The opinion
IN THE SUPREME COURT OF
CALIFORNIA
DEPARTMENT OF CORRECTIONS AND
REHABILITATION,
Petitioner,
v.
WORKERS’ COMPENSATION APPEALS BOARD and
MICHAEL AYALA,
Respondents.
S282013
Fourth Appellate District, Division Two
E079076
Workers’ Compensation Appeals Board
ADJ1360597
February 20, 2025
Justice Kruger authored the opinion of the Court, in which
Chief Justice Guerrero and Justices Corrigan, Liu, Groban,
Jenkins, and Evans concurred.
DEPARTMENT OF CORRECTIONS AND REHABILITATION
v. WORKERS’ COMPENSATION APPEALS BOARD
S282013
Opinion of the Court by Kruger, J.
California’s workers’ compensation law guarantees a
certain level of recovery for employees who are injured on the
job, regardless of whether the employer was at fault. (Lab. Code,
§ 3200 et seq.; Shoemaker v. Myers (1990) 52 Cal.3d 1, 16.) If,
however, the employee was injured because of the employer’s
serious and willful misconduct, the employee is entitled to a 50
percent increase in the “amount of compensation otherwise
recoverable.” (Lab. Code, § 4553.) The term “ ‘[c]ompensation’ ”
is defined specifically to mean “compensation under” the
workers’ compensation law. (Id., § 3207.)
The question in this case is whether, for purposes of
calculating the 50 percent premium under Labor Code section
4553, “compensation otherwise recoverable” includes industrial
disability leave payments, a benefit that the Government Code
makes available to certain public employees in lieu of workers’
compensation disability payments. The Workers’ Compensation
Appeals Board answered yes to this question. The Court of
Appeal, however, disagreed, explaining that the board’s
conclusion is plainly inconsistent with the statutory definition
of “ ‘compensation’ ” as limited to “compensation under” the
workers’ compensation law. (Lab. Code, § 3207.) We agree with
the Court of Appeal and affirm its judgment.
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
I.
Michael Ayala was working as a correctional officer for
California’s Department of Corrections and Rehabilitation
(CDCR) when he suffered significant injuries in a planned
attack by prison inmates. He filed a workers’ compensation
claim in which he asserted that his injuries were caused by
CDCR’s serious and willful misconduct in failing to take
appropriate safety measures to respond to a credible and specific
threat of inmate violence. Although a workers’ compensation
administrative law judge (WCJ) initially rejected the argument,
the Workers’ Compensation Appeals Board (Board) agreed with
Ayala that CDCR had engaged in serious and willful
misconduct, and thus concluded that Ayala was entitled to a 50
percent increase in compensation under Labor Code section
4553 (section 4553). (See Department of Corrections &
Rehabilitation v. Workers’ Comp. Appeals Bd. (2023) 94
Cal.App.5th 464, 468–469 (Ayala).)
CDCR did not challenge the Board’s finding of serious and
willful misconduct, but it disagreed with Ayala about the
amount to which he was entitled as a result. Under the terms
of the Workers’ Compensation Act, which is codified as division
4 of the Labor Code, employees recovering from injury are
entitled to collect temporary disability (TD) benefits, which are
capped at two-thirds of the employee’s average weekly earnings,
subject to statutory limits. (Lab. Code, § 4653; see id., § 4453
[setting out instructions for calculating average weekly
earnings]; Huston v. Workers’ Comp. Appeals Bd. (1979) 95
Cal.App.3d 856, 868 [“In general, temporary disability
indemnity is payable during the injured worker’s healing period
from the injury . . . .”].) But instead of collecting TD benefits,
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Opinion of the Court by Kruger, J.
Ayala received industrial disability leave (IDL) and enhanced
industrial disability leave (EIDL) benefits, which are more
generous disability benefits made available to certain public
employees under the Government Code. (Gov. Code, §§ 3527,
subd. (b), 19869, 19871, subd. (a), 19871.2; Cal. Code Regs., tit.
2, § 599.769.) Under the relevant provisions of the Government
Code, Ayala received his full salary (minus certain
withholdings), rather than the more limited amount he would
have received as TD payments under the workers’ compensation
law.
CDCR argued that the 50 percent increased compensation
under section 4553 should be calculated based not on the larger
IDL and EIDL benefits that Ayala received as an eligible public
employee under the Government Code, but instead on the
smaller TD benefits he was otherwise eligible to collect under
the workers’ compensation law. The WCJ agreed. The judge
reasoned that the 50 percent increase could apply only to the TD
benefits because the workers’ compensation law does not
provide for IDL or EIDL benefits, and the Board accordingly
lacks jurisdiction to award them. (Cal. Code Regs., tit. 2,
§ 599.768.)
On Ayala’s motion for reconsideration, the Board reversed.
The Board agreed that it lacked jurisdiction to award IDL and
EIDL benefits, but considered this beside the point, because the
Board “unquestionably has jurisdiction to issue and calculate
[the] applicant’s serious and willful award that he is entitled to
under section 4553.” The Board concluded that for purposes of
calculating the award, the “compensation otherwise
recoverable” included IDL and EIDL benefits. The Board relied
for its conclusion primarily on a Government Code provision
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WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
defining industrial disability leave as “temporary disability as
defined in Divisions 4 (commencing with Section 3201) and 4.5
(commencing with Section 6100) of the Labor Code.” (Gov. Code,
§ 19870, subd. (a).) The Board explained that in Brooks v.
Workers’ Comp. Appeals Bd. (2008) 161 Cal.App.4th 1522
(Brooks), the Court of Appeal had relied on the same definitional
provision to conclude that the workers’ compensation system’s
two-year limit on payments for temporary disability applied to
IDL as well as TD. (Id. at p. 1532; see Lab. Code, § 4656, subd.
(c)(1) [“Aggregate disability payments for a single injury . . .
causing temporary disability shall not extend for more than 104
compensable weeks within a period of two years from the date
of commencement of temporary disability payment.”].) The
Board reasoned that “[t]he inclusion of IDL to calculate
aggregate disability payments in Brooks indicates that [the]
applicant’s IDL payments must also be considered
compensation for purposes of the serious and willful award
because IDL is statutorily defined and treated as identical to
temporary disability, a benefit provided as part of
compensation.”
The Court of Appeal granted CDCR’s petition for review
and reversed the decision of the Workers’ Compensation
Appeals Board as inconsistent with the plain meaning of the
statute. (Ayala, supra, 94 Cal.App.5th at p. 469.) The court
explained that the Workers’ Compensation Act defines the term
“ ‘[c]ompensation’ ” specifically to mean “compensation under
this division [i.e., the workers’ compensation law, division 4 of
the Labor Code] and includes every benefit or payment conferred
by this division upon an injured employee.” (Lab. Code, § 3207,
italics added.) The court reasoned that while TD benefits are
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
compensation provided “under” the workers’ compensation law,
IDL and EIDL benefits are not; they are instead benefits
provided under the Government Code. “Accordingly, the
‘amount of compensation otherwise recoverable’ under section
4553 does not include industrial disability leave.” (Ayala, at
p. 472.)
The Court of Appeal acknowledged the Board’s reliance on
Brooks, noting that “although Brooks construed a different
statute, its reasoning could support a conclusion that base
compensation includes industrial disability leave.” (Ayala,
supra, 94 Cal.App.5th at p. 472.) The court expressed no view
on the issue presented in Brooks, concerning the application of
the two-year limitation period prescribed by Labor Code section
4656, subdivision (c)(1). But the court rejected any suggestion
that TD and IDL are for all relevant purposes equivalent: “[T]o
the extent that Brooks could be read as support for the
proposition that any features of or limitations on temporary
disability necessarily must apply to industrial disability leave
because of the way industrial disability leave is defined
[citation], we respectfully disagree.” (Ayala, at p. 473.)
The Court of Appeal also discussed and distinguished a
second appellate decision cited and discussed in Brooks. In State
of California v. Workers’ Comp. Appeals Bd. (1996) 44
Cal.App.4th 128 (Ellison), the Court of Appeal affirmed a Board
order awarding a statutory penalty under the workers’
compensation law for unreasonable delay in payment of
disability benefits, even though the claimant in that case was
entitled to receive IDL payments rather than TD payments.
(Ellison, at p. 130.) The court in this case saw Ellison as off-
point because nothing in the opinion purported to “expand the
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
scope” of the term “ ‘compensation.’ ” (Ayala, supra, 94
Cal.App.5th at p. 474.) The court also noted that the Board in
Ellison had determined that the penalty at issue should be
calculated based on what the employee would have received in
TD benefits, rather than what she was due in IDL payments.
(Ibid.) In this respect, the Board’s approach in Ellison was
consistent with the Court of Appeal’s determination about the
proper calculation of the 50 percent premium prescribed by
section 4553.
Ayala petitioned for review, supported by the Board as
amicus curiae. We granted the petition.
II.
The question in this case requires us to consider the
interplay between two statutory schemes governing disability
benefits for certain workers who are injured on the job. The first
of these schemes is the law governing workers’ compensation.
First enacted in 1913, the Workers’ Compensation Act is now
codified as division 4 of the Labor Code. The act sets out “a
comprehensive statutory scheme through which employees may
receive prompt compensation for costs related to injuries
incurred in the course and scope of their employment.”
(Kuciemba v. Victory Woodworks, Inc. (2023) 14 Cal.5th 993,
1005; see Lab. Code, §§ 3200–6002; Stats. 1913, ch. 176, §§ 1–
92, pp. 279–320; Stats. 1937, ch. 90, pp. 265–306.) “The system
is premised on a theoretical exchange we have called the
‘ “compensation bargain.” ’ [Citation.] Under this bargain, ‘the
employer assumes liability for industrial personal injury or
death without regard to fault in exchange for limitations on the
amount of that liability. The employee is afforded relatively
swift and certain payment of benefits to cure or relieve the
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
effects of industrial injury without having to prove fault but, in
exchange, gives up the wider range of damages potentially
available in tort.’ ” (Kuciemba, at p. 1006.)
The workers’ compensation law contains detailed
provisions governing the calculation of benefits for workplace
injury. As pertinent here, employees unable to work while
recovering from an injury are generally entitled to collect TD
payments, in an amount capped at up to two-thirds of the
employee’s average weekly earnings. (Lab. Code, § 4653; see id.,
§ 4453 [setting out instructions for calculating average weekly
earnings].) The law has set a two-year limit on aggregate
disability payments for a single injury causing temporary
disability. (Id., § 4656, subd. (c)(1); see generally Department of
Rehabilitation v. Workers’ Comp. Appeals Bd. (2003) 30 Cal.4th
1281, 1291–1292 (Lauher).)
