Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
WCAB No. SFO 0500209
Kline, P.J.
Petitioner Lavender Galvao (Galvao) petitions for review of an order by the Workers’ Compensation Appeals Board (Board). The Board modified a decision by a Workers’ Compensation Judge (WCJ) awarding Galvao vocational rehabilitation maintenance allowance (VRMA) benefits under Labor Code section 139.5 in connection with a work-related injury she sustained while employed by respondent Kinko’s in 2002. The Board modified the WCJ’s award to provide that respondent Zurich American Insurance Company (Zurich), the insurer for Kinko’s, is entitled to a credit against the VRMA benefits for wages Galvao earned working for a different employer after her injury. Galvao contends that the Board’s order is erroneous in light of the decisions in Gamble v. Workers’ Comp. Appeals Bd. (2006) 143 Cal.App.4th 71 (Gamble), and Medrano v. Workers’ Comp. Appeals Bd. (2008) 167 Cal.App.4th 56 (Medrano), in which the courts held that no wage credit may be applied against VRMA benefits. Zurich responds that the Board correctly found that Gamble is distinguishable based on its facts. Zurich asserts that Medrano, which was issued after the Board made its decision in this case, was incorrectly decided.
All further statutory references are to the Labor Code unless otherwise specified.
We adopt the conclusion of the Gamble and Medrano courts that VRMA is not a wage replacement benefit and that therefore employers are not entitled to credit against VRMA benefits for wages earned by the employee. Accordingly, we conclude that the Board should not have allowed a wage credit against Galvao’s VRMA benefits.
I. FACTUAL AND PROCEDURAL BACKGROUND
Galvao sustained injuries to her neck on October 24, 2002, while working as an assistant manager for Kinko’s. One of Galvao’s medical providers released her to return to work as of February 12, 2003. Galvao requested the release because she needed the money to support her children. Galvao did not return to work at Kinko’s, but began working at a less physically-demanding job for a different employer. As of September 10, 2003, Galvao’s injuries were permanent and stationary.
A dispute arose as to whether Galvao was a “qualified injured worker” entitled to vocational rehabilitation services, and the parties participated in a conference before the Rehabilitation Unit (RU) of the State Division of Workers’ Compensation. On November 9, 2007, the RU issued a Determination, in which it found that Galvao was medically eligible for vocational rehabilitation. The RU also found that Zurich had delayed the provision of vocational rehabilitation services and benefits. Specifically, Zurich did not send Galvao a Notice of Potential Eligibility (NOPE) for vocational rehabilitation, did not provide an appropriate written offer of modified work, and did not send Galvao a denial of vocational rehabilitation services. Accordingly, the RU ordered the provision of vocational rehabilitation services and awarded retroactive VRMA benefits from September 10, 2003 at the higher benefit rate that applies in cases of employer delay. Finally, the RU ruled that Zurich was entitled to a credit against the VRMA benefits for wages Galvao received from her other employer.
Under section 139.5, a worker who is entitled to VRMA (i.e., a worker who qualifies for vocational rehabilitation services and whose injuries have become permanent and stationary) may receive payments equal to two-thirds of the worker’s average weekly earnings (AWE) at the date of injury. (§ 139.5, subds. (c), (d).) This amount ordinarily consists of two components. First, the employee receives as VRMA the amount he or she would have received as continuing temporary disability indemnity, but this payment is capped at $246 per week. (§ 139.5, subd. (d)(1).) Second, the employee may supplement VRMA with advances against his or her final permanent disability award sufficient to provide a total maintenance allowance equal to two-thirds of his or her AWE at the date of injury. (§ 139.5, subd. (d)(2); Medrano, supra, 167 Cal.App.4th at p. 65; Kopitske v. Workers’ Comp. Appeals Bd. (1999) 74 Cal.App.4th 623, 632 (Kopitske).)
Both parties appealed the Determination of the RU. Zurich appealed the RU’s ruling that Galvao was eligible for vocational rehabilitation benefits. Galvao appealed the RU’s holding that Zurich was entitled to a wage credit against Galvao’s VRMA benefits. After trial, the WCJ upheld the RU’s rulings that Galvao was a qualified injured worker and was entitled to vocational rehabilitation services, including VRMA benefits at the delay rate. The WCJ ruled, however, that, under Gamble, Zurich was not entitled to a credit for wages Galvao received from her other employer. The WCJ stated that there were two factual distinctions between Gamble and this case: (1) in Gamble, the VRMA benefits were paid at the usual rate, while Galvao was awarded VRMA benefits at the higher delay rate; and (2) in Gamble, the employer sought a credit for wages the employee earned at a job he had held prior to his injury, while Zurich sought credit for wages Galvao earned at a job she obtained after she was injured and left Kinko’s. The WCJ concluded, however, that those factual distinctions were not sufficient to distinguish Gamble and that no wage credit could be allowed.
