10.1.0 Purpose of Workers' Compensation
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One of the greatest economic benefits that a California employee has is the extensive and liberal protection afforded by the California workers' compensation insurance law. This protection covers virtually all employees in this state.
The basic purpose of the law is to:
1.Insure that an employee who sustains an industrial injury will be provided with compensation and thereby have means of support while he or she employee is unable to work;
2.Insure that an employee who sustains an industrial injury will receive medical treatment to bring about a rapid recovery without cost to the employee;
3.Insure that an employee who sustains an industrial injury will be compensated (limited) by means of a money award (computed from disability rating tables) for any permanent disability he or she may sustain as a result of the injury, including, if necessary, a life pension;
4.Insure that an injured employer who is precluded because of work restrictions from returning to his or her regular work or modified work is provided with a monetary voucher, for retraining purposes;
5.Insure that the dependents of an employee who dies as the result of an industrial injury are provided with compensation and a burial allowance; and,
6.Insure that an employee who sustains an industrial injury is not discriminated against by his or her employer or the employer's insurance carrier because of the injury.
The purposes of the Act are several. It seeks (1) to ensure that the cost of industrial injuries will be part of the cost of goods rather than a burden on society, (2) to guarantee prompt, limited compensation for an employee's work injuries, regardless of fault, as an inevitable cost of production, (3) to spur increased industrial safety, and (4) in return, to insulate the employer from tort liability for his employees' injuries. (See Laeng, supra, 6 Cal.3d at p. 782; Van Horn v. Industrial Acc. Com. (1963) 219 Cal.App.2d 457, 467 [33 Cal.Rptr. 169]; 2 Hanna, supra, §1.05, , pp. 1-25 to 1-27.)....
In Huffman v. Interstate Brands Companies (2004) 17 Cal. Rptr. 3d 397, 121 Cal. App. 4th 679 (Published), the Court of Appeal, Second District, in commenting on the history of workers' compensation, observed that the bargain between employers and employees is that the employer assumes liability for all industrial injuries, including those that result in death, without regard to fault, in exchange for limitation as to the amount of liability. Further, the employee is afforded swift and certain payment of benefits to cure or relieve the effects of his or her injury without having to prove fault, but gives up the wider range of damages potentially available in a civil torts action.
All employers in California, except the state, regardless of how many employees (even one) must secure the payment of workers' compensation insurance in one or more ways as authorized by Labor Code section 3700. This may include purchasing an insurance policy from an insurer authorized to write workers' compensation insurance in California or securing a certificate of consent to self-insure as an individual employer, or as a single employer in a group of employers. Labor Code sections 3600(b) and 3702.10(J).
In creating and maintaining a system of workers' compensation, the people of this state made an important public policy decision and transformed how we address workplace injuries. It should be remembered, however, that the purpose of an award under the workers' compensation scheme " 'is not to make the employee whole for the loss which he has suffered but to prevent him and his dependents from becoming public charges during the period of his disability... . In short the award transfers a portion of the loss suffered by the disabled employee from him and his dependents to the consuming public... . Complete protection is not afforded the employee from disability because this would constitute an invitation to malinger or to be careless on the job as he would then lose nothing in assuming a disabled status.'" (Universal City Studios, Inc. v. Worker's Comp. Appeals Bd. (1979) 99 Cal.App.3d 647, 660 [160 Cal. Rptr. 597, 44 Cal. Comp. Cases 1133].)
The system of workers' compensation is not intended to provide full and total recompense for any and all consequences of a worker's injury, but instead represents a compromise between the interests of workers and those of employers. As the Court of Appeal reasoned below, quoting Mead v. Diamond International Corporation (1974) 39 Cal. Comp. Cases 1, 4: "[I]n compensation practice day in and day out employees are totally uncompensated for wages lost while attending to medical treatment during their work day. It has long been considered that in exchange for that blanket coverage of compensation without regard to fault, the employee bears some of the burden." (Quoting the trial referee in Mead.) We agree....
Failure to secure the payment of workers' compensation may result in up to a $10,000 fine or imprisonment in a county jail for up to one year, or both. (Lab. Code sec. 3700.5.) [Author's Note: See section 70.4.0 of this book for additional more severe penalties for an employer failing to carry workers' compensation insurance on employees.]
The California Constitution, Article XIV, section 4, sets forth the intent of the people to establish a system of workers' compensation. This section provides the Legislature with the power to create and enforce a complete system of workers' compensation and, in that behalf, create and enforce a liability on the part of any or all employers to compensate any or all of their employees for injury or disability, and their dependents, for death incurred or sustained by said employees in the course of their employment, irrespective of the fault of any employee.
Further, the Constitution provides that the system must accomplish substantial justice in all cases expeditiously, inexpensively, and without encumbrances of any character.
It was the intent of the people of California when they voted to amend the state constitution in 1918, to require the Legislature to establish a simple system that guaranteed full provision for adequate insurance coverage against liability to pay for or furnish compensation. Providing a full provision for regulating such insurance coverage in all its aspects, including the establishment and management of a state compensation insurance fund; full provision for otherwise securing the payment of compensation; and full provision for vesting power, authority, and jurisdiction in an administrative body with all the requisite governmental functions to determine any dispute or matter arising under such, in that the administration of such legislation accomplish substantial justice in all cases expeditiously, inexpensively, and without encumbrance of any character. All of which matters is the people expressly declared to be the social public policy of this state, binding upon all departments of the state government.
California's workers' compensation law differs from California tort law in that the workers' compensation law provides:
1. Liability without fault;
2. Compulsory insurance imposed on all employers, regardless of size;
3. An automatic delivery system of all compensation benefits;
4. An expeditious system that resolves disputes quickly, and;
5. Liberality for the benefit of injured workers.