BILL NUMBER: SB 71 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 6, 2001
PASSED THE ASSEMBLY SEPTEMBER 5, 2001
AMENDED IN ASSEMBLY SEPTEMBER 4, 2001
AMENDED IN ASSEMBLY AUGUST 21, 2001
AMENDED IN SENATE APRIL 23, 2001
INTRODUCED BY Senator Burton and Assembly Member Calderon
(Principal coauthor: Senator Alarcon)
(Coauthor: Assembly Member Shelley)
JANUARY 9, 2001
An act to amend Sections 1871, 1872.83, 11721, 11734, 11737,
11770, 11783, 11784, 11785, 11786, 11787, 11820, 11822, and 11860 of,
to add Section 11771.5 to, and to repeal Section 11823 of, the
Insurance Code, to amend Sections 62.5, 62.6, 62.7, 75, 77, 78, 90.5,
110, 123.3, 123.5, 123.6, 124, 127, 129, 129.5, 133, 138, 138.1,
138.2, 138.4, 139, 139.6, 3501, 3550, 3551, 3722, 3762, 3820, 4061,
4062, 4062.9, 4064, 4067, 4453, 4455, 4628, 4650, 4651, 4658, 4659,
4702, 4703.5, 5275, 5305, 5307, 5310, 5311.5, 5401, 5405, 5500.3,
5502, and 6354.5 of, to add Sections 90.3, 118, 127.5, 139.07, 3822,
4600.1, 4600.2, 5307.2, and 6354.7 to, and to repeal Sections 62.9,
139.05, 3552, and 4065 of the Labor Code, relating to workers'
compensation.
LEGISLATIVE COUNSEL'S DIGEST
SB 71, Burton. Workers' compensation: administration and
benefits.
(1) Existing law provides for an annual assessment of employers by
the Department of Industrial Relations for the purpose of funding
increased investigation and prosecution of workers' compensation
fraud by the Bureau of Fraudulent Claims of the Department of
Insurance and by district attorneys. Existing law provides for the
assessment of civil penalties for acts constituting workers'
compensation fraud.
This bill would also authorize use of these funds for
investigation and prosecution of an employer's willful failure to
secure payment of workers' compensation. This bill would require the
Bureau of State Audits to evaluate the effectiveness of the efforts
of the Fraud Assessment Commission, the Bureau of Fraudulent Claims,
the Department of Industrial Relations, and local law enforcement
agencies in identifying, investigating, and prosecuting workers'
compensation fraud and the willful failure to secure payment of
workers' compensation. The bill would increase the civil penalty
amounts that could be imposed for workers' compensation fraud. These
funds would be deposited in the Workers' Compensation Fraud Account
in the Insurance Fund.
(2) Existing law requires workers' compensation insurers to
maintain or provide occupational safety and health loss control
consultation services certified by the Director of Industrial
Relations.
This bill would eliminate the requirement that these services be
certified by the director, would eliminate fees imposed on insurers
for that certification, would accordingly eliminate the Loss Control
Certification Fund in which these fees are deposited, would require
an expansion of the scope of these services, and would make
legislative findings in this regard. The bill would eliminate the
requirement that each insurer submit an annual health and safety loss
control plan to the director for identifying employers with the
greatest workers' compensation losses and the most significant and
preventable health and safety hazards. The bill would require the
Department of Industrial Relations to establish an insurance loss
control services coordinator position to provide information to
employers about the availability of these loss control consultation
services, to be funded from the Workers' Occupational Safety and
Health Education Fund that would be created by the bill. The bill
would require the Commission on Health and Safety and Workers'
Compensation to establish and maintain a worker occupational safety
and health training and education program. The bill would require
the director to levy and collect fees from workers' compensation
insurers for purposes of the program, with the fees to be deposited
in the Workers' Occupational Safety and Health Education Fund.
(3) Existing law requires the Insurance Commissioner to designate
a rating organization to assist him or her in developing, among other
things, a classification system.
This bill would require the designated rating organization to
develop and file with the Insurance Commissioner a weekly premium per
employee for each classification used or proposed by the designated
rating organization for use in determining the premium for an
uninsured employer.
(4) Existing law provides for the Insurance Commissioner to
approve rates for workers' compensation insurance.
This bill, notwithstanding any other provision of law, would
authorize an insurer to increase rates on policies with inception
dates prior to January 1, 2002, to reflect the changes in benefit
levels enacted by this bill.
(5) Existing law provides for a 6-member board of directors to
administer the State Compensation Insurance Fund, with the Director
of Industrial Relations serving as a nonvoting, ex officio member.
This bill would add the Speaker of the Assembly and the President
Pro Tempore of the Senate, or their designees, to the board as ex
officio members.
(6) Existing law specifies the authority of the State Compensation
Insurance Fund.
This bill would authorize the fund to commission an independent
study to determine the feasibility of the fund issuing bonds or
securities. The bill would require advertising of the fund to
include a specified disclaimer.
(7) Existing law provides for a manager of the State Compensation
Insurance Fund.
This bill would change the title of this officer to president.
(8) Existing law requires the rates of the State Compensation
Insurance Fund to be fixed at a percentage of the payroll of any
employer which, in the long run and on average, will produce a
sufficient sum, when invested at 31/2% interest, to meet specified
goals.
This bill would replace the 31/2% interest standard with a
standard that the investment be made in a way so as to realize the
maximum return consistent with safe and prudent management practices.
(9) Existing law requires that the total cost of the
administration of the workers' compensation program be funded 20% by
employer assessments and 80% by appropriations from the General Fund.
This bill would delete the employer assessments and require the
total cost of the program to be funded from the General Fund.
(10) Existing law provides for an assessment against employers to
fund the Cal-OSHA targeted inspection program and the Cal-OSHA
targeted consultation program.
This bill would eliminate that assessment, and would instead
provide that these programs would be funded from the General Fund.
(11) Existing law provides for the Department of Industrial
Relations to be divided into at least 6 divisions, including the
Division of Workers' Compensation, which is under the direction of an
administrative director. Existing law provides that the
administrative director has various powers and duties with respect to
the Workers' Compensation Appeals Board and workers' compensation
administrative law judges who hear appeals of workers' compensation
claims.
This bill would create the position of court administrator with
respect to the workers' compensation adjudicatory process at the
trial level, who would be appointed by the Governor with the advice
and consent of the Senate. This bill would specify the court
administrator's powers and duties. The bill would add various other
provisions, including certain qualifications and ethics requirements
for workers' compensation administrative law judges and other
provisions relating to the operation of the workers' compensation
courts. The bill would also require the court administrator to
conduct a study to evaluate and recommend changes to the workers'
compensation court system.
(12) Existing law requires the administrative director to conduct
audits of insurers, self-insured employers, and third-party
administrators to ensure that injured workers are promptly and
accurately receiving the full measure of compensation they are
entitled to receive.
This bill would require the director to conduct a profile audit
review of each audit subject at least once every 5 years and to
conduct a full compliance audit on each audit subject that fails to
meet or exceed the profile audit review performance standard
established by the director. The bill would provide for the
assessment of penalties on audit subjects that fail to meet
established audit standards, and based on the results of these
audits, the administrative director would be required to publish and
make available on request a list ranking all insurers, self-insured
employers, and third-party administrators audited.
(13) Existing law requires the Administrative Director of the
Division of Workers' Compensation to establish a continuing program
to provide information and assistance concerning the rights,
benefits, and obligations of employees and employers subject to that
law.
This bill would require the administrative director to prepare a
comprehensive guide advising injured workers of their basic rights
under the workers' compensation law and various other laws.
(14) Existing law requires that specified notices be provided to
injured employees.
This bill would specify the contents of various notices that are
required to be posted, given to, or mailed to an employee. The bill
would provide for specified procedures to be used in notifying
employees regarding benefits and required actions in pursuing a
workers' compensation claim.
(15) Existing law provides that the Commission on Health and
Safety and Workers' Compensation in the Department of Industrial
Relations is to be funded by appropriations from the Workplace Health
and Safety Revolving Fund, in which certain civil and administrative
penalties are deposited.
This bill would instead provide for the deposit of these penalties
in the Workers' Compensation Administration Revolving Fund, and
would provide funding for the commission from this fund, upon
appropriation by the Legislature.
(16) Existing law requires the Industrial Medical Council to,
among other things, counsel and assist the administrative director
and suggest standards for improving care furnished to injured
employees.
This bill would require the Industrial Medical Council to
promulgate guidelines for the medical treatment of conditions
associated with common workplace injures which reflect best medical
practices for the injured worker.
(17) Existing law provides for the Director of Industrial
Relations to issue and serve on any employer that has failed to
secure the payment of workers' compensation a stop order prohibiting
the use of employee labor, and to also issue and serve on the
employer a penalty assessment order in the amount of $1,000 per
employee employed, as specified.
This bill would authorize the director to assess a higher amount
upon a determination that an employer has been uninsured for a period
in excess of one week during the calendar year preceding the
determination. The bill would enact other related changes with
respect to these provisions.
(18) Existing law specifies the medical information about an
injured employee that an insurer or a claim administrator may
disclose to an employer, including the diagnosis of the injury if
that diagnosis would affect the employer's premium.
This bill would permit disclosure of the diagnosis to an employer
if the diagnosis would affect an employer's premium or reserves.
(19) Existing law generally provides that the report of the
qualified medical evaluator and the report of the treating physician
with respect to a workers' compensation injury shall be the only
admissible reports relative to making a determination with regard to
an employer's workers' compensation liability. Existing law provides
that once a worker has received a comprehensive medical-legal
evaluation, the worker is not entitled to another evaluation if he or
she later becomes represented by an attorney.
This bill would delete the limitation on obtaining another
evaluation and would make various other changes to these and other
related provisions.
(20) Existing law generally provides that the findings of the
treating physician are presumed to be correct, unless rebutted, in
cases where an additional comprehensive medical evaluation is
obtained.
This bill would limit the operation of this presumption to
situations involving the treatment of a worker by a personal
physician or personal chiropractor who was predesignated prior to the
date of injury.
(21) Existing law requires injured employees to be provided with
medical services, including prescription drugs.
This bill would require the use of generic drugs and would require
the Administrative Director of the Division of Workers' Compensation
to adopt by July 1, 2002, and revise no less frequently than
biennially, an official pharmaceutical fee schedule. The bill would
additionally require that the injured employee have access to a
pharmacy within a reasonable distance from his or her residence.
(22) Existing law provides certain methods for determining workers'
compensation benefits payable to a worker or his or her dependents
for purposes of temporary disability, permanent total disability,
permanent partial disability, and in case of death.
This bill would provide for increased temporary disability and
permanent partial disability benefits for injuries or deaths
occurring on or after January 1, 2002, with additional increases in
benefits phased in over several years. The bill would also revise
the computation of the permanent disability benefit by increasing the
number of weeks, as specified, for injuries occurring on or after
July 1, 2004.
(23) Existing law requires that a disability indemnity payment
made by any written instrument be immediately negotiable and payable
in cash on demand.
This bill would provide that it is not a violation of this
provision if a delay in the negotiation of a written instrument is
caused solely by the application of state or federal banking laws or
regulations.
(24) Existing law provides for the payment of workers'
compensation death benefits to wholly dependent children, as defined,
of a deceased employee-parent until the youngest child attains 18
years of age.
This bill would also provide these benefits to children who are
physically or mentally incapacitated from earning until the death of
these children.
(25) Existing law requires certain disputes relating to workers'
compensation to be submitted to arbitration, including certain
disputes relating to permanent disability rating and vocational
rehabilitation.
This bill would delete the requirement for the arbitration of
these disputes.
(26) Existing law provides that medical and disability benefits
may be claimed for up to one year from specific triggering events.
This bill would additionally establish timeframes whereby lien
claimants must file liens against compensation.
(27) This bill would create the Workers' Occupational Safety and
Health Education Fund that would be funded by fees imposed upon
certain insurers. The bill would provide that money in this fund
could be expended upon appropriation by the Legislature in order to
establish and maintain a worker occupational safety and health
training and educational program.
(28) This bill would also require the Director of Industrial
Relations to establish 8 additional workers' compensation
administrative law judge positions and the same number of other
associated positions.
(29) This bill would declare the intent of the Legislature
relative to various matters.
(30) This bill would make other related changes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares as follows:
(a) That prevention of workplace injuries and illnesses is an
essential component of California's workers' compensation system.
(b) That the provision of loss control services by insurers is an
important tool in preventing injuries.
(c) That the development and use of injury and illness prevention
education programs also help reduce unnecessary injuries and
illnesses.
(d) That the certification program funded by the Loss Control
Certification Fund is ineffective and should be redirected to more
useful injury prevention programs.
(e) That all existent funding available in, and all current fees
used to maintain, the Loss Control Certification Fund should be used
to establish the Loss Control Ombudsperson Fund and the Workers'
Occupational Safety and Health Education Fund.
SEC. 2. Section 1871 of the Insurance Code is amended to read:
1871. The Legislature finds and declares as follows:
(a) That the business of insurance involves many transactions
which have potential for abuse and illegal activities. There are
numerous law enforcement agencies on the state and local levels
charged with the responsibility for investigating and prosecuting
fraudulent activity. This chapter is intended to permit the full
utilization of the expertise of the commissioner and the department
so that they may more effectively investigate and discover insurance
frauds, halt fraudulent activities, and assist and receive assistance
from federal, state, local, and administrative law enforcement
agencies in prosecution of persons who are parties in insurance
frauds.
(b) That insurance fraud is a particular problem for automobile
policyholders; fraudulent activities account for 15 to 20 percent of
all auto insurance payments. Automobile insurance fraud is the
biggest and fastest growing segment of insurance fraud and
contributes substantially to the high cost of automobile insurance
and is particularly significant in urban areas.
(c) That prevention of automobile insurance fraud will
significantly reduce the incidence of severity and automobile
insurance claim payments and will produce a commensurate reduction in
automobile insurance premiums.
(d) That workers' compensation fraud harms employers by
contributing to the increasingly high cost of workers' compensation
insurance and self-insurance and harms employees by undermining the
perceived legitimacy of all workers' compensation claims.
(e) That prevention of workers' compensation insurance fraud may
reduce the number of workers' compensation claims and claim payments
thereby producing a commensurate reduction in workers' compensation
costs. Prevention of workers' compensation insurance fraud will
assist in restoring confidence and faith in the workers' compensation
system, and will facilitate expedient and full compensation for
employees injured at the workplace.
(f) That the actions of employers who fraudulently underreport
payroll or fail to report payroll for all employees to their
insurance company in order to pay a lower workers' compensation
premium result in significant additional premium costs and an unfair
burden to honest employers and their employees.
(g) That the actions of employers who fraudulently fail to secure
the payment of workers' compensation as required by Section 3700 of
the Labor Code harm employees, cause unfair competition for honest
employers, and increase costs to taxpayers.
(h) That health insurance fraud is a particular problem for health
insurance policyholders. Although there are no precise figures, it
is believed that fraudulent activities account for billions of
dollars annually in added health care costs nationally. Health care
fraud causes losses in premium dollars and increases health care
costs unnecessarily.
SEC. 3. Section 1872.83 of the Insurance Code is amended to read:
1872.83. (a) The commissioner shall ensure that the Bureau of
Fraudulent Claims aggressively pursues all reported incidents of
probable workers' compensation fraud, as defined in Sections 11760
and 11880, in subdivision (a) of Section 1871.4, and in Section 549
of the Penal Code, and forwards to the appropriate disciplinary body
the names, along with all supporting evidence, of any individuals
licensed under the Business and Professions Code who are suspected of
actively engaging in fraudulent activity. The Bureau of Fraudulent
Claims shall forward to the Insurance Commissioner or the Director of
Industrial Relations, as appropriate, the name, along with all
supporting evidence, of any insurer, as defined in subdivision (c) of
Section 1877.1, suspected of actively engaging in the fraudulent
denial of claims.
(b) To fund increased investigation and prosecution of workers'
compensation fraud, and of willful failure to secure payment of
workers' compensation, in violation of Section 3700.5 of the Labor
Code, there shall be an annual assessment as follows:
(1) The aggregate amount of the assessment shall be determined by
the Fraud Assessment Commission, which is hereby established. The
commission shall be composed of five members consisting of two
representatives of self-insured employers, one representative of
insured employers, one representative of workers' compensation
insurers, and the President of the State Compensation Insurance Fund,
or his or her designee.
The Governor shall appoint members representing self-insured
employers, insured employers, and insurers. The term of office of
members of the commission shall be four years, and a member shall
hold office until the appointment of a successor. However, the
initial terms of three of the members appointed by the Governor shall
expire, respectively, on December 31, 1992, December 31, 1993, and
December 31, 1994. The President of the State Compensation Insurance
Fund shall be an ex officio, voting member of the commission.
Members of the commission shall receive one hundred dollars ($100)
for each day of actual attendance at commission meetings and other
official commission business, and shall also receive their actual and
necessary traveling expenses incurred in the performance of
commission duties. Payment of per diem and travel expenses shall be
made from the Workers' Compensation Fraud Account in the Insurance
Fund, established in paragraph (4), upon appropriation by the
Legislature.
(2) In determining the aggregate amount of the assessment, the
Fraud Assessment Commission shall consider the advice and
recommendations of the Bureau of Fraudulent Claims and the
commissioner.
(3) The aggregate amount of the assessment shall be collected by
the Director of Industrial Relations pursuant to Section 62.6 of the
Labor Code. The Fraud Assessment Commission shall annually advise
the Director of Industrial Relations, not later than March 15, of the
aggregate amount to be assessed for the next fiscal year.
(4) The amount collected, together with the fines collected for
violations of the unlawful acts specified in Sections 1871.4, 11760,
and 11880, Section 3700.5 of the Labor Code, and Section 549 of the
Penal Code, shall be deposited in the Workers' Compensation Fraud
Account in the Insurance Fund, which is hereby created, and may be
used, upon appropriation by the Legislature, only for enhanced
investigation and prosecution of workers' compensation fraud and of
willful failure to secure payment of workers' compensation as
provided in this section.
(c) For each fiscal year, the total amount of revenues derived
from the assessment pursuant to subdivision (b) shall, together with
amounts collected pursuant to fines imposed for unlawful acts
described in Sections 1871.4, 11760, and 11880, Section 3700.5 of the
Labor Code, and Section 549 of the Penal Code, not be less than
three million dollars ($3,000,000). Any funds appropriated by the
Legislature pursuant to subdivision (b) that are not expended in the
fiscal year for which they have been appropriated, and that have not
been allocated under subdivision (f), shall be applied to satisfy for
the immediately following fiscal year the minimum total amount
required by this subdivision. In no case may that money be
transferred to the General Fund.
(d) After incidental expenses, at least 40 percent of the funds to
be used for the purposes of this section shall be provided to the
Bureau of Fraudulent Claims of the Department of Insurance for
enhanced investigative efforts, and at least 40 percent of the funds
shall be distributed to district attorneys, pursuant to a
determination by the commissioner with the advice and consent of the
bureau and the Fraud Assessment Commission, as to the most effective
distribution of moneys for purposes of the investigation and
prosecution of workers' compensation fraud cases and cases relating
to the willful failure to secure the payment of workers'
compensation. Each district attorney seeking a portion of the funds
shall submit to the commissioner an application setting forth in
detail the proposed use of any funds provided. A district attorney
receiving funds pursuant to this subdivision shall submit an annual
report to the commissioner with respect to the success of his or her
efforts. Upon receipt, the commissioner shall provide copies to the
bureau and the Fraud Assessment Commission of any application, annual
report, or other documents with respect to the allocation of money
pursuant to this subdivision. Both the application for moneys and
the distribution of moneys shall be public documents. Information
submitted to the commissioner pursuant to this section concerning
criminal investigations, whether active or inactive, shall be
confidential.
