What happens if an employer or insurer overpays workers’ compensation benefits in California? It is something that can happen for a wide range of different reasons. The short answer is that California has a process in place that allows parties to petition for credit of an overpayment. Here, our Fresno workers’ compensation defense law firm highlights the key things to know about petitioning for credit of a workers’ compensation overpayment.
Know the Law: California Labor Code § 4909
As a background, it is important to understand how California law views a workers’ compensation overpayment. The issue is governed largely by California Labor Code § 4909. The statute holds that an overpayment received by an employee (or their family) is not an admission of liability by the employer or insurer. It can be considered for the purposes of “fixing the amount of the compensation to be paid.” In other words, the California Workers’ Compensation Appeals Board (WCAB) has a general discretion to grant creditors for workers’ compensation overpayment.
Petitioning for a Credit of a Workers’ Compensation Overpayment (Not Self-Correcting)
As of 2020, our state adopted new procedural rules for workers’ compensation overpayments. When an overpayment is made, neither an employer nor an insurer has the authority to “self-correct” the issue. Instead, California Code of Regulations § 10555 requires that they take action to file a petition for a workers’ compensation overpayment credit. The WCAB has the authority to grant credit if a good cause can be demonstrated. In its guidance for employers, the WCAB explains that:
- California state regulations prevent an employer from taking a unilateral credit for an alleged overpayment of workers’ compensation benefits. A petition must be filed, and the issue must be adjudicated.
Three Things That Must Be in a Petition for a Workers’ Compensation Overpayment Credit
What goes into a California workers’ compensation overpayment credit petition? It is crucial that an employer, claims administrator, or insurer presents a strong, well-supported petition that an overpayment of benefits was made to the worker. There are three specific things that must be addressed as part of every workers’ compensation overpayment petition:
- There must be a comprehensive account of all payments made by the employer;
- There must be a description of the benefits against which the employer wants a credit;
- There must be a specific amount claimed for the proposed credit.
Of course, as part of such a petition, the employer needs to be prepared to prove that an overpayment was made.
Get Help From Our Fresno, CA, Workers’ Compensation Defense Lawyer Today
At Yrulegui & Roberts, our Fresno workers’ compensation defense attorney has the professional and legal expertise to help clients navigate complex matters. If you have any questions or concerns about petitioning for credit of a workers’ compensation overpayment, please call us now or contact us online to arrange your confidential initial appointment. With offices in Fresno, Bakersfield, and Sacramento, our workers’ compensation defense law firm services WCAB locations throughout the wider region.
