Court Penalizes CHP For Deductions From Officer’s Salary Continuation Benefits

On August 15, 2016, in Andrew Hernandez vs. Workers’ Compensation Appeals Board and Department of the Highway Patrol, B268700, the Second District Court of Appeal, Division Seven, determined that accrued annual non-industrial leave benefits may not be used by the department in its calculation of the salary continuation conferred on a sworn member of the Department of the California Highway Patrol (CHP) pursuant to Labor Code section 4800.5 following an industrial injury. The court aned a decision by the Workers’ Compensation Appeals Board (WCAB) which determined that Sergeant Hernandez (Applicant) was not entitled to a penalty for unreasonable delay of disability benefits, and that Applicant’s claim for reimbursement of accrued leave time was outside the jurisdiction of the WCAB.

In California’s workers’ compensation scheme, public safety officers are afforded several benefits which are generally not available to other injured workers. One of these special benefits, provided only to public safety officers, is up to one year of paid leave of absence at full salary when required by an industrial injury as set out in Labor Code section 4800.5(a). These benefits are in lieu of temporary disability benefits which are payable at 2/3 of average weekly wages up to a statutory maximum to injured workers who are not public safety officers.

Sergeant Hernandez was originally found to be temporarily totally disabled during the period July 18, 2011 through November 8, 2011 by a workers’ compensation administrative law judge (WCJ) in February of 2013. When the Highway Patrol paid this award, a portion of Applicant’s accrued annual paid non-industrial leave was deducted from the section 4800.5 benefits. Applicant filed a Petition for Penalties for unreasonable delay of his section 4800.5 benefits, contending that although he received his full salary during the period in question, he was never reimbursed for the annual leave time which was wrongfully deducted from his section 4800.5 benefits. Applicant also sought to recover the full monetary value of the annual leave time. The WCJ agreed with Applicant’s position and awarded penalties in accordance with Labor Code section 5814.

Defendant filed a Petition for Reconsideration, contending that Applicant’s effort to recover the 4800.5 benefits was barred by res judicata, since Applicant never sought reconsideration of the original award of “temporary disability,” rather than section 4800.5 benefits in February 2013. Defendant also asserted that penalties were not appropriate, because Applicant received his full salary during the period in question, and that the issue of reimbursement of the accrued annual leave was an issue of employee benefits outside the jurisdiction of the WCAB. On October 22, 2015, the WCAB rescinded the WCJ’s findings and denied Applicant’s claims, essentially agreeing with the position outlined in Defendant’s Petition for Reconsideration.

In reversing the WCAB the Court of Appeal cited Labor Code section 3751(a) which states, “No employer shall exact or receive from any employee any contribution, or make or take any deduction from the earnings of any employee, either directly or indirectly, to cover the whole or any part of the cost of compensation under this division.” Using rather harsh language, the court found there “can be no dispute” that the deduction of Applicant’s accrued annual leave during the period in which the CHP owed section 4800.5 benefits to him violated both that section and section 3751(a) and was analogous to a loss of salary. The court held that to require Sergeant Hernandez to use his annual leave to pay for his salary in lieu of temporary disability payments meant he must pay for his own workers’ compensation benefits. The court further found that the WCAB had jurisdiction since the issue before it concerned whether Applicant was properly compensated in accordance with section 4800.5, and was not a dispute regarding employee benefits. Finally, the court found that Applicant’s claim was not barred by res judicata, since the WCJ awarded benefits in accordance with section 4800.5 in her Findings and Award.

While this decision involves sworn members of the CHP, its reasoning would almost certainly be applied to other public safety officers. Salary in lieu of temporary disability is accorded under Labor Code section 4850 to a wide range of public safety officers, including municipal police officers, sheriffs, city and county firefighters, county lifeguards, probation officers and others identified in section 4850(b). The Hernandez case gives clear warning to any governmental entity which employs public safety officers. No offset by industrial leave of absence benefits may be achieved by deducting accrued sick time, vacation, or other leave.

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August 24, 2016