New For 2011: Changes in Mileage, COLA, but SAWW Stays the Same
As the New Year approaches, we would like to draw your attention to three developments affecting the administration of workers' compensation benefits. First, the Third District Court of Appeal held on December 6, 2010 in Allied Waste Industries, et al. v. WCAB (Rojas) that a claimant's cost-of -living adjustments (COLA) under Labor Code section 4659(c) should commence on the January 1 after the date of injury. (Unpublished decision, No. C064914). In so doing, the Third District rejected the controversial Duncan v. WCAB decision in which the Sixth District held that COLA adjustments should be added as of January 1, 2004, and every January 1 thereafter, for all injuries after January 1, 2003.1
While the Rojas decision is not certified for publication and has no precedential value, the analysis therein may prove useful to the Supreme Court when it considers Duncan early next year.2 Indeed, the Duncan case has generated considerable controversy for its rather illogical reasoning and difficulty of application. It seems clear that the Third District is sending a message to the Supreme Court to modify the Duncan decision, so as to streamline the application of COLA, and lend clarity to an otherwise complicated area of workers' compensation law.
Second, due to the decrease in the State's Average Weekly Wage (SAWW) in the 12 month period ending March 31, 2010, California's minimum and maximum temporary total disability and permanent total disability rates will not change in 2011.3 Accordingly, new claims for 2011 work injuries should be administered at the 2010 rates.
The decrease in the SAWW means that annual COLA under Labor Code section 4659(c) to life pension and permanent total disability payments on existing claims with injury dates on or after January 1, 2003 will not apply this coming January. In other words, injured workers who are entitled to life pension or permanent total disability indemnity will not receive a payment increase (COLA) for the 2011 calendar year. Claims administrators are encouraged to contact legal counsel, should they have any questions regarding SAWW figures and COLA commutations.
Finally, the California Workers' Compensation Institute recently announced that the U.S. Internal Revenue Service's standard mileage rate for business travel will increase from 50 cents to 51 cents, effective January 1, 2011. Accordingly, injured workers who travel for medical treatment should also be reimbursed at the new rate. This one-cent increase applies to all travel, regardless of the date of injury.
Labor Code section 4600 (e)(2), in conjunction with Government Code section 19820 and Department of Personnel Administration regulations, requires claims administrators to reimburse injured workers for their travel expenses at the rate adopted by the Director of the Department of Personnel Administration for non-represented state employees, which is tied to the IRS published mileage rate.
1 Duncan v. WCAB (X.S.) (2009) 179 CA4th 1009, 37 Cal. Workers' Comp. Rptr. 269, 74 CCC 1427.
2 The Supreme Court case number for the Duncan case is S179194.
3 Table of SAWW Increases from 2004 - 2011.
2004: No increase
2005: 1.0197469
2006: 1.0400813
2007: 1.0495932
2008: 1.0393181
2009: 1.0454843
2010: 1.0299414
2011: No increase
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