(e) If a district attorney is determined by the commissioner to be
unable or unwilling to investigate and prosecute workers'
compensation fraud claims or claims relating to the willful failure
to secure the payment of workers' compensation, the commissioner
shall discontinue distribution of funds allocated for that county and
may redistribute those funds according to this subdivision.
(1) The commissioner shall promptly determine whether any other
county could assert jurisdiction to prosecute the fraud claims or
claims relating to the willful failure to secure the payment of
workers' compensation that would have been brought in the
nonparticipating county, and if so, the commissioner may award funds
to conduct the prosecutions redirected pursuant to this subdivision.
These funds may be in addition to any other fraud prosecution funds
or funds relating to the willful failure to secure the payment of
workers' compensation prosecution otherwise awarded under this
section. Any district attorney receiving funds pursuant to this
subdivision shall first agree that the funds shall be used solely for
investigating and prosecuting those cases of workers' compensation
fraud or the willful failure to secure the payment of workers'
compensation that are redirected pursuant to this subdivision and
submit an annual report to the commissioner with respect to the
success of the district attorney's efforts. The commissioner shall
keep the Fraud Assessment Commission fully informed of all
reallocations of funds under this paragraph.
(2) If the commissioner determines that no district attorney is
willing or able to investigate and prosecute the workers'
compensation fraud claims or claims relating to the willful failure
to secure the payment of workers' compensation arising in the
nonparticipating county, the commissioner, with the advice and
consent of the Fraud Assessment Commission, may award to the Attorney
General some or all of the funds previously awarded to the
nonparticipating county. Before the commissioner may award any
funds, the Attorney General shall submit to the commissioner an
application setting forth in detail his or her proposed use of any
funds provided and agreeing that any funds awarded shall be used
solely for investigating and prosecuting those cases of workers'
compensation fraud or the willful failure to secure the payment of
workers' compensation that are redirected pursuant to this
subdivision. The Attorney General shall submit an annual report to
the commissioner with respect to the success of the fraud prosecution
efforts of his or her office.
(3) Neither the Attorney General nor any district attorney shall
be required to relinquish control of any investigation or prosecution
undertaken pursuant to this subdivision unless the commissioner
determines that satisfactory progress is no longer being made on the
case or the case has been abandoned.
(4) No county that has become a nonparticipating county due to the
inability or unwillingness of its district attorney to investigate
and prosecute workers' compensation fraud or the willful failure to
secure the payment of workers' compensation shall become eligible to
receive funding under this section until it has submitted a new
application that meets the requirements of subdivision (d) and the
applicable regulations.
(f) If in any fiscal year the Bureau of Fraudulent Claims does not
use all of the funds made available to it under subdivision (d), any
remaining funds may be distributed to district attorneys pursuant to
a determination by the commissioner in accordance with the same
procedures set forth in subdivision (d).
(g) The commissioner shall adopt rules and regulations to
implement this section in accordance with the rulemaking provisions
of the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code). Included in the rules and regulations shall be the criteria
for redistributing funds to district attorneys and the Attorney
General. The adoption of the rules and regulations shall be deemed
to be an emergency and necessary for the immediate preservation of
the public peace, health, and safety, or general welfare.
(h) The department shall report on an annual basis to the
Legislature and the Fraud Assessment Commission on the activities of
the Bureau of Fraudulent Claims and local district attorneys
supported by the funds provided by this section.
The annual report shall include, but is not limited to, all of the
following information for the department and each district attorney'
s office:
(1) All allocations, distributions, and expenditures of funds.
(2) The number of search warrants issued.
(3) The number of arrests and prosecutions, and the aggregate
number of parties involved in each.
(4) The number of convictions, and names of all convicted fraud
perpetrators.
(5) The estimated value of all assets frozen, penalties assessed,
and restitutions made for each conviction.
(6) Any additional items necessary to fully inform the Fraud
Assessment Commission and the Legislature of the fraud-fighting
efforts financed through this section.
(i) In order to meet the requirements of subdivision (g), the
department shall submit a biannual information request to those
district attorneys who have applied for and received funding through
the annual assessment process under this section.
(j) Assessments levied or collected to fight workers' compensation
fraud and insurance fraud are not taxes. Those funds are entrusted
to the state to fight fraud and the willful failure to secure the
payment of workers' compensation by funding state and local
investigation and prosecution efforts. Accordingly, any funds
resulting from assessments, fees, penalties, fines, restitution, or
recovery of costs of investigation and prosecution deposited in the
Insurance Fund shall not be deemed "unexpended" funds for any purpose
and, if remaining in that account at the end of any fiscal year,
shall be applied as provided in subdivision (f) and to offset or
augment subsequent years' program funding.
(k) The Bureau of State Audits shall evaluate the effectiveness of
the efforts of the Fraud Assessment Commission, the Bureau of
Fraudulent Claims, the Department of Insurance, and the Department of
Industrial Relations, as well as local law enforcement agencies,
including district attorneys, in identifying, investigating, and
prosecuting workers' compensation fraud and the willful failure to
secure payment of workers' compensation. The report shall
specifically identify areas of deficiencies. Included in this report
shall be recommendations on whether the current program provides the
appropriate levels of accountability for those responsible for the
allocation and expenditure of funds raised from the assessment
provided in this section. The Bureau of State Audits shall submit a
report to the Chairperson of the Senate Committee on Labor and
Industrial Relations and the Chairperson of the Assembly Committee on
Insurance on or before May 1, 2003.
SEC. 4. Section 11721 of the Insurance Code is amended to read:
11721. An insurer desiring to write workers' compensation
insurance shall maintain or provide occupational safety and health
loss control consultation services pursuant to Section 6354.5 of the
Labor Code.
SEC. 5. Section 11734 of the Insurance Code is amended to read:
11734. (a) Every workers' compensation insurer shall adhere to a
uniform experience rating plan filed with the commissioner by a
rating organization designated by the commissioner and subject to his
or her disapproval.
(b) The commissioner shall designate a rating organization to
assist him or her in gathering, compiling, and reporting relevant
statistical information, and to develop a classification system. An
insurer may develop its own classification system upon which a rate
may be made or adopt the classification system developed by the
designated rating organization; provided, however, that any
classification system developed by an insurer must be filed with the
commissioner 30 days prior to its use. The commissioner shall
disapprove a classification system filed by an insurer pursuant to
this section if the insurer fails to demonstrate that the data
thereby produced can be reported consistent with the uniform
statistical plan or the classification system developed by the rating
organization. Every workers' compensation insurer shall record and
report its workers' compensation experience to the designated rating
organization as set forth in the uniform statistical plan approved by
the commissioner.
(c) The designated rating organization shall develop and file
manual rules, subject to the approval of the commissioner, reasonably
related to the recording and reporting of data pursuant to the
uniform statistical plan, uniform experience rating plan, and such
classification systems as may be in effect. Every workers'
compensation insurer shall adhere to the approved manual rules and
experience rating plan in writing and reporting its business. No
insurer shall agree with any other insurer or with a rating
organization to adhere to manual rules which are not reasonably
related to the recording and reporting of data pursuant to the
uniform statistical plan or classification system developed by the
rating organization.
(d) The designated rating organization shall also develop and file
with the commissioner a weekly premium per employee for each
classification used or proposed for use by that organization. The
weekly premium shall be developed by applying the proposed rate for
each classification to the state average weekly wage. For the
purpose of this section, "state average weekly wage" means the
average weekly wage paid by employers to employees covered by
unemployment insurance, as reported to the Employment Development
Department for the four calendar quarters ending June 30 of the
preceding calendar year. This weekly premium shall be used only for
the purpose of determining the premium for an uninsured employer
under subdivision (c) of Section 3722 of the Labor Code.
SEC. 6. Section 11737 of the Insurance Code is amended to read:
11737. (a) The commissioner may disapprove a rate if the insurer
fails to comply with the filing requirements under Section 11735.
(b) If the commissioner believes that rates may violate any of the
requirements of this article, he or she shall call a hearing prior
to any disapproval. The commissioner shall disapprove a rate if he
or she finds that the rate would, if continued in use, tend to impair
or threaten the solvency of an insurer or tend to create a monopoly
in the market pursuant to Section 11732.
(c) Every insurer or rating organization shall provide within this
state reasonable means whereby any person aggrieved by the
application of its filings may be heard on written request to review
the manner in which the rating system has been applied in connection
with the insurance afforded or offered. If the insurer or rating
organization fails to grant or reject the request within 30 days, the
applicant may proceed in the same manner as if the application had
been rejected. Any party affected by the action of the insurer or
rating organization on the request may, within 30 days after written
notice of the action, appeal to the commissioner who, after a hearing
held within 60 days from the date on which the party requests the
appeal, or longer upon agreement of the parties and not less than 10
days' written notice to the appellant and to the insurer or rating
organization, may affirm, modify, or reverse that action. If the
commissioner has information on the subject from which the appeal is
taken and believes that a reasonable basis for the appeal does not
exist or that the appeal is not made in good faith, the commissioner
may deny the appeal without a hearing. The denial shall be in
writing and shall set forth the basis for the denial and shall be
served on all parties.
(d) If the commissioner disapproves a rate, the commissioner shall
issue an order specifying in what respects it fails to meet the
requirements of this article and stating when within a reasonable
period thereafter that rate shall be discontinued for any policy
issued or renewed after a date specified in the order. The order
shall be issued within 30 days after the close of the hearing or
within such reasonable time extension as the commissioner may fix.
The order may include a provision for premium adjustment for the
period after the effective date of the order for policies in effect
on that date.
(e) Whenever an insurer has no legally effective rates as a result
of the commissioner's disapproval of rates or other act, the
commissioner shall on request of the insurer specify interim rates
for the insurer that are adequate to protect the interests of all
parties and may order that a specified portion of the premiums be
placed in an escrow account approved by him or her. When new rates
become legally effective, the commissioner shall order the escrowed
funds or any overcharge in the interim rates to be distributed
appropriately, except that refunds of less than ten dollars ($10) per
policyholder shall not be required.
(f) Notwithstanding any other provision of law, an insurer may
increase rates on policies with inception dates prior to January 1,
2002, in an amount no greater than the pure premium rate increase
approved by the commissioner reflecting the cost of the change in
benefit levels authorized by the act adding this subdivision.
SEC. 7. Section 11770 of the Insurance Code is amended to read:
11770. The State Compensation Insurance Fund is continued in
existence, to be administered by its board of directors for the
purpose of transacting workers' compensation insurance, and insurance
against the expense of defending any suit for serious and willful
misconduct, against an employer or his or her agent, and insurance to
employees and other persons of the compensation fixed by the workers'
compensation laws for employees and their dependents. Any
appropriation made therefrom or thereto before the effective date of
this code shall continue to be available for the purposes for which
it was made.
The Board of Directors of the State Compensation Insurance Fund is
composed of five members, one of whom shall be from organized labor,
appointed by the Governor. The Governor shall appoint the
chairperson who shall serve at the pleasure of the Governor. The
Director of Industrial Relations, the Speaker of the Assembly, and
the President Pro Tempore of the Senate, or their designees, shall be
ex officio, nonvoting members of the board, and shall not be counted
as members of the board for quorum purposes or any other purpose.
The term of office of the members of the board, other than that of
the director, the Speaker of the Assembly, and the President Pro
Tempore of the Senate, shall be five years and they shall hold office
until the appointment and qualification of their successors. The
term of office of the first additional member appointed pursuant to
amendment of this section effective January 1, 1990, shall expire on
January 15, 1995. Commencing January 15, 1991, the terms of office
of other members shall be extended to five years as each four-year
term expires, so that one member's term of office expires January 15
of each year. Each member shall receive his or her actual and
necessary traveling expenses incurred in the performance of his or
her duty as a member and, with the exception of the ex officio
members, one hundred dollars ($100) for each day of his or her actual
attendance at meetings of the board. In order to qualify for
membership on the board, each member other than the ex officio
members shall have been a policyholder or the employee or member of a
policyholder in the State Compensation Insurance Fund for one year
prior to his appointment, and must continue in this status during the
period of his or her membership.
SEC. 8. Section 11771.5 is added to the Insurance Code, to read:
11771.5. Any advertising of the State Compensation Insurance Fund
shall include the following disclaimer: "The State Compensation
Insurance Fund is not a branch of the State of California."
SEC. 9. Section 11783 of the Insurance Code is amended to read:
11783. The State Compensation Insurance Fund may:
(a) Sue and be sued in all actions arising out of any act or
omission in connection with its business or affairs.
(b) Enter into any contracts or obligations relating to the State
Compensation Insurance Fund which are authorized or permitted by law.
(c) Invest and reinvest the moneys belonging to the fund as
provided by this chapter.
(d) Conduct all business and affairs and perform all acts relating
to the fund whether or not specifically designated in this chapter.
(e)
Commission an independent study, with the assistance of an investment
banking firm, to determine the feasibility of the State Compensation
Insurance Fund issuing bonds or securities. The study may include,
among other things, the purpose for issuing bonds and any potential
adverse consequences that may arise from that issuance.
SEC. 10. Section 11784 of the Insurance Code is amended to read:
11784. In conducting the business and affairs of the fund, the
president of the fund may:
(a) Enter into contracts of workers' compensation insurance.
(b) Sell annuities covering compensation benefits.
(c) Decline to insure any risk in which the minimum requirements
of the industrial accident prevention authorities with regard to
construction, equipment and operation are not complied with, or which
is beyond the safe carrying of the fund. Otherwise he or she shall
not refuse to insure any workers' compensation risk under state law,
tendered with the premium therefor.
(d) Reinsure any risk or any part thereof.
(e) Cause to be inspected and audited the payrolls of employers
applying to the fund for insurance.
(f) Make rules for the settlement of claims against the fund and
determine to whom and through whom the payments of compensation are
to be made.
(g) Contract with physicians, surgeons and hospitals for medical
and surgical treatment and the care and nursing of injured persons
entitled to benefits from the fund.
SEC. 11. Section 11785 of the Insurance Code is amended to read:
11785. The board of directors shall appoint a president of the
fund and fix his or her salary. The president shall manage and
conduct the business and affairs of the fund under the general
direction and subject to the approval of the board of directors, and
shall perform other duties as the board of directors prescribes.
SEC. 12. Section 11786 of the Insurance Code is amended to read:
11786. Before entering on the duties of his or her office, the
president shall qualify by giving an official bond approved by the
board of directors, in the sum of fifty thousand dollars ($50,000)
and by taking and subscribing to an official oath. The approval of
the board shall be by written endorsement on the bond. The bond
shall be filed in the office of the Secretary of State.
SEC. 13. Section 11787 of the Insurance Code is amended to read:
11787. The board of directors may delegate to the president of
the fund, under those rules and regulations and subject to those
conditions as it from time to time prescribes, any power, function,
or duty conferred by law on the board of directors in connection with
the fund or in connection with the administration, management and
conduct of the business and affairs of the fund. The president may
exercise those powers and functions and perform those duties with the
same force and effect as the board of directors, but subject to its
approval.
SEC. 15. Section 11820 of the Insurance Code is amended to read:
11820. Subject to the provisions of Article 2 (commencing with
Section 11730) of Chapter 3, the board of directors shall establish
the rates to be charged by the State Compensation Insurance Fund for
insurance issued by it. These rates shall be fixed with due regard
to the physical hazards of each industry, occupation, or employment.
SEC. 16. Section 11822 of the Insurance Code is amended to read:
11822. The rates fixed by the board of directors shall be that
percentage of the payroll of any employer which, in the long run and
on the average, will produce a sufficient sum, when invested in a way
as to realize the maximum return consistent with safe and prudent
management practices:
(a) To carry all claims to maturity. The rates shall be based
upon the "reserve" and not upon the "assessment" plan.
(b) To meet the reasonable expenses of conducting the business of
the fund.
(c) To produce a reasonable surplus to cover the catastrophe
hazard.
SEC. 17. Section 11823 of the Insurance Code is repealed.
SEC. 18. Section 11860 of the Insurance Code is amended to read:
11860. Each quarter the President of the State Compensation
Insurance Fund shall make a report to the Governor of the business
done by the State Compensation Insurance Fund during the previous
quarter and a statement of the fund's resources and liabilities at
the close of that previous quarter. The State Compensation Insurance
Fund shall, at its own expense, hire a recognized firm of certified
public accountants to audit annually the books and records of the
State Compensation Insurance Fund and cause an abstract summary
thereof to be published one or more times in at least two newspapers
of general circulation in the state. The president of the fund shall
additionally provide the commissioner with all reports required by
law to be made to him or her by other insurers.
SEC. 19. Section 62.5 of the Labor Code is amended to read:
62.5. The Workers' Compensation Administration Revolving Fund is
hereby created as a special account in the State Treasury. Money in
the fund may be expended by the department, upon appropriation by the
Legislature, for the administration of the workers' compensation
program set forth in this division and Division 4 (commencing with
Section 3200), other than the activities financed pursuant to Section
3702.5, and shall not be used for any other purpose. The fund shall
consist of General Fund appropriations.
SEC. 20. Section 62.6 of the Labor Code is amended to read:
62.6. (a) The director shall levy and collect assessments from
employers in accordance with subdivision (b), as necessary, to
collect the aggregate amount determined by the Fraud Assessment
Commission pursuant to Section 1872.83 of the Insurance Code.
Revenues derived from the assessments shall be deposited in the
Workers' Compensation Fraud Account in the Insurance Fund and shall
only be expended, upon appropriation by the Legislature, for the
investigation and prosecution of workers' compensation fraud and the
willful failure to secure payment of workers' compensation, as
prescribed by Section 1872.83 of the Insurance Code.
(b) Assessments shall be levied by the director upon all employers
as defined in Section 3300. The total amount of the assessment
shall be allocated between self-insured employers and insured
employers in proportion to payroll respectively paid in the most
recent year for which payroll information is available. The director
shall promulgate reasonable rules and regulations governing the
manner of collection of the assessment. The rules and regulations
shall require the assessment to be paid by self-insurers to be
expressed as a percentage of indemnity paid during the most recent
year for which information is available, and the assessment to be
paid by insured employers to be expressed as a percentage of premium.
In no event shall the assessment paid by insured employers be
considered a premium for computation of a gross premium tax or agents'
commission.
SEC. 21. Section 62.7 of the Labor Code is amended to read:
62.7. (a) The Cal-OSHA Targeted Inspection and Consultation Fund
is hereby created as a special account in the State Treasury.
Proceeds of the fund may be expended by the department, upon
appropriation by the Legislature, for the costs of the Cal-OSHA
targeted inspection program provided by Section 6314.1 and the costs
of the Cal-OSHA targeted consultation program provided by subdivision
(a) of Section 6354.
(b) The fund shall consist of moneys appropriated to the fund by
the Legislature from the General Fund and other moneys transferred to
the fund.
SEC. 22. Section 62.9 of the Labor Code is repealed.
SEC. 23. Section 75 of the Labor Code is amended to read:
75. (a) There is in the department the Commission on Health and
Safety and Workers' Compensation. The commission shall be composed
of eight voting members. Four voting members shall represent
organized labor, and four voting members shall represent employers.
Not more than one employer member shall represent public agencies.
Two of the employer and two of the labor members shall be appointed
by the Governor. The Senate Committee on Rules and the Speaker of
the Assembly shall each appoint one employer and one labor
representative. The public employer representative shall be
appointed by the Governor. No action of the commission shall be
valid unless agreed to by a majority of the membership and by not
less than two members representing organized labor and two members
representing employers.