Zurich filed a petition for reconsideration with the Board. The WCJ filed a Report and Recommendation on Petition for Reconsideration, in which he reaffirmed his conclusion that Gamble precluded a wage credit against VRMA benefits.
On July 1, 2008, the Board granted Zurich’s petition for reconsideration. The Board upheld the WCJ’s determination that Galvao was a qualified injured worker and was entitled to VRMA benefits at the higher delay rate. However, the Board modified the WCJ’s award to provide that Zurich is entitled to a credit against the VRMA benefits for wages Galvao earned working for her subsequent employer. The Board ruled that Gamble did not preclude the allowance of a wage credit. Specifically, the Board held that the two factual distinctions between Gamble and this case that the WCJ had identified—the fact that the VRMA benefits in Gamble were paid at the ordinary rate rather than the delay rate, and the fact that the employee in Gamble was already working at his second job before his injury—were sufficient to distinguish Gamble.
We granted Galvao’s petition for a writ of review. We directed the parties to submit supplemental briefs addressing Medrano, which was decided after the parties filed their petition and answer in this case and which applied Gamble in circumstances very similar to this case.
II. DISCUSSION
A. Standard of Review
The sole issue raised in Galvao’s petition is whether the Board correctly concluded that the governing statutes permitted a wage credit against Galvao’s VRMA benefits. This court reviews issues of statutory interpretation de novo. (Gamble, supra, 143 Cal.App.4th at p. 86; Medrano, supra, 167 Cal.App.4th at p. 64.)
Zurich did not file a petition to challenge the Board’s determination that Galvao was a qualified injured worker entitled to receive VRMA benefits at the delay rate.
B. Vocational Rehabilitation Benefits
The workers’ compensation program has “two key components: (1) disability indemnity, and (2) vocational rehabilitation.” (Gamble, supra, 143 Cal.App.4th at p. 79; accord, Medrano, supra, 167 Cal.App.4th at p. 64.) From these components arise “four distinct classes of benefits: TD [temporary disability], VRTD [vocational rehabilitation temporary disability], VRMA [vocational rehabilitation maintenance allowance] and PD [permanent disability].” (Kopitske, supra, 74 Cal.App.4th at p. 630.)
These benefits serve different purposes. Temporary disability indemnity provides wage replacement assistance to an injured worker during medical recovery. (Medrano, supra, 167 Cal.App.4th at p. 64; Gamble, supra, 143 Cal.App.4th at pp. 79-80.) When the worker’s injury becomes permanent and stationary, he or she may be eligible for permanent disability benefits to compensate for impaired future earning capacity. (Medrano, at p. 64; Gamble, at p. 80.) Under the vocational rehabilitation program, which applies to workers injured before January 1, 2004, if a worker cannot return to his or her former position due to an injury, the worker is entitled to vocational rehabilitation services, including training, counseling and living expenses, to assist in the return to the workforce in a different position. (Gamble, supra, 143 Cal.App.4th at pp. 80-82; Medrano, supra, 167 Cal.App.4th at pp. 64-65.) A worker who participates in a vocational rehabilitation program while still temporarily disabled may continue to receive temporary disability indemnity payments. (§ 139.5, subd. (c); Gamble, at p. 82.) Those payments are called vocational rehabilitation temporary disability (VRTD), to distinguish them from medical temporary disability payments received outside a rehabilitation program. (Gamble, at p. 82.) Finally, when a worker’s medical condition becomes permanent and stationary, the worker may continue to receive vocational rehabilitation services, and the monetary benefit is VRMA. (Medrano, at p. 65; Gamble, at p. 82.) As noted above, the worker may request that VRMA be supplemented with permanent disability payments. (§ 139.5, subd. (d)(2); Medrano, at p. 65.) VRMA and temporary disability indemnity may not be paid concurrently. (§ 139.5, subd. (d)(2).)
Section 139.5 provides for vocational rehabilitation programs. (§ 139.5.) Section 139.5 applies to injuries occurring before January 1, 2004 (§ 139.5, subd. (k)), and will remain in effect only until January 1, 2009, unless extended by subsequent legislation (§ 139.5, subd. (l)). The Legislature has repealed the other provisions of the Labor Code that addressed vocational rehabilitation, sections 4635 to 4647, but the Board has held that the repealed statutes remain applicable to injuries that occurred prior to January 1, 2004. (See Medrano, supra, 167 Cal.App.4th at p. 65; Godinez v. Buffets, Inc. (2004) 69 Cal.Comp.Cases 1311, 1313.)
C. No Wage Credit May Be Applied Against VRMA Benefits
1. The Gamble Case
In Gamble, the Court of Appeal (Fourth District, Division Three) held that the “wage credit concept” applies only in limited circumstances involving temporarily disabled workers and is not applicable to VRMA, which is payable to permanently disabled workers. (Gamble, supra, 143 Cal.App.4th at p. 86.) In Gamble, the employee, Gamble, injured his back while working as an air freight agent for United Airlines (United), where he had been employed for 22 years. (Id. at p. 83.) At the time of his injury, Gamble was also employed as a teacher and dean with a school district, where he had worked for 27 years. (Ibid.) The injury precluded Gamble from continuing his physically-demanding job at United, but he was able to continue working for the school district. (Ibid.) The RU and a WCJ determined Gamble was entitled to vocational rehabilitation services, including VRMA benefits. (Id. at pp. 83-84.) Gamble testified at trial that he and his family were dependent on two incomes. (Id. at p. 84.) The WCJ initially determined that United was entitled to assert a credit against the VRMA benefits for the wages Gamble earned from the school district. (Ibid.) However, the WCJ later reversed his opinion and determined that United was not entitled to a wage credit. (Ibid.) Noting that Gamble and his family were dependent on his two incomes, the WCJ concluded that Gamble should not be penalized for continuing to work in a less physically-demanding occupation. (Ibid.) After United filed a petition for reconsideration, the Board affirmed the award of VRMA, but ruled that United was entitled to a credit for Gamble’s wages from the school district “ ‘on a wage-loss basis.’ ” (Id. at pp. 84-85.)
On review, the Court of Appeal in Gamble noted that there is no explicit authority that provides an employer may receive credit against VRMA when a worker continues to work at a second job. (Gamble, supra, 143 Cal.App.4th. at p. 86.) The court found that the Legislature designated different formulas to be used when calculating various benefits, including VRMA, and a wage credit only applied in limited circumstances involving temporary disability indemnity payments. (Ibid.) Specifically, workers who are temporarily partially disabled can often work in a modified position, such as a job with fewer hours or a lower-paying position. (Id. at p. 87.) Accordingly, the payments made to these workers, often called “ ‘wage-loss’ benefit[s],” must take into account wages earned or expected to be earned by the worker in an alternative lower-paying job, pursuant to a formula set forth in section 4657. (Id. at pp. 87-88.) The Gamble court concluded that this same formula applies to VRTD, the monetary benefit payable to workers who are able to participate in vocational rehabilitation services but whose injuries are not yet permanent and stationary. (Id. at pp. 88-90.) This conclusion was consistent with two Board decisions that the Gamble court discussed—County Sanitation District of Los Angeles v. Workers’ Comp. Appeals Bd. (1995) 60 Cal.Comp.Cases 618, 619-620 (Reyes) [allowing wage credit against VRTD], and Douglas v. Workers’ Comp. Appeals Bd. (1982) 47 Cal.Comp.Cases 932, 933 (Wiley) [same].
The Gamble court distinguished the Board’s decisions in Reyes and Wiley by explaining the different formulas used to calculate VRTD and VRMA. (Gamble, supra, 143 Cal.App.4th at p. 90.) Temporary disability indemnity and VRTD payments must be calculated using the wage-loss formula in section 4657. (Ibid.) In contrast, section 139.5, subdivision (d), which sets forth the amount of VRMA payable to permanently disabled workers, does not refer to a wage-loss credit for employers. (Ibid.) Instead, the amount payable is “two-thirds of the employee’s average weekly earnings [AWE] at the date of injury.” (§ 139.5, subd. (d); Gamble, supra, 143 Cal.App.4th at p. 90.) The Gamble court concluded that section 139.5, subdivision (d), does not contemplate a wage-loss credit because VRMA is not intended to replace lost earnings, but instead is “one of many components of the array of vocational rehabilitation services available to qualifying, permanently disabled workers.” (Gamble, at p. 90.) Finally, the court stated that if the Legislature had intended VRMA to be subject to a wage-loss formula, it could have used language similar to that found in section 4657, which contains the wage-loss formula for temporarily disabled workers. (Ibid.)