The second statutory scheme at issue in this case is the
statute creating IDL. Enacted in 1974 as part of the Berryhill
Total Compensation Act, the IDL statute applies to covered
state employees who are “temporarily disabled by illness or
injury arising out of and in the course of state employment.”
(Gov. Code, § 19871, subd. (a); Stats. 1974, ch. 374, § 2.5, p. 735.)
The statute defines the term “ ‘[i]ndustrial disability leave’ ” by
reference to the workers’ compensation law: “ ‘Industrial
disability leave’ means temporary disability as defined in
Divisions 4 (commencing with Section 3201) and 4.5
(commencing with Section 6100) of the Labor Code . . . .” (Gov.
Code, § 19870, subd. (a).) IDL benefits are provided in lieu of
workers’ compensation disability payments; an employee may
not “receive temporary disability indemnity . . . for any period
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
for which he or she receives industrial disability leave.” (Id.,
§ 19872, subd. (a).)
IDL benefits are, in general, more generous than the TD
benefits provided for under the workers’ compensation law. A
temporarily injured employee who qualifies for IDL is entitled
to receive leave and his or her full pay, minus taxes and certain
deductions or contributions, for up to 22 days. (Gov. Code,
§ 19871, subd. (a).) The employee then receives “two-thirds of
his or her regular salary throughout the remainder of 52 weeks,
during which time the employee may also supplement IDL
payments with accrued leave time in an amount approximating
the employee’s full net pay.” (Brooks, supra, 161 Cal.App.4th at
p. 1529, citing Gov. Code, §§ 19871, subd. (a), 19872, subd. (b).)
Because IDL benefits provide employees their net take home
pay, it ordinarily results in payments that are greater than or
equal to the payments available under the provisions of the
workers’ compensation law governing TD. (See Brooks, at
pp. 1528–1530.) In addition, many state employees, like Ayala,
may receive EIDL, under which IDL benefits may be extended
for a total period of one year. (Gov. Code, § 19871, subd. (a); id.,
§ 19871.2.)1 An employee who remains temporarily disabled
1 EIDL was originally, and primarily remains, a negotiated
benefit established through collective bargaining, though
certain “excluded” public employees are statutorily entitled to
receive EIDL. (See Gov. Code, § 19871, subd. (b) [“If the
provisions of this section are in conflict with the provisions of a
memorandum of understanding reached pursuant to [Labor
Code] Section 3517.5, the memorandum of understanding shall
be controlling without further legislative action, except [in
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
after IDL and EIDL payments terminate is then entitled to
receive payments for temporary disability under the workers’
compensation law. (Gov. Code, § 19874, subd. (a).)
III.
A.
The question before us is one of statutory interpretation,
which we review de novo. (Lauher, supra, 30 Cal.4th at p. 1290.)
We employ familiar principles in this enterprise. We begin with
the text, considering the ordinary meaning of the statutory
language as well as the text of related provisions, terms used
elsewhere in the statute, and the structure of the statutory
scheme. (Larkin v. Workers’ Comp. Appeals Bd. (2015) 62
Cal.4th 152, 157 (Larkin).) If the text is clear, we must give
effect to it. If, however, the text is ambiguous, we may consult
extrinsic sources, including the legislative history. (Id. at
p. 158.) In ascertaining the statutory meaning, we accord
appropriate weight to the interpretations adopted by the
Workers’ Compensation Appeals Board in the course of official
circumstances not applicable here].”]; id., §§ 19871.2 [EIDL
benefits for “an excluded employee”], 3527, subd. (b) [defining
“ ‘[e]xcluded employee’ ”]; Cal. Code Regs., tit. 2, § 599.769
[EIDL for excluded employees who supervise represented
employees eligible for EIDL]; see also Stats. 1977, ch. 1159,
p. 3752; Gov. Code, § 3524, as amended by Stats. 1986, ch. 103,
§ 1, p. 237; Dept. of Human Resources, Human Resources
Manual, § 1412 (Industrial Disability Leave) <https://
hrmanual.calhr.ca.gov/Home/ManualItem/1/1412> [as of Feb.
20, 2025] [“EIDL was established in 1984 through memoranda
of understanding between the state and exclusive
representatives for rank-and-file employees in specific
bargaining units.”].) All Internet citations in this opinion are
archived by year, docket number, and case name at <https://
courts.ca.gov/opinions/cited-supreme-court-opinions>.
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
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Opinion of the Court by Kruger, J.
proceedings. (Ibid., citing Yamaha Corp. of America v. State Bd.
of Equalization (1998) 19 Cal.4th 1, 12–13.) But if “the agency’s
interpretation is clearly erroneous or unauthorized under the
statute, we will not give effect to its understanding of the
statute.” (Larkin, at p. 158.)
The workers’ compensation law instructs that “[l]iability
for the compensation provided by this division [i.e., the workers’
compensation law] . . . shall, without regard to negligence, exist
against an employer for any injury sustained by his or her
employees arising out of and in the course of the
employment . . . .” (Lab. Code, § 3600, subd. (a).) But the law
contains special recovery rules in cases involving “ ‘[s]erious and
willful misconduct,’ ” which represents “an exceptionally high
degree” of fault. (Ferguson v. Workers’ Comp. Appeals Bd. (1995)
33 Cal.App.4th 1613, 1622 (Ferguson) [serious and willful
misconduct consists of “an act deliberately done for the express
purpose of injuring another, or intentionally performed whether
with knowledge that serious injury is a probable result or with
a positive, active, wanton, reckless and absolute disregard of its
possibly damaging consequences”].) If the injury is caused by
the serious and willful misconduct of the employee, then, with
some exceptions, the “compensation otherwise recoverable” for
the injury must be reduced by one-half. (Lab. Code, § 4551.) If,
however, the injury is caused by the serious and willful conduct
of the employer, then the “amount of compensation otherwise
recoverable” must be increased by one-half. (§ 4553.) This case
concerns the latter provision.
Section 4553 does not specify what constitutes the
“compensation otherwise recoverable” that is subject to the 50
percent premium for serious and willful employer misconduct.
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
But a definition applicable throughout the workers’
compensation law provides that “ ‘[c]ompensation’ means
compensation under this division and includes every benefit or
payment conferred by this division upon an injured employee . . .
without regard to negligence.” (Lab. Code, § 3207 (section 3207);
see also Ferguson, supra, 33 Cal.App.4th at p. 1619 [“Section
4553 cannot be read without reference to section 3207, which
defines ‘compensation.’ ”].) The WCJ in this case had held, and
CDCR now argues, that under sections 4553 and 3207, the
“compensation otherwise recoverable” to Ayala is limited to the
TD indemnity to which he is entitled under the workers’
compensation law. Ayala and the Board, by contrast, take the
view that the “compensation otherwise recoverable” to Ayala
includes the IDL2 payments Ayala received under Government
Code section 19871. Given the plain text of the statute, CDCR
has the better of the argument.
Section 3207 defines “ ‘[c]ompensation’ ” broadly in some
respects, to “include[] every benefit or payment conferred by” the
workers’ compensation law. But this definition includes an
essential limitation: that compensation includes only those
benefits and payments “under” the workers’ compensation law.
As the WCJ held and CDCR agrees, this means that Ayala is
entitled to a serious misconduct premium calculated as one-half
of the category of benefits and payments to which he is entitled
under the workers’ compensation law, including, most
significantly, TD payments (Lab. Code, §§ 4653–4654) as well as
2
For simplicity, we use the term “IDL” as a shorthand for
both industrial disability leave and enhanced industrial
disability leave. The distinctions between IDL and EIDL do not
affect the analysis.
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
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Opinion of the Court by Kruger, J.
reimbursement of medical and legal costs stemming from the
injury. (Adams v. Workers’ Comp. Appeals Bd. (1976) 18 Cal.3d
226, 231 [holding that medical-legal costs are “ ‘compensation’ ”
under § 3207 because they are “contained in division 4 of the
Labor Code,” and citing Lab. Code, §§ 4600 and 5811, subd.
(b)(2)]; Ayala, supra, 94 Cal.App.5th at p. 469 [“Assuming that
Ayala would have been entitled to temporary total disability, the
base compensation would have been two-thirds of his salary,
subject to statutory limits.”].) Although Ayala may be receiving
other amounts in the form of IDL payments, TD payments and
other benefits provided by division 4 represent the
compensation that is “recoverable” to him “under” the workers’
compensation law. (§§ 4553, 3207.) But Ayala is not entitled to
calculate the 50 percent premium based on the greater amount
of IDL benefits because IDL benefits are not compensation
“under” the workers’ compensation law; they are, instead,
benefits created and conferred under the Government Code.
This straightforward reading of the statutory language
accords with our prior decisions concerning the meaning of the
term “compensation” as used in the workers’ compensation law.
In City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143,
we considered whether the general exclusive remedy provisions
of the workers’ compensation law meant that Labor Code section
132a, which provides remedies for prohibited discrimination
against injured workers, supplies the exclusive remedy for
employment discrimination based on a disability arising from
an industrial injury. We answered no, explaining that the
general exclusive remedy provisions apply only to “[l]iability for
the compensation provided by this division” (Lab. Code, § 3600,
subd. (a)) and that the term “ ‘ “[c]ompensation” ’ ” was further
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defined in section 3207 as “ ‘compensation under Division 4,’ ”
while the Labor Code section 132a remedy appeared in division
1. (City of Moorpark, at p. 1154.) Three years later, we would
explain that the “same reasoning dictates the conclusion that
section 132a backpay is not subject to any limitation on interest
implicit in [Labor Code] section 5800,” a provision governing
“ ‘awards of the appeals board . . . for the payment of
compensation.’ ” (Currie v. Workers’ Comp. Appeals Bd. (2001)
24 Cal.4th 1109, 1113.) We explained that an award of backpay
under section 132a is not “ ‘compensation’ within the meaning
of section 5800, because that term, according to section 3207,
‘means compensation under Division 4.’ ” (Currie, at p. 1113.)
Section 132a’s authorization of a backpay remedy, we continued,
“appears in division 1 of the Labor Code and is separate and
distinct from the compensation for industrial injuries provided
for in division 4.” (Currie, at p. 1113.) Similarly here: The
authorization of IDL benefits does not appear in division 4 of the
Labor Code, and so IDL payments fall outside the scope of the
“compensation” to which section 4553 refers.
B.
Ayala agrees that “IDL is not ‘conferred by’ Division 4, so
it does not meet the strict definition of ‘compensation’ under
section 3207.” Still, he raises several arguments for treating
IDL benefits as though they were nonetheless “compensation”
under the workers’ compensation law. The arguments are not
persuasive.
1.
Ayala’s primary argument, which echoes the Board’s
primary line of reasoning in this case, does not concern the
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Opinion of the Court by Kruger, J.
meaning of either section 4553 or section 3207. It instead
focuses on a definitional provision in the statute creating IDL.
The definitional provision, Government Code section
19870, subdivision (a), states: “As used in this article: [¶] . . .
‘Industrial disability leave’ means temporary disability as
defined in Divisions 4 . . . and 4.5 . . . of the Labor Code and
includes any period in which the disability is permanent and
stationary and the disabled employee is undergoing vocational
rehabilitation.” To the extent the provision refers to “temporary
disability as defined in” the workers’ compensation law (ibid.),
it may be somewhat misleading, as no statutory definition
appears in the workers’ compensation law; the meaning of the
term has instead been elaborated through case law. (See Ayala,
supra, 94 Cal.App.5th at p. 473, fn. 6; Brooks, supra, 161
Cal.App.4th at p. 1537.) In all events, Ayala argues that
because the Government Code defines IDL as “mean[ing]
temporary disability” as the term is used in the workers’
compensation law, IDL “is to be treated as TD” and thus must
count as “compensation under” the workers’ compensation law
to the same extent as TD.
The argument places substantially more weight on the
definition in Government Code section 19870, subdivision (a)
than it can bear. For one thing, the definition does not actually
define “ ‘[i]ndustrial disability leave’ ” (ibid.) to mean TD
benefits, as Ayala appears to assume. While the terms
“ ‘[i]ndustrial disability leave’ ” and “temporary disability” are
frequently used as shorthand for the payments and benefits that
accompany injury-caused temporary disability, it does not
appear this is how Government Code section 19870, subdivision
(a) uses the terms. The specification that “ ‘[i]ndustrial
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Opinion of the Court by Kruger, J.
disability leave’ ” includes any “period” of vocational
rehabilitation suggests a focus on when the industrial disability
leave provisions apply — i.e., during any “period” of temporary
disability, as that term has been elaborated in the workers’
compensation context — as opposed to what benefits are
conferred.
In any event, Ayala’s Government Code section 19870,
subdivision (a) argument suffers from a more fundamental
problem, which was well described in the opinion of the Court of
Appeal: “As a logical matter, incorporating a definition from one
statutory scheme into a second one does not alone expand the
scope of the first statutory scheme. . . . [A]lthough our
Legislature has the power to amend both the Government Code
and the Labor Code, the fact that part of the Government Code
incorporates the Labor Code’s definition of ‘temporary disability’
does not, by itself, mean that the definition of ‘compensation’
under the Labor Code has expanded in any way. ‘Compensation’
under section 3207 still requires that it be provided by division
4 of the Labor Code, just as it always has.” (Ayala, supra, 94
Cal.App.5th at p. 473.) As Ayala acknowledges, IDL is not
provided for in division 4, and thus is not “compensation” within
the meaning of section 3207. Nothing about the definition of
IDL in Government Code section 19870, subdivision (a) alters
that inescapable fact.
Ayala’s argument to the contrary relies heavily on Brooks,
supra, 161 Cal.App.4th 1522. This reliance is misplaced.
Brooks concerned a different question: whether IDL payments
count as “temporary disability payment[s]” that start the
running of the two-year limit on “[a]ggregate disability
payments” in Labor Code section 4656, subdivision (c)(1). The
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Opinion of the Court by Kruger, J.
court answered yes. The Brooks court based its holding on the
plain language of the relevant statutes, including Government
Code section 19870, subdivision (a). It reasoned: “Because IDL
is statutorily defined as the equivalent of TD, then the two-year
limitation under section 4656, subdivision (c)(1), necessarily
must apply to both IDL and TD. Furthermore, the two-year
limitation does not restrict itself only to TD benefits payable
under the Workers’ Compensation Act or the Labor Code, as it
more broadly applies to ‘Aggregate disability payments for a
single injury.’ ([Lab. Code,] § 4656, subd. (c)(1), italics added.)”
(Brooks, at p. 1532.)
Brooks did not address the question whether IDL
payments count as “compensation” within the meaning of the
workers’ compensation law, and its reasoning does not dictate a
particular answer to that question. On the contrary: In
reaching its conclusion, the Brooks court emphasized that the
two-year limit on aggregate disability payments “does not
restrict itself only to TD benefits payable under the Workers’
Compensation Act or the Labor Code.” (Brooks, supra, 161
Cal.App.4th at p. 1532.) The definition of “ ‘[c]ompensation’ ” in
section 3207, by contrast, does restrict itself to amounts payable
under the workers’ compensation law. We are obligated to give
effect to the plain meaning of this restriction. Brooks does not
suggest otherwise.
Ayala relies primarily on language in the Brooks opinion
that speaks generally of a definitional “equivalen[ce]” between
IDL and TD. (Brooks, supra, 161 Cal.App.4th at p. 1532.) But
that language must be understood in context. The result in
Brooks did not depend on any broad conclusion that IDL is for
all legal purposes equivalent to TD. To answer the question
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WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
before it, Brooks needed to establish only that IDL benefits, like
TD benefits, are payments made to compensate an injured
employee during a period of temporary disability, such that the
period during which an employee receives IDL benefits ought to
count toward the two-year limit on aggregate disability
payments. (See, e.g., id. at p. 1533 [describing IDL as “a form of
temporary disability” and noting that “temporary disability
indemnity” can be paid at either the IDL rate or the TD rate
(italics added)].) The argument Ayala raises here depends on a
much more far-reaching view of the ways in which IDL is
assertedly “equivalent” to TD — one that runs up against the
plain meaning of the definition of “ ‘[c]ompensation’ ” in section
3207. Brooks did not adopt such a view; indeed, it had no reason
to consider it.3 Nor, by the same token, do we cast any doubt on
the holding of Brooks by giving effect to the plain meaning of
section 3207 in this case.