(b) The commission shall select one of the members representing
organized labor to chair the commission during the 1994 calendar
year, and thereafter the commission shall alternatively select an
employer and organized labor representative to chair the commission
for one-year terms.
(c) The initial terms of the members of the commission shall be
four years, and they shall hold office until the appointment of a
successor. However, the initial terms of one employer and one labor
member appointed by the Governor shall expire on December 31, 1995;
the initial terms of the members appointed by the Senate Committee on
Rules shall expire December 31, 1996; the initial terms of the
members appointed by the Speaker of the Assembly shall expire on
December 31, 1997; and the initial term of one employer and one labor
member appointed by the Governor shall expire on December 31, 1998.
Any vacancy shall be filled by appointment to the unexpired term.
(d) The commission shall meet every other month and upon the call
of the chair. Meetings shall be open to the public. Members of the
commission shall receive one hundred dollars ($100) for each day of
their actual attendance at meetings of the commission and other
official business of the commission and shall also receive their
actual and necessary traveling expenses incurred in the performance
of their duty as a member. Payment of per diem and traveling
expenses shall be made from the Workers' Compensation Administration
Revolving Fund, when appropriated by the Legislature.
SEC. 24. Section 77 of the Labor Code is amended to read:
77. (a) The commission shall conduct a continuing examination of
the workers' compensation system, as defined in Section 4 of Article
XIV of the California Constitution, and of the state's activities to
prevent industrial injuries and occupational diseases. The
commission may conduct or contract for studies it deems necessary to
carry out its responsibilities. In carrying out its duties, the
commission shall examine other states' workers' compensation programs
and activities to prevent industrial injuries and occupational
diseases. All state departments and agencies, and any rating
organization licensed by the Insurance Commissioner pursuant to
Article 3 (commencing with Section 11750) of Chapter 3 of Part 3 of
Division 2 of the Insurance Code, shall cooperate with the commission
and upon reasonable request provide information and data in their
possession that the commission deems necessary for the purpose of
carrying out its responsibilities. The commission shall issue an
annual report on the state of the workers' compensation system,
including recommendations for administrative or legislative
modifications which would improve the operation of the system. The
report shall be made available to the Governor, the Legislature, and
the public on request.
(b) On or before July 1, 2002, and periodically thereafter as it
deems necessary, the commission shall issue a report and
recommendations on the improvement and simplification of the notices
required to be provided by insurers and self-insured employers.
(c) The commission succeeds to, and is vested with, all of the
powers, duties, purposes, responsibilities, and jurisdiction of the
Health and Safety Commission which is hereby abolished, including the
administration of grants to assist in establishing effective
occupational injury and illness prevention programs.
SEC. 25. Section 78 of the Labor Code is amended to read:
78. (a) The commission shall review and approve applications from
employers and employee organizations, as well as applications
submitted jointly by an employer organization and an employee
organization, for grants to assist in establishing effective
occupational injury and illness prevention programs. The commission
shall establish policies for the evaluation of these applications and
shall give priority to applications proposing to target high-risk
industries and occupations, including those with high injury or
illness rates, and those in which employees are exposed to one or
more hazardous substances or conditions or where there is a
demonstrated need for research to determine effective strategies for
the prevention of occupational illnesses or injuries.
(b) Civil and administrative penalties assessed and collected
pursuant to Sections 129.5 and 4628 shall be deposited in the Workers'
Compensation Administration Revolving Fund. Moneys in the fund,
when appropriated by the Legislature, shall be expended by the
department, upon approval by the commission, for funding the grants
under subdivision (a), and by the commission for payment of the
commission's expenses incurred under this chapter.
SEC. 26. Section 90.3 is added to the Labor Code, to read:
90.3. (a) It is the policy of this state to vigorously enforce
the laws requiring employers to secure the payment of compensation as
required by Section 3700 and to protect employers who comply with
the law from those who attempt to gain a competitive advantage at the
expense of their workers by failing to secure the payment of
compensation.
(b) In order to ensure that the laws requiring employers to secure
the payment of compensation are adequately enforced, the Labor
Commissioner shall establish and maintain a program for targeting
employers in industries with the highest incidence of unlawfully
uninsured employers. The industries and employers shall be
identified from data from the Uninsured Employers' Fund, the
Employment Development Department, the rating organizations licensed
by the Insurance Commissioner pursuant to Article 3 (commencing with
Section 11750) of Chapter 3 of Part 3 of Division 2 of the Insurance
Code, and any other sources deemed likely to lead to the
identification of unlawfully uninsured employers. All state
departments and agencies and any rating organization licensed by the
Insurance Commissioner pursuant to Article 3 (commencing with Section
11750) of Chapter 3 of Part 3 of Division 2 of the Insurance Code
shall cooperate with the Labor Commissioner and on reasonable request
provide information and data in their possession reasonably
necessary to carry out the program.
(c) As part of the program, the Labor Commissioner shall establish
procedures for ensuring that employers with payroll but with no
record of workers' compensation coverage are contacted and, if no
valid reason for the lack of record of coverage is shown, inspected
on a priority basis.
(d) The Labor Commissioner shall annually report to the
Legislature, not later than March 1, concerning the effectiveness of
the program. The report shall include, but not be limited to, all of
the following:
(1) The number of unlawfully uninsured employers identified
pursuant to the program.
(2) The number of employers matched to records of insurance
coverage.
(3) The number of employers notified that there was no record of
their insurance coverage.
(4) The number of employers inspected.
(5) The number and amount of penalties assessed pursuant to
Section 3722 as a result of the program.
SEC. 27. Section 90.5 of the Labor Code is amended to read:
90.5. (a) It is the policy of this state to vigorously enforce
minimum labor standards in order to ensure employees are not required
or permitted to work under substandard unlawful conditions or for
employers that have not secured the payment of compensation, and to
protect employers who comply with the law from those who attempt to
gain a competitive advantage at the expense of their workers by
failing to comply with minimum labor standards.
(b) In order to ensure minimum labor standards are adequately
enforced, the Labor Commissioner shall establish and maintain a field
enforcement unit, which shall be administratively and physically
separate from offices of the division which accept and determine
individual employee complaints. The unit shall have offices in Los
Angeles, San Francisco, San Jose, San Diego, Sacramento, and such
other locations as the Labor Commissioner deems appropriate. The
unit shall have primary responsibility for administering and
enforcing those statutes and regulations most effectively enforced
through field investigations, including Sections 226, 226.2, 1021,
1021.5, 1193.5, 1193.6, 1194.5, 1197, 1198, 1771, 1776, 1777.5, 2651,
2673, 2675, and 3700, in accordance with the plan adopted by the
Labor Commissioner pursuant to subdivision (c). Nothing in this
section shall be construed to limit the authority of this unit in
enforcing any statute or regulation in the course of its
investigations.
(c) The Labor Commissioner shall adopt an enforcement plan for the
field enforcement unit. The plan shall identify priorities for
investigations to be undertaken by the unit which ensure the
available resources will be concentrated in industries, occupations,
and areas in which employees are relatively low paid and unskilled,
those in which there has been a history of violations of the statutes
cited in subdivision (b), and those with high rates of noncompliance
with Section 3700.
(d) The Labor Commissioner shall annually report to the
Legislature, not later than March 1, concerning the effectiveness of
the field enforcement unit. The report shall include, but not be
limited to, all of the following:
(1) The enforcement plan adopted by the Labor Commissioner
pursuant to subdivision (c), and the rationale for the priorities
identified in the plan.
(2) The number of establishments investigated by the unit, and the
number of types of violations found.
(3) The amount of wages found to be unlawfully withheld from
workers, and the amount of unpaid wages recovered for workers.
(4) The amount of penalties and unpaid wages transferred to the
General Fund as a result of the efforts of the unit.
SEC. 28. Section 110 of the Labor Code is amended to read:
110. As used in this chapter:
(a) "Appeals board" means the Workers' Compensation Appeals Board.
The title of a member of the board is "commissioner."
(b) "Administrative director" means the Administrative Director of
the Division of Workers' Compensation.
(c) "Division" means the Division of Workers' Compensation.
(d) "Medical director" means the physician appointed by the
Industrial Medical Council pursuant to Section 122.
(e) "Qualified medical evaluator" means physicians appointed by
the Industrial Medical Council pursuant to Section 139.2.
(f) "Court administrator" means the administrator of the workers'
compensation adjudicatory process at the trial level.
SEC. 29. Section 118 is added to the Labor Code, to read:
118. (a) The court administrator, on behalf of the administrative
director, and with the assistance of the Commission on Health and
Safety and Workers' Compensation, shall direct a study patterned
after the Judicial Council's review of the California courts. The
study will focus on the types of changes that may be necessary for
the system to "accomplish substantial justice in all cases
expeditiously, inexpensively, and without incumbrance of any
character," as required by Section 4 of Article XIV of the California
Constitution.
(b) The study shall include, but not be limited to, an evaluation
of (1) the manner in which the WCAB courts perform their functions;
(2) the court's organizational structure and workflow; and (3) the
current level of technological support.
(c) The study shall provide recommendations for:
(1) Appropriate timeframes for each step of the adjudication
process.
(2) Proposals for improving workflow.
(3) Appropriate methods of calendar setting to maximize use of
calendar time.
(4) Appropriate handling of continuances and preemptory
challenges.
(5) Appropriate staffing levels to ensure timeliness of case
resolution.
(6) Appropriate measures to recruit and train judges, evaluate
their performance, and discipline them when necessary.
(7) Technological improvements needed.
(8) Any other changes to improve the WCAB court system.
SEC. 30. Section 123.3 of the Labor Code is amended to read:
123.3. Any official reporter employed by the administrative
director shall render stenographic or clerical assistance as directed
by the court administrator when the court administrator determines
that the reporter is not engaged in the performance of any other duty
imposed by law.
SEC. 31. Section 123.5 of the Labor Code is amended to read:
123.5. (a) Workers' compensation judges employed by the
administrative director and supervised by the court administrator
pursuant to this chapter shall be taken from an eligible list of
attorneys licensed to practice law in this state, who have the
qualifications prescribed by the State Personnel Board. In
establishing eligible lists for this purpose, state civil service
examinations shall be conducted in accordance with the State Civil
Service Act (Part 2 (commencing with Section 18500) of Division 5 of
Title 2 of the Government Code). Every workers' compensation judge
shall maintain membership in the State Bar of California during his
or her tenure.
A workers' compensation judge may not receive his or her salary as
a workers' compensation judge while any cause before the workers'
compensation judge remains pending and undetermined for 90 days after
it has been submitted for decision.
(b) All workers' compensation judges appointed on or after January
1, 2002, shall be attorneys licensed to practice law in California
for five or more years prior to their appointment and shall have
experience in workers' compensation law.
(c) All workers' compensation administrative law judges shall be
subject to the jurisdiction of the Commission on Judicial
Performance.
SEC. 32. Section 123.6 of the Labor Code is amended to read:
123.6. (a) All workers' compensation administrative law judges
employed by the administrative director and supervised by the court
administrator shall subscribe to the Code of Judicial Ethics adopted
by the Supreme Court pursuant to subdivision (m) of Section 18 of
Article VI of the California Constitution for the conduct of judges
and shall not otherwise, directly or indirectly, engage in conduct
contrary to that code and to the commentary to the Code of Judicial
Ethics made by the California Judges Association.
The administrative director shall adopt regulations to enforce
this section based on recommendations from the court administrator.
Existing regulations shall remain in effect until new regulations
based on the recommendations of the court administrator have become
effective. To the extent possible, the rules shall be consistent
with the procedures established by the Commission on Judicial
Performance for regulating the activities of state judges, and, to
the extent possible, with the gift, honoraria, and travel
restrictions on legislators contained in the Political Reform Act of
1974 (Title 9 (commencing with Section 81000) of the Government
Code).
(b) Honoraria or travel allowed by the court administrator, and
not otherwise prohibited by this section in connection with any
public or private conference, convention, meeting, social event, or
like gathering, the cost of which is significantly paid for by
attorneys who practice before the board, may not be accepted unless
the court administrator has provided prior approval in writing to the
workers' compensation administrative law judge allowing him or her
to accept those payments.
SEC. 33. Section 124 of the Labor Code is amended to read:
124. (a) In administering and enforcing this division and
Division 4 (commencing with Section 3200), the division shall protect
the interests of injured workers who are entitled to the timely
provision of compensation.
(b) The administrative director, in consultation with the court
administrator, shall advise the Industrial Medical Council on a form
adopted by the council whether individual qualified medical
evaluators have prepared formal medical evaluations that can be
satisfactorily rated by the office.
(c) Forms and notices required to be given to employees by the
division shall be in English and Spanish.
SEC. 34. Section 127 of the Labor Code is amended to read:
127. The administrative director and court administrator may:
(a) Charge and collect fees for copies of papers and records, for
certified copies of official documents and orders or of the evidence
taken or proceedings had, for transcripts of testimony, and for
inspection of case files not stored in the place where the inspection
is requested. The administrative director shall fix those fees in
an amount sufficient to recover the actual costs of furnishing the
services. No fees for inspection of case files shall be charged to
an injured employee or his or her representative.
(b) Publish and distribute from time to time, in addition to the
reports to the Governor, further reports and pamphlets covering the
operations, proceedings, and matters relative to the work of the
division.
(c) Prepare, publish, and distribute an office manual, for which a
reasonable fee may be charged, and to which additions, deletions,
amendments, and other changes from time to time may be adopted,
published, and distributed, for which a reasonable fee may be charged
for the revision, or for which a reasonable fee may be fixed on an
annual subscription basis.
(d) Fix and collect reasonable charges for publications issued.
SEC. 35. Section 127.5 is added to the Labor Code, to read:
127.5. In the exercise of his or her functions, the court
administrator shall further the interests of uniformity and
expedition of proceedings before workers' compensation administrative
law judges, assure that all workers' compensation administrative law
judges are qualified and adhere to deadlines mandated by law or
regulations, and manage procedural matters at the trial level.
SEC. 36. Section 129 of the Labor Code is amended to read:
129. (a) To make
certain that injured workers, and their dependents in the event of
their death, receive promptly and accurately the full measure of
compensation to which they are entitled, the administrative director
shall audit insurers, self-insured employers, and third-party
administrators to determine if they have met their obligations under
this code. Each audit subject shall be audited at least once every
five years. The audit subjects shall be selected and the audits
conducted pursuant to subdivision (b). The results of audits of
insurers shall be provided to the Insurance Commissioner and the
results of audits of self-insurers and third-party administrators
shall be provided to the Director of Industrial Relations. Nothing
in this section shall restrict the authority of the Director of
Industrial Relations or the Insurance Commissioner to audit their
licensees.
(b) The administrative director shall schedule and conduct audits
as follows:
(1) A profile audit review of every audit subject shall be
conducted once every five years and on additional occasions indicated
by target audit criteria. The administrative director shall
annually establish a profile audit review performance standard that
will identify the poorest performing audit subjects.
(2) A full compliance audit shall be conducted of each profile
audited subject failing to meet or exceed the profile audit review
performance standard. The full compliance audit shall be a
comprehensive and detailed evaluation of the audit subject's
performance. The administrative director shall annually establish a
full compliance audit performance standard that will identify the
audit subjects that are performing satisfactorily. Any full
compliance audit subject that fails to meet or exceed the full
compliance audit performance standard shall be audited again within
two years.
(3) A targeted profile audit review or a full compliance audit may
be conducted at any time in accordance with target audit criteria
adopted by the administrative director. The target audit criteria
shall be based on information obtained from benefit notices, from
information and assistance officers, and from other reliable sources
providing factual information that indicates an insurer, self-insured
employer, or third-party administrator is failing to meet its
obligations under this division or Division 4 (commencing with
Section 3200) or the regulations of the administrative director.
(c) If, as a result of a profile audit review or a full compliance
audit, the administrative director determines that any compensation,
interest, or penalty is due and unpaid to an employee or dependent,
the administrative director shall issue and cause to be served upon
the insurer, self-insured employer, or third-party administrator a
notice of assessment detailing the amounts due and unpaid in each
case, and shall order the amounts paid to the person entitled
thereto. The notice of assessment shall be served personally or by
registered mail in accordance with subdivision (c) of Section 11505
of the Government Code. A copy of the notice of assessment shall
also be sent to the affected employee or dependent.
If the amounts are not paid within 30 days after service of the
notice of assessment, the employer shall also be liable for
reasonable attorney's fees necessarily incurred by the employee or
dependent to obtain amounts due. The administrative director shall
advise each employee or dependent still owed compensation after this
30-day period of his or her rights with respect to the commencement
of proceedings to collect the compensation owed. Amounts unpaid
because the person entitled thereto cannot be located shall be paid
to the Workers' Compensation Administration Revolving Fund. The
Director of Industrial Relations shall promulgate rules and
regulations establishing standards and procedures for the payment of
compensation from moneys deposited in the Workers' Compensation
Administration Revolving Fund whenever the person entitled thereto
applies for compensation.
(d) A determination by the administrative director that an amount
is or is not due to an employee or dependent shall not in any manner
limit the jurisdiction or authority of the appeals board to determine
the issue.
(e) Annually, commencing on April 1, 1991, the administrative
director shall publish a report detailing the results of audits
conducted pursuant to this section during the preceding calendar
year. The report shall include the name of each insurer,
self-insured employer, and third-party administrator audited during
that period. For each insurer, self-insured employer, and
third-party administrator audited the report shall specify the total
number of files audited, the number of violations found by type and
amount of compensation, interest and penalties payable, and the
amount collected for each violation. The administrative director
shall also publish and make available to the public on request a list
ranking all insurers, self-insured employers, and third-party
administrators audited during the period according to their
performance measured by the profile audit review and full compliance
audit performance standards.
These reports shall not identify the particular claim file that
resulted in a particular violation or penalty. Except as required by
this subdivision or other provisions of law, the contents of
individual claim files and auditor's working papers shall be
confidential. Disclosure of claim information to the administrative
director pursuant to an audit shall not waive the provisions of the
Evidence Code relating to privilege.
(f) A profile audit review of the adjustment of claims against the
Uninsured Employers Fund by the claims and collections unit of the
Division of Workers' Compensation shall be conducted at least every
five years. The results of this profile audit review shall be
included in the report required by subdivision (e).
SEC. 37. Section 129.5 of the Labor Code is amended to read:
129.5. (a) The administrative director may assess an
administrative penalty against an insurer, self-insured employer, or
third-party administrator for any of the following:
(1) Failure to comply with the notice of assessment issued
pursuant to subdivision (c) of Section 129 within 15 days of receipt.
(2) Failure to pay when due the undisputed portion of an indemnity
payment, the reasonable cost of medical treatment of an injured
worker, or a charge or cost implementing an approved vocational
rehabilitation plan.
(3) Failure to comply with any rule or regulation of the
administrative director.
(b) The administrative director shall promulgate regulations
establishing a schedule of violations and the amount of the
administrative penalty to be imposed for each type of violation. The
schedule shall provide for imposition of a penalty of up to one
hundred dollars ($100) for each violation of the less serious type
and for imposition of penalties in progressively higher amounts for
the most serious types of violations to be set at up to five thousand
dollars ($5,000) per violation. The administrative director is
authorized to impose penalties pursuant to rules and regulations
which give due consideration to the appropriateness of the penalty
with respect to the following factors:
(1) The gravity of the violation.
(2) The good faith of the insurer, self-insured employer, or
third-party administrator.
(3) The history of previous violations, if any.
(4) Whether the audit subject has met or exceeded the profile
audit review performance standard.
