Amended in Senate June 13, 2016

Amended in Assembly May 27, 2016

Amended in Assembly March 29, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2883

Introduced by Committee on Insurance (Assembly Members Daly (Chair), Travis Allen, Bigelow, Calderon, Cooley, Cooper, Dababneh, Frazier, Beth Gaines, Gatto, Gonzalez, and Rodriguez)

February 25, 2016

An act to begin insert amend Sections 3351 and 3352 of, to end insert add Section 77.7 to, and to repeal Section 6354.7 of, the Labor Code, relating to workers’ compensation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2883, as amended, Committee on Insurance. Workers’ compensation: utilization begin delete review. end delete begin insert review: employees end insert .

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment. Existing law requires every employer to establish a utilization review process, and defines “utilization review” as utilization review or utilization management functions that prospectively, retrospectively, or concurrently review and approve, modify, delay, or deny, based in whole or in part on medical necessity to cure and relieve an injured worker from the effects of his or her injury, treatment recommendations by physicians, prior to, retrospectively, or concurrent with providing medical treatment services.

Existing law also establishes the Commission on Health and Safety and Workers’ Compensation in the department. Existing law directs the commission to conduct a continuing examination of the workers’ compensation system and of the state’s activities to prevent industrial injuries and occupational diseases. Existing law also authorizes the commission to conduct or contract for studies it deems necessary to carry out its responsibilities.

This bill would require the commission to conduct, or contract for the conduct of, a feasibility study regarding the extent to which physicians’ requests for authorization of medical treatment for injured employees may be processed using an entirely paperless system. The bill would provide that the focus of the feasibility study shall be to determine whether the change to a paperless system would reduce the time required to provide medical treatment services to injured employees and improve the clarity and quality of communication between physicians and the employer’s utilization review process. The bill would require the commission to consult with stakeholders, as specified, and would grant the commission discretion to decide whether to conduct or contract for the conduct of the feasibility study. The bill would also delete obsolete provisions.

begin insert

Existing law defines an employee, for purposes of the laws governing workers’ compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition, among other persons, officers and directors of a private corporation who are the sole shareholders of the corporation and working members of a partnership or limited liability company, as specified, unless they elect to come under the compensation provisions of the laws governing workers’ compensation.

end insert begin insert

This bill would revise those exceptions from the definition of an employee to apply to an officer or member of the board of directors, as specified, if he or she owns at least 15% of the issued and outstanding stock of the corporation, or an individual who is a general partner of a partnership or a managing member of a limited liability company, and that person elects to be excluded by executing a written waiver of his or her rights under the laws governing workers’ compensation, stating under penalty of perjury that he or she is a qualifying officer or director, or a qualifying general partner or managing member, as applicable. The bill would specify the effective date of the waivers.

end insert begin insert

The bill would also make technical and clarifying changes to the provision excluding specified persons from the definition of employee.

end insert begin insert

Existing law proscribes the crime of perjury.

end insert begin insert

By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.

end insert begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

SECTION 1.  

Section 77.7 is added to the Labor Code, to read:

77.7.  

(a) The commission shall conduct, or contract for the
conduct of, a feasibility study regarding the extent to which
physicians’ requests for authorization of medical treatment for
injured employees may be processed using an entirely paperless
system. The focus of the feasibility study shall be to determine
whether the change to a paperless system would reduce the time
required to provide medical treatment services to injured employees
and improve the clarity and quality of communication between
physicians and the employer’s utilization review process. To make
that determination, the study shall also include an assessment
regarding the current state of infrastructure in place to meet this
goal, and any additional costs and requirements for providers and
the state that may be deemed necessary to ensure efficiency,
interoperability, and privacy protections in making the change to
a paperless system.

(b) The commission shall consult with stakeholders, including
employers, employees, and medical providers, in conducting or
contracting for the feasibility study pursuant to subdivision (a).

(c) The commission shall have discretion to decide whether to
conduct or contract for the conduct of the feasibility study pursuant
to this section.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 3351 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

3351.  

“Employee” means every person in the service of an
employer under any appointment or contract of hire or
apprenticeship, express or implied, oral or written, whether lawfully
or unlawfully employed, and includes:

(a) Aliens and minors.

(b) All elected and appointed paid public officers.

(c) All officers and members of boards of directors of
quasi-public or private corporations while rendering actual service
for the corporations for begin delete pay; provided that, where the officers and
directors of the private corporation are the sole shareholders
thereof, the corporation and the officers and directors shall come
under the compensation provisions of this division only by election
as provided in subdivision (a) of Section 4151. end delete begin insert pay may elect to
be excluded from coverage in accordance with subdivision (p) of
Section 3352. end insert

(d) Except as provided in subdivision (h) of Section 3352, any
person employed by the owner or occupant of a residential dwelling
whose duties are incidental to the ownership, maintenance, or use
of the dwelling, including the care and supervision of children, or
whose duties are personal and not in the course of the trade,
business, profession, or occupation of the owner or occupant.

