Workers’ Compensation Update Risk Management Q & A Participant Waiver Execution and Retention What Constitutes “Course and Scope” of Employment?

Workers’ Compensation Update

While it is likely the upcoming years will bring changes, the workers’ compensation system has remained relatively stable in 2010. The following are things that members need to know:

1. A new workers’ compensation posting notice that employers must use to inform employees of their rights and obligations under California workers’ compensation law was required, effective October 8, 2010. It is to be posted with the agency’s other mandated employment posters. English and Spanish versions are available on the workers’ compensation page of the Authority’s website.
2. The “Workers’ Compensation Claim Form and Notice of Potential Eligibility,” commonly referred to as the DWC-1, was updated by the State. The form, with its accompanying two-page summary of California’s workers’ compensation benefits, must be given to injured employees within one day of knowledge of an injury, illness or potential workers’ compensation claim. Every member was provided with a supply of forms from York, and information on reordering can be found on the workers’ compensation page of the Authority’s website.
3. The maximum temporary disability benefit rate remains at $986.69. Although there was a decrease of about 0.5% in the average weekly wage in the State of California during the measurement period, Labor Code §4453(a)(10) does not allow for a decrease in the temporary disability rate.
4. Reimbursement for workers’ compensation mileage increased 1¢, to 51¢ per mile.

If you have any questions or need assistance, contact Diana Rich, Workers’ Compensation Program Manager, drich@cjpia.org, or (562) 467-8707.

Risk Management Q & A: Independent Contractors Are Not Employees or Volunteers for Live Scan Purposes

Q: Our city uses independent contractors in our recreation programs. We want to make sure we have their backgrounds checked through a Live Scan program. Are there concerns about this practice?

A: Yes. Members who identify an independent contractor as an “employee” or “volunteer” for purposes of receiving their criminal history appears to violate both California Public Resources Code §5164 and California Penal Code §11143.

Q: But these contractors are working with minors.

A: Your concerns are well founded. Cal. Pub. Resources Code §5164 states, in part, that an agency cannot hire a person for employment, or hire a volunteer to perform recreational services in a position having supervisory or disciplinary authority over a minor, if that person has been convicted of an offense specified in the California Penal Code. In order to secure employment, agencies must require prospective employees and volunteers to submit fingerprints for the purposes of running a criminal background check.

The challenge is that independent contractors are explicitly excluded. Therefore, you are not legally permitted to request or receive criminal background information for them from the Department of Justice.

Q: What options does that leave us?

A: First, discontinue Live Scan for independent contractors, as there is no statutory basis for this practice. Second, modify your contracts with independent contractors by including provisions stating that the independent contractors are to submit their fingerprints via Live Scan and obtain criminal background checks on their own. This acts as authorization from the independent contractor for you to then obtain directly their criminal background information. Lastly, be sure and obtain insurance and contractual indemnification by insisting that independent contractors maintain proper insurance coverage and name the member as an additional insured on the policy. Remember, the actual policy must be written to include the member as an additional insured. Just obtaining a certificate of insurance is not the equivalent of being named as an additional insured.

Please contact your assigned risk consultant if you have questions or need additional information.

Participant Waiver Execution and Retention

Participant waivers, when properly executed, provide the best defense to injury and damage claims arising from participation in member-sponsored activities. Because of recent case law, it is imperative that members have updated their participant waivers using the template available through the Authority’s Resource Center. Enforceability of waivers relies on proper language. Equally important is that every member has an effective retention program so that the waiver is able to be produced in the event that a claim or lawsuit is presented. Under certain and rare circumstances, a member may even have a liability exposure until two years after an injured minor turns age 18.