As noted above, section 139.5, subdivision (d), further provides that this amount ordinarily consists of two components: (1) the employer pays as VRMA “[t]he amount the employee would have received as continuing temporary disability indemnity,” but with a maximum of $246 per week (§ 139.5, subd. (d)(1)); and (2) the employee may request that this amount be supplemented with permanent disability advances sufficient to provide a total maintenance allowance equal to two-thirds of the worker’s AWE at the date of injury (§ 139.5, subd. (d)(2)).
2. Under Medrano, Gamble Precludes a Wage Credit Here
As noted above, the Board in this case concluded that Gamble is distinguishable and does not preclude a wage credit because (1) Galvao, unlike Gamble, obtained her second job after her injury, and (2) Galvao, unlike Gamble, was awarded VRMA benefits at the delay rate. In its answer to Galvao’s petition and in its supplemental brief, Zurich also contends that Gamble is distinguishable for these two reasons. In addition, relying principally on Ritchie v. Workers’ Comp. Appeals Bd. (1994) 24 Cal.App.4th 1174 (Ritchie), Zurich argues that the Gamble court was incorrect in stating that VRMA is not a form of wage replacement and therefore is not subject to a wage credit.
However, in Medrano, which was decided on September 25, 2008, after the Board issued its decision in this case and after Galvao filed her petition and Zurich filed its answer, the Court of Appeal (Second District, Division Five) rejected similar arguments and applied Gamble in circumstances very similar to this case. (See Medrano, supra, 167 Cal.App.4th at pp. 68-70.) In Medrano, the injured employee, Medrano (like Galvao here) was awarded VRMA benefits at the delay rate due to the employer’s delay in providing vocational rehabilitation services. (Medrano, at pp. 62-63.) Applying Gamble, the WCJ in Medrano ruled that the employer’s insurer, State Compensation Insurance Fund (State Fund), was not entitled to a credit for wages Medrano earned in employment he obtained subsequent to his injury. (Medrano, at pp. 62-63.) The Board, however, determined that the amount of Medrano’s earnings from subsequent employment must be subtracted from his VRMA payments. (Medrano, at p. 63.)
According to a summary published in California Compensation Cases, the Board in Medrano distinguished Gamble on one of the same grounds the Board relied on in this case—the Board in Medrano found that Gamble established only that no wage credit was permissible for wages earned in a concurrent job that the worker had held before his injury. (Medrano v. Workers’ Comp. Appeals Bd. (2008) 73 Cal.Comp.Cases 928, 931.)
Medrano filed a petition for review that the Court of Appeal summarily denied. (Medrano, supra, 167 Cal.App.4th at p. 64.) Medrano then filed a petition for review by the California Supreme Court. (Ibid.) The Supreme Court granted review and transferred the matter to the Court of Appeal with directions to vacate its order denying the petition for writ of review and to issue a writ of review. (Ibid.) The Court of Appeal then issued a published opinion, in which it adopted Gamble and ruled that State Fund was not entitled to a credit against Medrano’s VRMA benefits for the wages Medrano earned in employment he obtained subsequent to his injury. (Medrano, at pp. 61, 68-70.)
In light of Medrano, Zurich’s arguments for distinguishing or rejecting Gamble and allowing a wage credit in this case fail. First, Zurich contends that Gamble is distinguishable because Gamble worked two jobs concurrently before his injury and needed to do so to support his family, while Galvao obtained her other job after her injury. Zurich argues that VRMA and the wages Galvao has earned from her subsequent employment “both serve the purpose of replacing the income stream she had before her injury.” Zurich concludes that allowing Galvao to receive both VRMA and her wages would result in a windfall to Galvao.
The Medrano court rejected a similar argument. After noting that Gamble earned wages at a position that preexisted the injury while Medrano earned wages at a position he secured after the injury, the Medrano court stated: “In view of the nature of VRMA, this is a distinction without a difference.” (Medrano, supra, 167 Cal.App.4th at p. 70.) The Medrano court held that VRMA, unlike temporary disability, is not a wage replacement benefit and thus is not subject to a wage credit, whether the wages were earned at a job the employee held before the injury or at a job the employee obtained after the injury. (See Medrano, supra, 167 Cal.App.4th at pp. 61, 69-70.) The Medrano court noted that most authorities do not view VRMA as a form of temporary disability, but as a benefit substantially different from temporary disability. (Medrano, at p. 70.) Under section 139.5, VRMA is one of an array of available vocational rehabilitation services. “It is paid at an amount less than temporary disability, the time period for which VRMA can be paid is limited, it is limited with all other vocational rehabilitation services to $16,000, and temporary disability indemnity is excluded from the cap.” (Ibid., citing Kopitske, supra, 74 Cal.App.4th at p. 633.) The Medrano court concluded that, under these circumstances, “there is no sound reason why a worker should not be able to supplement his or her VRMA with permanent disability and wages, particularly because doing so generally is necessary for support for the worker and his or her family.” (Medrano, at p. 70.)