(e) All persons incarcerated in a state penal or correctional
institution while engaged in assigned work or employment as
defined in paragraph (1) of subdivision (a) of Section 10021 of
Title 8 of the California Code of Regulations, or engaged in work
performed under contract.

(f) All working members of a partnership or limited liability
company receiving wages irrespective of profits from the
partnership or limited liability begin delete company; provided that where the
working members of the partnership or limited liability company
are general partners or managers, the partnership or limited liability
company and the partners or managers shall come under the
compensation provisions of this division only by election as
provided in subdivision (a) of Section 4151. If a private corporation
is a general partner or manager, “working members of a partnership
or limited liability company” shall include the corporation and the
officers and directors of the corporation, provided that the officers
and directors are the sole shareholders of the corporation. If a
limited liability company is a partner or member, “working
members of the partnership or limited liability company” shall
include the managers of the limited liability company. end delete begin insert company
may elect to be excluded from coverage in accordance with
subdivision (q) of Section 3352. end insert

begin delete

(g) For the purposes of subdivisions (c) and (f), the persons
holding the power to revoke a trust as to shares of a private
corporation or as to general partnership or limited liability company
interests held in the trust, shall be deemed to be the shareholders
of the private corporation, or the general partners of the partnership,
or the managers of the limited liability company.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 3352 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

3352.  

“Employee” excludes the following:

(a)  begin delete Any end delete begin insert A end insert person defined in subdivision (d) of Section 3351
who is employed by his or her parent, spouse, or child.

(b)  begin delete Any end delete begin insert A end insert person performing services in return for aid or
sustenance only, received from any religious, charitable, or relief
organization.

(c)  begin delete Any end delete begin insert A end insert person holding an appointment as deputy clerk or
deputy sheriff appointed for his or her own convenience, and who
begin delete receives no end delete begin insert does not receive end insert compensation from the county or
municipal corporation or from the citizens begin delete thereof end delete begin insert of that county
or municipal corporation end insert for his or her services as the deputy. This
exclusion is operative only as to employment by the county or
municipal corporation and does not deprive begin delete any end delete begin insert that end insert person begin delete so
deputized end delete from recourse against a private person employing him
or her for injury occurring in the course begin delete of end delete begin insert of, end insert and arising out begin delete of end delete
begin insert of, end insert the employment.

(d)  begin delete Any end delete begin insert A end insert person performing voluntary services at or for a
recreational camp, hut, or lodge operated by a nonprofit
organization, exempt from federal income tax under Section begin delete 101(6) end delete
begin insert 501 end insert of the Internal Revenue Code, of which he or she or a member
of his or her family is a member and who begin delete receives no end delete begin insert does not
receive end insert compensation for those begin delete services end delete begin insert services, end insert other than meals,
lodging, or transportation.

(e)  begin delete Any end delete begin insert A end insert person performing voluntary service as a ski
patrolman who begin delete receives no end delete begin insert does not receive end insert compensation for
those begin delete services end delete begin insert services, end insert other than meals or lodging or the use of
ski tow or ski lift facilities.

(f)  begin delete Any end delete begin insert A end insert person employed by a ski lift operator to work at a
snow ski area who is relieved begin delete of end delete begin insert of, end insert and begin insert is end insert not performing begin delete any end delete begin insert any, end insert
prescribed duties, while participating in recreational activities on
his or her own initiative.

(g)  begin delete Any end delete begin insert A end insert person, other than a regular employee, participating
in sports or athletics who begin delete receives no end delete begin insert does not receive end insert
compensation for the participation other than the use of athletic
equipment, uniforms, transportation, travel, meals, lodgings, or
other expenses incidental thereto.

begin delete

(h) Any person defined in subdivision (d) of Section 3351 who
was employed by the employer to be held liable for less than 52
hours during the 90 calendar days immediately preceding the date
of the injury for injuries, as defined in Section 5411, or during the
90 calendar days immediately preceding the date of the last
employment in an occupation exposing the employee to the hazards
of the disease or injury for injuries, as defined in Section 5412, or
who earned less than one hundred dollars ($100) in wages from
the employer during the 90 calendar days immediately preceding
the date of the injury for injuries, as defined in Section 5411, or
during the 90 calendar days immediately preceding the date of the
last employment in an occupation exposing the employee to the
hazards of the disease or injury for injuries, as defined in Section
5412.

