The Supplemental Job Displacement Benefit and Fraud Prevention

1. The Supplemental Job Displacement Benefit and Fraud Prevention 2/26/2019 James D. Fisher, Counsel to the Administrative Director of the DWC

2. People v. Rhonda F. Tapper and Virgilio Aguinaldo Abad (Career Advancement Solutions) (RTF Vocational Services) Filed: Apr. 12, 2018 Lab. Code § 3215 Pen. Code § 550 (b)(3) Ins. Code § 1871.4 (a) (1) Filed by Julie Sousa of the Santa Clara DAs Office.

3. Assessment of Fine and Order of Abatement Filed: November 29, 2018 Filed by Bureau For Private Postsecondary Education Penalty: $ 100,000 fine and an order to cease operation

4. What are we are going to cover • What is the Supplemental Job Displacement Benefit (SJDB) ? • Who is eligible to receive the SJDB? • When does the injured worker receive the SJDB? • What is payable under the SJDB? • Resolving disputes about the SJDB? • What does fraud look like involving the SJDB?

5. What is the Supplemental Job Displacement Benefit (SJDB) • Substitute for the Vocational Rehabilitation benefit that ended on 12/31/2003. • Injuries occurring between 2004 to 2012. • Injuries occurring between 2012 to the present. • The administrative director is authorized by the legislature to promulgate rules and regulations implementing the SJDB.

6. What is the Supplemental Job Displacement Benefit (SJDB) • Vocational Rehabilitation-$16,000 limit. (Sunset 2009) • Injuries occurring between 2004 to 2012 (Tiered Benefit) • $4,000 where Permanent Disability (PD) is 1% to14%. • $6,000 where PD is 15% to 25%. • $10,000 where PD is 26% to 99%. • Injuries occurring on or after 1/1/2013 to the present. • $6,000 no matter the level of PD. • Benefit expires either 2 years after the issuance or 5 years after the date of injury, which ever is later.

7. What triggers liability for the SJDB?

8. What triggers liability for the SJDB? • Constants for all dates of injury. • Liability is accepted by the employer or the WCAB found the employer liable for the injury. • The injury must cause permanent disability. • The injury must cause lost time from work. (i.e. temporary disability)

9. What triggers liability for the SJDB? Labor Code § 4658.6 (1/1/2004 to 21/31/2012) Labor Code § 4658.7 (1/1/2013 and after) The offer is made no later than 60 days after receipt by the claims administrator of the first report received from either the primary treating physician, an agreed medical evaluator, or a qualified medical evaluator, in the form created by the administrative director pursuant to subdivision (h),finding that the disability from all conditions for which compensation is claimed has become permanent and stationary and that the injury has caused permanent partial disability. • The injured employee does not return to work for the employer within 60 days of the termination of temporary disability, the injured employee shall be eligible for a supplemental job displacement benefit. • Note: possible increase in PD.

10. Offers of work(2004-2012) • Labor Code § 4658.6 (a): • Within 30 days of the termination of temporary disability, an injured worker rejects or fails to accept the form and manner prescribed by the administrative director, modified work, accommodating the employee’s work restrictions, lasting at least 12 months. • Warning:Use the right form or else.

13. Offers of work(Applicable for all dates of injury) • Labor Code § 4658.6 (b): Within 30 days of the termination of temporary disability, all of the following conditions occur: • (1) The employee has the ability to perform the essential functions of the job provided. • (2) The job provided is in a regular position lasting at least 12 months. • (3) The job provided offers wages and compensation that are within 85 percent of those paid to the employee at the time of injury. • (4) The job is located within reasonable commuting distance of the employee’s residence at the time of injury. • Cal. Code of Regs., tit. 8, § 10133.35-(2013 and after adopts the standard)

14. Triggering events for Offers of work Labor Code § 4658.5 (b) (1/1/2004 to 21/31/2012) Labor Code § 4658.7 (Posts 1/1/2013) Receipt of a report that caused PD. And Receipt of Physician’s Return-to-Work & Voucher Report. • Receipt of a report that caused PD. • Receipt of a report terminating TD. • No return to work within 60 days of the receipt of the reports

15. Not triggering events • Doctors finding IWs are “Qualified Injured Workers” • Offers of temporary work, in lieu of paying TD

16. What does the SJDB pay for?

17. SJDB(2004-2012) • Labor Code § 4658.5 • Tuition, fees, books. • Other expenses required by the school for retraining or skill enhancement. • 10 % of the voucher moneys may be used for vocational or return-to-work counseling.

18. What training providers are eligible for payment?2004-2012 (Labor Code § 4658.5) • (1) approved by the Bureau for Private Postsecondary and Education (www.bppe.ca.gov), or a California state agency that has an agreement with the Bureau for the regulation and oversight of non-degree-granting private postsecondary institutions; or • (2) accredited by one of the Regional Associations of Schools and Colleges authorized by the United States Department of Education; or • (3) by a California State agency that has an agreement with the United States Department of Education or Regional Associations of School and Colleges for the regulation and oversight of non-degree granting private post secondary providers; or • (4) certified by the Federal Aviation Administration. (Cal. Code of Regs., tit. 8, § 10133.58(b).)

