Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1138

Introduced by Assembly Member Chau

February 22, 2013

begin delete An act to amend Section 106 of the Labor Code, relating to employment. end delete begin insert An act to amend Sections 3550, 3551, and 3602 of, and to add Sections 3554, 3555, and 3556 to, the Labor Code, relating to workers’ compensation. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1138, as amended, Chau. begin delete Joint Enforcement Strike Force on the Underground Economy. end delete begin insert Workers’ compensation: notice: records: liability. end insert

begin insert

(1) Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law establishes the Department of Industrial Relations. Existing law provides for specified procedures to be used in notifying employees regarding workers’ compensation benefits and required actions in pursuing a workers’ compensation claim.

end insert begin insert

This bill would require employers to post a notice of covered employees showing the full names of employees covered by the employer’s workers’ compensation carrier, and updated quarterly, as specified. The employer would also be required to keep separate lists of covered employees, that would include specified identifying information for each covered employee, and make those lists available in written and electronic form, as specified, upon request, to specified governmental entities and the workers’ compensation insurer. The bill would require the employer to retain a copy of each notice and each list for 5 years. Except as provided, failure by an employer to retain or provide copies to specified government agencies of these notices or lists and the absence of the name of any employee from the notices or lists would conclusively establish that the employer did not obtain workers’ compensation insurance as required by law. The bill would provide that these lists are not public records subject to California Public Record Act.

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(2) Existing law requires every employer required to obtain workers’ compensation coverage, except as provided, to give every new employee, either at the time the employee is hired or by the end of the first pay period, a written notice of specified workers’ compensation information.

end insert begin insert

This bill would require every notice required to be given to the employee to contain his or her name and last four digits of the employee’s social security number. Every employer would be required to retain a copy for 5 years thereafter, and make it available to specified governmental entities and the insurer upon request. These notices would not be public records subject to California Public Record Act.

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This bill would provide that any employer that violates these new notice provisions would be subject to citation and civil penalty by the Labor Commissioner, as provided.

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(3) Existing law, except as provided, requires workers’ compensation benefits to be the exclusive remedy for workers injured on the job.

end insert begin insert

This bill would add an exception to the exclusive remedy provision when the compensable injury or illness was suffered during a period that the employee was not listed on the notice of covered employees or the list of covered employees or the employee was not provided with the required written notice of specified workers’ compensation information.

end insert begin insert

(4) Existing constitutional provisions require that a statute that limits the right of access to the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

end insert begin insert

This bill would make legislative findings to that effect.

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Existing law establishes the Joint Enforcement Strike Force on the Underground Economy to combat tax violations and cash-pay employment. Existing law authorizes the Labor Commissioner to authorize an employee of any of the agencies that participate in the strike force to issue citations and issue and serve a penalty assessment order. Existing law prohibits an employee from issuing citations or penalty assessment orders unless the employee has been specifically designated, authorized, and trained by the Labor Commissioner for this purpose.

end delete begin delete

This bill would make nonsubstantive changes to that prohibition.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 3550 of the end insert begin insert Labor Code end insert begin insert is amended to
read: end insert

3550.  

(a)  begin insert (1) end insert begin insert   end insert 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 begin delete when such is end delete the begin delete fact, end delete begin insert fact end insert
that the employer is self-insured, begin insert if applicable, end insert and who is
responsible for claims adjustment.

begin insert

(2) (A) Every employer that secures payment of compensation
from an insurer duly authorized to write compensation insurance
in this state shall post a notice of covered employees that lists only
the full name of each person that is covered by the policy with the
compensation insurance carrier identified in paragraph (1),
immediately adjacent to the notice required in paragraph (1). This
notice of covered employees shall be updated quarterly, or if there
are no changes, upon each addition or removal of a covered
employee.

end insert begin insert

(B) A list of covered employees, including name, address, last
four numbers of the employee’s social security number, and the
employee identification number shall be made available to the
Director of Industrial Relations, the Division of Labor Standards
Enforcement, the Department of Insurance, the Employment
Development Department, and the insurer, upon request. The list
of covered employees shall be made available in written form, and
also in electronic form by employers that utilize a computerized
payroll system. These lists are not public records subject to the
California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).

