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HomeMy WebLinkAboutWorkers' Compensation Settlement Policy and Committee - Guidelines and Settlement Authority LimitCITY OF PALM DESERT OFFICE OF THE DIRECTOR OF HUMAN RESOURCES STAFF REPORT REQUEST: Approve by motion, the establishment of the proposed City of Palm Desert Workers' Compensation Case Settlement Policy, and the establishment of a Workers' Compensation case settlement committee DATE: March 10, 2005 CONTENTS: Proposed City of Palm Desert Policy establishing a Workers' Compensation Case Settlements Committee, including procedural guidelines and a settlement authority limit. Also included is the proposed settlement authority form, which will serve to document the process SUBMITTED BY: Duane K. Munson, Director of Human Resources Recommendation: Waive Further Reading and Adopt by Motion, the proposed City of Palm Desert Workers' Compensation Case Settlement Policy, and establish a Workers' Compensation Case Settlement Committee. Discussion: One of the benefits that the City receives by virtue of our membership in the California Joint Powers Insurance Authority (CJPIA) is the Workers' Compensation claims processing services of Southern California Risk Management Association (SCRMA). The City of Palm Desert has accumulated an exemplary record for worker safety, and a corresponding low level of Workers' Compensation Claims; however, from time to time our existing cases present us with opportunities for settlement. There are two forms of voluntary settlement; the most common being the Compromise and Release (C&R), and the other form is the Stipulated Findings and Award. The advantage of the C&R is that it requires a cash settlement, without the uncertainty of G:\HR\Duane Munson Mork. Comp. Staff Report.dot future medical obligations, and it provides for a complete release of past, present and future liability. When there is an opportunity for settlement, the law firm that has been selected to defend the City's interest notifies SCRMA and copy's the City. The attorney's letter presents the potential settlement, along with some justification for acceptance. SCRMA notifies the City to acquire the City's approval to enter into the settlement agreement. The CJPIA and SCRMA do not need the approval to authorize a financial settlement, however, if the City approves the settlement request it greatly expedites the settlement process. The cash required to fund the settlement agreement does not come directly out of City funds, but the settlements and judgments paid on behalf of the City have an effect on the rate that we pay for Workers' Compensation Insurance through the CJPIA. The City may wish to establish a Workers' Compensation case settlement authority committee, consisting of the Director of Finance, the Director of Human Resources, and the City Manager. Because these opportunities are time sensitive, it would also be advisable that their authorized designee would have signing authority if any of the above were to be absent. Fiscal lmpact: None Staff recommends approval. by: DUANE K. MUNSON Director of Human Resources Approval: CARLOS L. OI TEGA City Manage Reviewed and Approved: L SI-(EILA R. GILLIGAN Assistant City Manager for Community Services PAUL GIBSON Finance Director G:\HR\Duane Munson\Work. Comp. Staff Report.dot ADMINISTRATIVE POLICY Affecting Workers' Compensation Case Settlements March 24, 2005 There are two forms of voluntary settlement, the most common being the Compromise and Release (C&R). The other form is the Stipulated Findings and Award. The advantage of the C&R is that it requires a cash settlement without the uncertainty of future medical obligations, and it provides for a complete release of past, present, and future liability. When there is an opportunity for settlement, the law firm that has been selected to defend the City's interest notifies Southern California Risk Management Association (SCRMA) and copies the City. The attorney's letter presents the potential settlement, along with some justification for acceptance. SCRMA notifies the City to acquire the authority to enter into the settlement agreement. The cash required to fund the settlement agreement does not come directly out of City funds, but the settlements and judgments paid on behalf of the City have an effect on the rate that we pay for Workers' Compensation Insurance through the CJPIA. This policy establishes a Workers' Compensation Case Settlement Committee, consisting of the Assistant City Manager for Community Services, the Director of Finance, and the Director of Human Resources (or their authorized designee). This committee shall review and evaluate any and all opportunities to reach a voluntary settlement in Workers' Compensation cases where the City of Palm Desert has been named as the defendant. It shall then recommend approval to the City Manager to authorize the CJPIA and/or its legal counsel to pursue voluntary settlement(s) by way of Compromise and Release or Stipulated Findings and Award. The settlement authority delegated to the Workers' Compensation Case Settlement Committee shall not exceed $100,000; settlement authority in excess of $100,000 will require City Council review and approval. WORKERS' COMPENSATION CLAIM SETTLEMENT AUTHORITY WCAB case name: vs City of Palm Desert WCAB case number(s): Claim number: Type of Settlement: Compromise and Release Stipulated Findings and Award Terms and conditions of settlement: Cash: $ Other Conditions (if any): Attach attomey's letterof recommendation and/or SCRMA letter recommending settlement. Reviewed and Approved: Assistant City Manager for Community Services Director of Finance Director of Human Resources Final Approval: City Manager Date: Date: Date: Date: