Understanding Temporary Disability & Working
Temporary disability (TD) replaces wages while you're unable to work due to your injury. Regardless of your work status, your right to medical treatment under Labor Code §4600 remains intact. California law provides two types of TD:
Two Types of Temporary Disability:
Temporary Total Disability (TTD)
You're completely unable to work. Doctor certifies you're off work entirely. Payment: 2/3 of your average weekly wage (up to state maximum, currently ~$1,764/week).
Example: You earned $1,500/week before injury. TTD payment = $1,000/week (2/3 of $1,500).
Temporary Partial Disability (TPD)
You're working in a reduced capacity or earning less than before. Payment: 2/3 of the difference between your old wage and new wage.
Example: Old wage $1,500/week, new light-duty job pays $800/week. Difference = $700. TPD payment = $467/week (2/3 of $700).
Key principle: TD compensates for wage loss. If you're working and earning money, your wage loss decreases, so your TD payment decreases proportionally.
Scenarios: When You Can & Can't Work
✓ Scenario 1: Doctor Releases You for Light Duty
Situation: You injured your back. Doctor says you can work with restrictions: no lifting over 10 lbs, no prolonged standing, no bending/twisting. Your construction job requires lifting 50+ lbs. Employer has no light-duty positions available.
Can you work elsewhere? Yes. You can take a sedentary job (office work, phone sales, customer service) that fits your restrictions.
What happens to benefits? If the new job pays less than your old job, you receive TPD for the wage difference. If it pays the same or more, TD stops.
✗ Scenario 2: Off Work Completely But Working Secret Cash Job
Situation: Doctor says you're totally disabled, can't work at all. You're receiving full TTD ($1,000/week). But you're secretly doing handyman work for cash—$500/week under the table.
Can you do this? No. This is insurance fraud.
Consequences: Criminal prosecution, terminate all benefits, repay all TTD received, lose permanent disability settlement, possible jail time.
✓ Scenario 3: Return to Work at Same Employer, Reduced Hours
Situation: Shoulder injury. Doctor clears you for 4 hours/day instead of full 8 hours. Employer accommodates—you work part-time at same hourly rate.
Can you do this? Yes. This is modified/light duty.
What happens to benefits? You earn half your previous wages. You receive TPD for 2/3 of the wage difference.
⚠ Scenario 4: Gig Economy Work (Uber, DoorDash, Freelance)
Situation: Injured warehouse worker. Doctor allows sedentary work. You drive for Uber or do freelance work online earning $300-$600/week (varies).
Can you do this? Yes, if work fits medical restrictions AND you report all earnings every week.
Reporting requirement: Must provide weekly earnings statements. TD recalculated each week based on actual income.
✗ Scenario 5: Working While Claiming Total Disability
Situation: You tell insurance you can't work at all due to severe pain. Receive full TTD. Surveillance video catches you working construction at a friend's site.
Result: Fraud case opened. All benefits terminated immediately.
Legal consequences: Insurance demands repayment of all TD received. District attorney may file criminal charges. You lose permanent disability settlement.
How Insurance Companies Monitor for Unreported Work
Don't assume you can work secretly. Insurance companies actively investigate workers receiving TD benefits:
Surveillance & Investigation Tactics:
- • Hiring private investigators – Video surveillance of your home, following you to job sites, recording physical activities
- • Social media monitoring – Checking Facebook, Instagram, LinkedIn for evidence of work, physical activity inconsistent with injury claims
- • Employment database searches – Cross-referencing your name/SSN against employment tax filings, new hire reports
- • Tips from informants – Coworkers, neighbors, even family members sometimes report unreported work
- • Field interviews – Investigators pose as customers, neighbors, or delivery people to observe/question you
Warning: Insurance companies spend thousands of dollars on surveillance when they suspect fraud. If caught, the financial penalties and criminal exposure far exceed the TD benefits you fraudulently received. Don't risk it.
How to Properly Report Work & Earnings
If you return to work or take a new job while receiving TD, follow these steps exactly:
Proper Work Reporting Process:
Get Doctor's Work Release
Before accepting any job, get written release from treating physician specifying restrictions and approved work activities.
Notify Insurance Immediately
Call or email insurance adjuster before starting work. Provide: new employer name, job title, hourly wage/salary, hours per week, start date.
Provide Pay Stubs Weekly
Submit copies of every paycheck or earnings statement. For variable income (gig work), report actual weekly earnings.
Fill Out Earnings Verification Forms
Insurance will send forms asking about work status. Complete and return promptly. Lying on these forms is fraud.
Keep Detailed Records
Save all pay stubs, work schedules, doctor's notes, and communications with insurance. Proves compliance if questioned later.
How Working Affects Your TD Payment (With Examples)
Example 1: Return to Work Earning Less
Example 2: Return to Work Earning Same or More
You're no longer experiencing wage loss, so temporary disability ends.