Second, in addition to arguing that Gamble is distinguishable, Zurich suggests that the Gamble court was incorrect in concluding that VRMA “is not intended to replace lost earnings.” (Gamble, supra, 143 Cal.App.4th at p. 90.) As Zurich points out, the Gamble court’s discussion of the purpose of VRMA is arguably inconsistent with the analysis of VRMA in Ritchie. In Ritchie, the employee, Ritchie, was an injured police officer who retired under Public Employees’ Retirement System (PERS) industrial disability retirement and began receiving retirement benefits. (Ritchie, supra, 24 Cal.App.4th at p. 1178.) Ritchie also requested vocational rehabilitation services, including VRMA. (Ibid.) Ritchie claimed he was entitled to receive both VRMA and his PERS retirement pension as long as he was participating in a vocational rehabilitation plan. (Id. at p. 1179.) Ritchie argued that, although VRTD benefits for police officers terminate upon retirement pursuant to sections 4850 and 4853, VRMA benefits do not, because VRTD and VRMA are different benefits. (Ritchie, supra, 24 Cal.App.4th at p. 1179.)
Section 4850 provides that an injured police officer is entitled to a leave of absence without loss of salary, in lieu of temporary disability or maintenance allowance, for one year or until retirement on a disability pension. (§ 4850, subd. (a); Ritchie, supra, 24 Cal.App.4th at pp. 1180-1181.) If the disability continues for more than one year, the officer is entitled to an unpaid leave of absence until retirement, and is also entitled to receive disability indemnity. (§ 4853; Ritchie, at pp. 1180-1181.) Under sections 4850 and 4853, temporary disability payments, including VRTD payments, terminate upon an injured officer’s disability retirement. (Gorman v. Workers’ Comp. Appeals Bd. (1982) 133 Cal.App.3d 998, 1001-1002 (Gorman).)
The Board rejected Ritchie’s argument, finding that VRMA, like VRTD, terminates upon retirement. (Ritchie, supra, 24 Cal.App.4th at p. 1179.) The Court of Appeal affirmed. (Ibid.) The Ritchie court held that the Legislature did not intend to treat VRTD and VRMA differently for purposes of sections 4850 and 4853. (Id. at p. 1185.) The court also stated that the purposes of VRTD and VRMA were the same—to provide subsistence for an employee who is participating in vocational rehabilitation. (Id. at p. 1189.) Accordingly, VRMA, like VRTD, terminates upon PERS disability retirement for employees covered by sections 4850 and 4853. (Ibid.)
However, as the Medrano court noted, Ritchie is distinguishable because its analysis of section 139.5 benefits (VRMA and VRTD) “applies only to public employees subject to sections 4850 and 4853.” (Medrano, supra, 167 Cal.App.4th at p. 69.) In addition, two subsequent cases disagree with Ritchie and conclude that VRMA is not equivalent to temporary disability. (See Rucker v. Workers’ Comp. Appeals Bd. (2000) 82 Cal.App.4th 151, 159 (Rucker) [VRMA is not temporary disability]; Kopitske, supra, 74 Cal.App.4th at p. 633 [disagreeing with Ritchie to the extent Ritchie holds that VRMA is a form of temporary disability and is not a new benefit].) Accordingly, Ritchie does not provide a persuasive basis to reject the Gamble court’s conclusion that VRMA differs from VRTD and therefore is not subject to a wage credit.
In addition to citing Ritchie, Zurich argues generally that the Gamble court’s conclusion that VRMA is not a form of wage replacement or a form of temporary disability is contrary to “the existing body of law,” to unspecified “cases cited [in Ritchie],” or to “other decisions” issued after Ritchie. However, despite these broad statements, the only decision other than Ritchie that Zurich cites on this point is the Board’s decision in Jimenez v. Workers’ Comp. Appeals Bd. (2002) 67 Cal.Comp.Cases 74 (Jimenez). Jimenez is not binding on this court, and in any event, it does not support Zurich’s argument. In Jimenez, the Board noted that, under section 139.5, subdivision (d)(1), the amount of VRMA ordinarily payable by the employer is the amount the worker would have received as continuing temporary disability indemnity, but with a maximum of $246 per week. (Jimenez, at p. 75, fn. 4; id. at p. 83.) The Board held that, under this calculation formula, a seasonal agricultural worker who, because of her variable earnings, received temporary disability at two different rates (an in-season rate and an off-season rate) should also receive VRMA at an in-season rate and an off-season rate, because those rates reflected the amounts she “would have received” as continuing temporary disability. (Ibid.) Contrary to Zurich’s suggestion, the Board in Jimenez did not hold that VRMA is equivalent to temporary disability, that the purpose of VRMA is wage replacement, or that a wage credit against VRMA is permissible. Zurich has not established that authorities other than Ritchie (which is distinguishable for the reasons discussed above) support its position that VRMA should be treated as a form of temporary disability indemnity or a form of wage replacement.
As the Board noted in its decision and as Zurich notes in its briefs, the WCJ in this case stated his view that permitting a wage credit against VRMA benefits “would appear to be consistent with the intention of the Labor Code and the body of workers’ compensation law,” and that denial of a wage credit “seems contrary to general principles of workers’ compensation law.” However, despite these general statements, the WCJ concluded that the Gamble decision, which expressly addresses the specific question of whether a wage credit against VRMA benefits is permissible, controls this case.
It may be that Zurich, by arguing that its position is supported by unspecified “cases cited” in Ritchie, is referring to Gorman, the case on which Ritchie principally relied. (See Ritchie, supra, 24 Cal.App.4th at pp. 1186-1188.) In Gorman, the court held that VRTD benefits, like medical temporary disability benefits, terminate upon a police officer’s disability retirement (Gorman, supra, 133 Cal.App.3d at p. 1001); as discussed above, Ritchie held that the same rule applies to VRMA benefits. (Ritchie, at p. 1189.) Gorman, however, does not support Zurich’s argument about the nature of VRMA. Gorman was decided in 1982, prior to the Legislature’s 1989 creation of VRMA. (See Gamble, supra, 143 Cal.App.4th at p. 82 [discussing creation of VRMA by 1989 statutory amendments]; Ritchie, at p. 1182 [same].) As a result, Gorman necessarily addressed only the nature of VRTD benefits, not VRMA benefits. (See Gorman, at pp. 1001-1002.) Moreover, we note that the Gorman court, in explaining its decision to treat VRTD as a form of temporary disability, emphasized that the Legislature had not used a new and different term for VRTD, but had instead chosen to refer to it as “temporary disability indemnity payments.” (See § 139.5, subd. (c); Gorman, at p. 1002.) In contrast, the statute does use a new and different term for VRMA, referring to that benefit as “maintenance allowance” rather than as “temporary disability indemnity,” and emphasizing that these two benefits may not be paid concurrently. (§ 139.5, subds. (c), (d)(2).) In this respect, the Gorman court’s reasoning, rather than supporting Zurich’s position, supports the view, adopted by the Gamble, Medrano, Rucker and Kopitske courts, that VRMA is a benefit substantially different from temporary disability. (See Gamble, at p. 90; Medrano, supra, 167 Cal.App.4th at p. 70; Rucker, supra, 82 Cal.App.4th at p. 159; Kopitske, supra, 74 Cal.App.4th at p. 633.)
Zurich’s third argument is that Gamble is distinguishable based on the other factor relied on by the Board—the fact that Galvao, unlike Gamble, was awarded VRMA benefits at the delay rate, i.e., the amount she would have received as continuing temporary disability indemnity, without the $246 per week cap. In discussing this issue, the Board reasoned that, because Galvao was awarded VRMA benefits at the temporary disability rate, those benefits should be treated as the equivalent of temporary disability indemnity. The Board concluded that, because the purpose of temporary disability indemnity is wage replacement, a wage credit should be permitted here. Zurich echoes this argument, asserting that VRMA, when paid at the temporary disability rate, is a wage replacement benefit and should be subject to a wage credit.
However, the court in Medrano held that no wage credit was permitted under section 139.5 even though Medrano, like Galvao, received VRMA benefits at the delay rate. (Medrano, supra, 167 Cal.App.4th at pp. 62-63, 69-70.) In fact, the Medrano court found that the employer delays that led to payment of VRMA benefits at the delay rate demonstrated the merit of applying section 139.5 and denying a wage credit. (Medrano, at pp. 69-70.) The court noted that, under section 139.5, subdivision (d)(2), “[i]f the employer disputes the treating physician’s determination of medical eligibility, the employee shall continue to receive that portion of the maintenance allowance [VRMA] payable under [section 139.5, subdivision (d)(1)] pending final determination of the dispute.” (§ 139.5, subd. (d)(2); Medrano, at p. 69.) Medrano, however, did not receive the disputed amounts. (Medrano, at p. 69.) The court stated that: “Medrano should not be penalized for obtaining work to provide him with compensation under these circumstances. And State Fund should not be the beneficiary of the work Medrano undertook, because it was State Fund’s denial of services that resulted in Medrano needing the work for compensation.” (Medrano, at pp. 69-70.)
