During stipulation to a permanent disability award, a furniture company claims the employee owes them $2000. What is the proper action?

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

Answer: (D)

In California workers’ compensation, when a third party asserts a debt against an employee during a workers’ comp claim, that claim must be pursued through a formal lien filed with the Workers’ Compensation Appeals Board. This ensures the debt is handled under the proper statutory process, with due process for the employee and orderly resolution of who pays what from any forthcoming benefits. If a third party tries to collect during a stipulation, the correct step is to have them file a lien with the WCAB so the board can determine validity, priority, and payment from the workers’ compensation award if applicable. Paying the debt directly from the settlement or dismissing the claim outright bypasses the required lien procedure and could create improper disbursements or disputes later. Therefore, telling the furniture company to file a lien with the WCAB is the proper action, as it puts the claim into the correct administrative process for resolution.