27 Apr 2018

California: Important Considerations When Calculating Permanent Disability

Recently, in Eyad v. Airport Commuter, Inc., 2018 Cal. Wrk. Comp. P.D. LEXIS 85 (Appeals Board noteworthy panel decision), a panel of commissioners with the Workers’ Compensation Appeals Board (WCAB) adopted and incorporated a decision by a Workers’ Compensation Administrative Law Judge (WCALJ) addressing the appropriate computation of permanent disability (PD) in a workers’ compensation case. What makes this case so interesting is not that it necessarily stands for a new legal principle concerning the proper calculation of PD, but that the panel upheld the WCALJ’s combining several separate principles in coming up with a significantly higher overall level of permanent disability.

Indeed, what started out in Eyad as a strict American Medical Association (AMA) Guides rating of 58%, after the principles set forth in Milpitas Unified School District v. WCAB (Guzman) (2010) 187 Cal. App. 4th 808, 75 Cal. Comp. Cases 837 and Athens Administrators v. Workers' Comp. Appeals Bd. (Kite) (2013) 78 Cal. Comp. Cases 213 (writ den.) were considered, the final rating turned out to be 98%. 58% would have been worth approximately $88,377.91 while 98% is worth $273,280.98 plus a life pension including cost of living adjustments. To state it plainly, these considerations were worth well over $200,000 to the injured employee.

Cases like Eyad raise the question of whether a PD benefit based solely on a strict AMA Guides rating, without any consideration of the principles set forth in Guzman, Kite as well as Ogilvie v. W.C.A.B. (2011) 197 Cal. App. 4th 1262, 76 Cal. Comp. Cases 624, should constitute an appropriate basis for a PD award any longer. These additional considerations just make too large of a financial difference not to be considered in any given case.

These cases all highlight the fact that the 2005 Permanent Disability Rating Schedule (PDRS) is nothing more than a guide for determining the appropriate level of permanent disability. All of the stakeholders in a workers’ compensation case should take note that it is only once the “strict rating” in accordance with AMA Guides has been established that the true yeoman work of determining an accurate and appropriate level permanent disability actually begins.

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