Ayala also relies on Ellison, supra, 44 Cal.App.4th 128.
Unlike Brooks, Ellison did consider the meaning of a provision
of the workers’ compensation law that referred to the provision
of “compensation,” as applied to a worker entitled to receive IDL.
But Ellison is no more helpful to Ayala than Brooks.
The question presented in Ellison was whether, when an
employer unreasonably delays “compensation” to an injured
worker, the Board has the authority to impose a 10 percent
penalty on the award of benefits (see Lab. Code, former § 5814),
3
To the extent some of the language in Brooks has been
understood out of context to mean that IDL is for all purposes
equivalent to, and effectively interchangeable with TD, we now
clarify that this conclusion is incorrect and Brooks should no
longer be cited for it.
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
even when the claimant is a public employee entitled to receive
IDL benefits in lieu of TD benefits. The Board had answered
this question in the affirmative, but it concluded that the
penalty should be calculated based only on the amount of TD
indemnity the employee would otherwise have been entitled to
receive. The Board disclaimed any authority to impose penalties
based on nonpayment of IDL benefits to which the employee was
entitled under the Government Code. (Ellison, supra, 44
Cal.App.4th at p. 142 [“ ‘[P]enalty was not imposed for
unreasonable delay in paying IDL benefits, but for [the State’s]
continuing failure to pay [Ellison] any benefits for her
temporary disability, despite its legal obligation to do so.
Therefore . . . the Board properly acted within its jurisdiction by
imposing a 10% penalty under Labor Code section 5814 against
the amount of temporary disability indemnity [original italics]
that would have been payable in this case, for [the State’s]
unreasonable failure to timely provide [Ellison] any benefits for
her undisputed period of temporary disability.’ ”]; accord, id. at
p. 145.)
The Court of Appeal in Ellison upheld the Board’s decision
on appeal. It concluded that the Board had acted within its
statutory authority in imposing the penalty, alluding to, among
other things, “the Legislature’s definition of IDL as identical
with temporary disability indemnity (TD) under the Labor Code
(Gov. Code, § 19870, subd. (a)).” (Ellison, supra, 44 Cal.App.4th
at p. 130, fn. omitted.)
Ayala seeks to marshal this language in support of the
proposition that the definition of IDL in Government Code
section 19870, subdivision (a) means that IDL payments, like
TD payments, are “compensation” under the workers’
18
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
compensation law. But this is not what the opinion says. The
Ellison court cited Government Code section 19870, subdivision
(a), as an indication of the Legislature’s “intent to grant state
workers the benefits of” the statutory penalty for late payment
in cases of temporary disability (Ellison, supra, 44 Cal.App.4th
at p. 146); it did not reach any broader conclusions about the
extent to which the full amount of an IDL payment must be
treated as “compensation” under the workers’ compensation
law, on which a section 4553 premium might be based. And
notably, in the decision on review, the Board had expressly
declined to rely on the proposition Ayala advances here, stating
clearly that “ ‘discussion . . . as to whether IDL benefits are
“compensation” under Division 4 of the Labor Code, and
therefore subject to penalty under Labor Code section 5814,
[was] not germane’ ” to its decision. (Ellison, at pp. 141–142.)
Again, the Board’s view — which the Court of Appeal upheld —
was that it had authority to impose the penalty only to the
extent that the employer’s nonpayment of benefits deprived the
employee of the TD indemnity to which she would otherwise
have been entitled under the workers’ compensation law; the
Board eschewed any authority to impose penalties based on
nonpayment of the IDL benefits to which the employee was
entitled under the Government Code. (Id. at pp. 142, 145.)
Ellison, in other words, lends no support to Ayala’s
argument that “compensation” includes the full amount he is
entitled to receive in IDL benefits under the Government Code.
Ellison instead simply recognizes that, when an employer fails
to make any timely payment to an injured public employee, the
employer is subject to a penalty for that failure, regardless of
whether the public employee was entitled to receive TD benefits
19
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
or a larger amount in IDL benefits. And to the extent Ellison
touches on the kind of calculation issues we confront in this case,
Ellison is even less helpful to Ayala. While the Board in Ellison
had taken the view that a public employee is entitled to a
penalty for failure to timely pay “compensation,” it also
concluded that the amount of that penalty must be calculated
solely on the basis of the amount the employee would have
received in TD payments under the workers’ compensation law;
it may not be calculated based on what a public employee
“actually received in industrial disability leave” under
Government Code section 19871. (Ayala, supra, 94 Cal.App.5th
at p. 474.) That is, in essence, the very argument CDCR makes
about the calculation of the 50 percent premium for serious and
willful misconduct under section 4553. Thus, as the Court of
Appeal in this case rightly noted, the Board’s decision and the
Ellison court’s affirmance are “broadly consistent” with CDCR’s
position in this case. (Ayala, at p. 474.) Ellison offers no
genuine assistance to Ayala’s argument based on the definition
of IDL in Government Code section 19870, subdivision (a).
2.
