1414 - Temporary Disability

Category

Benefits and Insurance

Audience List

  • Health and Safety Officers
  • Personnel Officers
  • Personnel Transactions Supervisors
  • Return-to-Work Coordinators
  • Workers' Compensation Claims Coordinators

Synopsis

This policy:

  • Clarifies directions related to Total Temporary Disability (TD), Temporary Disability with Supplementation (TD/S), and Partial Temporary Disability (Wage Loss).

Introduction

The workers' compensation system provides benefits to employees for work-related injuries or illnesses.  These benefits may include medical treatment, payments for lost wages, payments that compensate the injured employee for having a permanent impairment or limitation, vouchers to pay for retraining, and death benefits.

All state employees are covered by workers' compensation.  The cost of this protection is paid by the State of California, the employer.  Workers’ compensation benefits are tax free and are not subject to Social Security deductions.

The California Department of Human Resources’ (CalHR) Workers’ Compensation Program manages the State’s Master Agreement with State Compensation Insurance Fund (State Fund) to provide workers' compensation claims processing and legal representation for all the participating departments.  The Master Agreement is an Interagency Agreement.  Not all State of California agencies, departments, boards, and commissions are participants in the Master Agreement.  Some have opted to purchase an insurance policy from State Fund to cover the risks inherent to the workers’ compensation system.

Statement

Total Temporary Disability (TD)

TD benefits are provided to an injured employee by State Compensation Insurance Fund.  An employee who is temporarily disabled from work while recovering from the effects of a work-related injury or illness may be eligible to receive TD benefits.

TD benefits will be paid during periods of total temporary disability provided the employee is ineligible for or has exhausted eligibility for Industrial Disability Leave (IDL), Enhanced Industrial Disability Leave (EIDL), or benefits provided by Labor Code Sections 4800 & 4800.5 (4800/4800.5 time).

Prior to receiving TD payments the employee must serve a “waiting period” of three-calendar days.  The waiting period begins the day following the date of injury and need not be consecutive days.  Time lost on the date of injury is paid as administrative time off.  The waiting period is waived if the employee is unable to work for more than 14 calendar days, is hospitalized as an in-patient, or the injury is the result of a criminal act of violence.  The employee does not have to serve a new waiting period if the waiting period was previously served while receiving IDL, EIDL, or 4800/4800.5 time for the same work-related injury or illness.

The State Compensation Insurance Fund (State Fund) issues TD payments directly to an injured employee every two weeks.  TD payments are non-taxable.  The weekly TD rate is based on two-thirds of the employee’s average weekly wage on the date of injury and considers any wages that he or she is anticipated or scheduled to receive during the known disability period.  The weekly TD rate is subject to minimum and maximum amounts set by the Legislature.  The scheduled minimum and maximum weekly TD rates are listed in the Tables & Schedules Section of the California Labor Code.  There are some situations in which an employee’s TD rate will be higher than his or her average weekly wage.

Departments must report all scheduled and anticipated wages (e.g., scheduled merit salary increases, shift differential, special pay, or overtime) to State Fund using the “Employer Statement of Earnings” form (SCIF 3223).

An employee’s eligibility for TD ends if:

  • State Fund determines that the employee is no longer disabled from working based on the work-related injury or illness;

  • The employee’s condition reaches maximal medical improvement (also known as becoming permanent and stationary); or

  • The employee is released or returns to work at full pay status.

An employee may appeal a decision regarding TD benefits to the Workers’ Compensation Appeals Board.

Temporary Disability with Supplementation (TD/S)

An injured employee may be eligible to supplement the TD benefit up to an amount that approximates full net salary.  Any accrued leave credits can be used for supplementation purposes.  Leave credits include any accumulated sick leave, compensated time off, vacation, annual leave, or holiday credit.

Departments must notify the employee of his or her eligibility for TD/S within 15 days of notice that employee’s injury or illness is work related and TD benefits have been paid.  The employee has 15 days from receipt of the notice of eligibility to inform the department of his or her selection.

If the employee does not reply, departments must supplement an employee’s TD payments with available leave credits.  An employee can choose to terminate or reduce the TD supplementation amount at any time.  Any changes made will be on a prospective basis only.  The effective date of any change will be the first day of the pay period following the pay period in which the change was submitted.  Leave credits needed for supplementation are drawn in the following order, unless the employee specifies a different order; (1) sick leave, (2) compensated time off, (3) vacation or annual leave, or (4) other leave credits.

Supplementation pay is issued by the State Controller’s Office (SCO) and is subject to all mandatory or voluntary deductions.  Mandatory deductions include federal and state taxes, Social Security/Medicare, retirement contributions, garnishments, and union dues.  Tax deductions are based on the employee’s current year filing status.  Voluntary deductions, such as health, dental, vision, or life insurance, can also be withheld.  Deductions are only made as long as the supplementation pay is sufficient to cover the amount of the deductions.  Mandatory deductions have priority over voluntary deductions.

 Continuation of Health Benefits

If an employee declines TD/S he or she is entitled to a continuation of health benefits.  The employee must make arrangements with the department to pay any employee contribution.

In order to continue health benefits, the department is required to submit a “Payroll Adjustment Notice” form (STD 674).  The STD 674 must be submitted for each pay period in which the employee elects not to supplement the TD payment.  Under remarks, the STD 674 should state:

“Requesting continuation of medical benefits for employee on Temporary Disability, as required by Labor Code section 132a and Government Code 19863.”

The STD 674 should be sent to the Benefits Unit within the Personnel Payroll Services Division of the SCO.

FlexElect Enrollment

If an employee chooses not to supplement the TD payment while enrolled in the FlexElect Cash Option, the cash option will remain in effect.

In order to continue the FlexElect Cash Option, the department is required to submit a STD 674.  The STD 674 must be submitted for each pay period in which the employee elects not to supplement the TD payment.  Under remarks, the STD 674 should state:

“Requesting continuation of FlexElect Cash Option for employee on Temporary Disability.”

The STD 674 should be sent to the Benefits Unit within the Personnel Payroll Services Division of the SCO.

The employee will receive a separate check for the Cash Option, which will be issued approximately one week after the normally scheduled pay day.

If the employee is enrolled in either of the FlexElect reimbursement accounts, the account deductions will cease for as long as he or she is on TD.  If the employee returns to regular pay within the FlexElect plan year, the reimbursement account deductions will resume.  However, if the employee is on TD/S, these account deductions will resume only if the supplementation income is sufficient to cover them.

Partial Temporary Disability (Wage Loss)

An injured employee, who has been medically released to return to work but continues to miss hours, may qualify for partial temporary disability payments, also known as wage loss.  Wage loss payments are calculated by State Fund on a weekly basis.  The employee is entitled to receive two-thirds of the weekly loss of wages if the gross wage (based upon the actual hours worked) is less than the normal gross wage and falls below the employee’s TD weekly rate in any calendar week.  These payments are issued to the employee by SCIF every two weeks during the period of partial temporary disability.

Application

Not Applicable.

Authorities

Resources

FAQs

Forms

  • STD 674: Payroll Adjustment Notice

PML

  • PML 2004-026: PML 2004-026 - 6/25/2004 - Total Temporary Disability, Temporary Disability with Supplementation, and Partial Temporary Disability

Related Policies

  • 1412: Industrial Disability Leave
  • 1415: Workers' Compensation
  • 1416: Workers' Compensation Administrative Time Off
  • 1417: Workers' Compensation Liability Between Departments

Web Pages

Contact Person

Workers' Compensation Division
Program Managers, Workers' Compensation
Phone: 916-324-0522
Fax: 916-324-3213
Email: WorkComp@calhr.ca.gov

Authorized By

Ralph Cobb
Chief (Acting), Benefits Division

History

View History

Table of Contents

1000 - Equal Employment Opportunity

1100 - Selection

1200 - Appointments

1300 - Exempt Employees

1400 - Benefits and Insurance

1500 - Work Schedules

1600 - Third Party Pre-Tax Parking

1700 - Compensation

1800 - Savings Plus

1900 - Bona Fide Associations

2000 - Collective Bargaining

2100 - Leave

2200 - Travel/Relocation

2300 - State Owned Housing

2400 - Employee Recognition

2500 - Discipline

2600 - Layoffs

2700 - Retirement

2800 - Training

2900 - Workforce Planning

3000 - Examination and Hiring

3100 - Drug-Free Workplace