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The Honorable Arnold Schwarzenegger Governor, State of California State Capitol Building Sacramento, CA 95814 Dear Governor Schwarzenegger: I am requesting your SIGNATURE on AB 338 (Coto), which would resolve a problem in current law relating to the 104 week cap on temporary disability benefits by amending the “window” in which injured workers are eligible for benefits. AB 338 (Coto) represents a balanced approach to resolving a real and tangible problem in the workers’ compensation system. Current law caps an injured worker’s eligibility for temporary disability benefits at 104 weeks. The CalChamber does support capping temporary disability benefits for injured workers at 104 weeks in order to promote return to work and speedy resolution of claims. However, current law has been interpreted to mean that once an injured worker receives any temporary disability benefits, they only have a 104 week window in which they are eligible to receive temporary disability benefits. Under this interpretation an injured worker could return to work after even one day of payable temporary disability and that injured worker’s eligibility to receive benefits under the cap would continue to diminish. This situation under current law is unfair to injured workers who return to work after a short period of temporary disability and creates an incentive to stay on disability instead of returning to work. AB 338 (Coto) would keep the current 104 week cap on temporary disability benefits, but increase the period in which an employee would be eligible to receive those benefits. The solution under AB 338 (Coto) promotes return to work in an equitable way by allowing 104 weeks of aggregate benefits within five years of the date of injury. This gives injured workers adequate time to obtain needed treatment, including surgery, and return to work after recovery. However, this approach maintains the 104 week cap that has proved to be vitally important in speeding the claims process and improving return-to-work. AB 338 (Coto) also addresses an issue presented by Valeri Hawkins v. Amberwood Products and SCIF, a recent court case that would result in an employer owing more than 104 weeks of temporary disability payments under some circumstances. In this case the court found that the 104 week cap only applied to benefits after the date the first payment was made. The impact of this case could be significant in that it provides a disincentive to contest questionable claims. For example, if an employer contests a claim and the issue is not adjudicated for one year, the employer would be liable for a full year of temporary disability outside of the 104 week cap. AB 338 (Coto) would resolve this problem by reversing a judicial weakening of the cap and make it so employers are not punished for contesting questionable claims.