COne of the more significant changes to Californias workers compensation laws over the past several years has been an entirely different approach to return-to-work. Given the RAND wage loss data to be used for determining part of the permanent disability benefit, it is finally safe to say that there is empirical justification for what the business community had been saying for yearsthat the vocational rehabilitation benefit was a benefit to vendors but not much of a boon for injured workers. Labor and employers agreed, and in Assembly Bill 227 (Vargas) that benefit was repealed for injuries occurring on and after January 1, 2003

That epiphany, and others embodied in AB 227, and Senate Bill 228 (Alarcon), still were not enough to save Governor Gray Davis

When the threat of a workers compensation initiative loomed large last year, labor found itself in the somewhat awkward position of negotiating with employers rather than running them over. In this case, the carrot was mightier than the stick. Both sides agreed, however, that California employers still were not doing enough to bring injured workers back to work. At that point, an idea used in several states, and considered by the Davis administration but ultimately not included in Assembly Bill 749 (Calderon), was resurrectedpay more permanent disability if the employer does not bring the worker back to work

Regrettably, even when labor and employers come together and agree on something, it does not automatically mean that what comes out of the sausage factory makes a whole lot of sense. Such is the case with the multiple return-to-work provisions that have emerged over the past several years. If employers and insurers take full advantage of the tools at their disposal, both employers and workers will benefit. If employers continue to fail to bring their employees back to work, the short- and long-term costs will be significant

For injuries occurring on and after January 1, 2004, AB 227 requires the employer to offer a supplemental job displacement benefit in the form of an educational voucher if the worker has not returned to work within 60 days of the termination of temporary disability. This was considered an alternative to the vocational rehabilitation benefit when AB 227 was crafted

For injuries occurring on and after the date of the adoption of the still-elusive permanent disability rating schedule, as of January 1, 2005, if there is not an offer of regular, modified, or alternative work within 60 days of the date the injured worker becomes permanent and stationary, the permanent disability payments are increased 15 percent. If the offer is made, however, the payments are reduced 15 percent. Note that this is the payment of PD, not the PD rating itself. This return-to-work incentive applies only to employers with more than 50 employees

If you have asked whether employers have to offer both, the answer is yes. The bad news is requirements for the two job offers are not entirely the same and do not necessarily occur at the same time

The PD adjustment offer may be met by offering regular, modified, or alternative work. The educational voucher must be provided if one does not offer modified or alternative work, but offering regular work will not relieve the employer from this obligation. While this is certainly an absurd result, it will take regulatory action on the part of the Division to bring some consistency to these statutory requirements

Employers also will have to be certain that the job offer meets the requirements of the Labor Code. The job offer must be for a position with a duration of at least 12 months, be at a salary of at least 85 percent of the pre-injury wages, and must be within a reasonable distance of the workers residence at the time of injury

There are additional requirements as well. Applicants attorneys will review each of these criteria, given the consequence of not making an offera 15 percent increase in PD payments. Also, as is always the case with return-to-work programs, they will scrutinize such offers for potential exposure under Labor Code Section 132a and the Fair Employment and Housing Act

Employers with 50 or fewer employees do not have to worry about the adjustment to PD payments. The educational voucher, however, does apply. Return-to-work programs for small employers are supposed to be facilitated by the Return to Work program operated by the Division of Workers Compensation. This program, which was added in AB 749 and significantly amended in Senate Bill 899 (Poochigian), has yet to be funded. Its objective is to provide assistance, including monetary assistance, for small employers to make necessary work site modifications to bring workers back to modified or alternative work. The program sunsets on January 1, 2009 unless revived in subsequent legislation. We reiterate that this program has yet to be funded

Finally, although the vocational rehabilitation program was repealed in AB 227, that repeal applies only to injuries occurring on and after January 1, 2004. There is still a vocational rehabilitation tail. Outstanding VR claims still may be subject to a compromise and release, and the obligation to provide VR on these old claims still can be extinguished by offering regular, modified, or alternative work. This offer of work does not satisfy the offer for the educational voucher or, if applicable, the PD adjustment. Indeed, a situation could arise where a worker with an old claim rejects an offer of employment as part of the old claim and, if he or she has a claim that results in PD that occurs after January 1, 2005, could accept an offer under this new law. That can happen, however, only if the employer offers every return-to-work benefit contemplated under the Labor Code. Until regulations clarifying the content and time of these offers are promulgated, there is no one size fits all job offer

Effective, systemwide return-to-work is both critical and elusive. If a work-related injury is not going to be a life-altering event, more has to be done not only for prompt delivery of benefits but also to enable injured workers to return to the workforce

From a cost standpoint, employers subject to the 15 percent adjustment have a clear and immediate incentive to offer regular, modified, or alternative work. The worker also has a clear incentive to accept that offer. Over the long term, significant improvement in returning workers to work also will reduce PD ratings, at least as it relates to that part of the new system that adjusts ratings based on uncompensated wage loss. In short, the return-to-work incentives set forth in SB 899 will produce tangible short- and long-term benefits for employers and workers. It is a golden opportunity, provided employers dont let it slip through their fingers