Amended in Senate August 2, 2016

Amended in Senate June 28, 2016

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 amend Sections 3351 and 3352 of, begin delete to add Section 77.7 to, end delete 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: begin delete utilization review: end delete employees.

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. begin delete 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. end delete

begin delete

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.

end delete begin delete

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.

end delete

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.

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.

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

begin insert

The bill would also delete obsolete provisions.

end insert

Existing law proscribes the crime of perjury.

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

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.

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

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

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

begin delete

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.

end delete

begin delete SEC. 2. end delete

begin insert SECTION 1. end insert   

Section 3351 of the Labor Code is amended to
read:

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 pay. An officer or member of a board of
directors may elect to be excluded from coverage in accordance
with subdivision (p) of Section 3352.

(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 company. A general partner of a
partnership or a managing member of a limited liability company
may elect to be excluded from coverage in accordance with
subdivision (q) of Section 3352.

begin delete SEC. 3. end delete

begin insert SEC. 2. end insert   

Section 3352 of the Labor Code is amended to read:

3352.  

“Employee” excludes the following:

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

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

(c) A person holding an appointment as deputy clerk or deputy
sheriff appointed for his or her own convenience, and who does
not receive compensation from the county or municipal corporation
or from the citizens of that county or municipal corporation 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 that person from recourse against a private person
employing him or her for injury occurring in the course of, and
arising out of, the employment.

(d) A 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
501(c)(3) of the Internal Revenue Code, of which he or she or a
member of his or her family is a member and who does not receive
compensation for those services, other than meals, lodging, or
transportation.

(e) A person performing voluntary service as a ski patrolman
who does not receive compensation for those services, other than
meals or lodging or the use of ski tow or ski lift facilities.

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

(g) A person, other than a regular employee, participating in
sports or athletics who does not receive compensation for the
participation other than the use of athletic equipment, uniforms,
transportation, travel, meals, lodgings, or other expenses incidental
thereto.

(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:

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

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

(i) A person performing voluntary service for a public agency
or a private, nonprofit organization who does not receive
remuneration for the services, other than meals, transportation,
lodging, or reimbursement for incidental expenses.

(j) A person, other than a regular employee, performing
officiating services relating to amateur sporting events sponsored
by a public agency or private, nonprofit organization, who does
not receive remuneration for these services, 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) A student participating as an athlete in amateur sporting
events sponsored by a public agency or public or private nonprofit
college, university, or school, who does not receive remuneration
for the participation, other than the use of athletic equipment,
uniforms, transportation, travel, meals, lodgings, scholarships,
grants-in-aid, or other expenses incidental thereto.

(l) A 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) A 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 830.39 of the Penal Code.

(n) A 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) A 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.

(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 and acceptance 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.

(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 and acceptance 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.

begin delete SEC. 4. end delete

begin insert SEC. 3. 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 delete SEC. 5. end delete

begin insert SEC. 4. end 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.