California Dep’t of Corr. & Rehab. v. WCAB, 2023 WL 5198517 (Cal. Ct. App. 2023)

Under the Workers’ Compensation Act, if a worker is injured because of the employer’s serious and willful misconduct, the “compensation” the worker is entitled to receive increases by one half.  The statute defining “compensation” limits the term to benefits or payments provided by Division 4 of the Labor Code.  In this case, the Court held that “compensation” does not include industrial disability leave, which is provided by the Government Code, and therefore is not subject to being increased by one half in cases of serious and willful employer misconduct.

While at his job as a correctional officer at the Lancaster State Prison in August 2002, respondent Michael Ayala was severely injured in a preplanned attack by inmates.  He filed a workers’ compensation claim and alleged that the injury was caused by the serious and willful misconduct of his employer, petitioner California Department of Corrections and Rehabilitation (CDCR).  Labor Code § 4553 provides that “[t]he amount of compensation otherwise recoverable shall be increased one-half . . . where the employee is injured by reason of serious and willful misconduct” by the employer.  Ayala and CDCR agreed that the injury caused Ayala 85% permanent disability, but they could not agree whether CDCR engaged in serious and willful misconduct.

The Workers’ Compensation judge agreed with CDCR and found that the base compensation was what Ayala would have been paid in temporary disability.  But on reconsideration, the Board again rescinded and reversed the workers’ compensation judge’s decision, this time finding that the base compensation was what Ayala was paid on industrial disability leave and enhanced industrial disability leave.  The appellate court held that industrial disability leave and enhanced industrial disability leave are not “compensation” as that term is used in section 4553 and thus are not subject to a 50 percent increase.