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California WCAB Panel Addresses Temporary Disability With Salary Continuation Under the Education Code

November 19, 2011 (1 min read)
 By Bruce P. White, Esq.
A WCAB panel has recently issued an important decision that will give guidance to the workers’ compensation community on salary continuation plans.
The decision in Fiorentino v. Allan Hancock College, ADJ7527243, is noteworthy in that it pertains to the integration of Temporary Disability (TD) with salary continuation under the California Education Code.
The case involved payment of TD benefits after the WCJ’s Finding and Award (F&A) issued, finding the injury was work related.
The F&A issued on 5/19/11 finding injury. The TPA paid retroactive TD on 5/24/11. The TD was made payable to Allan Hancock College (AHC) because they would pay salary continuation benefits under the Education Code. The TD was received after the payroll cutoff period for the 5/31/11 payroll. Therefore, AHC paid the salary continuation benefits, with the TD incorporated into those benefits, on the 6/30/11 payroll. The WCJ found a Labor Code Section 5814 penalty because the salary continuation benefits were not paid until 6/30/11.
AHC relied on Labor Code Section 4650(g), which states that if the employee is on a valid salary continuation plan, a 10% self imposed increase does not apply. Labor Code Section 4650(g)(2) requires the payment to be made on the employee's regular payday. Because payment was made in accordance with Labor Code Section 4650(g), AHC's payment was not unreasonable.
Defendant argued that because the TD was included in a valid salary continuation plan that was paid on the employer's first possible regular payday, there was no Labor Code Section 5814 penalty.
The WCAB granted defendant's Petition for Reconsideration and reversed the WCJ's finding of a Labor Code Section 5814 penalty.
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