Venturing beyond the definition in Government Code
section 19870, subdivision (a), Ayala argues that various
provisions of the Labor Code confirm that IDL is, for all intents
and purposes, indistinguishable from TD. He cites two Labor
Code provisions, in particular, in support of his argument that
IDL is “compensation.” Neither provision supports the
argument — in fact, both provisions use terms other than
“compensation” to refer to benefits provided for outside of the
workers’ compensation law.
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DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
Ayala focuses in particular on Labor Code section 4650
(section 4650), which governs the timely payment of indemnity
for both temporary and permanent disability. Subdivision (d) of
the provision imposes a 10 percent penalty on untimely
indemnity payments “unless the employer continues the
employee’s wages under a salary continuation plan, as defined
in subdivision (g).” (§ 4650, subd. (d).) Subdivision (g), in turn,
defines a salary continuation plan as “a plan that meets both of
the following requirements: [¶] (1) The plan is paid for by the
employer pursuant to statute, collective bargaining agreement,
memorandum of understanding, or established employer policy.
[¶] (2) The plan provides the employee on his or her regular
payday with salary not less than the employee is entitled to
receive pursuant to statute, collective bargaining agreement,
memorandum of understanding, or established employer policy
and not less than the employee would otherwise receive in
indemnity payments.” (Id., subd. (g).) It is undisputed that IDL
benefits qualify as a “ ‘salary continuation plan’ ” within the
meaning of this provision. Because the payment of IDL benefits
will excuse an employer’s failure to pay TD benefits in a timely
manner, Ayala argues that IDL payments are a benefit “under”
the workers’ compensation law itself.
Although Ayala’s argument focuses mainly on IDL, the
argument he makes based on section 4650, subdivision (g) is not
so limited: It would apply equally to every kind of salary
continuation plan that will excuse the nonpayment of TD
benefits, including plans adopted “pursuant to” collective
bargaining agreements and employer policy. In this respect,
Ayala goes well beyond the Board whose decision is on review.
The Board’s decision does not depend on the notion that every
21
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
kind of salary continuation plan — from whatever legal source
it may derive — constitutes compensation under the workers’
compensation law, and for good reason: To accept the argument
would be to upend the established distinction between
“[p]ayment of workmen’s compensation liability, as required by
the state act, and payment of compensation benefits over and
beyond the liability imposed by the state.” (City etc. of San
Francisco v. Workmen’s Comp. App. Bd. (1970) 2 Cal.3d 1001,
1010.) Section 4650, subdivision (g) is not plausibly understood
to mean that payment over and beyond the amount prescribed
by the Workers’ Compensation Act is nonetheless compensation
“under” the act.
Ayala also invokes Labor Code section 4909, a provision of
the Workers’ Compensation Act that prevents double recovery
by allowing calculations of “the amount of the compensation to
be paid” to take into account “[a]ny payment, allowance, or
benefit received by the injured employee during the period of his
incapacity . . . which by the terms of this division was not then
due and payable or when there is any dispute or question
concerning the right to compensation.” Ayala argues that if the
payment of IDL benefits can reduce an award otherwise owed
under the workers’ compensation law, it must therefore qualify
as compensation “under” the workers’ compensation law itself.
Assuming for the sake of argument that section 4909 is relevant
here (see Sea-Land Service, Inc. v. Workers’ Comp. Appeals Bd.
(1996) 14 Cal.4th 76, 86), Ayala’s reading of that provision is
faulty. Section 4909 by its terms distinguishes between
payments “which by the terms of this division [i.e., the workers’
compensation law] [were] not . . . due and payable” at the time
they were received (i.e., voluntary payments or other payments
22
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
conferred outside the workers’ compensation law) and
“compensation to be paid.” And a voluntary wage payment, or
any other payment otherwise provided for outside of the
workers’ compensation law, is not a payment “under” the
workers’ compensation law merely because the law prevents
double recovery for the same injury.
3.
Ayala briefly advances two remaining textual arguments,
which we need only briefly address. Ayala first argues that even
if payments credited against TD benefits are not “compensation
under” the workers’ compensation law (§ 3207), they are
“compensation otherwise recoverable” for purposes of section
4553 (italics added). Ayala fails to explain, however, why
including the word “otherwise” would justify ignoring clear
limitations on what counts as “compensation” in the workers’
compensation law. Presumably the Legislature included the
term “otherwise” in section 4553 to make clear that the 50
percent premium applies to “compensation recoverable” under
other sections of the workers’ compensation law — i.e.,
“compensation” other than that recoverable under section 4553
itself. In any event, nothing about the phrase “compensation
otherwise recoverable” suggests that the Legislature meant for
the section 4553 premium to apply to amounts that are not
“compensation” within the meaning of the statute.
Ayala also argues that section 3207’s reference to
“ ‘[c]ompensation’ . . . without regard to negligence” means that
the standard definition may be “set aside for the more specific
provisions found within section 4553” that govern cases of
serious and willful employer misconduct. But there are no
“more specific provisions” within section 4553 governing what
23
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
“compensation” means. Section 4553 simply states that
“compensation otherwise recoverable” — that is, the
compensation that would be owed “without regard to
negligence” — must be increased by one-half in cases of serious
and willful employer misconduct. This is a straightforward
instruction for cases involving serious and willful employer
misconduct, and it creates no evident conflict with any other
provision of the law.
4.
