California’s public policy favors the workers’ compensation system as the preferred means to remedy employees’ work-related injuries. The system is based on the “compensation bargain,” under which employees give up the right to sue for personal injuries occurring in the course of employment in exchange for receiving a streamlined way of obtaining medical care and compensation. However, because workers’ compensation laws are subject to the political climate, this “compensation bargain” is not always welcome by employers, especially when they are facing increasing insurance costs.

Many employers have misperceptions about the workers’ compensation system. Some believe, for instance, that employees have a “right” to “workers’ compensation leave.”  In reality, there is no such thing.  Employees who require time off for injuries or illnesses that are work-related are entitled to the same leave as other employees, such as time off under the federal Family and Medical Leave Act and/or the California Family Rights Act and leave as a reasonable accommodation under California’s Fair Employment and Housing Act.

Similarly, some employers mistakenly understand the workers’ compensation laws to require “unlimited” time off, or paid time to attend medical appointments, even if the employee has no accrued paid time off available to them.

Another source of confusion? California Labor Code section 132a, which prohibits retaliation against employees who file or intend to file workers’ compensation claims. This law punishes any employer who discharges, threatens to discharge, or in any manner discriminates against an employee for participating in the workers’ compensation system. Examples of conduct prohibited by section 132a include any manner reducing an employee’s hours or pay without a legitimate reason and failing to reasonably accommodate a work-related injury or disability.

The available remedies for violations of section 132a include reinstatement, restoration of lost back pay and benefits, and a penalty of the lesser of 50% of the compensation given to the employee or $10,000. Employees typically pursue Section 132a claims before the Workers’ Compensation Appeals Board (WCAB), which has exclusive jurisdiction over claims for workers’ compensation injuries. However, the claim may be asserted in court, and discharged employees may pursue a common law claim for wrongful termination in violation of public policy under certain circumstances. 

Early court decisions interpreting section 132a punished employers for virtually any action taken that disadvantaged an employee who had suffered an industrial injury. The legal standard of proof merely required an employee to establish “that as the result of an industrial injury, the employer engaged in conduct detrimental to the worker.”

If the employee satisfied this standard, then the burden shifted to the employer to prove that the negative action was “necessary” and directly related to “business realities.” This interpretation of section 132a resulted in a lower standard of proof than typically is applied to discrimination claims (such as those based on race or sex), which require evidence not only that a negative action occurred, but also that others outside the protected group are treated more favorably. Under the above standard, employers’ policies regarding attendance and leaves of absence were particularly susceptible to attack under section 132a.

The California Supreme Court offered key guidance on this topic in its decision, Department of Rehabilitation v. Workers’ Compensation Appeals Board. There, the Court ruled that employees must prove “disparate treatment” to prevail under section 132a. Since that decision, several courts have decided that neutral policies applicable to all employees do not violate the section.

For example, in Pate v. Workers’ Compensation Appeals Board, the employer discharged an employee who was on modified duty due to an industrial injury. The WCAB found that the employee was terminated because of his failure to provide the necessary medical documentation to verify three absences and not because of his industrial injury. In reaching its decision, the WCAB emphasized that the employer’s policy required employees who were absent to provide a doctor’s note. Because the policy applied equally to industrial and non-industrial injuries, the employee could not establish that he was singled out because of his workers’ compensation claim, and the court affirmed the WCAB’s decision.

Keep in mind, though, employers cannot target an employee because of their industrial illness or industry. For example, in Crown Appliance v. Workers’ Compensation Appeals Board, the employer fired an employee who had returned to work with a modified duty.  Management mistakenly believed the employee was “faking” his injury and fired him. The WCAB and the California appellate court both ruled that Crown had discriminated against the employee.

Unfortunately, workers’ compensation adjusters often wittingly create confusion by failing to account for the impact of employment laws on employees who suffer industrial illnesses or injuries. What steps can you take to ensure you are following the correct laws, and not creating employee entitlements where they do not exist?

First, leave of absence and other neutral policies should be applied equally to all similarly situated employees, even when an individual has filed a workers’ compensation claim. Consistent application of such policies is essential to avoid liability under section 132a. Also, it is critical to ensure HR and the workers’ compensation folks in your organization work together and not at cross purposes. Finally, employers obviously may not take punitive measures against employees who file workers’ compensation claims or who claim to be injured.

Be careful out there.