(5) Whether a full compliance audit subject has met or exceeded
the full compliance audit performance standard.
(6) The size of the audit subject location.
(c) The administrative director shall assess penalties as follows:
(1) If, after a profile audit review, the administrative director
determines that the profile audit subject met or exceeded the profile
audit review performance standard, no penalties shall be assessed,
but the audit subject shall be required to pay any compensation due
and penalties due under subdivision (d) of Section 4650 as provided
in subdivision (c) of Section 129.
(2) If, after a full compliance audit, the administrative director
determines that the audit subject met or exceeded the full
compliance audit performance standards, penalties for unpaid or late
paid compensation, but no other penalties, shall be assessed. The
audit subject shall be required to pay any compensation due and
penalties due under subdivision (d) of Section 4650 as provided in
subdivision (c) of Section 129.
(3) If, after a full compliance audit, the administrative director
determines that the audit subject failed to meet the full compliance
audit performance standards, penalties shall be assessed as provided
in a full compliance audit failure penalty schedule to be adopted by
the administrative director. The full compliance audit failure
penalty schedule shall adjust penalty levels relative to the size of
the audit location to mitigate inequality between total penalties
assessed against small and large audit subjects. The penalty amounts
provided in the full compliance audit failure penalty schedule for
the most serious type of violations shall not be limited by
subdivision (b), but in no event shall the penalty for a single
violation exceed forty thousand dollars ($40,000).
(d) The notice of penalty assessment shall be served personally or
by registered mail in accordance with subdivision (c) of Section
11505 of the Government Code. The notice shall be in writing and
shall describe the nature of the violation, including reference to
the statutory provision or rule or regulation alleged to have been
violated. The notice shall become final and the assessment shall be
paid unless contested within 15 days of receipt by the insurer,
self-insured employer, or third-party administrator.
(e) In addition to the penalty assessments permitted by
subdivisions (a), (b), and (c), the administrative director may
assess a civil penalty, not to exceed one hundred thousand dollars
($100,000), upon finding, after hearing, that an employer, insurer,
or third-party administrator for an employer has knowingly committed
or performed with sufficient frequency so as to indicate a general
business practice any of the following:
(1) Induced employees to accept less than compensation due, or
made it necessary for employees to resort to proceedings against the
employer to secure compensation.
(2) Refused to comply with known and legally indisputable
compensation obligations.
(3) Discharged or administered compensation obligations in a
dishonest manner.
(4) Discharged or administered compensation obligations in a
manner as to cause injury to the public or those dealing with the
employer or insurer.
Any employer, insurer, or third-party administrator that fails to
meet the full compliance audit performance standards in two
consecutive full compliance audits shall be rebuttably presumed to
have engaged in a general business practice of discharging and
administering its compensation obligations in a manner causing injury
to those dealing with it.
Upon a second or subsequent finding, the administrative director
shall refer the matter to the Insurance Commissioner or the Director
of Industrial Relations and request that a hearing be conducted to
determine whether the certificate of authority, certificate of
consent to self-insure, or certificate of consent to administer
claims of self-insured employers, as the case may be, shall be
revoked.
(f) An insurer, self-insured employer, or third-party
administrator may file a written request for a conference with the
administrative director within seven days after receipt of a notice
of penalty assessment issued pursuant to subdivision (a), (c), or
(d). Within 15 days of the conference, the administrative director
shall issue a notice of findings and serve it upon the contesting
party by registered or certified mail. Any amount found due by the
administrative director shall become due and payable 30 days after
receipt of the notice of findings. The 30-day period shall be tolled
during any appeal. A writ of mandate may be taken from the findings
to the appropriate superior court upon execution by the contesting
party of a bond to the state in the principal sum that is double the
amount found due and ordered by the administrative director, on the
condition that the contesting party shall pay any judgment and costs
rendered against it for the amount.
(g) An insurer, self-insured employer, or third-party
administrator may file a written request for a hearing before the
Workers' Compensation Appeals Board within seven days after receipt
of a notice of penalty assessment issued pursuant to subdivision (e).
Within 30 days of the hearing, the appeals board shall issue
findings and orders and serve them upon the contesting party in the
manner provided in its rules. Any amount found due by the appeals
board shall become due and payable 45 days after receipt of the
notice of findings. Judicial review of the findings and order shall
be had in the manner provided by Article 2 (commencing with Section
5950) of Chapter 7 of Part 4 of Division 4. The 45-day period shall
be tolled during appellate proceedings upon execution by the
contesting party of a bond to the state in a principal sum that is
double the amount found due and ordered by the appeals board on the
condition that the contesting party shall pay the amount ultimately
determined to be due and any costs awarded by an appellate court.
(h) An insurer, self-insured employer, or third-party
administrator may file a written request for a conference with the
administrative director within seven days after receipt of the notice
of penalty assessment issued pursuant to subdivision (a) or (d).
Within 15 days of the conference, the administrative director shall
issue a notice of findings and serve it upon the contesting party by
registered or certified mail. Any amount found due by the
administrative director shall become due and payable 30 days after
receipt of the notice of findings. The 30-day period shall be tolled
during any appeal. A writ of mandate may be taken from the findings
to the appropriate superior court upon the execution by the
contesting party of a bond to the state in the principal sum that is
double the amount found due and ordered by the administrative
director, on the condition that the contesting party shall pay any
judgment and costs rendered against it for the amount.
(i) Nothing in this section shall create nor eliminate a civil
cause of action for the employee and his or her dependents.
(j) All moneys collected under this section shall be deposited in
the State Treasury and credited to the Workers' Compensation
Administration Revolving Fund.
SEC. 38. Section 133 of the Labor Code is amended to read:
133. The Division of Workers' Compensation, including the
administrative director, the court administrator, and the appeals
board, shall have power and jurisdiction to do all things necessary
or convenient in the exercise of any power or jurisdiction conferred
upon it under this code.
SEC. 39. Section 138 of the Labor Code is amended to read:
138. The administrative director and the court administrator may
each appoint a deputy to act during that time as he or she may be
absent from the state due to official business, vacation, or illness.
SEC. 40. Section 138.1 of the Labor Code is amended to read:
138.1. (a) The administrative director shall be appointed by the
Governor with the advice and consent of the Senate and shall hold
office at the pleasure of the Governor. He or she shall receive the
salary provided for by Chapter 6 (commencing with Section 11550) of
Part 1 of Division 3 of Title 2 of the Government Code.
(b) The court administrator shall be appointed by the Governor
with the advice and consent of the Senate. The court administrator
shall hold office at the pleasure of the director and shall report to
the administrative director. The court administrator shall receive
the salary provided for by Chapter 6 (commencing with Section 11550)
of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 41. Section 138.2 of the Labor Code is amended to read:
138.2. (a) The headquarters of the Division of Workers'
Compensation shall be based at and operated from a centrally located
city.
The administrative director and the court administrator shall have
an office in that city with suitable rooms, necessary office
furniture, stationery, and supplies, and may rent quarters in other
places for the purpose of establishing branch or service offices, and
for that purpose may provide those offices with necessary furniture,
stationery and supplies.
(b) The administrative director shall provide suitable rooms, with
necessary office furniture, stationery and supplies, for the appeals
board at the centrally located city in which the board shall be
based and from which it shall operate, and may rent quarters in other
places for the purpose of establishing branch or service offices for
the appeals board, and for that purpose may provide those offices
with necessary furniture, stationery, and supplies.
(c) All meetings held by the administrative director shall be open
and public. Notice thereof shall be published in papers of general
circulation not more than 30 days and not less than 10 days prior to
each meeting in Sacramento, San Francisco, Fresno, Los Angeles and
San Diego. Written notice of all meetings shall be given to all
persons who request in writing directed to the administrative
director that they be given notice.
SEC. 42. Section 138.4 of the Labor Code is amended to read:
138.4. (a) For the purpose of this section, "claims administrator"
means a self-administered workers' compensation insurer; or a
self-administered self-insured employer; or a self-administered
legally-uninsured employer; or a self-administered joint powers
authority; or a third-party claims administrator for an insurer, a
self-insured employer, a legally-uninsured employer, or a joint
powers authority.
(b) With respect to injuries resulting in lost time beyond the
employee's work shift at the time of injury or medical treatment
beyond first aid:
(1) If the claims administrator obtains knowledge that the
employer has not provided a claim form or a notice of potential
eligibility for benefits to the employee, it shall provide the form
and notice to the employee within three working days of its knowledge
that the form or notice was not provided.
(2) If the claims administrator cannot determine if the employer
has provided a claim form and notice of potential eligibility for
benefits to the employee, the claims administrator shall provide the
form and notice to the employee within 30 days of the administrator's
date of knowledge of the claim.
(c) The administrative director shall prescribe reasonable rules
and regulations for serving on the employee (or employee's
dependents, in the case of death), notices dealing with the payment,
nonpayment, or delay in payment of temporary disability, permanent
disability, and death benefits and the provision of vocational
rehabilitation services, notices of any change in the amount or type
of benefits being provided, the termination of benefits, and the
rejection of any liability for compensation, and an accounting of the
benefits paid.
(d) A comprehensive guide published or approved by the
administrative director, meeting the criteria specified in
subdivision (a) of Section 139.6, shall be included with the first
notice of payment, notice of delay in payment, notice of nonpayment,
or notice of rejection of any liability served on each injured
employee claimant. Each notice required under subdivision (c) shall
refer the claimant to the relevant portions of the comprehensive
guide required in this subdivision. Additional copies of the
comprehensive guide shall be provided to claimants upon request.
(e) Compliance with subdivision (d) relieves the claims
administrator of the obligation to provide, within the main body of
notice letters, the basic information and concepts contained in the
comprehensive guide. However, every notice required by this section
shall be accompanied, outside the main body of the letter, by the
following written statements, printed in at least 12-point font size:
(1) You have a right to disagree with decisions affecting your
claim. For more information about this, see (title of the
comprehensive guide required in subdivision (d) and relevant sections
or page numbers).
(2) You can obtain free information from an Information &
Assistance officer of the state Division of Workers' Compensation by
calling (telephone number of nearest I&A office). Or, you can hear
recorded information by calling (applicable I&A telephone number(s)).
(3) You can consult an attorney. Most attorneys offer one free
consultation. If you decide to hire an attorney, his or her fee will
be taken out of some of your benefits. For names of workers'
compensation attorneys, call the State Bar of California at
(telephone number of the State Bar of California's legal
specialization program, or its equivalent).
SEC. 43. Section 139 of the Labor Code is amended to read:
139. (a) The Industrial Medical Council shall consist of 11
doctors of medicine, at least one of whom shall be a psychiatrist and
at least one of whom shall specialize in occupational medicine, two
doctors of osteopathic medicine, two doctors of chiropractic, one
physical therapist, one doctor of psychology, one doctor of podiatric
medicine, and one acupuncturist, all of whom shall be licensed to
practice in this state, and one medical economist. The
administrative director shall be an ex officio, nonvoting member of
the council, and the medical director appointed pursuant to Section
122 shall serve as executive secretary of the council.
(b) The Governor shall appoint six doctors of medicine, two
doctors of osteopathic medicine, one doctor of chiropractic, and one
medical economist to the council. The Senate Committee on Rules
shall appoint three doctors of medicine, one of whom shall be a
psychiatrist, one doctor of chiropractic, and the acupuncturist. The
Speaker of the Assembly shall appoint two doctors of medicine, one
of whom shall be an occupational medicine specialist, the physical
therapist, the doctor of psychology, and the doctor of podiatric
medicine.
The term of office of members of the council shall be four years,
and a member shall hold office until the appointment of a successor.
However, the initial terms of three of the doctors of medicine
appointed by the Governor shall expire, respectively, on December 31,
1991, December 31, 1992, and December 31, 1993, and the initial
terms of the doctors of medicine appointed by the Speaker of the
Assembly shall expire, respectively, on December 31, 1991, December
31, 1992, and December 31, 1993. The initial term of one doctor of
osteopathic medicine and the doctor of psychology shall both expire
on December 31, 1991. Any vacancy shall be filled by the original
appointing authority for the unexpired term.
(c) The 11 doctors of medicine and the doctors of osteopathic
medicine of the council shall represent medical specialties concerned
with the treatment of industrial injury and disease. The doctors of
medicine shall be appointed after consultation with the statewide
and local associations of the medical profession. The doctors of
osteopathic medicine, psychology, and podiatric medicine shall be
appointed after consultation with the statewide associations of the
osteopathic medical profession, psychologists, and podiatric
medicine. The doctors of chiropractic shall be appointed after
consultation with statewide and local associations of the
chiropractic profession.
(d) Any physician of a type which must be represented pursuant to
subdivision (a) may be considered for appointment to the council if
the following qualifications are met:
(1) A physician and surgeon shall be board certified in his or her
specialty or, if a doctor of chiropractic, shall be certified in a
chiropractic specialty recognized and approved by the California
Chiropractic Association, the International Chiropractors Association
of California, or the American Chiropractic Association, or if a
psychologist, shall be board certified in clinical psychology, or
hold a doctoral degree in psychology from an accredited university or
professional school and have not less than five years' postdoctoral
experience in the diagnosis and treatment of emotional and mental
disorders.
(2) The physician and podiatrist shall be experienced in treating
and evaluating industrial injuries and shall maintain an active
practice, of which at least one-third of the total practice time is
devoted to direct patient treatment.
(e) Members of the council shall, within the scope of each member'
s professional training, do all of the following:
(1) Maintain liaisons with the medical, osteopathic, chiropractic,
psychological, and podiatric professions.
(2) Counsel and assist the administrative director and perform
other duties as the administrative director may request.
(3) Assist in recruiting physicians for the medical bureau of the
division.
(4) Assist in developing guidelines for the determination of
disputed questions of clinical fact, including guidelines for the
range of time normally required to perform a comprehensive
medical-legal evaluation, as well as the content of those procedures.
The guidelines shall include the range of time normally required
for direct patient contact between the physician and the patient in
each such procedure.
(5) Suggest standards for improving care furnished to injured
employees.
(6) Undertake continuing studies of developments in the field of
rehabilitation, and continuously inform treating physicians of these
developments.
(7) Recommend reasonable levels of fees for physicians performing
services under Division 4 (commencing with Section 3200).
(8) In coordination with the administrative director, monitor and
measure changes in the cost and frequency of the most common medical
services, and adopt guidelines for the treatment of common industrial
injuries on or before July 1, 1994. The guidelines shall reflect
practices as generally accepted by the health care community, and
shall apply the current standards of care, including, but not limited
to, appropriate and inappropriate diagnostic techniques, treatment
modalities, adjustive modalities,
length of treatment, and appropriate specialty referrals.
On or before July 1, 1994, the administrative director shall adopt
model utilization protocols in order to provide utilization review
standards. All insurers shall comply with this protocol by July 1,
1995. The Industrial Medical Council shall promulgate guidelines on
or before January 1, 2004, for the medical treatment of conditions
associated with common workplace injuries. The treatment guidelines
shall reflect best medical practices and in all cases shall be
concerned exclusively with improving the condition of injured
workers. In developing the guidelines, the Industrial Medical
Council shall consult medical societies, academic medical centers,
and nationally recognized standards for the treatment of injured
workers, as appropriate. The treatment guidelines shall be advisory
only, but may be considered as provided in Section 5703 by any board
or council charged with the task of disciplining treating physicians,
and in any training of qualified medical evaluators.
(9) In consultation with the administrative director, promulgate a
form which may be used by treating physicians to report on medical
issues necessary to determine an employee's compensation.
(f) The council shall appoint an advisory committee on psychiatric
injuries with both psychologists and psychiatrists as members and
shall consider the advisory committee's recommendations concerning
psychiatric injuries. The council may appoint advisory committees
for other specialties as may be necessary to the performance of its
duties.
(g) No action of the council shall be taken unless concurred in by
not less than nine members present and voting at a meeting.
(h) Members of the council shall receive actual, necessary
traveling expenses and a per diem allowance of one hundred dollars
($100) for each day spent in meetings of the council.
SEC. 44. Section 139.05 of the Labor Code is repealed.
SEC. 45. Section 139.07 is added to the Labor Code, to read:
139.07. (a) The Industrial Medical Council shall, on or before
July 1, 2002, contract with a public or private university or policy
institute in the state to develop physician utilization, quality of
care, and outcome measurement data.
(b) On or before July 1, 2003, and annually thereafter, the
Industrial Medical Council shall publish a report that includes this
data. It is the intent of the Legislature that this ongoing process
be designed and implemented to track treatment patterns in the state
and to facilitate the use of best medical practices by treating
physicians.
(c) In implementing this section, the Industrial Medical Council
shall ensure the confidentiality and protection of patient-specific
data.
SEC. 46. Section 139.6 of the Labor Code is amended to read:
139.6. (a) The administrative director shall establish and effect
within the Division of Workers' Compensation a continuing program
to provide information and assistance concerning the rights,
benefits, and obligations of the workers' compensation law to
employees and employers subject thereto. The program shall include,
but not be limited to, the following:
(1) The preparation, publishing, and as necessary, updating, of a
guide to the California workers' compensation system for employers.
The guide shall detail, in easily understandable language, the rights
and obligations of employees and employers, the procedures for
obtaining benefits, and means provided for resolving disputes. The
guide shall be provided to all labor and employer organizations known
to the administrative director, and to any other person upon
request.
(2) The preparation, publishing, and as necessary, updating, of a
comprehensive guide advising injured workers of their basic rights
under workers' compensation law, informing them of rights under the
Americans with Disabilities Act and the provisions of the Fair
Employment and Housing Act relating to individuals with a disability,
and informing them regarding injuries arising out of the negligence
of a third party. The guide shall be easily understandable and
available in both English and Spanish. It shall be provided to all
labor and employer organizations known to the administrative
director, and to any other person upon request. The administrative
director shall prepare and publish the guide after consultation with
the Commission on Health and Safety and Workers' Compensation. The
content shall include, but not be limited to:
(A) The kinds of events, injuries, and illnesses covered by
workers' compensation.
(B) The time limits for an employer to be notified of an
occupational injury and the consequences if the employer is not
notified within the time limit.
(C) How to fill out and file a claim form.
(D) How decisions are made on whether benefits will be provided
and what happens with the claim form after it is filed.
(E) The injured employee's right to receive medical care that is
reasonably required to cure or relieve the effects of a job injury.
(F) From whom an employee can obtain medical care for a job
injury.
(G) The role and function of the primary treating physician.
(H) The rights of an employee to select and change the treating
physician pursuant to the provisions of subdivision (e) of Section
3550 and Section 4600.
(I) How to get medical care while a claim is pending.
(J) The purpose of comprehensive medical evaluations; how to
request a comprehensive medical evaluation; and the possible
consequences of obtaining a comprehensive medical evaluation.
(K) The right of an employee to have another person present during
medical examinations.
(L) The right of an employee to request and receive copies of
medical reports pursuant to rules and regulations adopted by the
administrative director, and pursuant to Sections 123100 to 123149.5,
inclusive, of the Health and Safety Code.
(M) The right of an employee to receive temporary disability
indemnity, permanent disability indemnity, vocational rehabilitation
services, and death benefits, as appropriate.
(N) Steps to help an injured employee return to work; how
decisions are made on what work will be assigned while the employee
is recovering; and modified or alternative work that may be offered
to an employee who has a permanent disability.
(O) The criteria for the beginning and ending of temporary
disability benefits; the waiting period for the first temporary
disability payment; the amount and frequency of temporary disability
payments; and how the payment amount is determined, including the
calculation of overtime pay and pay from other jobs.
(P) The criteria for the beginning and ending of permanent
disability benefits; the amount and frequency of permanent disability
payments; and how the amount of individual permanent disability
payments and the total amount of permanent disability benefits are
determined.
(Q) The importance of a "permanent and stationary" medical report
and how it affects permanent disability benefits; the importance of a
rating and how it affects permanent disability benefits; and the
significance of a job title and how it affects ratings.
(R) How permanent disability advances reduce a final award or
settlement; the consequences of settling through a "compromise and
release" or with "stipulations with request for award."
(S) The criteria for the beginning and ending of vocational
rehabilitation services and payments; the monetary limit on
vocational rehabilitation benefits pursuant to Section 139.5; the
amount and frequency of vocational rehabilitation maintenance
allowance payments; and how the payment amount is determined.
(T) The significance of an employee's job description or a job
analysis and how it affects vocational rehabilitation benefits.
(U) The criteria for paying death benefits and how the amount of
death benefits is determined.
(V) The rights of an employee to increased workers' compensation
payments or an increased workers' compensation award if payments are
delayed.
(W) Protections against discrimination pursuant to Section 132a.
(X) Whom in claims administration a claimant can call for
information; the extent to which a claims administrator can give
information if the claimant is represented; and what the claimant can
do if the claims administrator is difficult to reach by telephone.
(Y) The right of an employee to consult a state information and
assistance officer or attorney, or both, for assistance; the
telephone number of the division's information and assistance
services; and the telephone number of the State Bar of California's
legal specialization program or equivalent.
(Z) The right of an employee to dispute a decision and the steps
that can be taken if the claimant disagrees with a decision; the role
of workers' compensation administrative law judges; and the role of
the Workers' Compensation Appeals Board.
(AA) Other sources of information and help in workers'
compensation.
(BB) Other systems that may provide benefits and assistance to
injured employees (or dependents), including, but not limited to,
unemployment compensation disability benefits.
(b) In each district and regional office of the division, the
administrative director shall appoint an information and assistance
officer, and any other deputy information and assistance officers as
the work of the office may require. The administrative director
shall provide office facilities and clerical support appropriate to
the functions of these information and assistance officers.
(c) Each information and assistance officer shall be responsible
for the performance of the following duties:
(1) Providing continuing information concerning rights, benefits,
and obligations under workers' compensation laws to injured workers,
employers, lien claimants, and other interested parties.
(2) Upon request by the injured worker, assisting in the prompt
resolution of misunderstanding, disputes, and controversies arising
out of claims for compensation, without formal proceedings, in order
that full and timely compensation benefits shall be furnished. In
performing this duty, information and assistance officers shall not
be responsible for reviewing applications for adjudication or
declarations of readiness to proceed. This function shall be
performed by workers' compensation judges. This function may also be
performed by settlement conference referees upon delegation by the
appeals board.
(3) Distributing any comprehensive guides and other materials
prepared and approved by the administrative director to all inquiring
injured workers and any other parties that may request copies.
(4) Establishing and maintaining liaison with the persons located
in the geographic area served by the district office, with other
affected state agencies, and with organizations representing
employees, employers, insurers, and the medical community.
SEC. 47. Section 3501 of the Labor Code is amended to read:
3501. (a) A child under the age of 18 years, or a child of any
age found by any trier of fact, whether contractual, administrative,
regulatory, or judicial, to be physically or mentally incapacitated
from earning, shall be conclusively presumed to be wholly dependent
for support upon a deceased employee-parent with whom that child is
living at the time of injury resulting in death of the parent or for
whose maintenance the parent was legally liable at the time of injury
resulting in death of the parent, there being no surviving totally
dependent parent.
(b) A spouse to whom a deceased employee is married at the time of
death shall be conclusively presumed to be wholly dependent for
support upon the deceased employee if the surviving spouse earned
thirty thousand dollars ($30,000) or less in the twelve months
immediately preceding the death.
SEC. 48. Section 3550 of the Labor Code is amended to read:
3550. (a) Every employer subject to the compensation provisions
of this division shall post and keep posted in a conspicuous location
frequented by employees, and where the notice may be easily read by
employees during the hours of the workday, a notice that states the
name of the current compensation insurance carrier of the employer,
or when such is the fact, that the employer is self-insured, and who
is responsible for claims adjustment.
(b) Failure to keep any notice required by this section
conspicuously posted shall constitute a misdemeanor, and shall be
prima facie evidence of noninsurance.
(c) This section shall not apply with respect to the employment of
employees as defined in subdivision (d) of Section 3351.
(d) The form and content of the notice required by this section
shall be prescribed by the administrative director, after
consultation with the Commission on Health and Safety and Workers'
Compensation, and shall advise employees that all injuries should be
reported to their employer. The notice shall be easily
understandable. It shall be posted in both English and Spanish where
there are Spanish-speaking employees. The notice shall include the
following information:
(1) How to get emergency medical treatment, if needed.
(2) The kinds of events, injuries, and illnesses covered by
workers' compensation.
(3) The injured employee's right to receive medical care.
(4) The rights of the employee to select and change the treating
physician pursuant to the provisions of Section 4600.
(5) The rights of the employee to receive temporary disability
indemnity, permanent disability indemnity, vocational rehabilitation
services, and death benefits, as appropriate.
(6) To whom injuries should be reported.
(7) The existence of time limits for the employer to be notified
of an occupational injury.
(8) The protections against discrimination provided pursuant to
Section 132a.
(9) The location and telephone number of the nearest information
and assistance officer.
(e) Failure of an employer to provide the notice required by this
section shall automatically permit the employee to be treated by his
or her personal physician with respect to an injury occurring during
that failure.
(f) The form and content of the notice required to be posted by
this section shall be made available to self-insured employers and
insurers by the administrative director. Insurers shall provide this
notice to each of their policyholders, with advice concerning the
requirements of this section and the penalties for a failure to post
this notice.
SEC. 49. Section 3551 of the Labor Code is amended to read:
3551. (a) Every employer subject to the compensation provisions
of this code, except employers of employees defined in subdivision
(d) of Section 3351, shall give every new employee, either at the
time the employee is hired or by the end of the first pay period,
written notice of the information contained in Section 3550. The
content of the notice required by this section shall be prescribed by
the administrative director after consultation with the Commission
on Health and Safety and Workers' Compensation.
(b) The notice required by this section shall be easily
understandable and available in both English and Spanish. In addition
to the information contained in Section 3550, the content of the
notice required by this section shall include:
(1) Generally, how to obtain appropriate medical care for a job
injury.
(2) The role and function of the primary treating physician.
(3) A form that the employee may use as an optional method for
notifying the employer of the name of the employee's "personal
physician," as defined by Section 4600, or "personal chiropractor,"
as defined by subdivision (b) of Section 4601.
(c) The content of the notice required by this section shall be
made available to employers and insurers by the administrative
director. Insurers shall provide this notice to each of their
policyholders, with advice concerning the requirements of this
section and the penalties for a failure to provide this notice to all
employees.
SEC. 50. Section 3552 of the Labor Code is repealed.
SEC. 51. Section 3722 of the Labor Code is amended to read:
3722. (a) At the time the stop order is issued and served
pursuant to Section 3710.1, the director shall also issue and serve a
penalty assessment order requiring the uninsured employer to pay to
the director, for deposit in the State Treasury to the credit of the
Uninsured Employers Fund, the sum of one thousand dollars ($1,000)
per employee employed at the time the order is issued and served, as
an additional penalty for being uninsured at that time.
(b) At any time that the director determines that an employer has
been uninsured for a period in excess of one week during the calendar
year preceding the determination, the director may issue and serve a
penalty assessment order requiring the uninsured employer to pay to
the director, for deposit in the State Treasury to the credit of the
Uninsured Employers Fund, the greater of (1) twice the amount the
employer would have paid in workers' compensation premiums during the
period the employer was uninsured, determined according to
subdivision (c), or (2) the sum of one thousand dollars ($1,000) per
employee employed during the period the employer was uninsured. Any
penalty assessment issued and served by the director pursuant to this
subdivision shall be in lieu of, and not in addition to, any other
penalty issued and served by the director pursuant to subdivision
(a).
(c) If the employer is currently insured, or becomes insured
during the period during which the penalty under subdivision (b) is
being determined, the amount an employer would have paid in workers'
compensation premiums shall be calculated by prorating the current
premium for the number of weeks the employer was uninsured. If the
employer is uninsured at the time the penalty under subdivision (b)
is being determined, the amount an employer would have paid in
workers' compensation premiums shall be calculated by applying the
weekly premium per employee calculated according to subdivision (d)
of Section 11734 of the Insurance Code to the number of weeks the
employer was uninsured. Each employee of the uninsured employer
shall be assumed to be assigned to the governing classification for
that employer as determined by the director after consultation with
the Insurance Commissioner. If the employer contends that the
assignment of the governing classification is incorrect, or that any
employee should be assigned to a different classification, the
employer has the burden to prove that the different classification
should be utilized.
(d) If upon the filing of a claim for compensation under this
division the Workers' Compensation Appeals Board finds that any
employer has not secured the payment of compensation as required by
this division and finds the claim either noncompensable or
compensable, the appeals board shall mail a copy of their findings to
the uninsured employer and the director, together with a direction
to the uninsured employer to file a verified statement pursuant to
subdivision (e).
After the time for any appeal has expired and the adjudication of
the claim has become final, the uninsured employer shall be assessed
and pay as a penalty either of the following:
(1) In noncompensable cases, two thousand dollars ($2,000) per
each employee employed at the time of the claimed injury.
(2) In compensable cases, ten thousand dollars ($10,000) per each
employee employed on the date of the injury.
(e) In order to establish the number of employees the uninsured
employer had on the date of the claimed injury in noncompensable
cases and on the date of injury in compensable cases, the employer
shall submit to the director within 10 days after service of
findings, awards, and orders of the Workers' Compensation Appeals
Board a verified statement of the number of employees in his or her
employ on the date of injury. If the employer fails to submit to the
director this verified statement or if the director disputes the
accuracy of the number of employees reported by the employer, the
director shall use any information regarding the number of employees
as the director may have or otherwise obtains.
(f) Except for penalties assessed under subdivision (b), the
maximum amount of penalties which may be assessed pursuant to this
section is one hundred thousand dollars ($100,000). Payment shall be
transmitted to the director for deposit in the State Treasury to the
credit of the Uninsured Employers Fund.
(g) The Workers' Compensation Appeals Board may provide for a
summary hearing on the sole issue of compensation coverage to effect
the provisions of this section.
SEC. 52. Section 3762 of the Labor Code is amended to read:
3762. (a) Except as provided in subdivisions (b) and (c), the
insurer shall discuss all elements of the claim file that affect the
employer's premium with the employer, and shall supply copies of the
documents that affect the premium at the employer's expense during
reasonable business hours.
(b) The right provided by this section shall not extend to any
document that the insurer is prohibited from disclosing to the
employer under the attorney-client privilege, any other applicable
privilege, or statutory prohibition upon disclosure, or under Section
1877.4 of the Insurance Code.
(c) An insurer, third-party administrator retained by a
self-insured employer pursuant to Section 3702.1 to administer the
employer's workers' compensation claims, and those employees and
agents specified by a self-insured employer to administer the
employer's workers' compensation claims, are prohibited from
disclosing or causing to be disclosed to an employer, any medical
information, as defined in subdivision (b) of Section 56.05 of the
Civil Code, about an employee who has filed a workers' compensation
claim, except as follows:
(1) If the diagnosis of the injury for which workers' compensation
is claimed would affect the employer's premium or reserves, then the
diagnosis may be disclosed pursuant to subdivision (a).
(2) Medical information regarding the injury for which workers'
compensation is claimed that is necessary for the employer to have in
order for the employer to modify the employee's work duties.
SEC. 53. Section 3820 of the Labor Code is amended to read:
3820. (a) In enacting this section, the Legislature declares that
there exists a compelling interest in eliminating fraud in the
workers' compensation system. The Legislature recognizes that the
conduct prohibited by this section is, for the most part, already
subject to criminal penalties pursuant to other provisions of law.
However, the Legislature finds and declares that the addition of
civil money penalties will provide necessary enforcement flexibility.
The Legislature, in exercising its plenary authority related to
workers' compensation, declares that these sections are both
necessary and carefully tailored to combat the fraud and abuse that
is rampant in the workers' compensation system.
(b) It is unlawful to do any of the following:
(1) Willfully misrepresent any fact in order to obtain workers'
compensation insurance at less than the proper rate.
(2) Present or cause to be presented any knowingly false or
fraudulent written or oral material statement in support of, or in
opposition to, any claim for compensation for the purpose of
obtaining or denying any compensation, as defined in Section 3207.
(3) Knowingly solicit, receive, offer, pay, or accept any rebate,
refund, commission, preference, patronage, dividend, discount, or
other consideration, whether in the form of money or otherwise, as
compensation or inducement for soliciting or referring clients or
patients to obtain services or benefits pursuant to Division 4
(commencing with Section 3200) unless the payment or receipt of
consideration for services other than the referral of clients or
patients is lawful pursuant to Section 650 of the Business and
Professions Code or expressly permitted by the Rules of Professional
Conduct of the State Bar.
(4) Knowingly operate or participate in a service that, for
profit, refers or recommends clients or patients to obtain medical or
medical-legal services or benefits pursuant to Division 4
(commencing with Section 3200).
(5) Knowingly assist, abet, solicit, or conspire with any person
who engages in an unlawful act under this section.
(c) For the purposes of this section, "statement" includes, but is
not limited to, any notice, proof of injury, bill for services,
payment for services, hospital or doctor records, X-ray, test
results, medical-legal expenses as defined in Section 4620, or other
evidence of loss, expense, or payment.
(d) Any person who violates any provision of this section shall be
subject, in addition to any other penalties that may be prescribed
by law, to a civil penalty of not less than four thousand dollars
($4,000) nor more than ten thousand dollars ($10,000), plus an
assessment of not more than three times the amount of the medical
treatment expenses paid pursuant to Article 2 (commencing with
Section 4600) and medical-legal expenses paid pursuant to Article 2.5
(commencing with Section 4620) for each claim for compensation
submitted in violation of this section.
(e) Any person who violates subdivision (b) and who has a prior
felony conviction of an offense set forth in Section 1871.1 or 1871.4
of the Insurance Code, or in Section 549 of the Penal Code, shall be
subject, in addition to the penalties set forth in subdivision (d),
to a civil penalty of four thousand dollars ($4,000) for each item or
service with respect to which a violation of subdivision (b)
occurred.
(f) The penalties provided for in subdivisions (d) and (e) shall
be assessed and recovered in a civil action brought in the name of
the people of the State of California by any district attorney.
(g) In assessing the amount of the civil penalty the court shall
consider any one or more of the relevant circumstances presented by
any of the parties to the case, including, but not limited to, the
following: the nature and seriousness of the misconduct, the number
of violations, the persistence of the misconduct, the length of time
over which the misconduct occurred, the willfulness of the defendant'
s misconduct, and the defendant's assets, liabilities, and net worth.
(h) All penalties collected pursuant to this section shall be paid
to the Workers' Compensation Fraud Account in the Insurance Fund
pursuant to Section 1872.83 of the Insurance Code. All costs
incurred by district attorneys in
carrying out this article shall be funded from the Workers'
Compensation Fraud Account. It is the intent of the Legislature
that the program instituted by this article be supported entirely
from funds produced by moneys deposited into the Workers'
Compensation Fraud Account from the imposition of civil money
penalties for workers' compensation fraud collected pursuant to this
section. All moneys claimed by district attorneys as costs of
carrying out this article shall be paid pursuant to a determination
by the Fraud Assessment Commission established by Section 1872.83 of
the Insurance Code and on appropriation by the Legislature.
SEC. 54. Section 3822 is added to the Labor Code, to read:
3822. The administrative director shall, on an annual basis,
provide to every employer, claims adjuster, third-party
administrator, physician, and attorney who participates in the
workers' compensation system a notice that warns the recipient
against committing workers' compensation fraud. The notice shall
specify the penalties that are applied for committing workers'
compensation fraud.
SEC. 55. Section 4061 of the Labor Code is amended to read:
4061. (a) Together with the last payment of temporary disability
indemnity, the employer shall, in a form prescribed by the
administrative director pursuant to Section 138.4, provide the
employee one of the following:
(1) Notice either that no permanent disability indemnity will be
paid because the employer alleges the employee has no permanent
impairment or limitations resulting from the injury or notice of the
amount of permanent disability indemnity determined by the employer
to be payable. The notice shall refer the employee to the relevant
portions of the comprehensive guide, required by subdivision (c) of
Section 138.4, that explain how the employee may obtain a formal
medical evaluation pursuant to subdivision (c) if he or she disagrees
with the position taken by the employer. The notice shall be
accompanied by the form prescribed by the Industrial Medical Council
for requesting assignment of a panel of qualified medical evaluators,
unless the employee is represented by an attorney. If the employer
determines permanent disability indemnity is payable, the employer
shall advise the employee of the amount determined payable and the
basis on which the determination was made and whether there is need
for continuing medical care.
(2) Notice that permanent disability indemnity may be or is
payable, but that the amount cannot be determined because the
employee's medical condition is not yet permanent and stationary.
The notice shall advise the employee that his or her medical
condition will be monitored until it is permanent and stationary, at
which time the necessary evaluation will be performed to determine
the existence and extent of permanent impairment and limitations for
the purpose of rating permanent disability and to determine the need
for continuing medical care, or at which time the employer will
advise the employee of the amount of permanent disability indemnity
the employer has determined to be payable. If an employee is
provided notice pursuant to this paragraph and the employer later
takes the position that the employee has no permanent impairment or
limitations resulting from the injury, or later determines permanent
disability indemnity is payable, the employer shall in either event,
within 14 days of the determination to take either position, provide
the employee with the notice specified in paragraph (1).
(b) Each notice required by subdivision (a) shall be accompanied,
outside the main body of the notice letter, by the written statements
required in subdivision (e) of Section 138.4, printed in at least
12-point font size.
(c) If the parties do not agree to a permanent disability rating
based on the treating physician's evaluation or the assessment of
need for continuing medical care, and the employee is represented by
an attorney, the employer shall seek agreement with the employee on a
physician to prepare a comprehensive medical evaluation of the
employee's permanent impairment and limitations and any need for
continuing medical care resulting from the injury. If no agreement
is reached within 10 days, or any additional time not to exceed 20
days agreed to by the parties, the parties may not later select an
agreed medical evaluator. Evaluations of an employee's permanent
impairment and limitations obtained prior to the period to reach
agreement shall not be admissible in any proceeding before the
appeals board. After the period to reach agreement has expired,
either party may select a qualified medical evaluator to conduct the
comprehensive medical evaluation. Neither party may obtain more than
one comprehensive medical-legal report, provided, however, that any
party may obtain additional reports at their own expense.
(d) If the parties do not agree to a permanent disability rating
based on the treating physician's evaluation, and if the employee is
not represented by an attorney, the employer shall not seek agreement
with the employee on a physician to prepare an additional medical
evaluation. The employer shall immediately provide the employee with
a form prescribed by the medical director with which to request
assignment of a panel of three qualified medical evaluators. The
employee shall select a physician from the panel to prepare a medical
evaluation of the employee's permanent impairment and limitations
and any need for continuing medical care resulting from the injury.
For injuries occurring on or after January 1, 2002, except as
provided in subdivision (b) of Section 4064, the report of the
qualified medical evaluator and the reports of the treating physician
or physicians shall be the only admissible reports and shall be the
only reports obtained by the employee or the employer on the issues
subject to this section.
