Ferguson

This case presents the heretofore unresolved question whether the 50 percent increase in workers’ compensation recovery provided *1617 in Labor Code section 4553 1 for cases of serious and willful misconduct by an employer is to be calculated on the basis of the entire workers’ compensation award, including nonindemnity payments, or must be calculated only on the basis of the compensation indemnity. We hold that the 50 percent increase is to be calculated on the entire award, not just compensation indemnity, provided the total benefits do not exceed the amount necessary to fully compensate the worker.

Background

On September 14, 1988, petitioner Judy A. Ferguson (applicant) slipped and fell on a wet floor while employed as a general merchandise clerk for respondent Raley’s Supermarkets (Raley’s). This admitted industrial injury resulted in the need for medical treatment and vocational rehabilitation. Applicant was paid temporary disability indemnity and awarded a permanent disability indemnity of 61 percent, the equivalent of $66,780, payable at $210 per week.

Applicant also sought a 50 percent increase in her award under section 4553, alleging serious and willful…

I respectfully dissent. By allowing the 50 percent compensation increase to be calculated on the entire amount of the award, including nonindemnity payments such as vocational rehabilitation and medical-legal costs, the majority effectively give an injured employee in a willful misconduct case the functional equivalent of a tort action, save only the opportunity to collect punitive damages. I do not believe the Legislature intended Labor Code section 4553 1 to be read so generously.

In reaching their decision, the majority rely primarily on the broadly worded definition of “compensation” in section 3207 as well as the Supreme Court’s decision in Adams holding that the 10 percent penalty under section 5814 for delayed payments applied to medical/legal expenses as well as to temporary disability indemnity. (Adams v. Workers’ Comp. Appeals Bd. (1976) 18 Cal.3d 226 [ 133 Cal.Rptr. 517 , 555 P.2d 303 ].) Additionally, they conclude that the Legislature’s removal of the $10,000 cap on the amount by which compensation could be increased under section 4553 indicated “. . . the Legislature intended no restriction on the basis upon which the increased compensation award is to be…

This case presents the heretofore unresolved question whether the 50 percent increase in workers' compensation recovery provided in Labor Code section 4553 [1] for cases of serious and willful misconduct by an employer is to be calculated on the basis of the entire workers' compensation award, including nonindemnity payments, or must be calculated only on the basis of the compensation indemnity. We hold that the 50 percent increase is to be calculated on the entire award, not just compensation indemnity, provided the total benefits do not exceed the amount necessary to fully compensate the worker.

On September 14, 1988, petitioner Judy A. Ferguson (applicant) slipped and fell on a wet floor while employed as a general merchandise clerk for respondent Raley's Supermarkets (Raley's). This admitted industrial injury resulted in the need for medical treatment and vocational rehabilitation. Applicant was paid temporary disability indemnity and awarded a permanent disability indemnity of 61 percent, the equivalent of $66,780, payable at $210 per week.

Applicant also sought a 50 percent increase in her award under section 4553, alleging serious and willful…