Similarly, here, the RU, the WCJ, and the Board ruled that Galvao was entitled to VRMA benefits at the delay rate from September 10, 2003, because Zurich delayed providing vocational rehabilitation services. During that time period, Galvao did not return to Kinko’s but worked for another employer because she needed the money to support her children. Galvao should not be penalized for obtaining work to support her family, nor should Zurich be rewarded for its delays in providing services to Galvao. (See Medrano, supra, 167 Cal.App.4th at pp. 69-70.)
3. The Medrano Court Correctly Applied Gamble
As discussed above in part II.C.2, the Medrano decision supports the application here of the Gamble rule precluding a wage credit against VRMA benefits. Zurich, however, argues in its supplemental brief that Medrano was incorrectly decided. We disagree.
First, Zurich advocates a narrow interpretation of Gamble, arguing that Gamble is “an anomalous case dependent on its specific facts,” i.e., the fact that Gamble already worked at his second job before his injury and received VRMA benefits at the ordinary rate rather than the delay rate. Similarly, the Board in this case (which did not have the benefit of the Medrano decision) stated its view that the Gamble court’s holding was “unquestionably tied to the factual situation presented in that case.” Based on this characterization of Gamble, Zurich contends that the Medrano court erred by applying Gamble outside its specific factual context to preclude a credit for wages earned at a job obtained after the worker’s injury against VRMA benefits paid at the delay rate.
However, contrary to the Board’s statement and Zurich’s argument, the Gamble court did not base its decision primarily on the specific circumstances surrounding Gamble’s employment or the amount of his VRMA payments. Instead, as discussed above in part II.C.1, the Gamble court analyzed the relevant statutes, the nature and purpose of VRMA, and the statutory formulas for calculating different types of benefits, including permanent disability, temporary disability, VRTD and VRMA. (Gamble, supra, 143 Cal.App.4th at pp. 86-92.) Based on this analysis, the Gamble court concluded, as a matter of statutory interpretation, that no wage credit applies to VRMA because VRMA, unlike temporary disability and VRTD, is not intended to replace lost earnings. (Id. at pp. 86, 90.) For the reasons discussed in part II.C.2 above, we agree with the Medrano court’s conclusion that this legal principle announced in Gamble applies to preclude a wage credit against VRMA benefits, regardless of whether the worker obtained the second job before or after the injury and regardless of whether the employee was paid VRMA benefits at the delay rate. (Medrano, supra, 167 Cal.App.4th at pp. 62-63, 69-70.)
Contrary to Zurich’s claim in its supplemental brief, the Medrano court did not “fail to recognize” that the VRMA benefits in that case were paid at the delay rate. The Medrano court expressly noted that Medrano’s benefits were paid at the delay rate. (Medrano, supra, 167 Cal.App.4th at pp. 62-63.) Moreover, as discussed above, the Medrano court noted that State Fund’s delays in that case supported application of the Gamble rule precluding a wage credit. (Id. at pp. 69-70.)
Second, Zurich asserts that the cases the Medrano court cited in its decision—which include Gamble, Ritchie, Kopitske, Rucker, Reyes, Wiley, and Webb v. Workers’ Comp. Appeals Bd. (1980) 28 Cal.3d 621 (Webb)—do not support the Medrano court’s conclusion that no wage credit may be applied against VRMA benefits. However, Zurich’s discussion of these cases does not persuade us that Medrano was incorrectly decided. Zurich’s principal complaint is that some of the cited cases did not address the precise issue of whether a wage credit could be applied against VRMA. That is correct, but the Medrano court did not claim that any case other than Gamble had addressed that specific question, and the Medrano court’s discussion of these other cases was not in any way inaccurate or misleading. The Medrano court correctly found that each of the cases listed above either supported its conclusion or was distinguishable.
For example, the Kopitske and Rucker decisions did not involve the specific question of whether a wage credit against VRMA is permitted, but, as the Medrano court correctly noted, the courts in those cases disagreed with Ritchie and concluded that VRMA is not equivalent to temporary disability. (Medrano, supra, 167 Cal.App.4th at p. 69, citing Rucker, supra, 82 Cal.App.4th at p. 159, and Kopitske, supra, 74 Cal.App.4th at p. 633.) This conclusion by the Kopitske and Rucker courts is consistent with, and supports, the Gamble and Medrano courts’ conclusion that VRMA, unlike temporary disability, is not a wage replacement benefit and that therefore no wage credit against VRMA is permitted. (See Gamble, supra, 143 Cal.App.4th at p. 90; Medrano, at pp. 61, 69-70.)
The Kopitske court held that the permanent disability advances a worker may take to supplement VRMA under section 139.5, subdivision (d)(2), are part of the worker’s permanent disability award, and that therefore a statutory penalty for an employer’s delay in paying these advances should be assessed against the worker’s total permanent disability award, rather than against the smaller total of VRMA and permanent disability advances received by the worker. (Kopitske, supra, 74 Cal.App.4th at pp. 627, 633.) In Rucker, the employer argued that, because an employee may not receive temporary disability and permanent disability payments at the same time, an employee should not be able to receive VRMA and permanent disability advances at the same time. (Rucker, supra, 82 Cal.App.4th at p. 159.) The Rucker court rejected the employer’s argument, holding that, because VRMA is not temporary disability, there is no prohibition on an employee receiving VRMA and permanent disability advances at the same time. (Ibid.)
Zurich criticizes the Medrano court’s description of Rucker. The Rucker court stated that “VRMA is not temporary disability” (Rucker, supra, 82 Cal.App.4th at p. 159); the Medrano court stated that Rucker concluded that VRMA is “not analogous to temporary disability.” (Medrano, supra, 167 Cal.App.4th at p. 69.) Zurich argues that this phrasing is inaccurate and contends that the Rucker court “did not hold, as Medrano asserts, that VRMA is ‘not analogous to’ [temporary disability], merely that it is not the same benefit.” However, this alleged distinction is not helpful to Zurich. For the reasons outlined in Gamble and Medrano, VRMA is not temporary disability or a form of wage replacement and therefore is not subject to a wage credit. (Gamble, supra, 143 Cal.App.4th at pp. 86, 90; Medrano, at pp. 61, 69-70.)
As for the Board’s decisions in Reyes and Wiley, the Medrano court simply noted that (1) the Board found in those cases that a wage credit may be applied against VRTD (Medrano, supra, 167 Cal.App.4th at pp. 67-68, citing Reyes, supra, 60 Cal.Comp.Cases at pp. 619-620, and Wiley, supra, 47 Cal.Comp.Cases at p. 933), and (2) the Gamble court distinguished Reyes and Wiley because they involved VRTD, rather than VRMA. (Medrano, at pp. 67-68, citing Gamble, 143 Cal.App.4th at p. 90.)
Finally, in Webb, the Supreme Court noted, in a discussion of section 139.5, the statute that now authorizes VRMA, that “a rule of liberal construction applies to all aspects of workers’ compensation law.” (Webb, supra, 28 Cal.3d at p. 626.) The policy of the workers’ compensation statutes and their constitutional foundation “ ‘has been one of a pervasive and abiding solicitude for the workman.’ ” (Ibid., quoting Moyer v. Workers’ Comp. Appeals Bd. (1973) 10 Cal.3d 222, 233.) This rule of construction provides further support for the interpretation of section 139.5 adopted in Gamble and Medrano, i.e., that an employer is not entitled to a credit against VRMA benefits for wages earned by the employee.
Section 3202, which mandates a rule of liberal construction for divisions 4 and 5 of the Labor Code, does not apply to section 139.5, because section 139.5 appears in division 1. (Webb, supra, 28 Cal.3d at p. 626.) However, the judicial rule of liberal construction discussed in Webb does apply to section 139.5. (Id. at pp. 626-627.)
For all of the reasons discussed above, we adopt the conclusion of the Gamble and Medrano courts that VRMA is not a wage replacement benefit and that, therefore, employers are not entitled to a wage credit against VRMA benefits. Accordingly, the Board should not have permitted a wage credit against Galvao’s VRMA benefits.
III. DISPOSITION
The Board’s Decision After Reconsideration is annulled, and the WCJ’s decision is reinstated.
We concur: Haerle, J., Lambden, J.
However, when an employer delays providing vocational services and benefits, former section 4642, subdivision (a) (which continues to apply to injuries that occurred before January 1, 2004) requires the employer to pay the full maintenance allowance amount specified in section 139.5 (equal to two-thirds of the employee’s AWE), including the portion that the employee ordinarily would have to fund with permanent disability advances under section 139.5, subdivision (d)(2). (Former § 4642, subd. (a).) In effect, in cases of employer delay, the $246 per week cap on the employer’s VRMA payments does not apply, and the employee receives VRMA payments at the same rate payable for temporary disability. (Former § 4642, subd. (a); Medrano, supra, 167 Cal.App.4th at p. 63 [referring to the higher rate as the “delay” rate].)