State of California M E M O R A N D U M REFERENCE CODE: PML 96-059 DATE: December 2, 1996 TO: Personnel Officers Personnel Transactions Supervisors Workers' Compensation Claims Coordinators FROM: Department of Personnel Administration Benefits Division SUBJECT: Industrial Disability Leave (IDL), Enhanced Industrial Disability Leave(EIDL)and Industrial Disability Leave with Supplementation(IDL/S) CONTACT: Jamie Meyers, Manager, Workers' Compensation Program (916) 327-4024 or CALNET 467-4024 Office Vision: DPA(JLMeyers) INTERNET: JLMeyers@SMTP.DPA.CA.GOV This PML is intended to review and clarify policy related to Industrial Disability Leave (IDL), Enhanced Industrial Disability Leave (EIDL) and Industrial Disability Leave with Supplementation (IDL/S). It supersedes all previous directives and correspondence from the Department of Personnel Administration (DPA) related to administration of these benefits. This PML also includes an Attachment with answers to commonly asked questions about IDL, EIDL and IDL/S. Any changes made by departments, pursuant to the guidance provided in this memorandum, should be done on a prospective basis. IDL Established by the Berryhill Total Compensation Act of 1975, IDL is a salary continuation program specifically designed as an alternative benefit program to Workers' Compensation Temporary Disability (TD). The legal authority for this program is found in Government Code Sections 19869 - 19877.1. To qualify for IDL benefits, an injured employee must be an active member of the Public Employees' Retirement System (PERS) or the State Teachers' Retirement System (STRS). IDL benefits are paid in lieu of TD. An employee's appeal regarding IDL benefits is within the jurisdiction of the Workers' Compensation Appeals Board (WCAB) with regard to the basic time frames, amounts and penalties relevant to that portion of the IDL payment that is equal to the TD payment. The other rules and limitations governing IDL are not subject to the jurisdiction of the WCAB, but may be subject to the grievance process. Prior to the start of IDL, the employee must serve a waiting period of three (3) calendar days. The waiting period is waived if the employee is [1] hospitalized at any time as a result of the injury/illness, [2] unable to work for more than fourteen (14) calendar days, or [3] the injury is the result of a criminal act of violence. IDL benefit payments are based on the employees full salary for the first 22 working dates of disability. Thereafter, the payments are based on two-thirds (2/3) of the employee's normal gross salary. Even though IDL is not taxable, the gross amount for IDL during the first 22 working dates is reduced by the amounts which would have been taken for taxes (Federal, Social Security/ Medicare, and State). This is called the "reduced gross" and it is the amount reflected on the warrant register as well as the earnings statement. This reduced gross is calculated, because the statutory intent of the IDL benefit is continuation of the employee's net compensation for a period while he/she is disabled an unable to work. It is not designed to provide the employee with more money on disability than he/she would otherwise make working. On the 23rd working date, the IDL pay is based on two-thirds of the employee's gross salary without any reduction for taxes. The only mandatory deduction always taken form IDL pay is the retirement contribution based on the employees actual gross. In addition, IDL payments may be subject to the following deductions: survivor's benefits, accounts receivables, child support, spousal support, conservatee support and PERS arrears contributions. All voluntary deductions continue to be taken, unless they are cancelled by the employee, except for deferred compensation, tax sheltered annuities and any pre-tax contributions for FlexElect reimbursement accounts and health/dental premium copays. (See FlexElect discussion under IDL/S for additional information). IDL benefits are payable for a maximum of 52 weeks, or 365 calendar days, within a two (2) year period, from the first date of disability. Any time paid as IDL, whether one hour or eight hours, constitutes one date of IDL applied to the maximum time limits. An employee's eligibility for IDL ends if: o The employee is no longer an active member of PERS/STRS, because of separation or retirement. o The employee refuses to participate in a vocational rehabilitation program if one is offered. o IDL benefits are exhausted or the time limit is exceeded. o The State Compensation Insurance Fund (SCIF) determines that the employee is no longer disabled from working based on the work related injury or illness. EIDL EIDL was established in 1984 through memoranda of understanding between the State and exclusive representatives for rank and file employees in specific bargaining units. Government Code Section 19871.2 provides the authority for excluded employees to have this benefit also. Currently, employees in Bargaining Units 1,3, 4, 6, 7, 8, 11, 13, 15, 17, 18, 19, and 20 and excluded employees are eligible for this benefit if they suffer a qualifying illness/injury. To qualify for EIDL benefits, the injured employee must be temporarily disabled as a result of an injury incurred in the official performance of his/her duties. Such injury must be a physical injury which has been directly and specifically caused by: o an assault by an inmate, ward or parolee under the jurisdiction of the California Department of Corrections or the California Youth Authority; or o responding to, returning from, or fighting an "active fire"; or o a criminal act of violence against a peace officer who was performing in the line of duty (a criminal act of violence is an act which would constitute a misdemeanor or felony if pursued to conviction); or o an assault by a resident, inmate, patient, client or student under the jurisdiction of the Department of Developmental Services, the Department of Mental Health, the Department of Veterans' Affairs, or the Department of Education. EIDL benefits only apply to physical injuries and medical complications directly related to one of the above circumstances. EIDL shall not apply to either presumptive, stress-related disabilities or physical disabilities of mental origin. The department Appointing Power or his/her designee has the