end insert begin insert

(C) Every employer shall retain copies of all notices of covered
employees required by subparagraph (A) and copies of all lists of
covered employees required by subparagraph (B) for a period of
not less than five years.

end insert begin insert

(3) (A) Except where an employer establishes workers’
compensation coverage for an employee that is provided by another
employer pursuant to subdivision (d) of Section 3602, absence of
the name of any employee on any notice of covered employees or
any list of covered employees required by paragraph (2)
conclusively establishes that the employer did not secure payment
of compensation from an insurance carrier, as required by Section
3700, for the purposes of any proceeding pursuant to Sections
3710.1, 3710.2, and 3722.

end insert begin insert

(B) Failure by an employer to retain each notice of covered
employees or each list of covered employees or provide copies to
the Director of Industrial Relations or the Division of Labor
Standards Enforcement in compliance with paragraph (2)
conclusively establishes that the employer failed to secure payment
of compensation from an insurance carrier, as required by Section
3700, for the purposes of any proceeding pursuant to Sections
3710.1, 3710.2, and 3722, unless the employer establishes that
there was coverage pursuant to subdivision (d) of Section 3602.

end insert

(b) Failure to keep any notice required by begin delete this section end delete begin insert paragraph
(1) of subdivision (a) end insert 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 begin delete this section end delete
begin insert paragraph (1) of subdivision (a) end insert 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, supplemental job
displacement, 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 Internet Web site address and contact information that
employees may use to obtain further information about the
workers’ compensation claims process and an injured employee’s
rights and obligations, including the location and telephone number
of the nearest information and assistance officer.

(e) Failure of an employer to provide the notice required by begin delete this
section end delete begin insert paragraph (1) of subdivision (a) end insert 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
begin delete this section end delete begin insert paragraph (1) of subdivision (a) end insert 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.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 3551 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

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
begin insert subdivision (d) of end insert 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 begin insert subdivision (d) of end insert 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 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.

begin insert

(d) Notices required by this section shall be made available to
the Director of Industrial Relations, the Division of Labor
Standards Enforcement, the Department of Insurance, the
Employment Development Department, and the insurer upon
request. These documents are not public records subject to the
California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 3554 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 3554. end insert   

(a) Any employer who violates subparagraph (A) of
paragraph (2) of subdivision (a) of Section 3550 shall be subject
to citation, pursuant to Section 3555, and a civil penalty in the
amount of one hundred dollars ($100) per employee for the first
violation, and five hundred dollars ($500) per employee for each
violation in a subsequent citation.

(b) Any employer that fails to turn over records pursuant to
subparagraph (B) of paragraph (2) of subdivision (a) of Section
3550 shall be subject to citation, pursuant to Section 3555, and a
civil penalty in the amount of two hundred fifty dollars ($250) per
employee for the first violation, and one thousand dollars ($1,000)
per employee for each violation in a subsequent citation.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 3555 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 3555. end insert   

If, upon inspection or investigation, the Labor
Commissioner determines that an employer is in violation of
Section 3550, the Labor Commissioner may issue a citation to that
person. The citation may be served personally or by registered
mail in accordance with subdivision (c) of Section 11505 of the
Government Code. Each citation shall be in writing and shall
describe the nature of the violation, including reference to the
statutory provision alleged to have been violated.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 3556 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 3556. end insert   

The procedures for contesting and enforcing judgments
for citations or civil penalties issued by the Labor Commissioner
for a violation of this chapter shall be the same as those set out in
Section 226.5.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 3602 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

3602.  

(a) Where the conditions of compensation set forth in
Section 3600 concur, the right to recover compensation is, except
as specifically provided in this section and Sections 3706 and 4558,
the sole and exclusive remedy of the employee or his or her
dependents against the employer. The fact that either the employee
or the employer also occupied another or dual capacity prior to,
or at the time of, the employee’s industrial injury shall not permit
the employee or his or her dependents to bring an action at law for
damages against the employer.