19. Labor Code § 4658.7(2013 to the present) • Education-related retraining or skill enhancement, or both, at a California public school or with a provider that is certified and on the state’s Eligible Training Provider List (EPTL), as authorized by the federal Workforce Investment Act (P.L. 105-220), including payment of tuition, fees, books, and other expenses required by the school. • Payment for occupational licensing or professional certification fees, related examination fees, and examination preparation course fees. • Purchase of tools required by a training or educational program. • Purchase of computer equipment, up to one thousand dollars ($1,000).* • Up to five hundred dollars ($500) as a miscellaneous expense reimbursement or advance, payable upon request and without need for itemized documentation or accounting.* • 10 % for the services of licensed placement agencies, vocational or return-to-work counseling, and résumé preparation.

20. What providers get paid?2013 to the present (Lab. Code § 4658.7) • Education-related retraining or skill enhancement, or both, at a California public school or with a provider that is certified and on the state’s Eligible Training Provider List (EPTL), as authorized by the federal Workforce Investment Act (P.L. 105-220) http://etpl.edd.ca.gov/wiaetplind.htm. • Payment for occupational licensing or professional certification fees, related examination fees, and examination preparation course fees.

21. The ETPL is not easy to navigate • Expands and contracts the list of training providers. • Beware of differences between the ETPL and the BPPE approvals. • BPPE approved course for distance learning, but not approved at ETPL only for in class training. • Differences between costs, fees, and expenses listed on ETPL and what is listed in school catalogs required by BPPE. • Private schools must apply course by course for inclusion on the ETPL list. • Includes state or federally regulated apprenticeship programs. • Eliminates out of state training programs that are not on the California ETPL list. • Most private four year schools and professional schools are not on the ETPL list; for example, Santa Clara University and the University of San Francisco. • ETPL provides “policy guidance” in the form of directives to providers and local boards.

22. What providers get paid?2013 to the present (Lab. Code § 4658.7) • Purchase of tools requiredby a training or educational program. • Up to $1,000 for the purchase of computer equipment. • Up to $500 as a miscellaneous expense reimbursement or advance, payable upon request and without need for itemized documentation or accounting.

23. When does the SJDB get paid? • The claims administrator shall issue the voucher payments to the employee or direct payments to the VRTWC, training providers, and/or computer retailer within 45 calendar days from receipt of the completed voucher, receipts, and documentation. • If computer equipment will be provided directly to the employee, the employer must provide the computer equipment along with documentation of the cost of the computer equipment to the employee within 45 days of receipt of the Request for Purchase of Computer Equipment. (Cal. Code of Regs.,tit. 8, § 10133.31 (j).)

24. Vocational Return to Work Counselors (VRTWC) • 10 % of the voucher. • Who does the VRTWC work for? • What work did the VRTWC do? • When did the VRTWC do the work? • How does this work benefit the injured worker? • How does the work comply with the paper work you received from the school and the counselor? • Check the qualifications of the VRTWC. (PRA request)

25. SJDB Dispute resolutionCal. Code of Regs., tit. 8, § 10133.54 • Has been around since 2005. • Any party can request resolution of a dispute. • Use form 10133.55 to file for and respond to dispute resolutions. • Attach all of the relevant documents. (Relevant documents depends on the nature of the dispute.) • Party responding to the Request for Dispute Resolution has 30 days to respond. • Agreements to provide the voucher in a C & R are not enforced by the AD. • AD has 30 days to write a decision and the decision may be appealed to the District office of the WCAB.

26. Issues in resolving disputes • The AD resolving the statutory entitlement to the SJDB v. Parties settling the SJDB by way of C & R. (Beltran) • Lack of response from the employer or claims administrator. • No “triggering event” to start the offer process. • General lack of documentation. (How was the case resolved, no indication of lost time form work, for example.) • Inconsistent paperwork from the school. (ETPL v. BPPE issues.) • PD only where there is no TD paid. (Variations on the no lost time problem.)

27. Dubious financial arrangements • VRTWC employed by a school. (Lab. Code § § 139.32; 3215 (Self-referral and Kickback.) • VRTWC fees by the school. (Lab. Code § 139.32.) • Schools kicking back money to VRTWC. (Lab. Code § § 139.32; 3215.) • Schools giving computers or a $1,000 to injured workers. (Lab. Code § 3215.) • Schools offering other services to injured workers. (Lab. Code § 139.32.) • Schools paying the $500 directly to the injured worker and seeking reimbursement from CAs. (Lab. Code § 3215.) • Schools providing scholarships or discounts to injured workers to reduce the cost. (Lab. Code § 3215.)

28. What is payable using the SJDB? • If you have paid for any computer equipment directly to a school call the Franchise Tax Board and discuss whether the school failed to pay sales tax. • Franchise Tax Board (800) 852-5711.

29. Reporting potential illegal behavior • Bureau of Private Post-Graduate Education (BPPE) • Karen Johnson, Department of Consumer Affairs • Karen.L.Johnson@dca.ca.gov>

30. Cases of Note • City of Sebastopol v. W.C.A.B. (Braga) (2012) 208 Cal.App.4th 1197 , 77 Cal. Comp. Cases 783. (No offer necessary without lost time from work.) • King v. Anaheim Police Department, 2014 Cal. Wrk. Comp. P.D. LEXIS 153. (No offer required were the worker is retired.) • Pasquotto v. Hayward Lumber, Connecticut Indemnity Insurance Company (2006) 71 C.C.C. 223 (en banc)(What constitutes an award of benefits.) (2004 to 2012.) • Beltran v. Structural Steel Fabrications (2016) 81 C.C.C. 1224 (Panel decision. (Settlement of post 2013 SJDB.)(Thomas Finding Required)

31. Questions?