VCB Liens: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Do you know what a VCB lien is? Many claims professionals have never heard of it, yet under Labor Code 4309(i) it is one of several types of liens which arise in a claim for workers’ compensation benefits. Our blog today will explain VCB liens and provide claims handling instructions, as VCB liens are not resolved in the same manner as other liens.

VCB is an acronym for “Victims Compensation Board.” When someone is the victim of a crime resulting in bodily or mental injury, they may seek and receive benefits from VCB pursuant to Article 1 (commencing with Section 13959) of Chapter 5 of Part 4 of Division 3 of Title 2 of the Government Code.

With that said, every year many employees acting within the course and scope of employment are injured on the job as a result of crime. We have all heard stories of employees shot during a robbery; assaulted by an angry customer; attacked while driving a bus; or struck while teaching a class. Not only may these injured employees file for standard workers’ compensation benefits, but they are also entitled to VCB benefits. In fact, police officers file more VCB claims attributed to on-the-job injuries than any other occupation.

The maximum VCB benefit allowed as of the date of this publication is $70,000 per person/per incident. If a recipient also has a workers’ compensation claim on file, the comp settlement is subject to a VCB lien. And here is where the handling of VCB liens differs from all others. Resolving the VCB lien is not the claims administrator’s obligation. Instead, it is a matter to be handled between VCB and the injured worker. Resolution of the lien is to be subtracted from the injured worker’s settlement, similar to how attorneys’ fees and child support liens are handled. Claims administrators should never hold an applicant harmless against a VCB lien because the lien is solely the applicant’s liability. As soon as an injured worker receives VCB benefits, a lien is automatically filed in the work comp claim pursuant to a written agreement between the employee and VCB. As a condition precedent to receiving VCB benefits, the employee must sign a promissory note guaranteeing reimbursement to VCB out of their work comp settlement.

Again, the VCB lien is to be paid out of the employee’s portion of the settlement. Unfortunately, far too many claims administrators never receive education or training on how to handle VCB liens. As a result, they end up needlessly holding the applicant harmless and settling the lien themselves. Going forward, a claims administrator need only remember three rules when encountering a VCB lien: #1. Don’t hold the applicant harmless; #2. Don’t settle the lien, as it is not your responsibility; and #3. Contact Friedman + Bartoumian for guidance in any claim involving VCB.