BILL ANALYSIS Ó
AB 638
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Date of Hearing: April 10, 2013
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
AB 638 (Alejo) - As Introduced February 13, 2013
SUBJECT : Illegally uninsured employers: expedited hearings
SUMMARY : Provides that issues relating to whether the
applicant was employed, or whether the injury occurred on the
job, shall be resolved at an expedited hearing before the
Workers' Compensation Appeals Board (WCAB).
EXISTING LAW :
1)Requires every employer in the state to either purchase
workers' compensation insurance, or obtain a certificate of
self-insurance from the Department of Industrial Relations,
that provides specified benefits to employees who are injured
on the job.
2)Establishes a system of administrative adjudication to resolve
disputes over any issues relevant to the delivery of these
benefits, including whether the person was employed, whether
the injury occurred on the job, and the scope of benefits to
which the person is entitled.
3)Specifies certain issues that are entitled to "expedited"
hearings within the administrative adjudication system.
4)Establishes the Uninsured Employers Fund (UEF) within the
Department of Industrial Relations to pay for the benefits
owed to an injured worker whose employer was, at the time of
the injury, illegally uninsured.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose . According to the author, a disproportionate number
of workers whose employer is illegally uninsured are low-wage
workers who may not be able to afford an attorney. Since
these workers do not have direct access to the medical care
provided by the insurer of a lawfully insured employer, these
injured workers must establish eligibility with the WCAB, and
AB 638
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it takes formal proceedings before this class of injured
worker can obtain benefits. The bill ensures that these
proceedings occur expeditiously so that needed medical care
can be provided as timely as possible.
2)UEF . All legally insured employers pay into a fund that
finances the benefits for workers who are employed by an
illegally uninsured employer. While there are certain other
sources of funding for the UEF, it is substantially employer
funded. As a result, lawful employers subsidize those
employers who choose to ignore the law. Many of these
employers support the bill because it will assist in
identifying illegal actors sooner, and because it will ensure
that the injured workers are cared for earlier, and better.
In general, early medical intervention in workers compensation
cases results in lower medical costs and earlier return to
work.
3)Early identification of violators . One of the benefits of the
bill is that the system will be able to identify the illegal
actors earlier than under current law. Currently, these cases
may take months or years to wind their way through the normal
calendaring system to resolution, and the illegally uninsured
employer can continue to operate illegally during this delay.
The bill creates a better disincentive to those who would act
illegally.
4)Represented employees . Current law allows the issues of
employment and causation to be expedited in cases where the
applicant is represented by counsel. For some reason,
unrepresented workers, including those most likely to be
employed by an uninsured employer, do not have statutory
access to this expedited procedure. The bill cures this
anomaly whereby some of the most vulnerable employees -
low-wage workers not represented by counsel who are working
for a bad-actor employer - do not have the benefit of
expedited hearings.
REGISTERED SUPPORT / OPPOSITION :
Support
California Applicants' Attorneys Association (CAAA)
California Association for Health Services at Home (CAHSAH)
California Labor Federation, AFL-CIO
AB 638
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Safeway
Worksafe, Inc.
Opposition
None received.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086