SB 1127: Workers’ Compensation Liability Presumptions

Keenan Briefings

Briefings

SB 1127: Workers’ Compensation Liability Presumptions

October 26, 2022

SB 1127 (Chapter 835, Statutes of 2022) was signed into law by Governor Newsom on September 29, 2022. The passage of SB 1127 reduces time periods a claim administrator/employer has to deny liability for workers’ compensation claims for certain injuries, increases the time specified that employees can access temporary disability benefits for work-related cancer injuries, and most importantly imposes a penalty for alleged unreasonably rejected claims.

Reduced Time Periods

This bill requires that for presumptive injuries, covered under Labor Code Sections 3212 to 3212.85 and 3212.9 to 3213.2 be considered compensable if the claim is not denied within 75-days after the claim form is filed. This bill does not reduce the period to deny liability of claims for ALL injuries, rather only those covered in the listed sections. Those code sections govern the peace officer and firefighters’ presumptions for specified injuries. The time period has been reduced from 90-days to 75-days. The presumptions continue to be rebuttable, whereas employers can still demonstrate the injury did not arise out of employment by other evidence or exposure is not reasonably linked to the disabling injury. Because this presumption is limited to certain injuries (Cancer, PTSD, heart trouble, pneumonia, etc.) it is important to know what injury is being claimed and whether the reduced time period will apply.

Temporary Disability Benefits

Newly enacted, SB 1127 expands temporary disability for specified firefighters and peace officers claiming injuries related to cancers, including leukemia, to receive up to 240 weeks of temporary disability benefits. Unlike the other provisions in Labor Code 4656 that limit receipt of temporary disability benefits within 5 years from the date of injury, SB 1127 does not limit the collecting of benefits within 5 years from the date of injury for injuries related to cancer. Because this does not expand temporary disability over every injury nor to every employee, again it is important to make sure that the employer is aware that for this section to apply, the firefighter or peace officer must be claiming an injury related to cancer.

Penalty

Where liability has been found to be unreasonably rejected, the claims administrator/employer may be penalized equal to five times the amount of the delayed benefits, not to exceed $50,000. Whether the claim is “unreasonably” denied is to be determined by the local Workers’ Compensation Appeals Board. Unlike the other two provisions, where they are to commence on January 1, 2023, and injuries thereafter, penalties may be sought to apply to ALL injuries under Labor Code Sections 3212 to 3213.2, whether the injury occurs on or after January 1, 2023, or before. Therefore, should the claims administrator/employer decide to reject a claim, the appropriate factual, medical, and legal evidence is required to prove why the claim was rejected. .

This legislation is to become operative January 1, 2023. AP Keenan’s workers’ compensation TPA is incorporating these new rules into its workflow and will be ready to comply on January 1.

AP Keenan is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities, and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.