BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 22, 2011 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 335
Author: Solorio
Version: As amended May 27, 2011
SUBJECT
Workers' compensation: notices
KEY ISSUE
Should the Legislature require that the administrative director
(AD) of the Division of Workers' Compensation (DWC) develop and
make available informational materials that describes the
overall workers' compensation claims process?
PURPOSE
To provide injured workers with informational materials
regarding the workers' compensation claims process to enable
employees to better understand the system.
ANALYSIS
Existing law establishes a workers' compensation system,
administered by the Administrative Director (AD) of the Division
of Workers' Compensation (DWC) within the Department of
Industrial Relations (DIR), to compensate an employee for
injuries that arise out of, or in the course of, employment.
Employers are required to secure the payment of workers'
compensation for injuries incurred by their employees. Existing
law establishes the Commission on Health and Safety and Workers'
Compensation, within the DIR, as a joint labor-management body
created by the workers' compensation reform legislation of 1993
and charged with overseeing the health and safety and workers'
compensation system in California, and recommending
administrative and/or legislative modifications to improve their
operation.
Existing law provides for specified procedures to be used in
notifying employees regarding benefits and required actions in
pursuing a workers' compensation claim.
Existing law requires that specified notices be provided to
injured employees and prescribes the contents of notices
required to be posted, given to, or mailed to an employee. The
administrative director is responsible for prescribing rules and
regulations pertaining to these notices. Existing law also
contains numerous statutorily prescribed statements that must be
used in certain notices.
This Bill would require the administrative director (AD) of the
Division of Workers' Compensation to prescribe rules and
regulations regarding notices that are provided to employees in
the workers' compensation system.
Specifically, this bill:
1) Adds a requirement that the AD consult with the
Commission on Health and Safety and Workers' Compensation
(CHSWC) when prescribing the rules and regulations
governing notices required to be provided to employees
regarding their rights under the workers' compensation
system.
2) Expands the subjects of information that benefit notices
shall include by adding notice of supplemental job
displacement benefits, rights concerning selection of a
personal treating physician, requests for comprehensive
medical evaluation, and offers of regular, modified, or
alternative work.
3) Requires the AD, in consultation with the CHSWC, to
develop, and make readily available, including on the DWC
website, informational material written in plain language
that describes the overall workers' compensation claims
Hearing Date: June 22, 2011 AB 335
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
system, including the rights and obligations of employees
and employers at every stage of a claim when a notice is
required.
4) Adds a requirement that each notice prescribed by the
AD, as required by law, be in plain language and include a
citation to the place in the informational material that
discusses relevant information to enable employees to
understand the context of the notices.
5) Makes a number of conforming changes, such as deletion
of specific statutory language regarding notices, which
have the effect of implementing the above requirements.
COMMENTS
1. Need for this bill?
In response to widespread concern that the system of notifying
injured workers of their rights, and how to navigate, in the
workers' compensation system was failing, the CHSWC undertook
an evaluation of the efficacy of the notices that are provided
to injured workers. This evaluation included working with all
relevant stakeholders to determine what the goals of these
notices should be, whether the goals were being met, and if
not, what could be done to improve the situation.
In July 2010, the CHSWC released a report, "Report on Benefit
Notices and Recommendation," which concluded that there is
consensus that currently-used benefit notices are:
Too voluminous (wordy, redundant, and frequently
contain information that is not needed by the recipient).
Complex, overwhelming, and frightening (e.g., "You
may lose important rights unless you . . . .").
Difficult to understand (Indirect terminology,
overly legalistic), and at times misleading.
Not standardized.
Difficult for employers to keep updated.
Hearing Date: June 22, 2011 AB 335
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
In addition, the CHSWC found that it was difficult for injured
workers to find information on their own, or obtain answers to
questions. As a result, in addition to improving the quality
and effectiveness of the notices, the Commission recommended
that a plain language booklet be made readily available on the
Division's website and through other means of delivery.
This bill was introduced in order to implement the
recommendations made by the CHSWC.
The bill would require the AD of the DWC to work with CHSWC to
develop new benefit notices written in easily understandable
language as well as informational material which describes the
workers' compensation claims process and the rights and
obligations of both employers and employees.
2. Proponent Arguments :
According to proponents of the measure, today, injured workers
receive notice after notice, often written in legalese that is
incomprehensible to most workers. They argue that an approach
to streamline, simplify and clarify these notices is long
overdue.
Proponents argue that this bill will create better outcomes
for injured workers by providing them with more digestible
information at key points in the claims process. According to
proponents, this should lead to a reduction in frictional
legal expenses that result from confusion and poor
communication. Lastly, according to proponents, CHSWC
estimates that this legislation will provide a net savings of
over $42 million per year.
3. Opponent Arguments :
None received.
SUPPORT
Acclamation Insurance Management Services
Hearing Date: June 22, 2011 AB 335
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
Allied Managed Care
Association of California Insurance Companies
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers' Compensation
California Labor Federation
California Manufacturers & Technology Association
California Nurses Association
California State Association of Counties
League of California Cities
OPPOSITION
None received
Hearing Date: June 22, 2011 AB 335
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations