BILL ANALYSIS
AB 2625
Page 1
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 2625 (Villines) - As Introduced: February 19, 2010
SUBJECT : Workers' compensation: state employees
SUMMARY : Adds the State of California in its capacity as an
employer to the list of employers that can, upon compliance with
a series of procedural steps, opt out of the existing workers'
compensation adjudication system.
EXISTING LAW :
1)Establishes a comprehensive system of workers' compensation
benefits for employees who are injured on the job, including
medical benefits, temporary and permanent disability benefits,
job retraining benefits, and death benefits for heirs.
2)Requires every employer in the state, except the state itself,
to either purchase a policy of workers' compensation insurance
or obtain a certificate of self-insurance from the Department
of Industrial Relations.
3)Establishes a formal adjudicatory system to resolve any
disputes that may arise in connection with a workers'
compensation claim, administered by the Division of Workers'
Compensation (DWC), that includes administrative trials
presided over by administrative law judges, reviewed by the
Workers' Compensation Appeals Board (WCAB).
4)Authorizes employers in the construction industry, employers
with more than 50 employees and with workers' compensation
premiums of at least $50,000, employers that are self-insured,
and employers that are members of a safety group established
pursuant to specified conditions and that collectively have
workers' compensation premiums of at least $500,000, to enter
into a "carve out" agreement with their employees to have any
workers' compensation disputes that may occur resolved outside
of the DWC's procedure in accordance with the agreement.
5)Requires any employer that wishes to negotiate a carve out
with its employees to obtain the permission of the
Administrative Director (AD) of the DWC in order to initiate
AB 2625
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the negotiations.
6)Provides that only employers whose employees are represented
by a recognized or certified exclusive collective bargaining
agent may negotiate a carve out agreement.
7)Prohibits any negotiated agreement from diminishing workers'
compensation benefits, and from limiting the right of an
employee to be represented by counsel at all stages of the
alternative dispute resolution process.
FISCAL EFFECT : Undetermined
COMMENTS :
1)Purpose . According to the author, alternative dispute
resolution (ADR) has long been recognized as a highly
effective approach to dispute resolution. The author further
points out that the state is not covered by the existing carve
out laws, despite being a highly unionized employer.
2)Prior legislation . SB 177 (Poochigian) of 2005 proposed the
same change in the law that AB 2615 is proposing. That bill
was presented in the Senate Labor and Industrial Relations
Committee, but no vote was taken and the bill was ultimately
held in Committee.
3)Opposition . The California Applicants' Attorneys Association
(CAAA) is opposed to the bill, arguing that it is unnecessary,
and potentially damaging to the rights of state employees.
Specifically, CAAA asserts that with existing carve outs, it
is virtually impossible for injured workers to obtain counsel
when needed. This is so because the agreements can address
how compensation for counsel is to be handled, and because the
system is so different that often workers' compensation
practitioners do not feel competent to work in an alien
system. CAAA also argues that the history of carve outs since
first authorized in 1994 shows some save costs, others do not;
some deliver faster benefits, others do not. In this regard,
CAAA notes that the Commission on Health and Safety and
Workers' Compensation is conducting a pilot project on carve
outs, and until that is completed and shows carve outs to be
beneficial, it is premature to expand carve outs to state
employees.
AB 2625
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The California Nurses Association argues in opposition that
these arrangements can be reasonably negotiated only when
there is a level playing field between the employer and union,
and that in the current anti-state worker political and
economic climate, the state has undue leverage.
REGISTERED SUPPORT / OPPOSITION :
Support
None received.
Opposition
California Applicants' Attorneys Association
California Nurses Association
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086