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Arnold Schwarzenegger and Jerry Brown both backed Senate Bills that had a significant impact on Injured Workers' in California - How does this affect you and what can we do about it?

“I never want to hurt any one of the workers or the people that get the benefits”

[former]  Gov.  Schwarzenegger,Sacramento Bee 11/19/03

The Workers’Compensation System seems to go through a huge legislative upheaval every five years or so. Most recently, Governor Jerry Brown signed SB- 863 into law. What happened in 2004 truly changed everything.

One Day of Infamy:

Bad things happened to working men and women in this state on April 19, 2004. That was the day SB-899 was signed into law. Unhappy with Gray Davis, Californians hired Arnold Schwarzenegger to do the job. He succeeded in pressuring the “girly men” of the California Legislature into passing lopsided pro-insurance “reforms.” Benefits to injured workers were slashed across the state. Billions of dollars changed hands with the stroke  of a pen. Insurance companies began making money like big oil companies.

Some of the major changes to benefits under SB-899:

1)  Temporary Disability: Payment for Lost Wages or TD

Now, injured workers only get two years coverage for TD. If you are continuously disabled, it will most certainly end in two years ready or not. Fortunately, most injuries take much less than two years to recover from. But what about people who have more serious injuries (think back or major joint surgery) that take longer to recover from? They are literally left out in the cold unless they qualify for other state and federal benefits.

2)  Permanent Disability: Payments made for loss of earning capacity or PD

Permanent Disability is now determined by the Guides to the Evaluation of Permanent Impairment, 5th (the Guides). The Guides are simply a mean spirited impairment calculation protocol developed by conservative doctors who have no idea what the true cost of an industrial injury is to a working person. The Guides themselves indicate that they are not to be used to develop figures for permanent disability, but they are used across the nation because they are very stingy to workers. They aid the bottom line of big insurance companies which is why they have been implemented in cookie cutter fashion across this country—working people here in California being the latest victim.

Also, “apportionment” rules under Labor Code Sections 4663 and 4664 now allow significant reductions to PD based on preexisting conditions, pathology and awards.

3)  Medical treatment is now evidence based and driven by the American College of Occupation Medicine Guides (“ACEOM Guides”)

The ACEOM Guides are another sad reminder of the Golden Rule—he who has the gold, makes the rules. This protocol was, like the AMA Guides, assembled by a group of conservative industrial doctors to save money for insurance companies. SB-899 gave insurance adjust- ers some serious tools to limit medical treatment to injured workers, including, Multiple Provider Networks, Utilization Review and Second opinion on back surgeries.

Jerry Brown and SB-863

Governor Jerry Brown signed SB-863 into law in 2012. Like SB-899, it will usher in wide ranging changes to the compensation system. I touch on only two here. There are things about the new law I like and don’t like. The good news is that people injured on and after 1/1/13 are going to get a bump in their permanent disability level on their claims. It is about time. The rumor is that permanent disability rates will increase overall by 30% over the next two years. The bad news is the insurance industry got their way again on medical treatment issues. Medical disputes are supposedly no longer in the hands of lawyers and judges. All disputes over medical treat- ment will now be handled by the Department of Industrial Relations via their Independent Medical Review system. It will be HMO style decision making by doctors who you will never see. Appellate rights are sharply limited. There are lots of unknowns here that only the next few years will clarify.


It has been years since SB- 899 was voted into law. It was like an atomic bomb went off in our little legal community. But when you think about it, you have to ask yourself the question: what are we going to do about it? I have a client who suffered a very serious back injury that ultimately confined her to a wheel chair. The doctors could never understand her sunny disposition. I asked her about this once and she said, “Tom, 10% of life is what happens to you; and 90% is how you deal with it…” So that is to be our job from here on out—dealing with it. Dusting ourselves off and fighting back. It is not an impossible task. And Arnold? — Well he is single now and back where he belongs— Hollywood.

The  preceding article is a condensed version of a chapter appearing in the Worker’s Compensation Survival Manual, by Thomas Ledgerwood. If you would like a copy of the book, you may download a complimentary copy here.

Thomas Ledgerwood
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