HB 2179

Present law provides that the rights and remedies granted to an employee subject to the Workers' Compensation Law, on account of personal injury or death by an accident, are the exclusive rights and remedies of the employee, the employee's representative , dependents or next of kin, for the injury or death. This bill clarifies that the exclusiveness of the rights and remedies granted to an employee, the employee's representative, dependents or next of kin under such law do not apply in any civil action f or damages arising out of the death of an employee where the death is alleged to have been caused by the gross negligence or criminal conduct of the employer, a principal, or intermediate contractor, or any officer, director, managing agent, or supervisory employee of such person or entity. As used in this bill, "criminal conduct"" means conduct that constitutes a felony or Class A or Class B misdemeanor under the laws of this state or the United States and that is a cause in fact and a legal cause of the e mp loyee's death. In an action brought pursuant to the paragraph above, this bill authorizes an employee's personal representative, dependents, or next of kin to pursue all remedies and damages available in a wrongful death action in addition to any benefits payable under the Workers' Compensation Law. However, any workers' compensation benefits paid or payable on account of the employee's death must be credited or set off against any recovery in such an action to the extent required by law. This bill does not limit or abrogate any existing exception to the exclusive remedy provisions of the Workers' Compensation Law, including any judicially recognized cause of action for intentional injury by an employer or co-employee. CONTESTING EXTENT OF WORK INJURY Present law authorizes an injured worker, or an injured worker's dependents, to pursue an action against a third person, when such third person is liable for the worker's injury or death. In the event of any recovery against such third person, an attorn ey retained by the employer to effect recovery against the third person is entitled to a portion of the reasonable attorney's fees awarded by the court. Further, an employer may receive a subrogation lien against any recovery from such third person if th e employer's maximum liability for workers' compensation has been paid or discharged. This bill clarifies that an employer's recovery of attorney's fees or a subrogation lien is waived if such employer has contested the medical causation, permanency, or ex tent of the employee's work injury. SCHEDULE OF COMPENSATION For injuries producing temporary total disability, present law requires 66 2/3% of the average weekly wage be paid to the employee, subject to the maximum and minimum weekly benefit limits. This bill raises the compensation percentage to 75% of the empl oyee's average weekly wage subject to maximum and minimum weekly benefit limits. For injuries producing temporary partial disability, present law requires 66 2/3% of the difference between the average weekly wage of the worker at the time of the injury and the wage the worker is able to earn in the worker's partially disabled conditi on be paid to the employee, subject to the maximum and minimum weekly benefit limits. This bill raises the compensation percentage to 75% of the difference between the average weekly wage of the worker at the time of the injury and the wage the worker is a ble to earn in the worker's partially disabled condition, subject to maximum and minimum weekly benefit limits. PERMANENT PARTIAL DISABILITY In the case of a disability that is partial in character but adjudged to be permanent, at the time the injured employee reaches maximum medical improvement, present law requires the injured employee to be paid 66 2/3% of the employee's average weekly wag es for the period of compensation, which is determined by multiplying the employee's impairment rating by 450 weeks. Present law refers to this amount as the ""original award."" This bill increases the percentage to 75% of the employee's average weekly wa ge s for the period of compensation, subject to maximum and minimum weekly benefit limits. Further, this bill provides that acceptance, payment, approval, or satisfaction of an original award does not extinguish, waive, release, or otherwise bar an employee's right to seek benefits for total disability if the employee later becomes permanently and totally disabled as a result of the compensable injury. An employee may file for such permanent total disability benefits at any time after the conclusion of the compensation period for the original award, subject to statutes of limitation and repos e. This bill requires the employer to receive credit for permanent disability benefits paid to an injured employee for a partial permanent disability, but this credit does not preclude or limit an award of permanent total disability benefits for any period after the expiration of the original award's compensation period. However, this bill clarifies that this provision does not diminish or impair an employee's right to seek increased benefits or extraordinary relief in addition to or instead of permanent to tal disability benefits. Present law authorizes an employee with a temporary partial disability to file a claim for increased benefits if such employee has not returned to work at the time the period of compensation ends or 180 days after the employee reaches maximum medical impr ovement, whichever is later. An employee is also eligible for an increased award if they have returned to work, but are earning a wage or salary less than 100% of the wages received pre-injury. Such an increased award is known as the ""resulting award."" This bill provides a new method for calculating an employee's resulting award. The injured employee's original award must be increased by multiplying the original award by 2.5. In addition, the injured employee's resulting award must be further increas ed by multiplying the resulting award by 1.45 if the employee lacks a high school diploma or equivalent and by 1.45 if the employee is older than 40 at the time the employee becomes eligible for an increased benefit. PERMANENT TOTAL DISABILITY For injuries resulting in total permanent disability, present law requires 66 2/3% of the wages received at the time of the injury be paid to be employee, subject to maximum and minimum weekly benefit limits. This compensation generally must be paid dur ing the period of the permanent total disability until the employee is eligible for full benefits in the federal Old Age Insurance Benefit Program under the federal Social Security Act. This bill increases the percentage to 75% of the wages received at t he time of the injury, subject to maximum and minimum weekly benefit limits. This bill provides that the right to permanent total disability benefits is independent of, and cumulative to, the right to permanent partial total disability benefits, as described above. ATTORNEY'S FEES Present law prohibits any attorney's fees for services to employees under the Workers' Compensation Law from exceeding 20% of the amount of the recovery or award to the injured worker. This bill increases the percentage to 25% of the amount of the recov ery or award. Present law authorizes the court of workers' compensation claims to award reasonable attorneys' fees and costs incurred when an employer unreasonably denies a claim or unreasonably fails to timely initiate any of the benefits to which the employee or dep endents is entitled, if the workers' compensation judge makes a finding that the benefits were owed at an expedited hearing or compensation hearing. This bill, instead, authorizes for an award of reasonable attorneys' fees when an employer wrongfully den ie s a claim or wrongfully fails to timely initiate any of the benefits to which the employee or dependents is entitled if the workers' compensation judge makes a finding that the benefits were owed at an expedited hearing or compensation hearing. As used i n this provision, ""wrongfully"" means erroneously, incorrectly, or otherwise inconsistent with the law or facts. ON MARCH 12, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1981, AS AMENDED. AMENDMENT #1 r ewrites this bill to add a requirement that an award of attorneys' fees and costs incurred when an employer unreasonably denies a workers' compensation claim or unreasonably fails to timely initiate any of the benefits associated with the claim must be based on a finding by the workers' compensation judge that the employer's conduct was unreasonable. When, at an expedited hearing, the workers' compensation judge concludes that the employer unreasonably denied the claim or unreasonably failed to timely initiate benefits, th is amendment authorizes th e court to award attorneys' fees and costs at that time. If, in addition, the workers' compensation judge finds that the evidence of such unreasonableness is clear and convincing, then any award of attorneys' fees and costs m ust not be deferred to a compensation hearing ."