In California, permanent disability benefits are a kind of payment made to employees that suffer a permanent work-related injury or health condition. Permanent disability benefits usually become payable when temporary disability benefits end. The number of a permanently-disabled employee’s benefits will depend on several factors, all of which contribute to something called a “disability rating.” A disability rating is a number assigned to employees by a medical professional that reflects the loss of their earning capacity caused by the work-related injury or health condition.
This article explains the concept of permanent disabilities because it applies to California employees. It also explains how permanent disabilities are rated, why employees and employers might disagree about the acceptable disability rating, and therefore the different rules that apply to physical and mental disabilities.
Chapter 1
The Definition of “Permanent Disability”
California’s workers’ compensation statutes don't define the term “permanent disability.” So, instead, lawyers use court decisions to know the concept. California courts generally consider a disability to the residual effect of an injury or illness. A disability is considered permanent if it is irreversible.
As the term is employed in workers’ compensation statutes, a permanent disability is traditionally defined as “the irreversible residual of a work-related injury that causes impairment in earning capacity, impairment in the normal use of a member or a handicap in the open labor market.” Courts have recognized two problems with that definition.
First, there's no meaningful distinction between an “impairment in earning capacity” and “a handicap within the open market .” The definition, therefore, draws distinctions that are illusory. Second, the phrase “impairment in the normal use of a member” does not capture the breadth of physical or mental impairments that might be disabling. An impairment of the body or mind may create a disability if it reduces the power to perform work activities, but also if it reduces the power to perform the activities of daily living.
The existence of compensable permanent disability, therefore, does not depend upon impairment of the ability to work. An employee does not need to miss work, to lose a job, or to lose the ability to earn full wages in order to qualify for permanent disability benefits. An employee could also be permanently disabled thanks to a piece injury albeit the worker didn't receive temporary disability benefits.
1.1 Disability vs. Impairment
A physical or mental impairment, however, is not necessarily the same as a physical or mental disability. An impairment is “a loss, loss of use, or derangement of any part, organ system or organ function.” From a medical perspective, the severity of impairment is measured by the degree to which it reduces the power to perform activities of daily living, excluding work. Impairment ratings reflect functional limitations, not disabilities.
In workers’ compensation cases, impairments are evaluated by physicians and are then considered in conjunction with other factors to arrive at a disability rating.
1.2 Meaning of “Permanent”
While courts define a permanent disability together that's irreversible, employees with disabilities that are expected to be permanent do sometimes heal. As a practical matter, since it is impossible to be certain whether a health condition will improve at some point in the future, a disability is “considered permanent when the employee has reached maximal medical improvement, meaning his or her condition is well stabilized and unlikely to vary substantially within the next year with or without medical treatment.”
1.3 Permanent Mental Health Disabilities
Both physical and mental (“psychiatric”) disabilities are covered by workers’ compensation. However, coverage of psychological state disabilities is in some respects more limited than coverage of physical disabilities. In addition, California law requires “a higher threshold of compensability for psychiatric injury.” this text discusses the excellence between benefits for physical and psychological state disabilities below.
Chapter 2
Purpose of Permanent Disability Benefits
Compensation for permanent disabilities caused by a job-related injury differs from compensation awarded during a civil lawsuit to victims of negligence. Compensation during a negligence case is meant to form the injury victim whole. That means reimbursing losses caused by the accident and, to the extent possible, restoring the victim to the position the victim occupied before the accident.
While it's not literally possible to form a disability disappear, compensation helps victims of negligence deal with their disabilities (for example, by paying for the services of a caretaker who will assist with tasks that the victim can no longer perform). Negligence victims are also compensated for pain and suffering.
Unlike damages awarded in a negligence lawsuit, workers’ compensation benefits are not meant to make an injury victim whole. As part of the “bargain” between workers and employers, injured employees are not compensated for pain and suffering and do not necessarily receive full compensation for the losses that are caused by their disabilities.
In exchange, employees are relieved of the obligation to prove that their employer was negligent or otherwise at fault for the event that caused the injury. Workers’ compensation benefits are intended to help disabled workers avoid poverty so that they do not become dependent upon taxpayers for support. While permanent disability benefits are not as generous as compensation for permanent injuries that could be awarded in a lawsuit for negligence, there are some similarities between the two systems.
For example, permanent disability benefits, like damages for injuries caused by negligence, are meant to compensate injury victims “for both physical loss and therefore the loss of some or all of their future earning capacity.”
