BILL ANALYSIS
AB 516
Page 1
Date of Hearing: January 6, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 516 (Niello) - As Amended: January 4, 2010
SUBJECT : Workers' compensation: temporary disability.
SUMMARY : Repeals the minimum level of workers' compensation
temporary disability (TD) benefits to inmates in county jails
and on work release programs. Specifically, this bill :
1)Specifies that in computing average annual earnings for the
purposes of TD benefits for injuries occurring to an inmate of
any county jail or an inmate assigned to a work release
program on or after January 1, 2010, the average weekly
earnings shall be taken at not less than an amount equal to
the employee's average weekly earnings from all employers, nor
more than $1,260 or 1.5 times the state average weekly wage,
whichever is greater.
2)Provides that commencing on January 1, 2010, and each January
1 thereafter, the maximum limit specified above shall be
increased by an amount equal to the percentage increase in the
state average weekly wage as compared to the prior year.
EXISTING LAW:
1)Specifies that in computing average annual earnings for the
purposes of TD benefits and permanent total disability (PD)
benefits for injuries occurring on or after January 1, 2006,
the average weekly earnings shall be taken at not less than
$189, nor more than $1,260 or 1.5 times the state average
weekly wage, whichever is greater.
2)Provides that commencing on January 1, 2007, and each January
1 thereafter, the limits specified in existing law shall be
increased by an amount equal to the percentage increase in the
state average weekly wage as compared to the prior year.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose. The purpose of this bill is to eliminate the minimum
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temporary disability (TD) benefit in current law for inmates
in city or county jails to ensure that inmates do not receive
more in temporary disability benefits under workers'
compensation than they would have been paid in wages while
working.
2)Background. The author states that California law requires
injured workers to be paid a TD benefit equal to 2/3 of the
average weekly wage, and specifies that the minimum TD benefit
will be $148 per week in 2010. The minimum TD benefit level
applies to all injured workers including inmates in city and
county jails when they are performing work. Thus, under
existing law, an inmate in a city or county jail that did not
work before incarceration, but was injured while working in
the jail, would be paid $148 per week in TD benefits for up to
two years.
3)Comparison of benefits under current law to those in bill.
Under existing law, the minimum TD benefit will be $148 per
week in 2010. The bill would eliminate this minimum benefit
for inmates in county jails who are injured and have no
earnings. This bill would affect certain inmates in county
jails and inmates who are assigned to a work release program
to perform a variety of assignments including manual labor on
levees, streets, parks, schools, helping nonprofit
organizations, graffiti cleanup for local governments, weed
abatement, and yard services for senior centers. This bill
applies to county jail inmates and inmates on a work release
program with average earnings of less than $222 per week.
Under present law, if an individual's wages are $140 per week,
and if he or she is injured on the job, he or she will receive
the statutory minimum $148 in workers' compensation weekly
(2/3 of $222). With this bill, the same person would receive
$93 per week (2/3 of $140), or $55 less than under present
law.
4)Support arguments. The author states this bill is needed for
the following reasons:
a) Current law allows some people who are incarcerated in
city and county jails to receive more in TD benefits than
they would have been paid in wages if they were working.
The author points out this applies to both injured workers
who had no wages prior to incarceration and to injured
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workers who earned less than $100 in average weekly wages.
b) The existing minimum TD benefit rewards inmates
financially at the expense of city, county and state
taxpayers. Cities and counties are self-insured entities
and this additional cost is paid directly from their
budgets and not by an insurance company. This means less
money for police and sheriffs departments and their work on
the street and community outreach programs. Placer County
reports costs of approximately $70,000 annually for TD
benefits paid to inmates in county jails and on work
release programs. That amount does not include
administrative costs.
c) This bill provides that city and county jail inmates who
have not received wages for services provided would not be
entitled to temporary disability compensation, if they
sustain a workers' compensation injury, as there would be
no loss of earnings. This is consistent with the intent of
the workers' compensation system which is to provide
medical treatment and a wage replacement supplement for
those who sustained a loss of earnings due to injury.
While workers' compensation is aimed at making an injured
worker whole, it should not allow a greater compensation
than that which is actually lost.