(b) An employee, or his or her dependents in the event of his
or her death, may bring an action at law for damages against the
employer, as if this division did not apply, in the following
instances:

(1) Where the employee’s injury or death is proximately caused
by a willful physical assault by the employer.

(2) Where the employee’s injury is aggravated by the employer’s
fraudulent concealment of the existence of the injury and its
connection with the employment, in which case the employer’s
liability shall be limited to those damages proximately caused by
the aggravation. The burden of proof respecting apportionment of
damages between the injury and any subsequent aggravation
thereof is upon the employer.

(3) Where the employee’s injury or death is proximately caused
by a defective product manufactured by the employer and sold,
leased, or otherwise transferred for valuable consideration to an
independent third person, and that product is thereafter provided
for the employee’s use by a third person.

(c) In all cases where the conditions of compensation set forth
in Section 3600 do not concur, the liability of the employer shall
be the same as if this division had not been enacted.

(d) (1) For the purposes of this division, including Sections
3700 and 3706, an employer may secure the payment of
compensation on employees provided to it by agreement by another
employer by entering into a valid and enforceable agreement with
that other employer under which the other employer agrees to
obtain, and has, in fact, obtained workers’ compensation coverage
for those employees. In those cases, both employers shall be
considered to have secured the payment of compensation within
the meaning of this section and Sections 3700 and 3706 if there is
a valid and enforceable agreement between the employers to obtain
that coverage, and that coverage, as specified in subdivision (a)
or (b) of Section 3700, has been in fact obtained, and the coverage
remains in effect for the duration of the employment providing
legally sufficient coverage to the employee or employees who
form the subject matter of the coverage. That agreement shall not
be made for the purpose of avoiding an employer’s appropriate
experience rating as defined in subdivision (c) of Section 11730
of the Insurance Code.

(2) Employers who have complied with this subdivision shall
not be subject to civil, criminal, or other penalties for failure to
provide workers’ compensation coverage or tort liability in the
event of employee injury, but may, in the absence of compliance,
be subject to all three.

begin insert

(e) Notwithstanding the provisions of subdivisions (a) to (c),
inclusive, the exclusive remedy provision shall not apply for
compensable injuries and illnesses suffered during a period that
an employee is not included in a notice of covered employees or
list of covered employees as required pursuant to Section 3550.

end insert begin delete

(e)

end delete

begin insert (f) end insert  As provided in paragraph (12) of subdivision (f) of Section
1202.4 of the Penal Code, in cases where an employer is convicted
of a crime against an employee, a payment to the employee or the
employee’s dependent that is paid by the employer’s workers’
compensation insurance carrier shall not be used to offset the
amount of the restitution order unless the court finds that the
defendant substantially met the obligation to pay premiums for
that insurance coverage.

begin insert

begin insert SEC. 7. end insert   

end insert begin insert

The Legislature finds and declares that Sections 1 and
2 of this act impose a limitation on the public’s right of access to
the writings of public officials and agencies within the meaning
of Section 3 of Article I of the California Constitution. Pursuant
to that constitutional provision, the Legislature makes the following
findings to demonstrate the interest protected by this limitation
and the need for protecting that interest:

end insert begin insert

In order to protect the inalienable right to privacy pursuant to
Section 1 of Article I of the California Constitution, it is necessary
to enact legislation that the documents containing employee
personal information provided pursuant to this act are maintained
confidential.

end insert

begin delete

SECTION 1.  

Section 106 of the Labor Code is amended to
read:

106.  

(a) The Labor Commissioner may authorize an employee
of any of the agencies that participate in the Joint Enforcement
Strike Force on the Underground Economy, as defined in Section
329 of the Unemployment Insurance Code, to issue citations
pursuant to Sections 226.4 and 1022 and issue and serve a penalty
assessment order pursuant to subdivision (a) of Section 3722.

(b) An employee shall not issue a citation or penalty assessment
order pursuant to this section unless the employee has been
specifically designated, authorized, and trained by the Labor
Commissioner for this purpose. Appeals of all citations or penalty
assessment orders shall follow the procedures prescribed in Section
226.5, 1023, or 3725, as applicable.

end delete