(e) If an applicant secures a qualified medical evaluator from a
panel pursuant to subdivision (d) or pursuant to subdivision (b) of
Section 4062 and thereafter becomes represented and obtains an
additional qualified medical evaluator, the defense shall have a
corresponding right to secure an additional qualified medical
evaluator.
(f) The represented employee shall be responsible for making an
appointment with an agreed medical evaluator.
(g) The unrepresented employee shall be responsible for making an
appointment with a qualified medical evaluator selected from a panel
of three qualified medical evaluators. The evaluator shall give the
employee, at the appointment, a brief opportunity to ask questions
concerning the evaluation process and the evaluator's background.
The unrepresented employee shall then participate in the evaluation
as requested by the evaluator unless the employee has good cause to
discontinue the evaluation. For purposes of this subdivision, "good
cause" shall include evidence that the evaluator is biased against
the employee because of his or her race, sex, national origin,
religion, or sexual preference or evidence that the evaluator has
requested the employee to submit to an unnecessary medical
examination or procedure. If the unrepresented employee declines to
proceed with the evaluation, he or she shall have the right to a new
panel of three qualified medical evaluators from which to select one
to prepare a comprehensive medical evaluation. If the appeals board
subsequently determines that the employee did not have good cause to
not proceed with the evaluation, the cost of the evaluation shall be
deducted from any award the employee obtains.
(h) Upon selection or assignment pursuant to subdivision (c) or
(d), the medical evaluator shall perform a comprehensive medical
evaluation according to the procedures promulgated by the Industrial
Medical Council under paragraphs (2) and (3) of subdivision (j) of
Section 139.2 and summarize the medical findings on a form prescribed
by the Industrial Medical Council. The comprehensive medical
evaluation shall address all contested medical issues arising from
all injuries reported on one or more claim forms prior to the date of
the employee's initial appointment with the medical evaluator. If,
after a comprehensive medical evaluation is prepared, the employer or
the employee subsequently objects to any new medical issue, the
parties, to the extent possible, shall utilize the same medical
evaluator who prepared the previous evaluation to resolve the medical
dispute.
(i) Except as provided in Section 139.3, the medical evaluator
may obtain consultations from other physicians who have treated the
employee for the injury whose expertise is necessary to provide a
complete and accurate evaluation.
(j) The qualified medical evaluator who has evaluated an
unrepresented employee shall serve the comprehensive medical
evaluation and the summary form on the employee, employer, and the
administrative director. The unrepresented employee or the employer
may submit the treating physician's evaluation for the calculation of
a permanent disability rating. Within 20 days of receipt of the
comprehensive medical evaluation, the administrative director shall
calculate the permanent disability rating according to Section 4660
and serve the rating on the employee and employer.
(k) Any comprehensive medical evaluation concerning an
unrepresented employee which indicates that part or all of an
employee's permanent impairment or limitations may be subject to
apportionment pursuant to Sections 4663 or 4750 shall first be
submitted by the administrative director to a workers' compensation
judge who may refer the report back to the qualified medical
evaluator for correction or clarification if the judge determines the
proposed apportionment is inconsistent with the law.
(l) Within 30 days of receipt of the rating, if the employee is
unrepresented, the employee or employer may request that the
administrative director reconsider the recommended rating or obtain
additional information from the treating physician or medical
evaluator to address issues not addressed or not completely addressed
in the original comprehensive medical evaluation or not prepared in
accord with the procedures of the Industrial Medical Council
promulgated under paragraph (2) or (3) of subdivision (j) of Section
139.2. This request shall be in writing, shall specify the reasons
the rating should be reconsidered, and shall be served on the other
party. If the administrative director finds the comprehensive
medical evaluation is not complete or not in compliance with the
required procedures, the administrative director shall return the
report to the treating physician or qualified medical evaluator for
appropriate action as the administrative director instructs. Upon
receipt of the treating physician's or qualified medical evaluator's
final comprehensive medical evaluation and summary form, the
administrative director shall recalculate the permanent disability
rating according to Section 4660 and serve the rating, the
comprehensive medical evaluation, and the summary form on the
employee and employer.
(m) If a comprehensive medical evaluation from the treating
physician or an agreed medical evaluator or a qualified medical
evaluator selected from a three-member panel resolves any issue so as
to require an employer to provide compensation, the employer shall
commence the payment of compensation or promptly commence proceedings
before the appeals board to resolve the dispute. If the employee
and employer agree to a stipulated findings and award as provided
under Section 5702 or to compromise and release the claim under
Chapter 2 (commencing with Section 5000) of Part 3, or if the
employee wishes to commute the award under Chapter 3 (commencing with
Section 5100) of Part 3, the appeals board shall first determine
whether the agreement or commutation is in the best interests of the
employee and whether the proper procedures have been followed in
determining the permanent disability rating. The administrative
director shall promulgate a form to notify the employee, at the time
of service of any rating under this section, of the options specified
in this subdivision, the potential advantages and disadvantages of
each option, and the procedure for disputing the rating.
(n) No issue relating to the existence or extent of permanent
impairment and limitations or the need for continuing medical care
resulting from the injury may be the subject of a declaration of
readiness to proceed unless there has first been a medical evaluation
by a treating physician or an agreed or qualified medical evaluator.
With the exception of an evaluation or evaluations prepared by the
treating physician or physicians, no evaluation of permanent
impairment and limitations or need for continuing medical care
resulting from the injury shall be obtained prior to service of the
comprehensive medical evaluation on the employee and employer if the
employee is unrepresented, or prior to the attempt to select an
agreed medical evaluator if the employee is represented. Evaluations
obtained in violation of this prohibition shall not be admissible in
any proceeding before the appeals board. However, the testimony,
records, and reports offered by the treating physician or physicians
who treated the employee for the injury and comprehensive medical
evaluations prepared by a qualified medical evaluator selected by an
unrepresented employee from a three-member panel shall be admissible.
SEC. 56. Section 4062 of the Labor Code is amended to read:
4062. (a) If either the employee or employer objects to a medical
determination made by the treating physician concerning the
permanent and stationary status of the employee's medical condition,
the employee's preclusion or likely preclusion to engage in his or
her usual occupation, the extent and scope of medical treatment, the
existence of new and further disability, or any other medical issues
not covered by Section 4060 or 4061, the objecting party shall notify
the other party in writing of the objection within 20 days of
receipt of the report if the employee is represented by an attorney
or within 30 days of receipt of the report if the employee is not
represented by an attorney. These time limits may be extended for
good cause or by mutual agreement. If the employee is represented by
an attorney, the parties shall seek agreement with the other party
on a physician, who need not be a qualified medical evaluator, to
prepare a report resolving the disputed issue. If no agreement is
reached within 10 days, or any additional time not to exceed 20 days
agreed upon by the parties, the parties may not later select an
agreed medical evaluator. Evaluations obtained prior to the period
to reach agreement shall not be admissible in any proceeding before
the appeals board. After the period to reach agreement has expired,
the objecting party may select a qualified medical evaluator to
conduct the comprehensive medical evaluation. Neither party may
obtain more than one comprehensive medical-legal report, provided,
however, that any party may obtain additional reports at their own
expense. The nonobjecting party may continue to rely on the treating
physician's report or may select a qualified medical evaluator to
conduct an additional evaluation.
(b) If the employee is not represented by an attorney, the
employer shall not seek agreement with the employee on a physician to
prepare the comprehensive medical evaluation. The employer shall
immediately provide the employee with a form prescribed by the
medical director with which to request assignment of a panel of three
qualified medical evaluators. The employee shall select a physician
from the panel to prepare a comprehensive medical evaluation. For
injuries occurring on or after January 1, 2002, except as provided in
subdivision (b) of Section 4064, the evaluation of the qualified
medical evaluator selected from a panel of three and the reports of
the treating physician or physicians shall be the only admissible
reports and shall be the only reports obtained by the employee or
employer on issues subject to this section in a case involving an
unrepresented employee.
(c) Upon completing a determination of the disputed medical issue,
the physician selected under subdivision (a) or (b) to perform the
medical evaluation shall summarize the medical findings on a form
prescribed by the Industrial Medical Council and shall serve the
formal medical evaluation and the summary form on the employee,
employer, and administrative director. The medical evaluation shall
address all contested medical issues arising from all injuries
reported on one or more claim forms prior to the date of the employee'
s initial appointment with the medical evaluator. If, after a
medical evaluation is prepared, the employer or the employee
subsequently objects to any new medical issue, the parties, to the
extent possible, shall utilize the same medical evaluator who
prepared the previous evaluation to resolve the medical dispute.
(d) No disputed medical issue specified in subdivision (a) may be
the subject of a declaration of readiness to proceed unless there has
first been an evaluation by the treating physician or an agreed or
qualified medical evaluator.
(e) With the exception of a report or reports prepared by the
treating physician or physicians, no report determining disputed
medical issues set forth in subdivision (a) shall be obtained prior
to the expiration of the period to reach agreement on the selection
of an agreed medical evaluator under subdivision (a). Reports
obtained in violation of this prohibition shall not be admissible in
any proceeding before the appeals board. However, the testimony,
records, and reports offered by the treating physician or physicians
who treated the employee for the injury shall be admissible.
SEC. 57. Section 4062.9 of the Labor Code is amended to read:
4062.9. (a) For injuries occurring on or after January 1, 2002,
in cases where an additional comprehensive medical evaluation is
obtained under Section 4061 or 4062, if the employee has been treated
by his or her personal physician, who was predesignated prior to the
date of injury as provided under Section 4600, or by his or her
personal chiropractor, as defined in subdivision (b) of Section 4601,
the findings of that personal physician or personal chiropractor are
presumed to be correct. This presumption is rebuttable and may be
controverted by a preponderance of medical opinion indicating a
different level of disability. However, the presumption shall not
apply where both parties select qualified medical examiners.
(b) The administrative director and the Industrial Medical Council
shall develop not later than January 1, 2003, and periodically
revise as necessary thereafter, educational materials to be used to
provide treating physicians with information and training in basic
concepts of workers' compensation, the role of the treating
physician, the conduct of permanent and stationary evaluations, and
report writing.
SEC. 58. Section 4064 of the Labor Code is amended to read:
4064. (a) The employer shall be liable for the cost of each
reasonable and necessary comprehensive medical-legal evaluation
obtained by the employee pursuant to Sections 4060, 4061, and 4062.
Each comprehensive medical-legal evaluation shall address all
contested medical issues arising from all injuries reported on one or
more claim forms.
(b) For injuries occurring on or after January 1, 2002, if an
unrepresented employee obtains an attorney after the evaluation
pursuant to subdivision (d) of Section 4061 or subdivision (b) of
Section 4062 has been completed, the employee shall be entitled to
the same reports at employer expense as an employee who has been
represented from the time the dispute arose and those reports shall
be admissible in any proceeding before the appeals board.
(c) Subject to Section 4906, if an employer files an application
for adjudication and the employee is unrepresented at the time the
application is filed, the employer shall be liable for any attorney's
fees incurred by the employee in connection with the application for
adjudication.
(d) The employer shall not be liable for the cost of any
comprehensive medical evaluations obtained by the employee other than
those authorized pursuant to Sections 4060, 4061, and 4062.
However, no party is prohibited from obtaining any medical evaluation
or consultation at the party's own expense. In no event shall an
employer or employee be liable for an evaluation obtained in
violation of subdivision (b) of Section 4060. All comprehensive
medical evaluations obtained by any party shall be admissible in any
proceeding before the appeals board except as provided in
subdivisions (d) and (m) of Section 4061 and subdivisions (b) and (e)
of Section 4062.
SEC. 59. Section 4065 of the Labor Code is repealed.
SEC. 60. Section 4067 of the Labor Code is amended to read:
4067. If the jurisdiction of the appeals board is invoked
pursuant to Section 5803 upon the grounds that the effects of the
injury have recurred, increased, diminished, or terminated, a formal
medical evaluation shall be obtained pursuant to this article.
When an agreed medical evaluator or a qualified medical evaluator
selected by an unrepresented employee from a three-member panel has
previously made a formal medical evaluation of the same or similar
issues, the subsequent or additional formal medical evaluation shall
be conducted by the same agreed medical evaluator or qualified
medical evaluator, unless the workers' compensation judge has made a
finding that he or she did not rely on the prior evaluator's formal
medical evaluation, any party contested the original medical
evaluation by filing an application for adjudication, the
unrepresented employee hired an attorney and selected a qualified
medical evaluator to conduct another evaluation pursuant to
subdivision (b) of Section 4064, or the prior evaluator is no longer
qualified or readily available to prepare a formal medical
evaluation, in which case Sections 4061 or 4062, as the case may be,
shall apply as if there had been no prior formal medical evaluation.
SEC. 61. Section 4453 of the Labor Code is amended to read:
4453. (a) In computing average annual earnings for the purposes
of temporary disability indemnity and permanent total disability
indemnity only, the average weekly earnings shall be taken at:
(1) Not less than one hundred twenty-six dollars ($126) nor more
than two hundred ninety-four dollars ($294), for injuries occurring
on or after January 1, 1983.
(2) Not less than one hundred sixty-eight dollars ($168) nor more
than three hundred thirty-six dollars ($336), for injuries occurring
on or after January 1, 1984.
(3) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and, for temporary disability, not less
than the lesser of one hundred sixty-eight dollars ($168) or 1.5
times the employee's average weekly earnings from all employers, but
in no event less than one hundred forty-seven dollars ($147), nor
more than three hundred ninety-nine dollars ($399), for injuries
occurring on or after January 1, 1990.
(4) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than five hundred four dollars ($504), for injuries occurring on
or after January 1, 1991.
(5) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than six hundred nine dollars ($609), for injuries occurring on
or after July 1, 1994.
(6) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than six hundred seventy-two dollars ($672), for injuries
occurring on or after July 1, 1995.
(7) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than seven hundred thirty-five dollars ($735), for injuries
occurring on or after July 1, 1996.
(8) Not less than one hundred eighty-nine dollars ($189), nor more
than eight hundred nineteen dollars ($819) for injuries occurring on
or after January 1, 2002.
(9) Not less than one hundred eighty-nine dollars ($189), nor more
than nine hundred three dollars ($903) for injuries occurring on or
after January 1, 2003.
(10) Not less than one hundred eighty-nine dollars ($189), nor
more than the greater of nine hundred seventy-six dollars and fifty
cents ($976.50) or 1.5 times the state average weekly wage, for
injuries occurring on or after January 1, 2004. For the purposes of
this paragraph, "state average weekly wage" means the average weekly
wage as reported by the Bureau of Labor Statistics of the United
States Department of Labor.
(b) In computing average annual earnings for purposes of permanent
partial disability indemnity, except as provided in Section 4659,
the average weekly earnings shall be taken at:
(1) Not less than seventy-five dollars ($75), nor more than one
hundred ninety-five dollars ($195), for injuries occurring on or
after January 1, 1983.
(2) Not less than one hundred five dollars ($105), nor more than
two hundred ten dollars ($210), for injuries occurring on or after
January 1, 1984.
(3) When the final adjusted permanent disability rating of the
injured employee is 15 percent or greater, but not more than 24.75
percent: (A) not less than one hundred five dollars ($105) nor more
than two hundred twenty-two dollars ($222), for injuries occurring on
or after July 1, 1994; (B) not less than one hundred five dollars
($105) nor more than two hundred thirty-one dollars ($231) for
injuries occurring on or after July 1, 1995; (C) not less than one
hundred five dollars ($105) nor more than two hundred forty dollars
($240) for injuries occurring on or after July 1, 1996.
(4) When the final adjusted permanent disability rating of the
injured employee is 25 percent or greater, not less than one hundred
five dollars ($105), nor more than two hundred
twenty-two dollars ($222), for injuries occurring
on or after January 1, 1991.
(5) When the final adjusted permanent disability rating of the
injured employee is 25 percent or greater but not more than 69.75
percent: (A) not less than one hundred five dollars ($105), nor more
than two hundred thirty-seven dollars ($237), for injuries occurring
on or after July 1, 1994; (B) not less than one hundred five dollars
($105), nor more than two hundred forty-six dollars ($246), for
injuries occurring on or after July 1, 1995; and (C) not less than
one hundred five dollars ($105), nor more than two hundred fifty-five
dollars ($255), for injuries occurring on and after July 1, 1996.
(6) When the final adjusted permanent disability rating of the
injured employee is less than 70 percent: (A) not less than one
hundred twenty dollars ($120), nor more than two hundred fifty-five
dollars ($255), for injuries occurring on or after January 1, 2002;
(B) not less than one hundred fifty dollars ($150), nor more than two
hundred ninety-two dollars and fifty cents ($292.50), for injuries
occurring on or after January 1, 2003; (C) not less than one hundred
fifty-seven dollars and fifty cents ($157.50), nor more than three
hundred fifteen dollars ($315), for injuries occurring on or after
January 1, 2005; and (D) not less than one hundred ninety-five
dollars ($195), nor more than three hundred forty-five dollars
($345), for injuries occurring on or after January 1, 2006.
(7) When the final adjusted permanent disability rating of the
injured employee is 70 percent or greater, but less than 99.75
percent: (A) not less than one hundred five dollars ($105), nor more
than two hundred fifty-two dollars ($252), for injuries occurring on
or after July 1, 1994; (B) not less than one hundred five dollars
($105), nor more than two hundred ninety-seven dollars ($297), for
injuries occurring on or after July 1, 1995; (C) not less than one
hundred five dollars ($105), nor more than three hundred forty-five
dollars ($345), for injuries occurring onor after July 1, 1996; (D)
not less than one hundred twenty dollars ($120), nor more than three
hundred forty-five dollars ($345), for injuries occurring on or after
January 1, 2002; (E) not less than one hundred fifty dollars ($150),
nor more than three hundred forty-five dollars ($345), for injuries
occurring on or after January 1, 2003; (F) not less than one hundred
fifty-seven dollars and fifty cents ($157.50), nor more than four
hundred five dollars ($405), for injuries occurring on or after
January 1, 2004; and (G) not less than one hundred ninety-five
dollars ($195), nor more than four hundred five dollars ($405), for
injuries occurring on or after January 1, 2006.
(c) Between the limits specified in subdivisions (a) and (b), the
average weekly earnings, except as provided in Sections 4456 to 4459,
shall be arrived at as follows:
(1) Where the employment is for 30 or more hours a week and for
five or more working days a week, the average weekly earnings shall
be the number of working days a week times the daily earnings at the
time of the injury.
(2) Where the employee is working for two or more employers at or
about the time of the injury, the average weekly earnings shall be
taken as the aggregate of these earnings from all employments
computed in terms of one week; but the earnings from employments
other than the employment in which the injury occurred shall not be
taken at a higher rate than the hourly rate paid at the time of the
injury.
(3) If the earnings are at an irregular rate, such as piecework,
or on a commission basis, or are specified to be by week, month, or
other period, then the average weekly earnings mentioned in
subdivision (a) shall be taken as the actual weekly earnings averaged
for this period of time, not exceeding one year, as may conveniently
be taken to determine an average weekly rate of pay.
(4) Where the employment is for less than 30 hours per week, or
where for any reason the foregoing methods of arriving at the average
weekly earnings cannot reasonably and fairly be applied, the average
weekly earnings shall be taken at 100 percent of the sum which
reasonably represents the average weekly earning capacity of the
injured employee at the time of his or her injury, due consideration
being given to his or her actual earnings from all sources and
employments.
(d) Every computation made pursuant to this section beginning
January 1, 1990, shall be made only with reference to temporary
disability or the permanent disability resulting from an original
injury sustained after January 1, 1990. However, all rights existing
under this section on January 1, 1990, shall be continued in force.