The California State Sheriffs' Association supports the bill
on the grounds that the benefit amounts payable to an injured
worker will be equal to the employee's weekly earnings from
all employers. This association states this bill would have a
positive financial impact on the workers' compensation system
since those who have no history of earnings would not be
entitled to temporary disability benefits.
The CSAC Excess Insurance Authority (CSAC-EIA), a joint powers
authority representing public agencies, states that cities and
counties pay the cost of special workers' compensation
benefits for jail inmates. The cost of these benefits is
often paid directly out of the budgets of the law enforcement
agencies that administer the local jails.
5)Opposition arguments. The California Applicants' Attorneys
Association (CAAA) opposes the bill for the following reasons:
a) The bill would eliminate the current minimum weekly TD
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payment for county jail inmates or inmates assigned to a
work release program who are injured while performing work
assignments such as fire suppression, highway cleanup, etc.
Under existing law, these inmates are considered county
employees for purposes of workers' compensation, which
means they have no civil remedy where the negligence of
supervising authorities causes them to be injured. This
bill would eliminate the workers' compensation remedy as
well as for inmates who had low or no income immediately
prior to incarceration or work-release assignment.
b) Proponents have provided no convincing data that minimum
TD benefits for county inmates are a financial burden;
instead they have offered only anecdotal evidence.
c) The surest way to reduce workers' compensation costs is
to prevent injuries. This bill, however, would extinguish
a county's incentive to assure safe and healthy working
conditions and equipment for jail inmates and inmates
assigned to work release programs who had low or no income
prior to incarceration.
The California Labor Federation, AFL-CIO, states that this
bill violates the fundamental principal of a minimum benefit
level. If one is injured on the job, he or she will need a
minimum amount to survive. The Legislature has adopted the
policy position that workers temporarily unable to work should
qualify for a minimum benefit. There should be no distinction
as to what type of work or where the work was performed.
6)Clarifying and Corrective Amendments Needed. The bill
mentions inmates in county jails but does not mention those in
city jails. As a clarifying amendment to assure that inmates
in city jails are covered by the bill the following amendment
is recommended:
On page 4, line 3, of the bill, strike out the word
"county" and replace it with "city, county, or city and
county".
The bill states that it applies to injuries occurring after
January 1, 2010. That would have been possible had the bill
been approved in 2009 (when the bill was introduced) but since
it was not approved in 2009, the earliest this bill may become
effective is January 1, 2011. Therefore, it is recommended
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that the bill be amended as follows:
On page 4, line 5, of the bill, strike out "2010" and
insert "2011".
7)Prior legislation . In 2002, AB 749 (Calderon), Chapter 6,
Statutes of 2002, enacted both increases in workers'
compensation benefits and cost-saving reforms to the workers'
compensation system. One of provisions of that law was to
establish the minimum weekly TD benefit at $126 and adjust it
for increases in the state average weekly wage.
In 2005, AB 427 (La Malfa) proposed that inmates in county
jails, industrial farms, road camps, or city jails, and
inmates assigned to a county work release program would have
their average weekly earnings for purposes of TD determined at
not less than $189 or the actual weekly wages lost due to
disability resulting from the injury, whichever is less .
Thus, under AB 427, an inmate who had substantial
pre-incarceration earnings would not even have been entitled
to receive the full benefit of the TD formula. AB 427 was
approved by the Assembly on a 70-1 vote, but failed passage in
the Senate Labor and Industrial Relations Committee.
In 2007, AB 1341 (Benoit) originally proposed to repeal the
minimum level of TD workers' compensation for all employees
(including part-time and low-wage employees, county jail
inmates, and volunteers), similar to the previous version of
AB 516. The author removed that provision from AB 1341 before
the bill was heard.
Also in 2007, AB 338 (Coto) as passed by the Assembly
contained a provision very similar to who is being proposed by
AB 516. The Senate deleted that provision prior to passing
the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
California State Association of Counties (CSAC)
California State Sheriffs' Association
CSAC-Excess Insurance Authority
Placer County
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Opposition
California Applicants' Attorneys Association (CAAA)
California Labor Federation
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086