Amended in Assembly April 16, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1138

Introduced by Assembly Member Chau

February 22, 2013

An act to begin delete amend Sections 3550, 3551, and 3602 of, and to add Sections 3554, 3555, and 3556 to, the Labor Code, end delete begin insert add Section 1871.12 to the Insurance Code, end insert relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1138, as amended, Chau. Workers’ compensation: begin delete notice: records: liability. end delete begin insert records. end 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 begin delete provides for specified procedures to be used in notifying employees regarding workers’ compensation benefits and required actions in pursuing a workers’ compensation claim. end delete begin insert seeks to prevent workers’ compensation fraud through various procedures. end insert

begin delete

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.

end delete begin delete

(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 delete begin delete

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.

end delete begin delete

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.

end delete begin delete

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

end delete begin delete

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 delete begin insert

This bill would require the employer, commencing January 1, 2014, and January 1, 2015, to submit to its workers’ compensation insurer specified reports that it is required to submit to the Employment Development Department, and the insurer would be required to include the names of all covered employees in the workers’ compensation insurance policy. The employer would also be required to make a list of all employees covered by its workers’ compensation policy, which would include specified identifying information for each covered employee, to be available in written and electronic form, as specified, upon request, to specified governmental entities and the workers’ compensation insurer. The bill would provide that these lists are not public records subject to the California Public Records Act.

end insert begin delete

(4)

end delete

begin insert (2) end insert  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.

This bill would make legislative findings to that effect.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

Section 1871.12 is added to the Insurance Code, immediately following Section 1871.9, to read:

begin insert 1871.12. end insert   

(a) (1) Commencing January 1, 2014, employers
applying for or renewing a policy of workers’ compensation
insurance shall submit to the insurer the same wage data that is
contained in annual, quarterly, and reconciliation reports that are
submitted to the Employment Development Department pursuant
to Section 1088 of the Unemployment Insurance Code.

(2) The department shall adopt regulations to implement this
subdivision.

(b) (1) Commencing January 1, 2015, insured employers shall
submit to their workers’ compensation insurer the data contained
in reports of new employees and reports of independent contractors
that are submitted to the Employment Development Department
pursuant to Sections 1088.5 and 1088.8 of the Unemployment
Insurance Code.

(2) Insurers shall list the names of all covered employees in any
policy of workers’compensation insurance issued to an employer.

(3) The department shall adopt regulations to implement this
subdivision.

(c) A list of all employees covered by the workers’ compensation
policy, 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, or 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).

(d) A list of covered employees, with the full name only, shall
be made available to any employee upon request.

end insert

begin delete

SECTION 1.  

Section 3550 of the Labor Code is amended to
read:

3550.  

(a) (1) 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 the fact that the employer is
self-insured, if applicable, and who is responsible for claims
adjustment.

(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.

(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).

(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.

(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.

(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.

(b) Failure to keep any notice required by paragraph (1) of
subdivision (a) 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 paragraph
(1) of subdivision (a) 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
paragraph (1) of subdivision (a) 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
paragraph (1) of subdivision (a) 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. 2.  

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
subdivision (d) of 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 subdivision (d) of 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.

(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).

SEC. 3.  

Section 3554 is added to the Labor Code, to read:

3554.  

(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.

SEC. 4.  

Section 3555 is added to the Labor Code, to read:

3555.  

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.

SEC. 5.  

Section 3556 is added to the Labor Code, to read:

3556.  

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.

SEC. 6.  

Section 3602 of the Labor Code is amended to read:

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.

(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.

(f) 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.

end delete

begin delete SEC. 7. end delete
begin insert SEC. 2. end insert   

The Legislature finds and declares that begin delete Sections 1 and
2 end delete begin insert Section 1 end insert 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:

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.