on IMR Decisions 2015 to 2021  https://www.cwci.org/document.php?file=5219.pdf and another on medical access under the California system https://www.cwci.org/press_release.html?id=889.

And around midyear CWCI produced a study on the impact of the new Medical-Legal Fee Schedule: https://www.cwci.org/press_release.html?id=905. My blog on that can be found here: https://www.boxerlaw.com/workerscompzone/cwci-say-new-doc-fee-schedule-is-costly/

Stay tuned as we make our way in the second half of 2022.

By Julius Young

Courtesy of Workers Comp ZONE

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