final decision regarding an employee's eligibility for EIDL based on the specific circumstances of each case. EIDL is an extension of IDL and has most of the same requirements, however, permanent intermittent employees in Bargaining Unit 6 may be entitled to EIDL even if they are not PERS/STRS members. As with IDL, employees must serve a waiting period of three (3) calendar days. This waiting period can be waived if the employee is hospitalized, unable to work for more than fourteen calendar days, or the injury is the result of a criminal act of violence. Since full IDL is paid for the first 22 working dates of disability, EIDL begins on the 23rd working date of disability and continues payment as full IDL for the remaining period of eligibility up to a maximum of 365 days total within one year (or two or three years, depending on specific provisions in each memorandum of understanding). If the Appointing Power determines that an injured employee is no longer eligible for EIDL because the physical injury has healed, the employee may still be eligible for two-thirds IDL for presumptive, stress related disabilities associated with the qualifying event. An employee can be released to return to work part time and still receive EIDL for the period of time off work, provided that this period is approved by SCIF. IDL/S All excluded employees and rank and file employees in Bargaining Units 1, 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, who meet the eligibility requirements for IDL are also eligible for IDL with Supplementation (IDL/S). This benefit is not available to employees in Bargaining Units 2, 5, and 21. When an injury/illness has been determined to be work related and workers' compensation benefits are approved, an employee will be given 15 calendar days in which to choose IDL or IDL/S. The 15 calendar day "election period" commences on the date that the department informs the employee that he/she is eligible for workers' compensation benefits. Employees who fail to make an election within 15 calendar days shall be placed on IDL without supplementation. Employees who fail to make an election in a timely manner forfeit the right to supplement the IDL benefit at any future time. If an employee elects IDL/S, the employee may choose to supplement at the level sufficient to yield an income which approximates his/her full net pay, or at a level that is less than that amount. Once the supplementation level is selected, the employee may elect to decrease the amount at any point in the future, but he/she may not elect to increase the amount. Any subsequent reduction in the supplementation amount will be made on a prospective basis only. Levels cannot include fractions of hours. Leave balances needed for supplementation are drawn from the employee's leave balance in the following order, unless the employee requests a different order: o Sick Leave o Compensating Time Off (CTO) o Vacation/Annual Leave o Other Leave Credits (e.g. Personal Leave, Holiday Credit) If an employee's leave credits fall below the supplementation amount selected, the supplementation should be reduced to the amount of leave credits available. If an employee is on IDL a portion of the month and the amount of supplementation selected exceeds the amount necessary to obtain full net pay, then the Personnel Office must adjust the supplementation amount to insure that the employee's disability payment does not exceed full net pay. "Full net pay" means the employee's gross salary minus Federal and State Taxes, OASDI/Medicare and Retirement. Miscellaneous deductions will not be factored into the calculation of the employees full net pay. Income received from supplementation is taxable and will be reported on the employees W-2 Form at the end of the year. Federal and State Taxes will be based on the flat tax rate of 28% and 6%. Accounts receivables that the State has not already taken from the IDL pay, or any other pay for the pay period, will be taken from the supplementation pay to the extent that there is a sufficient amount to do so. All established mandatory and voluntary deductions will be withheld from supplementation pay, if not already taken from another payment in the pay period and there is sufficient gross pay. For example, an employee who has a deferred compensation deduction would not have the deduction taken from the IDL two-thirds payment because you cannot defer taxes on tax exempt income. However, if the supplementation gross is sufficient, the deferred compensation can be deducted from the supplementation payment. Employees must cancel any voluntary deductions that they do not wish to have withheld from supplementation pay. Employees must initiate requests for deduction cancellations by contacting their personnel/payroll offices. FlexElect Enrollment: If an employee goes on IDL while enrolled in FlexElect and has elected to receive the Cash Option, the Cash election will remain in effect. He/She will receive a separate check for the Cash Option, which will be issued approximately one week after the IDL paycheck. If the employee is enrolled in either of the reimbursement accounts, the deductions into the accounts will cease for as long as the employee is on IDL. If the employee returns to regular pay within the FlexElect Plan year, his/her reimbursement account deductions will resume. However, if the employee is on IDL/S, reimbursement account deductions may continue provided the amount of the supplementation income is sufficient to cover the full amount of the monthly reimbursement account deduction. Additional questions regarding IDL, EIDL, or IDL/S should be directed to: o For questions regarding the role of the State Compensation Insurance Fund and Vocational Rehabilitation requirements related to IDL, EIDL and IDL/S please contact Jamie Meyers, DPA Workers' Compensation Program (916) 327- 4024 or CALNET 467-4024. o For questions regarding collective bargaining agreements and DPA salary rules related to IDL, EIDL and IDL/S contact the designated DPA Personnel Services Specialist assigned to your department per PML 96-010. o For Disability Payroll Processing question contact the Disability Liaison Unit at the State Controller's Office (916) 322-3619 or CALNET 492-3619. Patricia Pavone, Chief Benefits Division Attachment will be mailed with hard copy of PML.