What are the implications of the 15% “UP and Down” Lab C 4658(d)(2)?

How Confusing Can This Be?

There are perhaps few other provisions of the SB 899 reforms, which have caused a wider level of confusion and misunderstanding, than the so-called 15% PD “bump up/bump down” provisions of the PD statute, which were grafted onto to Labor Code 4658, under the 2004 era reforms.

For starters, we know there is a problem with the timing of the employee notice provisions, because 4658(d)(2) is tied to the “permanent and stationary date” but the S.J.D.B. which contains another return to work notice provision, is linked to the end of T.D.  Ideally, if an applicant returns to work the same day he or she is permanent and stationary, then the issue is easy.  But, what happens when an injured worker never misses any time from work or returns to work at the end of TD, but is not permanent and stationary for another six months?

While this is not a major “issue of the day” I am getting a number of questions and voiced concerns about how to handle the notices and the time frames involved.



Both Labor Code Section 4658(d)(2) and 8 CCR 10117(b) specify that the service of the return to work offer, whether regular, modified or alternative, is due within 60 calendar days from the date the condition of an injured worker with permanent partial disability becomes permanent and stationary. 

  • EXAMPLE No. 1:  Applicant is examined by an orthopedic PQME, Dr. Stretch, on 8/2/11.  The report is late but neither side objects so the report comes out on 9/28/11 and is received by the defendant on 10/3/11.  Dr. Stretch finds the applicant is permanent and stationary as of 8/2/11.  He also finds impairment for the back at 8% whole person. QUESTION:  Does the 60 days run from 8/2/11? If, so, even if we add 5 days for mailing, the return to work notice, under 4658(d)(2), would have to go out as of 10/7/11, which gives the defendant 4 days within which to comply with the statute. 


  • Let us take the same example, but change the permanent and stationary date to a time retrospective.  So, the medical report of Dr. Stretch now deems the applicant was permanent and stationary from 4/1/11.  If we take a literal approach to the statute and its implementing regulation, then factually, there would be no way in which the defendant could timely issue its notice, since the 60 calendar days from the permanent and stationary date, long passed.  I know this sounds absurd, but no more so then getting a late medical report, declaring the applicant permanent and stationary months prior to its receipt by defendant.


  • EXAMPLE NO. 2:  The parties decide to go to Dr. Armlong, the famous hand AME.  The examination is set for 7/6/11.  However, Dr. Armlong is a notoriously slow report writer, and he needs more time to reflect.  So, the report finally comes out on 10/31/11. (remember when using an AME, there is no 30 day report rule)  The parties finally receive the report the next day.  In his evaluation, Dr. Armlong declares the applicant was permanent and stationary on 7/6/11.  If we apply the statute and the regulations to their literal meaning, there is a functional impossibility for the defendant to comply, since the 60 days would have run as of 9/6/11.  This makes no sense and does not comport with the elements of due process.


  • ADVICE:  It is my position that the 60 calendar days runs from “the time of receiving notice” that the applicant was permanent and stationary and not from the actual date upon which the applicant became permanent and stationary. To conclude otherwise, would lead to absurd and unfair results, not to mention a denial of due process by simple lack of notice.    In at least one WCAB Panel Decision, Ornelaz v. Albertsons Inc., the panel found that the 60 days commenced within 60 days of receiving notice of permanent and stationary status, plus 5 more days for mailing, under CCP 1013. i


  • MORE ADVICE If you get a late medical report or a report where there has been a retrospective permanent and stationary date, you might want to include the date that you received the report and therefore notice, within your return to work offer, so you are making a good record.



  • This subject may not come up often, but it does arise.  We have a worker who suffers an injury, obtains medical treatment, is not permanent and stationary but remains at work and therefore there is no period of TD.  When the applicant is finally declared permanent and stationary and there is PPD, does 4658(d)(2) apply?


  • The law here is anything but settled.  We have a couple of WCAB Panel Decisions, which may lend some insights but they are hardly dispositive.  In Hisato Tsuchiya v. County of Los Angeles, Sheriff’s Department (ADJ2508984/VNO 0541888) the WCAB Panel held that 4658(d)(2) was not intended to apply, and hence no notice of return to work was required, when there had been not lost time following injury.  As they stated on page 2, “The provisions have no purpose if the employee is continuing to perform his or her regular work.  Accordingly, we interpret them as being applicable only when the employee is not working.”  In this case, the injured worker, a Deputy Sheriff, was found to have suffered injury to his heart and hypertension, resulting in PD at 49%, but he had missed no time from work.   Therefore, the case was remanded back to the WCAB, as the trial judge had applied the statute and permitted a 15% reduction in PD payments.  The Commissioners disagreed, concluding that notice was not required because the statute did not apply and therefore neither the 15% bump/up/down was operable unless there had been lost time.     In another WCAB Panel Decision, Audiss v. City of Rohnert Park (2007) 35 Cal. Workers’ Comp. Rrptr. 12, (cited in Tsuchiya on page 2). The employer made an untimely offer of regular/modified/alternative work, (beyond the 60 days) but since the applicant had missed no time from work, the WCAB Panel therefore concluded that continuation of the work was the substantial equivalent of having given notice.ii  This is probably a very big reach.


  • ADVICE:   I see nothing in either 4658(d) (2) or 10117(b), which conditions the 15% up/down to whether or not the applicant missed time from work. There is no stated connection to TD found. Instead, the elements are:(1) 50 or more employees at time of policy inception, for a self-insured employer, at time of most recent filing of the Self Insurer’s Annual Report or for a legally uninsured employer, at the time of the injury; (2)  Applicant is permanent and stationary:  (3)  Applicant has permanent partial disability; THESE ARE THE ONLY ELEMENTS:  I see nothing which ties in having to miss time from work.  I therefore recommend taking the position that the 4658(d)(2) “up/down” applies when these conditions are met, regardless of whether there is time lost from work.  Also, I even question whether the WCAB must make a 15% up/down finding, since it appears that that this provision is already built into the statute governing PD.  I have further concerns that the failure to provide these notices may subject the claims administrator to potential DWC Audit Penalties.   I therefore recommend that the return to work notices go out even if the applicant has missed no time from work.  At least, you avoid a potential Audit Penalty and your rights are otherwise fully preserved.

Unfortunately, we have no published decisions on point, but stay tuned.

i WCAB Panel Decisions carry no citable authority or legal weight, under then a reflection in time as to what at least three WCAB Commissioners were thinking at the time.  But, these cases can be persuasive and therefore they are potentially very important.

ii In Tsuchiya, the Commissioners specifically stated they did not agree with this interpretation.  But, on a broader level, they would also have found that the statute did not even apply, so the timing issue would have been moot.


Navigate Our Site