Ayala worries that if IDL benefits are not treated as
“compensation” under division 4 of the Labor Code, then the
result will be to render section 4553 useless as it applies to
public employees. This argument assumes that if IDL payments
are not treated as “compensation” to which the one-half
premium applies, then a public employee who receives IDL
benefits will not be entitled to any additional recovery at all in
the event of injury caused by an employer’s serious and willful
misconduct. But the assumption is wrong: As noted above, it is
undisputed in this case that the “compensation otherwise
recoverable” on which the one-half premium is to be calculated
includes the “compensation” to which Ayala is entitled “under”
the workers’ compensation law, including TD benefits. This is
the order entered by the WCJ in this case, and it is consistent
with the statutory direction to calculate the 50 percent premium
based on “compensation otherwise recoverable” to Ayala under
the workers’ compensation law. (§ 4553.) The central function
of the section 4553 premium is thus preserved; the conclusion
we reach today simply means that the premium Ayala receives
is to be calculated in the same manner as the premium to which
24
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
other employees are entitled under the workers’ compensation
law. He will receive no more, but also no less.
Ayala and the Board argue that Labor Code section 3202,
which sets forth a principle favoring interpretations that benefit
injured workers, counsels in favor of a rule that would increase
compensation for workers injured because of serious and willful
employer misconduct. But as we have long made clear, the
general interpretive principle in section 3202 will not “justify an
otherwise erroneous construction.” (Larkin, supra, 62 Cal.4th
at p. 167; see Nickelsberg v. Workers’ Comp. Appeals Bd. (1991)
54 Cal.3d 288, 298 [“[T]he rule of liberal construction stated in
section 3202 should not be used to defeat the overall statutory
framework and fundamental rules of statutory construction.”].)
It is, moreover, worth remembering that the interpretive
question we address here has implications that extend beyond
the context of section 4553 premiums for serious and willful
employer misconduct. “Certainly, our holding applying the
limitation in the statutory definition of ‘compensation’ does not
benefit Ayala. However, in other contexts, it would favor the
injured worker. For instance, had Ayala’s injuries been caused
by his own serious and willful misconduct, his industrial
disability leave [benefit] would not have been reduced by one-
half for the very same reason it does not increase by one-half
here.” (Ayala, supra, 94 Cal.App.5th at pp. 475–476, citing Lab.
Code, § 4551 [calling for a one-half reduction in “compensation
otherwise recoverable” for an employee injured by his or her own
serious and willful misconduct].) Thus, “[r]ather than construe
the workers’ compensation statute[] so that it benefits this
particular injured worker in this particular circumstance, we
remind ourselves that compensation under section 3207 is a
25
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
‘technical’ term that affects cases in various contexts,” and thus
construe the term “in the technical way that the Legislature
defined it.” (Ayala, at p. 476.) “Of course, if the Legislature
wants compensation to include industrial disability leave, or
otherwise allow workers in Ayala’s position to receive additional
payments, it can say so.” (Ibid.)
Finally, we are mindful of our obligation to give
appropriate deference to the Board’s reasoned interpretations of
the statute it administers. We have accordingly given careful
consideration to the Board’s position that the section 4553
award should be calculated based on the IDL payments Ayala
received. But we cannot give effect to that position because it is
contrary to the plain language of the statute. (Larkin, supra, 62
Cal.4th at p. 158.) The Board does not convincingly contend
otherwise. Neither its decision in this case nor its amicus curiae
submission to this court ever explains how the statutory
definition of “compensation” as including only “compensation
under” division 4 of the Labor Code can be stretched to cover
IDL payments provided by the Government Code. The Board’s
position instead relies largely on the language of Brooks,
Ellison, and other cases that did not purport to answer the
question now before us, and whose holdings create no conflict
with the straightforward reading of the statutory text we adopt
today.
26
DEPARTMENT OF CORRECTIONS AND REHABILITATION v.
WORKERS’ COMPENSATION APPEALS BOARD
Opinion of the Court by Kruger, J.
CONCLUSION
We affirm the judgment of the Court of Appeal.
KRUGER, J.
We Concur:
GUERRERO, C. J.
CORRIGAN, J.
LIU, J.
GROBAN, J.
JENKINS, J.
EVANS, J.
27
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion Department of Corrections & Rehabilitation v.
Workers’ Compensation Appeals Board
__________________________________________________________
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published) XX 94 Cal.App.5th 464
Review Granted (unpublished)
Rehearing Granted
__________________________________________________________
Opinion No. S282013
Date Filed: February 20, 2025
__________________________________________________________
Court:
County:
Judge:
__________________________________________________________
Counsel:
Carla R. Anene, Jasmine Dovlatyan, Mark Beatty, Mary R. Huckabaa,
A. Gina Hogtanian and Tariq Ashrati for Petitioner.
Ellen Sims Langille for California Workers’ Compensation Institute as
Amicus Curiae on behalf of Petitioner.
Anne Schmitz and Allison J. Fairchild for Respondent Workers’
Compensation Appeals Board.
Adams, Ferrone, Ferrone, Ferrone Law Group and Michael T. Bannon
for Respondent Michael Ayala.
Anne Schmitz and Allison J. Fairchild for Workers’ Compensation
Appeals Board as Amicus Curiae on behalf of Respondent Michael
Ayala.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Michael T. Bannon
Ferrone Law Group
4333 Park Terrace Drive, Suite 200
Westlake Village, CA 91361
(805) 373-5900
A. Gina Hogtanian
State Compensation Insurance Fund
655 North Central Avenue, 3d Floor
Glendale, CA 91203
(707) 592-9416