Liability for Temporary Disability When Employee Refuses Work

Temporary disability (TD) benefits serve as wage replacement during the period an injured worker is healing from an industrial injury. An employer's obligation to pay TD benefits ceases when such replacement income is no longer needed. The obligation to pay TD benefits ends when the worker returns to work, is deemed able to return to work or when the worker's condition achieves permanent and stationary status.

If an employer offers temporary modified or alternate work within the injured employee's abilities, the worker may be estopped from claiming temporary disability indemnity corresponding to periods that he or she has refused the work. The appeals board, however, has required an employer to prove that the temporary modified or alternate work offered was within the employee's work restrictions. It also has allowed employees to recover TD benefits when the refusal of work was reasonable.

Those principles were highlighted recently in the case of Franzen v. Calvary Murrieta Christian School, 2023 Cal. Wrk. Comp. P.D. LEXIS 335. In that case, an employee worked as a graphic designer, and her job duties included using a computer for 95-98 percent of her job. She was evaluated by a Qualified Medical Evaluator (QME) who reported that she was temporarily partially disabled with various restrictions. The claims adjuster communicated the restrictions to the employer, who offered the employee temporary alternate modified work as an assistant director. The offer listed the job duties, but it did not list the work restrictions found by the QME, nor provide an explanation of how the job was modified to accommodate her health condition. The employee refused the job offer in an email, stating that her treating physician had not released her to work. There was no evidence of any other communication regarding the issue.

The appeals board did not address whether the treating physician's report was more persuasive than the QME's. But it found that the employee had good cause not to report for modified duty until she was told the exact nature of the work. It found that she was not made aware by the employer of her work restrictions, or how the work offered was commensurate with them. It also noted that the employer's representative testified at trial that the job description read as if it was the employee's regular duties. The board concluded that without an explanation, the employee reasonably could believe that she was not capable of performing the work offered.

So, employers may not unilaterally decide that temporary modified or alternate work falls within an employee's restrictions. The offer of work must be sufficiently detailed so that the employee also can determine whether he or she is capable of performing it. An offer of temporary modified or alternate work, at the very least, must list the work restrictions being accommodated. It also should explain how the work offered is consistent with the restrictions.

In Franzen, the appeals board specifically noted that there was no evidence of any other communication on the issue after the employee refused the offer of work. Under the California Fair Employment and Housing Act (FEHA), employers must engage in a good-faith interactive process with a disabled employee to explore the alternatives for accommodating the disability. The interactive process required by the FEHA is informal, involving the employee or the employee's representative to attempt to identify a reasonable accommodation to enable the worker to perform the job effectively.

If an employee refuses an offer of temporary modified or alternate work, the employer should be prepared to engage in further communications regarding an appropriate accommodation. Not only is it a legal requirement, it could assist an employer in defeating a claim for temporary disability benefits. If the employee refuses to participate in the interactive process, it could be used as evidence to support an employer's claim that the employee's refusal to work was unreasonable.

For further discussion of the requirements for an offer of work, see Sullivan on Comp Section 9.24 Termination of Liability for Payment. For further discussion of the interactive process, see Section 11.35 Interactive Process Under Fair Employment and Housing Act.