end delete begin insert

(h) A person described in subdivision (d) of Section 3351 whose
employment by the employer to be held liable, during the 90
calendar days immediately preceding the date of injury, for injuries
as described in Section 5411, or during the 90 calendar days
immediately preceding the date of the last employment in an
occupation exposing the employee to the hazards of the disease
or injury, for diseases or injuries as described in Section 5412,
comes within either of the following descriptions:

end insert begin insert

(1) The employment was, or was contracted to be, for less than
52 hours.

end insert begin insert

(2) The employment was, or was contracted to be, for wages of
not more than one hundred dollars ($100).

end insert

(i)  begin delete Any end delete begin insert A end insert person performing voluntary service for a public
agency or a private, nonprofit organization who begin delete receives no end delete begin insert does
not receive end insert remuneration for the begin delete services end delete begin insert services, end insert other than meals,
transportation, lodging, or reimbursement for incidental expenses.

(j)  begin delete Any end delete begin insert A end insert person, other than a regular employee, performing
officiating services relating to amateur sporting events sponsored
by begin delete any end delete begin insert a end insert public agency or private, nonprofit organization, who
begin delete receives no end delete begin insert does not receive end insert remuneration for these begin delete services end delete
begin insert services, end insert other than a stipend for each day of service no greater
than the amount established by the Department of Human
Resources as a per diem expense for employees or officers of the
state. The stipend shall be presumed to cover incidental expenses
involved in officiating, including, but not limited to, meals,
transportation, lodging, rule books and courses, uniforms, and
appropriate equipment.

(k)  begin delete Any end delete begin insert A end insert student participating as an athlete in amateur sporting
events sponsored by begin delete any end delete begin insert a end insert public begin delete agency, end delete begin insert agency or end insert public or
private nonprofit college, begin delete university end delete begin insert university, end insert or school, who
begin delete receives no end delete begin insert does not receive end insert remuneration for the begin delete participation end delete
begin insert participation, end insert other than the use of athletic equipment, uniforms,
transportation, travel, meals, lodgings, scholarships, grants-in-aid,
or other expenses incidental thereto.

(l)  begin delete Any end delete begin insert A end insert law enforcement officer who is regularly employed
by a local or state law enforcement agency in an adjoining state
and who is deputized to work under the supervision of a California
peace officer pursuant to paragraph (4) of subdivision (a) of Section
832.6 of the Penal Code.

(m)  begin delete Any end delete begin insert A end insert law enforcement officer who is regularly employed
by the Oregon State Police, the Nevada Department of Motor
Vehicles and Public Safety, or the Arizona Department of Public
Safety and who is acting as a peace officer in this state pursuant
to subdivision (a) of Section begin delete 830.32 end delete begin insert 830.39 end insert of the Penal Code.

(n)  begin delete Any end delete begin insert A end insert person, other than a regular employee, performing
services as a sports official for an entity sponsoring an
intercollegiate or interscholastic sports event, or any person
performing services as a sports official for a public agency, public
entity, or a private nonprofit organization, which public agency,
public entity, or private nonprofit organization sponsors an amateur
sports event. For purposes of this subdivision, “sports official”
includes an umpire, referee, judge, scorekeeper, timekeeper, or
other person who is a neutral participant in a sports event.

(o)  begin delete Any end delete begin insert A end insert person who is an owner-builder, as defined in
subdivision (a) of Section 50692 of the Health and Safety Code,
who is participating in a mutual self-help housing program, as
defined in Section 50087 of the Health and Safety Code, sponsored
by a nonprofit corporation.

begin insert

(p) An officer or member of the board of directors, as described
in subdivision (c) of Section 3351, if he or she owns at least 15
percent of the issued and outstanding stock of the corporation and
executes a written waiver of his or her rights under this chapter
stating under penalty of perjury that the person is a qualifying
officer or director. The waiver shall be effective upon the date of
receipt by the corporation’s insurance carrier and shall remain
effective until the officer or member of the board of directors
provides the insurance carrier with a written withdrawal of the
waiver.

end insert begin insert

(q) An individual who is a general partner of a partnership or
a managing member of a limited liability company who executes
a written waiver of his or her rights under this chapter stating
under penalty of perjury that the person is a qualifying general
partner or managing member. The waiver shall be effective upon
the date of receipt by the partnership or limited liability company’s
insurance carrier and shall remain effective until the general
partner or managing member provides the insurance carrier with
a written withdrawal of the waiver.

end insert

begin delete SEC. 2. end delete

begin insert SEC. 4. end insert   

Section 6354.7 of the Labor Code, as added by Section
84 of Chapter 6 of the Statutes of 2002, is repealed.

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert