You are in the process of stipulation to a permanent disability award with the employee when you receive a call from a furniture company who says the employee owes them $2000. You should:

• 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 debt from the F&A.
• D. Tell the furniture company to file a lien with the WCAB.

Answer: (D)

When a third party claims a debt related to an employee in a workers’ compensation case, the proper path is to have that creditor file a lien with the Workers’ Compensation Appeals Board (WCAB). The WCAB lien process is the official mechanism for asserting and resolving such claims within the workers’ comp system, ensuring the lien is valid, prioritized correctly, and paid from the appropriate compensation if allowed by statute.

In this scenario, you’re in the middle of stipulating a permanent disability award. A furniture company says the employee owes them money. Directing the creditor to file a lien with the WCAB gives the board the chance to review the lien’s validity and amount and to determine how any allowable lien will be paid (often from future workers’ comp benefits or from the settlement as applicable). It protects the employee’s settlement rights and keeps payment handling within the established workers’ compensation framework.

Opting to pay the debt from the F&A or treating the claim as invalid without a WCAB proceeding bypasses the required lien process and could disrupt the employee’s settlement. Simply referring the creditor elsewhere or assuming non-liability without the board’s review is not appropriate, since lien rights must be adjudicated through the WCAB.