What You Need to Know About California Workers’ Comp Settlement
Injured employees may find navigating worker’s compensation complicated. Here’s what to know about workers’ comp settlement in California.
An injured employee should always wait until the maximum medical improvement period ends before deciding to settle a workers’ compensation case. The doctor will issue the employee a permanent impairment rating if the injury does not completely heal. California considers multiple factors to determine compensation, including the nature of the disability, date of injury, and permanent impairment rating.
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Maximum Medical Improvement (MMI) in California
The maximum medical improvement (MMI) refers to an employee’s injury not improving or worsening. California may refer to the plateaued state of medical recovery as permanent and stationary (P&S). The doctor will issue a P&S report and send it to the claims administrator.
The document should include:
- Specific medical problems (range of movement, pain level, etc.),
- Work restrictions (limits on work an employee can perform),
- Future medical care relating to the injury,
- Decision on whether the employee can return to the old job, and
- Apportionment of how much the disability is job-related and how much the disability is due to other factors.
The P&S report will affect the future California permanent disability benefits an injured employee may receive. An employee suffering from a medical condition has the right to receive a copy of the P&S report. An employee dissatisfied with the P&S report may seek a second opinion from another doctor. The employee may be able to choose the doctor who gives a second opinion over the insurance company.
Determining Permanent Impairment Rating in California
The doctor will note the employee has made a complete recovery if the employee experiences no pain or loss of function following recovery from the work-related injury. However, the doctor will issue a permanent impairment rating to an employee who still deals with weakness, loss of function, pain, or deformity no longer improving from medical treatment. The permanent impairment rating reflects the percentage of change from the employee’s pre-injury condition.
Several factors determine the permanent impairment rating:
- Medical condition,
- Date of injury,
- Age when injured,
- Occupation (at time of injury),
- Apportionment of how much the disability is job-related and how much the disability is due to other factors, and
- Multiplication by an adjustment factor:
- The adjustment factor is 1.4 if injured in 2013 or later, or
- The adjustment factor adheres to reduced “future earning capacity” if injured before 2013, and permanent injury is rated using the 2005 rating schedule.
An employee has a permanent total disability if the permanent impairment rating is 100 percent. A rating between 1 and 99 percent means an employee has a permanent partial disability. Ratings of 100 percent are rare for employees with a permanent disability.
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Permanent Impairment Ratings for Compensation in California
The weekly amount of benefits for partial and total permanent disabilities are often two-thirds of the employee’s average weekly wages. The minimum and maximum compensation amounts depend on the date of employee injury. The weekly sum of total and partial disability payments are similar but differ in how long an injured employee receives payments. An employee with a partial rating above 70 percent is also entitled to smaller, perpetual compensation (life pension) after the original settlement ceases. The injury date, level of disability, and pre-injury wages up to a maximum level will determine the life pension amount.
California Labor Code Section 4658 contains several charts for determining compensation depending on the year the injury occurred. The following chart applies to permanent disabilities occurring on or after January 1, 2013.
| Range of Percentage of Permanent Disability Incurred | Number of weeks for which two-thirds of average weekly earning allowed for each 1 percent of permanent disability within percentage range |
| 0.25 – 9.75 | 3 |
| 10 – 14.75 | 4 |
| 15 – 24.75 | 5 |
| 25 – 29.75 | 6 |
| 30 – 49.75 | 7 |
| 50 – 69.75 | 8 |
| 70 – 99.75 | 16 |
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