Example 3: Variable Gig Work Income
- Week 1: $300 → TPD payment $467 (2/3 of $700 loss)
- Week 2: $500 → TPD payment $333 (2/3 of $500 loss)
- Week 3: $100 → TPD payment $600 (2/3 of $900 loss)
- Week 4: $800 → TPD payment $133 (2/3 of $200 loss)
TD payment recalculated weekly based on actual reported earnings.
What About Self-Employment or Starting Your Own Business?
Some injured workers consider starting a business or freelancing while on workers' comp. This is allowed, with strict reporting requirements:
Self-Employment While on Workers' Comp:
- •
Report ALL business income
Gross receipts minus business expenses = reportable income. You can't claim zero income because the business "isn't profitable yet."
- •
Provide business tax records
Insurance may request Schedule C (self-employment tax forms), invoices, bank statements to verify earnings.
- •
Stay within medical restrictions
If doctor says sedentary work only, your business can't involve physical labor.
Working After Permanent Disability Rating (Post-Settlement)
Once you reach maximum medical improvement and receive a permanent disability rating, the rules change:
After MMI (Maximum Medical Improvement):
- • You can work any job you're physically capable of performing
- • No more temporary disability payments (TD ends when you reach MMI)
- • No income reporting required (unless still receiving TD for different body part)
- • Your permanent disability settlement isn't affected by working (PD based on medical impairment, not work status)
Exception: If you claim you can't return to your usual and customary occupation to qualify for vocational rehabilitation benefits, then working full-time in any job may disqualify you from those benefits.
Penalties for Fraudulently Working While on Workers' Comp
California takes workers' comp fraud seriously. Penalties include:
Criminal Penalties (California Penal Code § 550, Insurance Code § 1871.4):
- • Felony charges if fraud exceeds $950 (most cases)
- • Up to 5 years in prison
- • Fines up to $150,000 or double the fraud amount
- • Restitution – repay all improperly received TD benefits
- • Permanent criminal record
Civil Penalties & Benefit Loss:
- • All benefits terminated immediately
- • Permanent disability claim denied
- • Future medical treatment denied
- • Civil lawsuit for repayment plus penalties
- • Attorney fees and costs awarded to insurance company
Real Case Example:
Worker claimed total disability due to back injury. Collected $42,000 in TD benefits over 10 months. Surveillance caught him doing roofing work.
Result: Felony insurance fraud conviction, 18 months in county jail, ordered to repay $42,000 plus $15,000 in investigation costs, permanent disability claim denied (would have been worth $80,000).
Net loss: Lost $137,000 in total benefits, spent 18 months in jail, permanent felony record preventing future employment.
Common Questions & Scenarios
"Can I volunteer while on workers' comp?"
Maybe. If the volunteer work is within medical restrictions and truly unpaid, it's generally allowed. However, if you claim total disability but are physically capable of volunteering 20 hours/week, insurance will argue you're not actually totally disabled. Use caution.
"What if I work for a family member's business?"
Must report it. Even if it's informal "helping out," if you receive any compensation (including cash, free rent, or other benefits), it's reportable income. Insurance investigators specifically look for family business arrangements.
"Can I sell items online (eBay, Etsy) while on TD?"
Yes, but report income. Online sales are work. Net profit (sales minus cost of goods) is reportable income that reduces TD. Occasional garage sale-type sales of personal items likely okay; operating a business requires reporting.
"Does working affect my permanent disability rating?"
No. Permanent disability is based on medical impairment, not ability to work. You can work full-time and still have a 30% permanent disability rating. The rating measures physical impairment to your body, not employability.
Best Practices: Protecting Your Claim While Working
Safe Work Guidelines:
Get everything in writing. Doctor's work release, job offer, insurance approval, medical restrictions—document everything.
Report income immediately. Don't wait for insurance to ask. Proactive reporting shows honesty.
Stay within restrictions. If doctor says no lifting over 10 lbs, don't accept a job requiring 25 lbs lifting. One violation can kill your claim.
Consult your attorney before accepting work. A 10-minute phone call can prevent accidentally sabotaging your claim.
Assume you're being watched. If insurance suspects fraud, they hire investigators. Operate as if every activity is recorded.
When to Contact a Lawyer
Consult a California workers' comp attorney if:
- • You're considering returning to work and want to know how it affects benefits
- • Insurance accused you of working without reporting
- • You're being investigated for fraud
- • You reported work but insurance miscalculated your TD payments
- • Your doctor's restrictions don't match available work and you need guidance
- • Insurance terminated benefits claiming you can work when you physically can't (you are protected against retaliation under Labor Code §132a)
- • You worked briefly and want to know if it affects your permanent disability claim
Free consultations. We'll review your situation, explain how working affects your benefits, and ensure you comply with reporting requirements while maximizing your recovery.