During stipulation to a permanent disability award, a furniture company says the employee owes them $2,000. How should you proceed?

During stipulation to a permanent disability award, a furniture company says the employee owes them $2,000. How should you proceed?

• A. Refer the furniture company to the WCAB.
• B. Don't pay because the debt is not a valid lien under the Labor Code.
• C. Pay the furniture company debt from the F&A.
• D. Tell the furniture company to file a lien with the WCAB.

Answer: (B)

In workers’ compensation, only amounts that are backed by a valid lien or order can be paid against an award. A private debt claimed by a third party, such as a furniture company saying the employee owes them money, does not automatically become a lien against the disability award. Therefore, you should not pay that debt from the award or from any interim fund unless there is a recognized lien. If the third party truly has a valid claim, they must file a proper lien with the WCAB and have it evaluated for validity and priority; until then, there’s nothing for the award to satisfy. Payments from the F&A fund are intended for approved fees and costs, not for satisfying private debts.

In workers’ compensation, only amounts that are backed by a valid lien or order can be paid against an award. A private debt claimed by a third party, such as a furniture company saying the employee owes them money, does not automatically become a lien against the disability award. Therefore, you should not pay that debt from the award or from any interim fund unless there is a recognized lien. If the third party truly has a valid claim, they must file a proper lien with the WCAB and have it evaluated for validity and priority; until then, there’s nothing for the award to satisfy. Payments from the F&A fund are intended for approved fees and costs, not for satisfying private debts.