In twenty years of practice, I had never litigated the issue of temporary disability for a seasonal employees. The issue seldom arises in the Bay Area. Then, within a period of three weeks, two new files arrive in which temporary disability for seasonal employees was at issue – presto my research on the issue of temporary disability for a seasonal employee.
The seminal case on temporary disability rates for seasonal employees is the 1978 Court of Appeals case of Westside Produce Co. v. WCAB (Avila), 81 Cal.App.3d 546, 43 Cal. Comp. Cases 653 (1978). In Avila , the Court of Appeals held:
“Since Avila was hired as a seasonal worker, temporary disability is payable based upon earnings at the time of injury only for that period the employment would have continued. After the employment would have terminated, Avila is entitled to temporary disability considering her past earnings history and her anticipated future earnings had she not been injured.”
Ibid, 43 Cal. Comp. Cases 653, 657.
Avila established that seasonal employees have one temporary disability rate during their employment season, and another for the off-season. However, Avila did not address the issue of whether the off-season temporary disability rate was subject to the statutory minimum temporary disability rate. For over a decade, from 1990 through 2002, that issue faded in significance because there was no longer a statutory minimum rate for temporary disability. Once again, when the statutory minimum temporary disability returned for dates of injury on or after January 1, 2003, the question returned whether seasonal employees with no off-season earnings would have to be paid the statutory minimum TD rate during the off-season.
The 2002 en banc decision of Jimenez v. San Joaquin Valley Labor, 67 Cal. Comp. Cases 74 (writ denied 2002), was the first to address the issue. The holding of Jimenez was essentially the same as the quoted holding of Avila above:
“[A]n industrially injured seasonal employee shall be awarded temporary disability indemnity at two rates: (1) an in-season rate based on the employee’s in-season earning capacity and (2) an off-season rate based on the employee’s off-season earning capacity, taking into consideration such factors as the employee’s earning history, willingness and ability to work, age and health, education and skill, as well as employment opportunities and the general condition of the labor market.”
Jimenez, 67 Cal. Comp. Cases 74, 75.
Regarding the statutory minimum temporary disability rate, the commissioners in Jimenez rejected its application to the off-season because to give seasonal employees a windfall of temporary disability during the off-season when they would have earned nothing had they not been injured would create a perverse incentive and encourage malingering.
In the case of Signature Fruit Company v. WCAB (Ochoa), 142 Cal.App.4th 790, 71 Cal. Comp. Cases 1044 (2006), the Court of Appeals affirmed Jimenez’s denial of off-season temporary disability for seasonal workers with no off-season earnings. But their reasoning was significantly different and the difference arose from their divergent interpretation of Labor Code Section 4653.
Labor Code Section 4653 provides:
“If the injury causes temporary total disability, the disability payment is two-thirds of the average weekly earnings during the period of such disability, consideration being given to the ability of the injured employee to compete in an open labor market.”
The commissioners in Jimenez reached their determination that seasonal employees with no off-season earnings should receive no off-season temporary disability by mechanically applying Labor Code Section 4653’s formula that says the temporary disability rate is two-thirds of average weekly earnings. If off-season earnings are zero, then one simply multiplies zero times two-thirds to arrive at the off-season temporary disability rate of zero.
The Court in Ochoa rejected that mechanical formula and instead focused on Labor Code 4663’s final clause: “consideration being given to the ability of the injured employee to compete in an open labor market” noting as follows:
“Because section 4653 requires the WCAB to consider employment marketability in awarding temporary disability, we conclude that a seasonal employee who voluntarily or by necessity makes herself unavailable for employment during part of the year may not receive temporary disability payments during her regular off-season of unemployment. Since the issue is not before us, we do not address the situation where a seasonal employee has a history or potential for some minimal level of off-season earnings below the minimum average weekly earnings rate set forth in section 4453.”
Ochoa, 47 Cal.Rptr.3d 878, 885.
The Court repeated this holding in different words at the end of the case:
“Consistent with the legislative intent of section 4653, we conclude that temporary disability during a seasonal employee’s in-season period of regular employment is payable based upon two-thirds of the employee’s in-season average weekly earnings, subject to the minimum and maximum levels established under section 4453. Where, however, an employee does not have any off-season earnings and does not compete in the open labor market during a portion of the year, the employee is not entitled to temporary disability payments during that season. We do not express any opinion in calculating a seasonal employee’s off-season temporary disability where the employee maintains some level of off-season earnings below the minimum average weekly earnings rate.”
Ochoa, 47 Cal.Rptr.3d at 888.
Though Jimenez and Ochoa reach the same conclusion, the distinction is an important one. If Jimenez is correct and seasonal employees with no off-season earnings had a temporary disability rate of zero for the off-season, the entire off-season of temporary disability paid at the rate of zero would arguably count toward the 104-week temporary disability cap. On the other hand, under Ochoa that is not the case; during the off-season such employees are simply not entitled to temporary disability and the cap is not implicated.
So determining the off-season temporary disability rate involves a fact-intensive inquiry that takes into account such variables as earnings history, willingness and ability to work, age and health, education and skill as well as employment opportunities and the general condition of the labor market with the ultimate goal of ascertaining the applicant’s anticipated off-season earnings had she not been injured. The consequence being how best to fit the applicant’s off-season earnings of no temporary disability for inclusion in the 104-week temporary disability cap.
By Mark W. Thorndal, Associate Attorney, San Francisco office January 2021