City of Marysville
526 C Street
Marysville, CA 95901
(530) 749-3901
1 October 4, 2022
The Honorable Gavin Newsom
Governor, State of California
1021 O Street, Suite 9000
Sacramento, CA 95814
Subject: SB 1127 (Atkins) – Workers’ Compensation: Liability Presumptions
REQUEST FOR VETO
Dear Governor Newsom,
I am writing to request that you VETO SB 1127 (Atkins), which proposes to truncate the claims review process required of employers without giving them the tools to make decisions more quickly.
SB 1127 reduces the timeline for employers to make an informed decision about covering workers’ compensation claims covered by a presumption statute from 90 to 75 days, and it retroactively imposes penalties as high as $50,000 per claim if an employer “unreasonably” rejects liability for one of these workers’ compensation claims. Since there is no definition of an “unreasonable denial” each denial of a “rebuttable” presumption will be litigated as unreasonable- at a minimum drastically increasing costs and litigation for all employers.
I support making better and faster decisions about workers’ compensation claims. However, I believe, respectfully, that you should VETO SB 1127 and encourage stakeholders to work together on reforms that actually achieve more timely claims resolution.
The laws of the State of California already provide for a fair and equitable system for all workers. Our workers’ compensation system is “no fault”, meaning that employers pay for benefits even if there was no specific negligence. Additionally, state law requires the workers’ compensation appeals board judges to “liberally construe” the laws of the state toward the provision of benefits. These two statutory requirements make our workers’ compensation system extremely accessible for injured workers.
SB 1127 DOES NOT PROVIDE SUFFICIENT TIME TO INVESTIGATE CLAIMS The Investigation Process
California law requires employers to “conduct a reasonable and timely investigation upon receiving notice or knowledge of an injury or claim.” The regulations expressly prohibit an employer from restricting an investigation to “preparing objections or defenses to a claim.” Instead, employers must “fully and fairly gather the pertinent information, whether that information requires, or excuses benefit payment.” Finally, the employer is required to document the investigatory acts undertaken and the information obtained as a result. Taken together, the law requires employers to conduct a thorough investigation of all relevant facts, which both protects their due process rights and the injured worker’s due process rights by creating a full, impartial record of the events.
SB 1127 requires employers to complete investigations more quickly but provides no remedy for the systemic limitations imposed by the state that prevent employers from achieving that outcome. I strongly oppose changes to the investigation period because it undermines the due process rights of both the injured worker and the employer. Ensuring a fair, impartial investigation that protects the City of Marysville
526 C Street
Marysville, CA 95901
(530) 749-3901
2 rights of both parties equally and fairly takes time, and, in some cases, it just takes longer than 30, 75, and sometimes 90 days.
Disproportional Impact on Public Employers
This bill places a costly burden on public employers who are responsible for administering claims for injured workers with presumptive occupational injuries. Presumption statutes apply to injuries and illnesses such as heart disease, cancer, and PTSD that are complex in causation and sometimes difficult for workers to connect to employment. That is, in fact, why the legislature has historically chosen to impose a presumption that shifts the legal burden of proof away from employees and instead requires an employer to prove that the claimed injury was not caused by employment.
Presumptions might be rebuttable in name, but they already impose a near-impossible task by requiring employers to “prove a negative” (e.g., that a cancer is not caused by employment). This requires a more thorough investigation that, as will be discussed below, cannot be completed in 90 days, let alone 75.
Hurts Injured Workers by Providing Less Employer-Funded Medical Care During the investigative period, the injured worker receives up to $10,0000 of medically necessary treatment, free of charge to them. This employer funded medical treatment ensures that the injured worker is not adversely impacted by this investigative period. Even if the employer is found later to not be liable and the claim is denied, the injured worker does not need to pay a cent back. This balances the rights and responsibilities of employers and injured workers, maintaining a fair and equitable system.
NEW PENALTIES MAKE TAXPAYER-FUNDED CLAIMS EVEN MORE EXPENSIVE SB 1127 proposes harsh new penalties for employers who “unreasonably” reject liability for clams covered by presumption statutes, yet it does not define that term making each rebuttable presumption claim, fodder for litigation. SB 1127 mandates a penalty of five times the value of benefits delayed or denied, with a maximum penalty of $50,000. This bill impacts public and private employers because these penalty provisions apply not only to the severe injuries and illnesses found in the public safety presumption statutes, but also to the COVID-19 presumption. Similarly, all these claims will be held to the 30-day investigation period, which all but guarantees that a legally sufficient investigation cannot be conducted within the allotted timeframe.
Finally, the new penalties in SB 1127 apply RETROACTIVELY to all injuries without regard to the date of injury. This means that the penalty portion of the bill would apply retroactively to decisions that were made prior to the date of enactment. This is fundamentally unfair to employers and will add significantly to the litigation and friction associated with the bill.
MORE THAN DOUBLES TEMPORARY DISABILITY BENEFITS
SB 1127 more than doubles the period of temporary disability that is available to firefighters and police officers covered by the cancer presumption. The peace officers and firefighters covered by the cancer presumption are also eligible for one year of complete wage replacement benefits instead of temporary disability, and disability retirement benefits that are unavailable to other workers. We oppose the vast expansion of temporary disability benefits as proposed by SB 1127 because we are unaware of any data that would suggest this is necessary or desirable.
City of Marysville
526 C Street
Marysville, CA 95901
(530) 749-3901
3 If signed, this bill threatens litigation and penalties for doing the work of appropriate claims investigation. In addition to tax-free wages and pensions available to safety officers, this bill proposes baseless multipliers and creates a taxpayer-funded bonus for “delays” outside of the employer’s control.
Dramatic changes to employer-funded medical care and benefits, largely bankrolled by taxpayers, requires data, thoughtful review, and more robust stakeholder engagement. Until that time, please VETO SB 1127.
Signed,
__________________________________ __________________________________ Chris Branscum, Mayor Bruce Buttacavoli, Vice Mayor
__________________________________ __________________________________ Dominique Belza, Councilmember Stuart Gilchrist, Councilmember __________________________________
Brad Hudson, Councilmember