Except as provided in Section 4661.5, disability indemnity benefits
shall be calculated according to the limits in this section in effect
on the date of injury and shall remain in effect for the duration of
any disability resulting from the injury.
SEC. 62. Section 4455 of the Labor Code is amended to read:
4455. If the injured employee is under 18 years of age, and his
or her incapacity is permanent, his or her average weekly earnings
shall be deemed, within the limits fixed in Section 4453, to be the
weekly sum which under ordinary circumstances he or she would
probably be able to earn at the age of 18 years, in the occupation in
which he or she was employed at the time of the injury or in any
occupation to which he or she would reasonably have been promoted if
he or she had not been injured. If the probable earnings at the age
of 18 years cannot reasonably be determined, his or her average
weekly earnings shall be taken at the maximum limit established in
Section 4453.
SEC. 63. Section 4600.1 is added to the Labor Code, to read:
4600.1. Any pharmacy providing medicines and medical supplies
required by Section 4600 shall provide the generic drug equivalent,
if a generic drug equivalent is available, unless the prescribing
physician specifically provides otherwise in writing.
SEC. 64. Section 4600.2 is added to the Labor Code, to read:
4600.2. (a) Notwithstanding Section 4600, when a self-insured
employer, group of self-insured employers, insurer of an employer, or
group of insurers contracts with a pharmacy, group of pharmacies, or
pharmacy benefit network to provide medicines and medical supplies
required by this article to be provided to injured employees, those
injured employees that are subject to the contract shall be provided
medicines and medical supplies in the manner prescribed in the
contract for as long as medicines or medical supplies are reasonably
required to cure or relieve the injured employee from the effects of
the injury.
(b) Nothing in this section shall affect the ability of
employee-selected physicians to continue to prescribe and have the
employer provide medicines and medical supplies that the physicians
deem reasonably required to cure or relieve the injured employee from
the effects of the injury.
(c) Each contract described in subdivision (a) shall comply with
standards adopted by the administrative director. In adopting those
standards, the administrative director shall seek to reduce
pharmaceutical costs and may consult any relevant studies or
practices in other states. The standards shall guarantee access to a
pharmacy within a reasonable geographic distance from an injured
employee's residence.
SEC. 65. Section 4628 of the Labor Code is amended to read:
4628. (a) Except as provided in subdivision (c), no person, other
than the physician who signs the medical-legal report, except a
nurse performing those functions routinely performed by a nurse, such
as taking blood pressure, shall examine the injured employee or
participate in the nonclerical preparation of the report, including
all of the following:
(1) Taking a complete history.
(2) Reviewing and summarizing prior medical records.
(3) Composing and drafting the conclusions of the report.
(b) The report shall disclose the date when and location where the
evaluation was performed; that the physician or physicians signing
the report actually performed the evaluation; whether the evaluation
performed and the time spent performing the evaluation was in
compliance with the guidelines established by the Industrial Medical
Council or the administrative director pursuant to paragraph (5) of
subdivision (j) of Section 139.2 or Section 5307.6 and shall disclose
the name and qualifications of each person who performed any
services in connection with the report, including diagnostic studies,
other than its clerical preparation. If the report discloses that
the evaluation performed or the time spent performing such evaluation
was not in compliance with the guidelines established by the
Industrial Medical Council or the administrative director, the report
shall explain, in detail, any variance and the reason or reasons
therefor.
(c) If the initial outline of a patient's history or excerpting of
prior medical records is not done by the physician, the physician
shall review the excerpts and the entire outline and shall make
additional inquiries and examinations as are necessary and
appropriate to identify and determine the relevant medical issues.
(d) No amount may be charged in excess of the direct charges for
the physician's professional services and the reasonable costs of
laboratory examinations, diagnostic studies, and other medical tests,
and reasonable costs of clerical expense necessary to producing the
report. Direct charges for the physician's professional services
shall include reasonable overhead expense.
(e) Failure to comply with the requirements of this section shall
make the report inadmissible as evidence and shall eliminate any
liability for payment of any medical-legal expense incurred in
connection with the report.
(f) Knowing failure to comply with the requirements of this
section shall subject the physician to a civil penalty of up to one
thousand dollars ($1,000) for each violation to be assessed by a
workers' compensation judge or the appeals board. All civil
penalties collected under this section shall be deposited in the
Workers' Compensation Administration Revolving Fund and credited to
the Commission on Health and Safety and Workers' Compensation.
(g) A physician who is assessed a civil penalty under this section
may be terminated, suspended, or placed on probation as a qualified
medical evaluator pursuant to subdivisions (k) and (l) of Section
139.2.
(h) Knowing failure to comply with the requirements of this
section shall subject the physician to contempt pursuant to the
judicial powers vested in the appeals board.
(i) Any person billing for medical-legal evaluations, diagnostic
procedures, or diagnostic services performed by persons other than
those employed by the reporting physician or physicians, or a medical
corporation owned by the reporting physician or physicians shall
specify the amount paid or to be paid to those persons for the
evaluations, procedures, or services. This subdivision shall not
apply to any procedure or service defined or valued pursuant to
Section 5307.1.
(j) The report shall contain a declaration by the physician
signing the report, under penalty of perjury, stating:
"I declare under penalty of perjury that the information contained
in this report and its attachments, if any, is true and correct to
the best of my knowledge and belief, except as to information that I
have indicated I received from others. As to that information, I
declare under penalty of perjury that the information accurately
describes the information provided to me and, except as noted herein,
that I believe it to be true."
The foregoing declaration shall be dated and signed by the
reporting physician and shall indicate the county wherein it was
signed.
(k) The physician shall provide a curriculum vitae upon request by
a party and include a statement concerning the percent of the
physician's total practice time that is annually devoted to medical
treatment.
SEC. 66. Section 4650 of the Labor Code is amended to read:
4650. (a) If an injury causes temporary disability, the first
payment of temporary disability indemnity shall be made not later
than 14 days after knowledge of the injury and disability, on which
date all indemnity then due shall be paid, unless liability for the
injury is earlier denied.
(b) If the injury causes permanent disability, the first payment
shall be made within 14 days after the date of last payment of
temporary disability indemnity. Where the extent of permanent
disability cannot be determined at the date of last payment of
temporary disability indemnity, the employer nevertheless shall
commence the timely payment required by this subdivision and shall
continue to make these payments until the employer's reasonable
estimate of permanent disability indemnity due has been paid, and if
the amount of permanent disability indemnity due has been determined
until that amount has been paid. When the monetary value of the
permanent disability has been determined or estimated, the payment of
the permanent disability indemnity shall be made at the same rate as
temporary disability indemnity. Along with the first payment of
permanent disability, the employer shall provide the employee the
notices specified in Section 4061 and the following conspicuous
warning in at least 12-point type: "WARNING: Your permanent
disability indemnity is paid at the same weekly rate as your
temporary disability indemnity, and any future payments of permanent
disability indemnity may be deducted from the ultimate award or
settlement." This section shall not apply to payments made pursuant
to subdivision (a) of Section 4659 (relating to the payment of life
pensions).
(c) Payment of temporary or permanent disability indemnity
subsequent to the first payment shall be made as due every two weeks
on or before the day designated with the first payment.
(d) If any indemnity payment is not made timely as required by
this section, the amount of the late payment shall be increased 10
percent and shall be paid, without application, to the employee,
unless the employer continues the employee's wages under a salary
continuation plan, as defined in subdivision (g). No increase shall
apply to any payment due prior to or within 14 days after the date
the claim form was submitted to the employer under Section 5401. No
increase shall apply when, within the 14-day period specified under
subdivision (a), the employer is unable to determine whether
temporary disability indemnity payments are owed and advises the
employee, in the manner prescribed in rules and regulations adopted
pursuant to Section 138.4, why payments cannot be made within the
14-day period, what additional information is required to make the
decision whether temporary disability indemnity payments are owed,
and when the employer expects to have the information required to
make the decision.
(e) If the employer is insured for its obligation to provide
compensation, the employer shall be obligated to reimburse the
insurer for the amount of increase in indemnity payments, made
pursuant to subdivision (d), if the late payment which gives rise to
the increase in indemnity payments, is due less than seven days after
the insurer receives the completed claim form from the employer.
Except as specified in this subdivision, an employer shall not be
obligated to reimburse an insurer nor shall an insurer be permitted
to seek reimbursement, directly or indirectly, for the amount of
increase in indemnity payments specified in this section.
(f) If an employer is obligated under subdivision (e) to reimburse
the insurer for the amount of increase in indemnity payments, the
insurer shall notify the employer in writing, within 30 days of the
payment, that the employer is obligated to reimburse the insurer and
shall bill and collect the amount of the payment no later than at
final audit. However, the insurer shall not be obligated to collect,
and the employer shall not be obligated to reimburse, amounts paid
pursuant to subdivision (d) unless the aggregate total paid in a
policy year exceeds one hundred dollars ($100). The employer shall
have 60 days, following notice of the obligation to reimburse, to
appeal the decision of the insurer to the Department of Insurance.
The notice of the obligation to reimburse shall specify that the
employer has the right to appeal the decision of the insurer as
provided in this subdivision.
(g) For purposes of this section, "salary continuation plan" means
a plan that meets both of the following requirements:
(1) The plan is paid for by the employer pursuant to statute,
collective bargaining agreement, memorandum of understanding, or
established employer policy.
(2) The plan provides the employee on his or her regular payday
with salary not less than the employee is entitled to receive
pursuant to statute, collective bargaining agreement, memorandum of
understanding, or established employer policy and not less than the
employee would otherwise receive in indemnity payments.
(h) Nothing in this section is intended to increase the aggregate
amount of permanent disability due under Section 4659.
SEC. 67. Section 4651 of the Labor Code is amended to read:
4651. (a) No disability indemnity payment shall be made by any
written instrument unless it is immediately negotiable and payable in
cash, on demand, without discount at some established place of
business in the state.
Nothing in this section shall prohibit an employer from depositing
the disability indemnity payment in an account in any bank, savings
and loan association or credit union of the employee's choice in this
state, provided the employee has voluntarily authorized the deposit,
nor shall it prohibit an employer from electronically depositing the
disability indemnity payment in an account in any bank, savings and
loan association, or credit union that the employee has previously
authorized to receive electronic deposits of payroll, unless the
employee has requested, in writing, that disability indemnity
benefits not be electronically deposited in the account.
(b) It is not a violation of this section if a delay in the
negotiation of a written instrument is caused solely by the
application of state or federal banking laws or regulations.
(c) On or before July 1, 2003, the administrative director shall
present to the Governor recommendations on how to provide better
access to funds paid to injured workers in light of the requirements
of federal and state laws and regulations governing the negotiability
of disability indemnity payments. The administrative director shall
make specific recommendations regarding payments to migratory and
seasonal farmworkers. The Commission on Health and Safety and
Workers' Compensation and the Employment Development Department shall
assist the administrative director in the completion of this report.
SEC. 68. Section 4658 of the Labor Code is amended to read:
4658. (a) For injuries occurring prior to January 1, 1992, if the
injury causes permanent disability, the percentage of disability to
total disability shall be determined, and the disability payment
computed and allowed, according to paragraph (1). However, in no
event shall the disability payment allowed be less than the
disability payment computed according to paragraph (2).
(1)
Column 2--Number of weeks
for which two-thirds of
Column 1--Range average weekly earnings
of percentage allowed for each 1 percent
of permanent of permanent disability
disability incurred: within percentage range:
Under 10 ....................... 3
10-19.75 ....................... 4
20-29.75 ....................... 5
30-49.75 ....................... 6
50-69.75 ....................... 7
70-99.75 ....................... 8
The number of weeks for which payments shall be allowed set forth
in column 2 above based upon the percentage of permanent disability
set forth in column 1 above shall be cumulative, and the number of
benefit weeks shall increase with the severity of the disability.
The following schedule is illustrative of the computation of the
number of benefit weeks:
Column 1--
Percentage Column 2--
of permanent Cumulative
disability number of
incurred: benefit weeks:
5 .......................... 15.00
10 .......................... 30.25
15 .......................... 50.25
20 .......................... 70.50
25 .......................... 95.50
30 .......................... 120.75
35 .......................... 150.75
40 .......................... 180.75
45 .......................... 210.75
50 .......................... 241.00
55 .......................... 276.00
60 .......................... 311.00
65 .......................... 346.00
70 .......................... 381.25
75 .......................... 421.25
80 .......................... 461.25
85 .......................... 501.25
90 .......................... 541.25
95 .......................... 581.25
100 .......................... for life
(2) Two-thirds of the average weekly earnings for four weeks for
each 1 percent of disability, where, for the purposes of this
subdivision, the average weekly earnings shall be taken at not more
than seventy-eight dollars and seventy-five cents ($78.75).
(b) This subdivision shall apply to injuries occurring on or after
January 1, 1992. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed, according to paragraph
(1). However, in no event shall the disability payment allowed be
less than the disability payment computed according to paragraph (2).
(1)
Column 1--Range Column 2
of percentage
of permanent
disability incurred:
Under 10 ...................... 3.0
10-19.75 ...................... 4.0
20-24.75 ...................... 5.0
25-29.75 ...................... 6.0
30-49.75 ...................... 7.0
50-69.75 ...................... 8.0
70-99.75 ...................... 9.0
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(2) Two-thirds of the average weekly earnings for four weeks for
each 1 percent of disability, where, for the purposes of this
subdivision, the average weekly earnings shall be taken at not more
than seventy-eight dollars and seventy-five cents ($78.75).
(c) This subdivision shall apply to injuries occurring on or after
July 1, 2004. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed as follows:
Column 1--Range Column 2
of percentage
of permanent
disability incurred:
Under 10 ..................... 4
10-19 ..................... 4
20-24 ..................... 5
25-29 ..................... 6
30-49 ..................... 7
50-69 ..................... 8
70-99 ..................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(d) This subdivision shall apply to injuries occurring on or after
January 1, 2005. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed as follows:
Column 1--Range Column 2
of percentage
of permanent
disability incurred:
Under 10 ..................... 4
10-19 ..................... 5
20-24 ..................... 5
25-29 ..................... 6
30-49 ..................... 7
50-69 ..................... 8
70-99 ..................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
(e) This subdivision shall apply to injuries occurring on or after
January 1, 2006. If the injury causes permanent disability, the
percentage of disability to total disability shall be determined, and
the disability payment computed and allowed as follows:
Column 1--Range Column 2
of percentage
of permanent
disability incurred:
Under 25 ..................... 5
25-29 ..................... 6
30-49 ..................... 7
50-69 ..................... 8
70-99 ..................... 9
The numbers set forth in column 2 above are based upon the
percentage of permanent disability set forth in column 1 above and
shall be cumulative, and shall increase with the severity of the
disability in the manner illustrated in subdivision (a).
SEC. 69. Section 4659 of the Labor Code is amended to read:
4659.
(a) If the permanent disability is at least 70 percent, but less
than 100 percent, 1.5 percent of the average weekly earnings for each
1 percent of disability in excess of 60 percent is to be paid during
the remainder of life, after payment for the maximum number of weeks
specified in Section 4658 has been made. For the purposes of this
subdivision only, average weekly earnings shall be taken at not more
than one hundred seven dollars and sixty-nine cents ($107.69). For
injuries occurring on or after July 1, 1994, average weekly wages
shall not be taken at more than one hundred fifty-seven dollars and
sixty-nine cents ($157.69). For injuries occurring on or after July
1, 1995, average weekly wages shall not be taken at more than two
hundred seven dollars and sixty-nine cents ($207.69). For injuries
occurring on or after July 1, 1996, average weekly wages shall not be
taken at more than two hundred fifty-seven dollars and sixty-nine
cents ($257.69). For injuries occurring on or after January 1, 2004,
average weekly wages shall be taken at the greater of three hundred
seven dollars and sixty-nine cents ($307.69) or the amount equal to
the average weekly wages amount in effect immediately prior to that
date increased by the percentage increase in the "state average
weekly wage" as compared to the prior year. For the purpose of this
subdivision, "state average weekly wage" means the average weekly
wage paid by employers to employees covered by unemployment
insurance, as reported to the Employment Development Department for
the four calendar quarters ending June 30 of the calendar year
preceding the year in which the adjustment is made.
(b) If the permanent disability is total, the indemnity based upon
the average weekly earnings determined under Section 4453 shall be
paid during the remainder of life.
(c) Any injured employee who, on or after January 1, 2004,
regardless of date of injury, is receiving or becomes entitled to
receive a life pension or total permanent disability indemnity as set
forth in subdivisions (a) and (b) shall have that payment increased
annually, commencing January 1, 2004, and each January 1 thereafter,
by an amount equal to the percentage increase in the "state average
weekly wage" as compared to the prior year. For the purpose of this
subdivision, "state average weekly wage" means the average weekly
wage paid by employers to employees covered by unemployment
insurance, as reported to the Employment Development Department for
the four calendar quarters ending June 30 of the calendar year
preceding the year in which the adjustment is made.
SEC. 70. Section 4702 of the Labor Code is amended to read:
4702. (a) Except as otherwise provided in this section and
Sections 4553, 4554, 4557, and 4558, the death benefit in cases of
total dependency shall be as follows:
(1) In the case of two total dependents and regardless of the
number of partial dependents, for injuries occurring before January
1, 1991, ninety-five thousand dollars ($95,000), for injuries
occurring on or after January 1, 1991, one hundred fifteen thousand
dollars ($115,000), for injuries occurring on or after July 1, 1994,
one hundred thirty-five thousand dollars ($135,000), for injuries
occurring on or after July 1, 1996, one hundred forty-five thousand
dollars ($145,000), and for injuries occurring on or after January 1,
2005, one hundred ninety-five thousand dollars ($195,000).
(2) In the case of one total dependent and one or more partial
dependents, for injuries occurring before January 1, 1991, seventy
thousand dollars ($70,000), for injuries occurring on or after
January 1, 1991, ninety-five thousand dollars ($95,000), for injuries
occurring on or after July 1, 1994, one hundred fifteen thousand
dollars ($115,000), for injuries occurring on or after July 1, 1996,
one hundred twenty-five thousand dollars ($125,000), and for injuries
occurring on or after January 1, 2005, one hundred sixty-five
thousand dollars ($165,000), plus four times the amount annually
devoted to the support of the partial dependents, but not more than
the following: for injuries occurring before January 1, 1991, a total
of ninety-five thousand dollars ($95,000), for injuries occurring on
or after January 1, 1991, one hundred fifteen thousand dollars
($115,000), for injuries occurring on or after July 1, 1994, one
hundred twenty-five thousand dollars ($125,000), for injuries
occurring on or after July 1, 1996, one hundred forty-five thousand
dollars ($145,000), and for injuries occurring on or after January 1,
2005, one hundred ninety-five thousand dollars ($195,000).
(3) In the case of one total dependent and no partial dependents,
for injuries occurring before January 1, 1991, seventy thousand
dollars ($70,000), for injuries occurring on or after January 1,
1991, ninety-five thousand dollars ($95,000), for injuries occurring
on or after July 1, 1994, one hundred fifteen thousand dollars
($115,000), for injuries occurring on or after July 1, 1996, one
hundred twenty-five thousand dollars ($125,000), and for injuries
occurring on or after January 1, 2005, one hundred sixty-five
thousand dollars ($165,000).
(4) (A) In the case of no total dependents and one or more partial
dependents, for injuries occurring before January 1, 1991, four
times the amount annually devoted to the support of the partial
dependents, but not more than seventy thousand dollars ($70,000), for
injuries occurring on or after January 1, 1991, a total of
ninety-five thousand dollars ($95,000), for injuries occurring on or
after July 1, 1994, one hundred fifteen thousand dollars ($115,000),
and for injuries occurring on or after July 1, 1996, but before
January 1, 2005, one hundred twenty-five thousand dollars ($125,000).