The Authority has recently changed its position on best risk management practice with regard to participant waivers. They are as follows:

1. Ensure that participant waivers have been updated following the Authority’s template.
2. Each waiver must include a description and location of the event, and must encompass the activity for which liability is being waived. The event period does not need to be time and date specific, but should not have duration longer than one year.
3. Ensure participant waivers are properly executed. While some members utilize online registration and online execution of waivers, the use of waivers can be strengthened when a wet signature is obtained after staff verifies the identity of the person signing the waiver, particularly when the person is signing on behalf of a minor child. In those instances participant waivers for minors must be signed by a parent or legal guardian.
4. For members that have optical imaging capabilities, all waivers should be scanned and catalogued so that they can be easily retrieved. Members that retain optical images of participant waivers may destroy original paper participant waivers one year after the activity concludes, unless an incident is known or reported that may give rise to a claim. In those instances, the original participant waiver should be retained with the incident report until the claim or lawsuit has been resolved.
5. When optical imaging is not an option, original participant waivers should be retained for a minimum of three years from the date of the activity, unless an incident is known or reported that may give rise to a claim. In those instances, the participant waiver should be retained with the incident report until the claim or lawsuit has been resolved.

If you have any questions or need additional assistance regarding participant waivers, please contact your assigned risk consultant.

What Constitutes “Course and Scope” of Employment?

The common law principle of respondeat superior (“let the master answer”) holds that an employer is responsible for the actions of its employees while acting within the course and scope of employment. Often the question of whether an employee is in the course and scope of employment is a factual one which falls upon the courts to decide. Two recent cases highlight the issues.

Liability

Is an employer responsible for the actions of its employees while commuting in their personal vehicles? Members will recall the discussion of the Lobo v. Tamco case at the 2010 Risk Management Conference, and being frightened by the potential impact on automobile liability coverage.

In Lobo v. Tamco, employee Del Rosario was traveling home from work when he caused an auto accident, resulting in serious injuries to Lobo. Lobo sued Del Rosario and his employer, Tamco. Tamco filed a Motion for Summary Judgment, on the basis that Del Rosario was commuting and not in the course and scope of employment, and was dismissed. Lobo appealed, and the Court of Appeal reversed the decision, finding that Tamco historically required Del Rosario to use his personal vehicle from time to time to respond to emergency calls from clients. Although occurring less than ten times over sixteen years, the Court of Appeal found that Tamco was receiving a benefit from Del Rosario’s personal vehicle, and remanded the case to a jury to decide if Del Rosario was indeed covered by his employer’s automobile liability coverage when going and coming to work. The case is scheduled for trial in March 2011, and the next edition of “The Authority” will contain an update on this important case.

Workers’ Compensation

Employees must be within the course and scope of employment to be entitled to workers’ compensation benefits. There are many doctrines that govern coverage for non-work hours, including the Bunkhouse Rule and the Commercial Traveler Rule. The Coming and Going Rule governs commuting, and holds that ordinary travel to and from work is not in the course and scope of employment.

In Herndon v. City of Pasadena, an employee’s quick trip to move her vehicle during work hours created an interesting question for the Workers’ Compensation Appeals Board. Employee Herndon arrived at her work location at 7:30am and was unable to park in the city-provided parking lot because it was full. She parked along a curb instead, even though a security guard warned there was no parking because of Rose Bowl activities. She went into the office and took care of a few items, and then returned to move her vehicle into the city’s parking lot. She was struck by a vehicle, coincidentally owned by the city, while crossing the street to go back to the city office. Her workers’ compensation claim was denied for the reason that she was not in the course and scope of employment. On appeal, the Workers’ Compensation Appeals Board ruled that Herndon was indeed within the course and scope of her duties and was entitled to benefits. The quick trip to move her vehicle, albeit unauthorized by her supervisor, did not constitute “abandoning her job”, nor did it constitute “coming and going” to work as she did not have the intention to leave her job and in addition, she was simply intending to move her car to a city provided parking lot, technically still part of the workplace.

These cases reflect the complex state of the law, but clearly show that just because an employee is not physically on an agency’s premises, he or she can still incur civil liability for the agency or be eligible for workers’ compensation benefits.

Please contact Paul Zeglovitch, Liability Program Manager, Diana Rich, Workers’ Compensation Program Manager, or your assigned risk consultant with any questions.