Understanding the Supplemental Job Displacement Benefit

This is a benefit that many of us do not have a firm grasp on because of the fact that it is not considered until the conclusion of a case, and even then it is not dealt with appropriately.

Title 8 of the California Code of Regulations, Section 10133.56, points out the factors that are required before an employee shall be eligible for a supplemental job displacement benefit. They are as follows:

1. First, the Supplemental Job Displacement Voucher (SJDV) applies only to injuries occurring on or after January 1, 2004.
2. Secondly, the injury must cause permanent partial disability.
3. Third, within thirty days of the termination of temporary disability indemnity benefits, the Claims Administrator does not offer modified or alternative work in accordance with Labor Code Section 4658.6; and
4. Lastly, the injured employee does not return to work for the employer within sixty days of the termination of temporary disability benefits.

In every case, the above criteria must be met before an injured worker is entitled to an SJDV. The facts of the case must be reviewed carefully to make certain each prong is satisfied. While in Court recently at the Oakland WCAB, I overheard a discussion among attorneys where they were arguing over whether an applicant was entitled to an SJDV where the parties were stipulating to a 15% PD level. Applicant’s attorney was arguing vigorously that the applicant was entitled to the SJDV solely because he was left with a permanent disability. Defense counsel was arguing the opposite in light of the fact that the applicant had returned to work. Although it is true that the existence of PD is one prong that leads to a voucher, it is not the end of the story. All of the above noted factors must be met and, if not, it can be argued that the applicant is not entitled to an SJDV.

In my opinion, the SJDV is not an issue that should be left unresolved. If a case settles by way of Compromise and Release and there is no language in the Compromise and Release addressing the SJDV, then it is likely that a claims administrator will not provide a non-transferrable voucher to the employee within twenty-five calendar days from approval of the settlement documents. Tile 8 of the California Code of Regulations, Section 10133.56(c) states clearly that the claims administrator has twenty-five calendar days from the issuance of the permanent partial disability award to provide the voucher to the employee. I have seen applicant’s attorneys argue that a penalty situation arises if the claims administrator delays in providing the SJDV to the applicant within twenty-five days of an award if, in fact, all the factors exist that support applicant’s entitlement to a voucher. (This article will not address the issue of whether a Compromise and Release constitutes an "award" of permanent disability.)

It is prudent to err on the side of caution and to specifically deal with the SJDV at the time of settlement. Listing the appropriate permanent disability percentage in a Compromise and Release is important for purposes of determining the value of the voucher. Even it if it is ultimately determined that failure to send out the voucher within twenty-five calendar days is not grounds for a penalty, there are certainly audit issues that would impact the claims administrator.