EDD lien (California)

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EDD lien (California)

Postby lacompfun on Fri Aug 11, 2017 8:02 am

Scenario:

1. Case goes to trial and F&A issued.

2. EDD is Awarded repayment. No mention of Interest. Defendant pays the principle, but not interest per the F&A decision.

3. EDD wants the interest.

Question:

1. Does EDD get interest?

If so what is the authority?
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Re: EDD lien (California)

Postby LawAdvocate on Fri Aug 11, 2017 10:17 am

It is an obscure EDD code, but yes they are owed. Curious - did they list it as an issue?

If so, then they have to recon. If not, then you face another trial - pay the interest.
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Re: EDD lien (California)

Postby mytwocents on Fri Aug 11, 2017 11:35 am

I assume you're talking about pre-judgment interest because Labor Code section 5800 provides that post-judgment interest attaches by operation of law. I don't know whether EDD has to raise pre-judgment interest as an issue and obtain an award that includes interest or whether it's automatic like the post-judgment interest. The statute is Unemployment Code section 2629.1(e). It provides that if the workers' comp defendant assumes liability or is found to be liable, they have to reimburse EDD, and then goes on to say: "In addition, the employer shall pay the department interest on the disability benefits at the annual rate provided in Section 19521 of the Revenue and Taxation Code." So, I think LawAdvocate gave you good advice when he said to just pay it. I got curious and looked up that Revenue and Taxation Code section. It makes reference to the Internal Revenue Code and the rest of it is so confusing that I can't tell what they're talking about. Maybe you can figure it out.
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Re: EDD lien (California) (California)

Postby lacompfun on Fri Aug 11, 2017 3:28 pm

This is a unique situation I do not see much... I think EDD is treated different than other lien claimants.... understatement.

Lien claimants always list P&I....

Here EDD did not list P&I on the PTC statement so it was not Awarded at trial.. maybe waiver.
Last edited by lacompfun on Fri Aug 11, 2017 6:12 pm, edited 1 time in total.
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Re: EDD lien (California)

Postby mytwocents on Fri Aug 11, 2017 4:00 pm

What I gathered from the Revenue and Taxation Code section is that the interest rate is the same as what the Franchise Tax Board collects and pays as interest on overpayments and underpayments of state income tax. So I guess the difference is that the lien claimant is really the State of California and not a private entrepreneur.
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Re: EDD lien (California)

Postby 50Cal20 on Fri Aug 11, 2017 9:11 pm

I actually have a case where the parties informally agreed that the employer would pay retroactive TD to applicant and also reimburse EDD thanks to the excellent workup conducted by applicant attorney. Consequently, applicant attorney has petitioned for a fee of 15% of the employee's TD as well as 15% of the EDD recovery, to which of course EDD disputes. Since this was an informal agreement with no award being issued the defendants are withholding the attorney's fee portion of the EDD recovery until the two resolve the dispute or until it is resolved by the Board. I am just going to sit back and watch to see what happens. To tell you the truth, I am rooting for applicant attorney on this one because I think he deserves it. But let's see what the law says.
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Re: EDD lien (California) (California) (California) (California)

Postby mytwocents on Sat Aug 12, 2017 12:38 pm

The ground rules for awarding an applicant's attorney a fee to be paid by EDD are in Labor Code section 4903.2 and they’re pretty stringent. EDD must have been served with notice of all hearings after the lien was filed, as well as notice of intention to award the fee. Also, they must not have participated in the proceedings before the Board. Case law has interpreted this to mean that services rendered by the applicant's attorney during informal resolution don’t count and that all EDD has to do to participate is to show up at the hearing. So, if EDD disputes the fee, they're probably within their rights although it does seem somewhat unfair that they should get a free ride.
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Re: EDD lien (California)

Postby lacompfun on Sat Aug 12, 2017 5:15 pm

Interesting scenario... let us know who wins AA or EDD...
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Re: EDD lien (California)

Postby vampireinthenight on Mon Aug 14, 2017 8:45 am

I think my2cents is right about it flowing from the Unemployment Code. And further, it might carry interest compounding daily instead of yearly, or simple interest, so keep that in mind too.
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