HomeMy WebLinkAbout2000-06-06; City Council; 15765; Workers Compensation Claims SettlementCITY OF CARLSBAD - AGENaQ BILL /-; i/ )
WORKERS’ COMPENSATION CLAIMS
SETTLEMENT AUTHORITY
RECOMMENDED ACTION: Adopt Resolution NO. dOO& I @ revising workers’ compensation claims settlement
authority.
ITEM EXPLANATION:
In 1996, Council adopted Resolution 96.345 providing the City Manager, with the
concurrence of the City Attorney, the authority to settle workers’ compensation claims
against the City when the amount to be paid pursuant to the settlement does not exceed
ten thousand dollars ($10,000). This provided staff with an increase in settlement
authority from the previous level of five thousand dollars ($5,000). The attached
Resolution would increase this settlement authority amount to twenty-five thousand
dollars ($25,000) in order to expedite the payment of workers’ compensation claims.
For the most part, the settlement of workers’ compensation claims is dictated by the State
of California. The State Office of Benefit Determination requires settlements to be
calculated in a specific manner. A physician’s report is “rated”, using specific criteria
developed by the State, to arrive at a level of permanent disability (PD) that is equivalent
to a sum of money. This sum of money constitutes the “settlement” with the employee.
The State requires that PD payments be made within a specified time period. Under
Section 4650 of the Labor Code, employers are mandated to begin paying PD benefits
within 14 days of the date the employee is determined to be “permanent and stationary”
by the treating physician. Even if there is a disagreement on the total amount of the
settlement, or the City is waiting for completed settlement paperwork on a case, the City
must make advances in good faith toward a sum that is a reasonable expectation of
settlement.
As a result of this process, there is very little discretion that can be applied to workers’
compensation settlements. For most settlements presented to the Council, the Council is
simply approving payments that have already been made or payments that have already
been mandated by the State. In the nearly all cases, except those litigated, there is little
discretionary action provided for under the Labor Code. Even if the rating on one medical
report is disputed, it is contested through another physician’s report which undergoes the
same rating system. Finally, all settlements, contested or not, are approved by the
Workers’ Compensation Appeals Board (WCAB) and are adjusted if a judge so
determines it is appropriate.
In recognition of the state laws surrounding settlement determinations and procedures, the
increase in the cost of settlements since the limit was increased in 1996, and the
importance of public review of expenditures, staff recommends adoption of the attached
resolution to provide the City Manager, with the concurrence of the City Attorney, the
authority to settle workers’ compensation claims against the City when the amount to be
paid pursuant to the settlement does not exceed twenty-five thousand dollars ($25,000).
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FISCAL IMPACT
Revising the settlement authority limits will not have a direct fiscal impact on the City.
However, the quick and expeditious settlement of certain claims may help the City avoid
additional legal costs and/or increases in the amounts claimed due to frustration with the
settlement process.
EXHIBITS
1. Resolution No. do00 - /go Revising Workers’ Compensation Claims
Settlement Authority
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RESOLUTION NO. 2000-180
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAFUSBAD,
CALIFORNIA, REVISING WORKERS’ COMPENSATION CLAIMS
SETTLEMENT AUTHORITY
WHEREAS, the effective and expedient administration of the workers’
compensation self-insurance programs requires that the authority to settle claims be
clearly defined and established; and
WHEREAS, the workers’ compensation claims settlement authority limit was
established in 1996; and
WHEREAS, the need exists to revise the settlement authority limits.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of
Carlsbad as follows:
1. That the above recitations are true and correct.
2. That the City Manager with the concurrence of the City Attorney shall have
the authority to settle workers’ compensation claims against the City when the amount to
be paid pursuant to the settlement does not exceed twenty-five thousand dollars
($25,000).
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1 3. That the City Council shall have authority to settle workers’ compensation
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claims against the City when the amount to be paid pursuant to the settlement exceeds
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4 II twenty-five thousand dollars ($25,000).
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8 PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad
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City Council, held on this 6 t h day of June ,2000, by the following vote, to
wit:
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AYES: council Members Lewis
NOES: None
ABSENT: None
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ATTEST:
SEAL
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