California Labor Code 4650 Overview & Example Scenarios
Legally reviewed by: Jessica Anvar Stotz, JD, MBA
Updated 10/18/2024
California Labor Code 4650 is a very important piece of California’s labor code that ensures workers have access to both temporary and permanent disability payments if they are injured. The Code describes when employers must make payments to their injured employees according to when the injury took place.
California Labor Code 4650 Explained in 90 Seconds
California Labor Code 4650 first discusses what happens when an employee is temporarily disabled. In such a circumstance, the employer must pay the first temporary disability indemnity within 14 days of learning about the injury. On the 14th day, the employer must pay all owed temporary disability payments. If the employee claims the injury is not the fault of the employer, no payments are owed.
If an injury causes an employee to be permanently disabled, the employer must begin paying within 14 days of the last temporary disability payment being made. Once the final temporary disability payment has been made, the employer must begin paying permanent disability payments until they have paid as much as they are required if the amount has been determined, or a reasonable amount if it has not been determined.
Alternatively, instead of providing permanent disability pay, the employer can offer the employee a position that pays at least 85% of what the position the employee previously held before being injured was paying. If the employee is currently working in a position that pays the same as the position they left due to the injury, permanent disability payments are also not required to be made by the employer unless specifically awarded.
Payments must be made every two weeks after the first, and if payments are late, a 10% increase is put on the payments which goes directly to the employee. This increase does not apply if the employee is still being paid under a salary continuation plan.
Finally, if an employer is insured against having to provide indemnity, it must repay the insurer.
When Does Labor Code 4650 Apply?
California Labor Code 4650 applies to employees who are injured at work and become temporarily or permanently disabled as a result of that injury. An employee is considered temporarily disabled if their doctor has said they cannot work for three or more days due to the injury, or if the employee is hospitalized overnight. Permanent disabilities, on the other hand, are those that have a lingering impact on a worker’s ability to do their work.
An employee is no longer considered temporarily disabled if they return to work, if their doctor tells them the injury as improved as much as it will, or when a doctor simply says the employee is okay to return to work.
What are Temporary Disability Payments?
Temporary disability payments are payments an employee receives if they suffer an injury that prevents them from being able to effectively do their job. Monetarily-speaking, they are two-thirds of an employee’s gross wages before taxes that the employee would have earned had they been working. The amount an employee can earn as temporary disability is capped at a maximum weekly amount determined by the law. As an example, an employee who would have earned $750 in the time they were temporarily disabled will earn $500 from the temporary disability payments.
When Do I Start Receiving Temporary Disability Payments?
Employees begin receiving temporary disability payments within 14 days of reporting their injury to their employer. This is an important number for both the employer and employee to be aware of, as employers can be penalized for making payments late. This penalty is equal to 10% of the intended amount for each late day and goes directly to the employee.
How Long Do Temporary Disability Payments Last?
At most, temporary disability payments can continue for 104 weeks (two years) after the injury is reported to the employer. However, as discussed earlier, an employee returning to work or being cleared by their doctor will end their temporary disability status. There are some limited extensions to the two-year period, primarily involving specific types of injuries or illnesses like HIV, eye/vision injuries, or amputations.
What Happens if My Employer Denies Temporary Disability Payments?
An employee who has their temporary disability benefits wrongfully denied by their employer should seek legal recourse against that employer to secure the payment of benefits. An employment attorney can assess the employee’s case, verify that they should in fact be getting disability payments, and file a suit against the employer to recover the payments for the employee.
If temporary disability benefits are denied to an employee, the state of California will send the employee a letter saying as much. Accompanying this letter will be a form where the employee can appeal the decision. Employees only have 30 days to do this after receiving the denial of benefits, so they should act quickly to ensure their appeal will be heard.
Example Scenarios
Example 1: Injured employee, employer makes payments late
- Scenario: A fast-food worker burns her hands changing the oil in the fryers and is deemed eligible for temporary disability while the burns heal. 15 days after she reported the injury to her employer, she receives her first payment.
- Violation: Late payment of temporary disability payment.
- How Labor Code 4650 Protects: Under Labor Code 4650, employers must make temporary disability payments within 14 days of learning about the injury from the employee. In this case, the employee would be entitled to an additional 10% payment because it was a day late.
Example 2: Employee permanently disabled, employer offers unsuitable replacement position
- Scenario: A warehouse worker injures his back lifting heavy items and is determined to be permanently disabled such that he cannot lift things above a certain point on his body and cannot lift things that are too heavy. His employer offers a substitute position involving no intense labor, but which pays only 70% of the previous position.
- Violation: Insufficient offer for replacement position.
- How Labor Code 4650 Protects: To replace permanent disability payments, an offered replacement position must pay at least 85% of the employee’s previous position. Since that is not the case here, the employer would need to begin paying permanent disability payments.
Example 3: Employee claims temporary disability past 104 weeks
- Scenario: An employee sprains his wrist while carrying something for his work. He claims that the wrist is still injured two years later and demands continued temporary disability payments from his employer.
- Violation: Temporary disability benefits exceeding 104 weeks.
- How Labor Code 4650 Protects: Generally, temporary disability benefits can only be provided to employees for 104 weeks, or two years. Exceptions are possible, but a sprained wrist likely would not meet the threshold for an exception.
Important Note: The above situations are merely examples of how Labor Code 4650 can function in the real world. These situations are not representative of actual legal situations and do not offer any legal advice or conclusions.
Important Additional Considerations
There are a few other things employees should be aware of regarding temporary and permanent disability payments. There are other payments that can offset disability payments, such as unemployment benefits. These benefits come into play when calculating whether an employee is earning above the statutory maximum per week.
Employees should also take care to keep good records of hours worked and medical documentation, as this will make it easier to communicate with your employer throughout the temporary disability benefits process.
Resources for Employees and Employers
- California Labor Code 4650
- California Department of Industrial Relations
- California Department of Industrial Relations – Division of Labor Standards Enforcement
- California Department of Industrial Relations – Division of Labor Standards: Temporary Disability Benefits
- California Department of Industrial Relations – Division of Labor Standards: Permanent Disability Benefits
Connect with an Attorney
If you are an employee who believes you have wrongly been denied temporary disability payments by your employer, your best next move is to seek legal recourse against them. California’s labor codes are in place to help aggrieved employees, but without initiating a lawsuit, many employees will not be able to be compensated. If you are seeking legal assistance, contact LawLinq today.
LawLinq works with you to find an experienced and skilled employment attorney who can help you evaluate your case and bring a claim against your employer. You don’t have to deal with the stress of denied payments on your own: contact us today by calling (855) 997-2588 or by filling out our form online by clicking here.
