During stipulation to a permanent disability award, a furniture company claims a $2000 debt; what is proper handling of this lien?

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

Answer: (B)

The key idea here is that only liens that the Labor Code expressly authorizes can be paid from a workers’ compensation claim or award. Not every debt against the employee qualifies as a valid lien against a stipulation for permanent disability.

A furniture company’s $2,000 claim is not one of the statutorily recognized lien categories in California workers’ comp. That means it cannot be paid out of the Findings & Award or treated as a lien against the PD award. The proper action is to refrain from paying that debt from the award, since it’s not a valid Labor Code lien. If the furniture company wants to pursue a lien, they would need to file a proper, statutory lien with the WCAB and prove its validity under the relevant rules, but such a claim cannot be satisfied merely by including it in the stipulation.