(B) In the case of no total dependents and one or more partial
dependents, eight times the amount annually devoted to the support of
the partial dependents, for injuries occurring on or after January
1, 2005, but not more than one hundred sixty-five thousand dollars
($165,000).
(5) In the case of three or more total dependents and regardless
of the number of partial dependents, one hundred fifty thousand
dollars ($150,000), for injuries occurring on or after July 1, 1994,
one hundred sixty thousand dollars ($160,000), for injuries occurring
on or after July 1, 1996, and two hundred fifteen thousand dollars
($215,000), for injuries occurring on or after January 1, 2005.
(b) The death benefit in all cases shall be paid in installments
in the same manner and amounts as temporary total disability
indemnity would have to be made to the employee, unless the appeals
board otherwise orders. However, no payment shall be made at a
weekly rate of less than two hundred twenty-four dollars ($224).
(c) Disability indemnity shall not be deducted from the death
benefit and shall be paid in addition to the death benefit when the
injury resulting in death occurs after September 30, 1949.
(d) All rights under this section existing prior to January 1,
1990, shall be continued in force.
SEC. 71. Section 4703.5 of the Labor Code is amended to read:
4703.5. In the case of one or more totally dependent minor
children, as defined in Section 3501, after payment of the amount
specified in Section 4702, and notwithstanding the maximum
limitations specified in Sections 4702 and 4703, payment of death
benefits shall continue until the youngest child attains age 18, or
until the death of a child physically or mentally incapacitated from
earning, in the same manner and amount as temporary total disability
indemnity would have been paid to the employee, except that no
payment shall be made at a weekly rate of less than two hundred
twenty-four dollars ($224).
SEC. 72. Section 5275 of the Labor Code is amended to read:
5275. (a) Disputes involving the following issues shall be
submitted for arbitration:
(1) Insurance coverage.
(2) Right of contribution in accordance with Section 5500.5.
(b) By agreement of the parties, any issue arising under Division
1 (commencing with Section 50) or Division 4 (commencing with Section
3200) may be submitted for arbitration, regardless of the date of
injury.
SEC. 73. Section 5305 of the Labor Code is amended to read:
5305. The Division of Workers' Compensation, including the
administrative director, and the appeals board have jurisdiction over
all controversies arising out of injuries suffered outside the
territorial limits of this state in those cases where the injured
employee is a resident of this state at the time of the injury and
the contract of hire was made in this state. Any employee described
by this section, or his or her dependents, shall be entitled to the
compensation or death benefits provided by this division.
SEC. 74. Section 5307 of the Labor Code is amended to read:
5307. (a) Except for those rules and regulations within the
authority of the court administrator regarding trial level
proceedings as defined in subdivision (c), the appeals board may by
an order signed by four members:
(1) Adopt reasonable and proper rules of practice and procedure.
(2) Regulate and provide the manner in which, and by whom, minors
and incompetent persons are to appear and be represented before it.
(3) Regulate and prescribe the kind and character of notices,
where not specifically prescribed by this division, and the service
thereof.
(4) Regulate and prescribe the nature and extent of the proofs and
evidence.
(b) No rule or regulation of the appeals board pursuant to this
section shall be adopted, amended, or rescinded without public
hearings. Any written request filed with the appeals board seeking a
change in its rules or regulations shall be deemed to be denied if
not set by the appeals board for public hearing to be held within six
months of the date on which the request is received by the appeals
board.
(c) The court administrator shall adopt reasonable, proper, and
uniform rules of practice and procedure governing trial level
proceedings of the Workers' Compensation appeals board, which rules
shall include, but not be limited to:
(1) Rules regarding conferences, hearings, continuances, and other
matters deemed reasonable and necessary to expeditiously resolve
disputes.
(2) The kind and character of forms to be used at all trial level
proceedings.
All rules and regulations adopted by the court administrator
pursuant to this subdivision shall be subject to the requirements of
the Administrative Procedures Act (Chapter 4.5 (commencing with
Section 11400) and Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code).
SEC. 75. Section 5307.2 is added to the Labor Code, to read:
5307.2. The administrative director, after public hearings, shall
adopt not later than July 1, 2002, and revise, no less frequently
than biennially, an official pharmaceutical fee schedule which shall
establish reasonable maximum fees paid for medicines and medical
supplies provided pursuant to this division. This schedule shall be
included within the official medical fee schedule adopted by the
administrative director pursuant to Section 5307.1. In adopting the
reasonable maximum fees included within the official pharmaceutical
fee schedule, the administrative director may consult any relevant
studies or practices in other states. The schedule shall guarantee
access to a pharmacy within a reasonable geographic distance from an
injured employee's residence.
SEC. 76. Section 5310 of the Labor Code is amended to read:
5310. The appeals board may appoint one or more workers'
compensation administrative law judges in any proceeding, as it may
deem necessary or advisable, and may refer, remove to itself, or
transfer to a workers' compensation administrative law judge the
proceedings on any claim. The administrative director, upon
recommendation of the court administrator, may appoint workers'
compensation administrative law judges. Any workers' compensation
administrative law judge appointed by the administrative director has
the powers, jurisdiction, and authority granted by law, by the order
of appointment, and by the rules of the appeals board.
SEC. 77. Section 5311.5 of the Labor Code is amended to read:
5311.5. The administrative director or the court administrator
shall require all workers' compensation administrative law judges to
participate in continuing education to further their abilities as
workers' compensation administrative law judges, including courses in
ethics and conflict of interest. The director may coordinate the
requirements with those imposed upon attorneys by the State Bar in
order that the requirements may be consistent.
SEC. 78. Section 5401 of the Labor Code is amended to read:
5401. (a) Within one working day of receiving notice or knowledge
of injury under Section 5400 or 5402, which injury results in lost
time beyond the employee's work shift at the time of injury or which
results in medical treatment beyond first aid, the employer shall
provide, personally or by first-class mail, a claim form and a notice
of potential eligibility for benefits under this division to the
injured employee, or in the case of death, to his or her dependents.
As used in this subdivision, "first aid" means any one-time
treatment, and any followup visit for the purpose of observation of
minor scratches, cuts, burns, splinters, or other minor industrial
injury, which do not ordinarily require medical care. This one-time
treatment, and followup visit for the purpose of observation, is
considered first aid even though provided by a physician or
registered professional personnel. "Minor industrial injury" shall
not include serious exposure to a hazardous substance as defined in
subdivision (i) of Section 6302. The claim form shall request the
injured employee's name and address, social security number, the time
and address where the injury occurred, and the nature of and part of
the body affected by the injury. Claim forms shall be available at
district offices of the Employment Development Department and the
division. Claim forms may be made available to the employee from any
other source.
(b) Insofar as practicable, the notice of potential eligibility
for benefits required by this section and the claim form shall be a
single document and shall instruct the injured employee to fully read
the notice of potential eligibility. The form and content of the
notice and claim form shall be prescribed by the administrative
director after consultation with the Commission on Health and Safety
and Workers' Compensation. The notice shall be easily understandable
and available in both English and Spanish. The content shall
include, but not be limited to:
(1) The procedure to be used to commence proceedings for the
collection of compensation for the purposes of this chapter.
(2) A description of the different types of workers' compensation
benefits.
(3) What happens to the claim form after it is filed.
(4) From whom the employee can obtain medical care for the injury.
(5) The role and function of the primary treating physician.
(6) The rights of an employee to select and change the treating
physician pursuant to the provisions of subdivision (e) of Section
3550 and Section 4600.
(7) How to get medical care while the claim is pending.
(8) The protections against discrimination provided pursuant to
Section 132a.
(9) The following written statements:
(A) You have a right to disagree with decisions affecting your
claim.
(B) You can obtain free information from an Information &
Assistance officer of the State Division of Workers' Compensation, or
you can hear recorded information and a list of local offices by
calling (applicable information and assistance telephone number(s)).
(C) You can consult an attorney. Most attorneys offer one free
consultation. If you decide to hire an attorney, his or her fee will
be taken out of some of your benefits. For names of workers'
compensation attorneys, call the State Bar of California at
(telephone number of the State Bar of California's legal
specialization program, or its equivalent).
(c) The completed claim form shall be filed with the employer by
the injured employee, or, in the case of death, by a dependent of the
injured employee, or by an agent of the employee or dependent.
Except as provided in subdivision (d), a claim form is deemed filed
when it is personally delivered to the employer or received by the
employer by first-class or certified mail. A dated copy of the
completed form shall be provided by the employer to the employer's
insurer and to the employee, dependent, or agent who filed the claim
form.
(d) The claim form shall be filed with the employer prior to the
injured employee's entitlement to late payment supplements under
subdivision (d) of Section 4650, or prior to the injured employee's
request for a medical evaluation under Section 4060, 4061, or 4062.
Filing of the claim form with the employer shall toll, for injuries
occurring on or after January 1, 1994, the time limitations set forth
in Sections 5405 and 5406 until the claim is denied by the employer
or the injury becomes presumptively compensable pursuant to Section
5402. For purposes of this subdivision, a claim form is deemed filed
when it is personally delivered to the employer or mailed to the
employer by first-class or certified mail.
SEC. 79. Section 5405 of the Labor Code is amended to read:
5405. The period within which proceedings may be commenced for
the collection of the benefits provided by Article 2 (commencing
with Section 4600) or Article 3 (commencing with Section 4650), or
both, of Chapter 2 of Part 2 is one year from:
(a) The date of injury; or
(b) The expiration of any period covered by payment under Article
3 (commencing with Section 4650) of Chapter 2 of Part 2; or
(c) The last date on which any benefits provided for in Article 2
(commencing with Section 4600) of Chapter 2 of Part 2 were
furnished.
(d) The period within which a lien claimant shall file and serve a
lien before the appeals board to determine and allow as a lien
against compensation expenses as defined in subdivision (b) of
Section 4903 is one year from the date of last finding of permanent
disability by the appeals board, one year from the date the appeals
board approved a compromise and release of other issues, or two years
from the last date of medical treatment. The injured worker shall
not be liable for any underlying obligation if a lien claim has not
been filed and served within the allowable period. A lien claimant
shall not file a declaration of readiness to proceed in any case
prior to acceptance of the claim or the determination of
compensability of the claim.
SEC. 80. Section 5500.3 of the Labor Code is amended to read:
5500.3. (a) The court administrator shall establish uniform court
procedures, uniform forms, and uniform time of court settings for
all district offices of the appeals board. No district office of the
appeals board or workers' compensation judge administrative law
shall require forms or procedures other than as established by the
court administrator. The court administrator shall take reasonable
steps to ensure enforcement of this section. A workers' compensation
administrative law judge who violates this section may be subject to
disciplinary proceedings.
(b) The appeals board shall establish uniform court procedures and
uniform forms for all other proceedings of the appeals board. No
district office of the appeals board or workers' compensation
administrative law judge shall require forms or procedures other than
as established by the appeals board.
SEC. 81. Section 5502 of the Labor Code is amended to read:
5502. (a) Except as provided in subdivisions (b) and (d), the
hearing shall be held not less than 10 days, and not more than 60
days, after the date a declaration of readiness to proceed, on a form
prescribed by the court administrator, is filed. If a claim form
has been filed for an injury occurring on or after January 1, 1990,
and before January 1, 1994, an application for adjudication shall
accompany the declaration of readiness to proceed.
(b) The court administrator shall establish a priority calendar
for issues requiring an expedited hearing and decision. A hearing
shall be held and a determination as to the rights of the parties
shall be made and filed within 30 days after the declaration of
readiness to proceed is filed if the issues in dispute are any of the
following:
(1) The employee's entitlement to medical treatment pursuant to
Section 4600.
(2) The employee's entitlement to, or the amount of, temporary
disability indemnity payments.
(3) The employee's entitlement to vocational rehabilitation
services, or the termination of an employer's liability to provide
these services to an employee.
(4) The employee's entitlement to compensation from one or more
responsible employers when two or more employers dispute liability as
among themselves.
(5) If the employee is represented by an attorney, whether the
employer is liable for payment of compensation pursuant to Section
3600.
(6) Any other issues requiring an expedited hearing and
determination as prescribed in rules and regulations of the
administrative director.
(c) The court administrator shall report quarterly to the Governor
and to the Legislature concerning the frequency and types of issues
which are not heard and decided within the period prescribed in this
section and the reasons therefor.
(d) (1) In all cases, a mandatory settlement conference shall be
conducted not less than 10 days, and not more than 30 days, after the
filing of a declaration of readiness to proceed. If the dispute is
not resolved, the regular hearing shall be held within 75 days after
the declaration of readiness to proceed is filed.
(2) The settlement conference shall be conducted by a workers'
compensation judge or by a referee who is eligible to be a workers'
compensation judge or eligible to be an arbitrator under Section
5270.5. At the mandatory settlement conference, the referee or
workers' compensation judge shall have the authority to resolve the
dispute, including the authority to approve a compromise and release
or issue a stipulated finding and award, and if the dispute cannot be
resolved, to frame the issues and stipulations for trial. The
appeals board shall adopt any regulations needed to implement this
subdivision. The presiding workers' compensation judge shall
supervise settlement conference referees in the performance of their
judicial functions under this subdivision.
(3) If the claim is not resolved at the mandatory settlement
conference, the parties shall file a pretrial conference statement
noting the specific issues in dispute, each party's proposed
permanent disability rating, and listing the exhibits, and disclosing
witnesses. Discovery shall close on the date of the mandatory
settlement conference. Evidence not disclosed or obtained thereafter
shall not be admissible unless the proponent of the evidence can
demonstrate that it was not available or could not have been
discovered by the exercise of due diligence prior to the settlement
conference.
(e) In cases involving the Director of the Department of
Industrial Relations in his or her capacity as administrator of the
Uninsured Employers Fund, this section shall not apply unless proof
of service, as specified in paragraph (1) of subdivision (d) of
Section 3716 has been filed with the appeals board and provided to
the Director of Industrial Relations, valid jurisdiction has been
established over the employer, and the fund has been joined.
(f) Except as provided in subdivision (a) and in Section 4065, the
provisions of this section shall apply irrespective of the date of
injury.
SEC. 82. Section 6354.5 of the Labor Code is amended to read:
6354.5. (a) Any insurer desiring to write workers' compensation
insurance shall maintain or provide occupational safety and health
loss control consultation services. The insurer may employ qualified
personnel to provide these services or provide the services through
another entity.
(b) The program of an insurer for furnishing loss control
consultation services shall be adequate to meet minimum standards
prescribed by this section. Required loss control consultation
services shall be adequate to identify the hazards exposing the
insured to or causing the insured significant workers' compensation
losses, and to advise the insured of steps needed to mitigate the
identified workers' compensation losses or exposures. The program of
an insurer for furnishing loss control consultation services shall
provide all of the following:
(1) A workplace survey, including discussions with management and,
where appropriate, nonmanagement personnel with permission of the
employer.
(2) A review of injury records with appropriate personnel.
(3) The development of a plan to improve the employer's health and
safety loss control experience, which shall include, where
appropriate, modifications to the employer's injury and illness
prevention program established pursuant to Section 6401.7. At the
time that an insurance policy is issued and annually thereafter, and
again when notified by Cal-OSHA that an insured employer has been
identified as a targeted employee pursuant to Section 6314.1, the
insurer shall provide each insured employer with a written
description of the consultation services together with a notice that
the services are available at no additional charge to the employer.
These notices to the employer shall appear in at least 10-point bold
type.
(c) The insurer shall not charge any fee in addition to the
insurance premium for safety and health loss control consultation
services.
(d) Nothing in this section shall be construed to require insurers
to provide loss control services to places of employment that do not
pose significant preventable hazards to workers.
(e) The director shall establish an insurance loss control
services coordinator position in the Department of Industrial
Relations. The coordinator shall provide information to employers
about the availability of loss control consultation services and
respond to employers' questions and complaints about loss control
consultation services provided by their insurer. The coordinator
shall notify the insurer of every complaint concerning loss control
consultation services. If the employer and the insurer are unable to
agree on a mutually satisfactory solution to the complaint,
the coordinator shall investigate
the complaint. Whenever the coordinator determines that the loss
control consultation services provided by the insurer are inadequate
or inappropriate, he or she shall recommend to the employer and the
insurer the actions required to bring the loss control program into
compliance. If the employer and the insurer are unable to agree on a
mutually satisfactory solution to the complaint, the coordinator
shall forward his or her recommendations to the director. The cost
of providing the coordinator services shall be paid out of the
Workers' Occupational Safety and Health Education Fund created by
subdivision (a) of Section 6354.7. However, no more than 20 percent
of that fund may be expended for this purpose each year.
SEC. 83. Section 6354.7 is added to the Labor Code, to read:
6354.7. (a) The Workers' Occupational Safety and Health Education
Fund is hereby created as a special account in the State Treasury.
Proceeds of the fund may be expended, upon appropriation by the
Legislature, by the Commission on Health and Safety and Workers'
Compensation for the purpose of establishing and maintaining a worker
occupational safety and health training and education program and
insurance loss control services coordinator. The director shall levy
and collect fees to fund these purposes from insurers subject to
Section 6354.5. However, the fee assessed against any insurer shall
not exceed the greater of one hundred dollars ($100) or 0.00286
percent of paid workers' compensation indemnity claims reported by
that insure for the latest calendar year to the Workers' Compensation
Insurance Rating Bureau. All fees shall be deposited in the fund.
(b) The commission shall establish and maintain a worker safety
and health training and education program. The purpose of the worker
occupational safety and health training and education program shall
be to promote awareness of the need for prevention education
programs, to develop and provide injury and illness prevention
education programs for employees and their representatives, and to
deliver those awareness and training programs through a network of
providers throughout the state. The commission may conduct the
program directly or by means of contracts or interagency agreements.
(c) The commission shall establish an employer and worker advisory
board for the program. The advisory board shall guide the
development of curricula, teaching methods, and specific course
material about occupational safety and health, and shall assist in
providing links to the target audience and broadening the
partnerships with worker-based organizations, labor studies programs,
and others that are able to reach the target audience.
(d) The program shall include the development and provision of a
needed core curriculum addressing competencies for effective
participation in workplace injury and illness prevention programs and
on joint labor-management health and safety committees. The core
curriculum shall include an overview of the requirements related to
injury and illness prevention programs and hazard communication.
(e) The program shall include the development and provision of
additional training programs for any or all of the following
categories:
(1) Industries on the high hazard list.
(2) Hazards that result in significant worker injuries, illnesses,
or compensation costs.
(3) Industries or trades where workers are experiencing numerous
or significant injuries or illnesses.
(4) Occupational groups with special needs, such as those who do
not speak English as their first language, workers with limited
literacy, young workers, and other traditionally underserved
industries or groups of workers. Priority shall be given to training
workers who are able to train other workers and workers who have
significant health and safety responsibilities, such as those workers
serving on a health and safety committee or serving as designated
safety representatives.
(f) The program shall operate one or more libraries and
distribution systems of occupational safety and health training
material, which shall include, but not be limited to, all material
developed by the program pursuant to this section.
(g) The advisory board shall annually prepare a written report
evaluating the use and impact of programs developed.
(h) The payment of administrative costs incurred by the commission
in conducting the program shall be made from the Workers'
Occupational Safety and Health Education Fund.
SEC. 84. The Director of Industrial Relations shall establish the
following new positions for staffing of the workers' compensation
courts:
(a) Eight workers' compensation administrative law judges.
(b) Eight hearing reporters.
(c) Eight senior typists (legal).