BILL NUMBER: SB 313 INTRODUCED
BILL TEXT
INTRODUCED BY Senator DeSaulnier
FEBRUARY 25, 2009
An act to amend Section 3722 of the Labor Code, relating to
workers' compensation.
LEGISLATIVE COUNSEL'S DIGEST
SB 313, as introduced, DeSaulnier. Workers' compensation: penalty
assessments.
Existing law requires every employer, except the state, to secure
the payment of workers' compensation. Existing law provides that at
any time that the director determines that an employer has been
uninsured for a period in excess of one week during the calendar year
preceding the director's determination, the director may issue and
serve a penalty assessment order that requires the uninsured employer
to pay to the director, for deposit into the State Treasury to the
credit of the Uninsured Employers Fund, the greater of (1) twice the
amount the employer would have paid in workers' compensation premiums
during the period the employer was uninsured or (2) the sum of one
thousand dollars ($1,000) per employee employed during the period the
employer was uninsured.
Existing law provides that if the employer is currently insured,
or becomes insured during the period during which the above penalty
is being determined, the amount an employer would have paid in
workers' compensation premiums shall be calculated by prorating the
current premium for the number of weeks the employer was uninsured.
Existing law provides that if the employer is uninsured at the
time the above penalty is being determined, the amount an employer
would have paid in workers' compensation premiums shall be calculated
by applying the weekly premium per employee on file with the
Insurance Commissioner to the number of weeks the employer was
uninsured. Existing law provides that each employee of the uninsured
employer shall be assumed to be assigned to the governing
classification for that employer as determined by the director after
consultation with the Insurance Commissioner. Existing law provides
that if the employer contends that the assignment of the governing
classification is incorrect, or that any employee should be assigned
to a different classification, the employer has the burden to prove
that the different classification should be utilized.
This bill would require that, if the employer is currently
insured, or becomes insured during the period during which the above
penalty is being determined, the amount an employer would have paid
in workers' compensation premiums shall be calculated by prorating
the current premium for the number of weeks the employer was
uninsured within the three-year period immediately prior to the date
the above penalty assessment is issued.
This bill would also provide that if the employer is uninsured at
the time the above penalty is being determined, the amount an
employer would have paid in workers' compensation premiums shall be
the product of the employer's payroll for all periods of time the
employer was uninsured within the 3-year period immediately prior to
the date the above penalty assessment is issued multiplied by a rate
determined in accordance with regulation that may be adopted by the
Labor Commissioner or, if none has been adopted, the average insurer
rate per $100 of payroll as reported in the most recent summary of
the insurer uniform experience rating plan published by the rating
organization designated by the Insurance Commissioner. The bill would
delete the provisions regarding the governing classification to
which each employee of an uninsured employer shall be assumed to be
assigned.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 3722 of the Labor Code is amended to read:
3722. (a) At the time the stop order is issued and served
pursuant to Section 3710.1, the director shall also issue and serve a
penalty assessment order requiring the uninsured employer to pay to
the director, for deposit in the State Treasury to the credit of the
Uninsured Employers Fund, the sum of one thousand dollars ($1,000)
per employee employed at the time the order is issued and served, as
an additional penalty for being uninsured at that time.
(b) At any time that the director determines that an employer has
been uninsured for a period in excess of one week during the calendar
year preceding the determination, the director may issue and serve a
penalty assessment order requiring the uninsured employer to pay to
the director, for deposit in the State Treasury to the credit of the
Uninsured Employers Fund, the greater of (1) twice the amount the
employer would have paid in workers' compensation premiums during the
period the employer was uninsured, determined according to
subdivision (c), or (2) the sum of one thousand dollars ($1,000) per
employee employed during the period the employer was uninsured. A
penalty assessment issued and served by the director pursuant to this
subdivision shall be in lieu of, and not in addition to, any other
penalty issued and served by the director pursuant to subdivision
(a).
(c) If the employer is currently insured, or becomes insured
during the period during which the penalty under subdivision (b) is
being determined, the amount an employer would have paid in workers'
compensation premiums shall be calculated by prorating the current
premium for the number of weeks the employer was uninsured
within the three- year period immediately prior to the
date the penalty assessment is issued . If the employer is
uninsured at the time the penalty under subdivision (b) is being
determined, the amount an employer would have paid in workers'
compensation premiums shall be calculated by applying the
weekly premium per employee calculated according to subdivision (d)
of Section 11734 of the Insurance Code to the number of weeks the
employer was uninsured. Each employee of the uninsured employer shall
be assumed to be assigned to the governing classification for that
employer as determined by the director after consultation with the
Insurance Commissioner. If the employer contends that the assignment
of the governing classification is incorrect, or that any employee
should be assigned to a different classification, the employer has
the burden to prove that the different classification should be
utilized the product of the employer's payroll for all
periods of time the employer was uninsured within the three-
year period immediately prior to the date the penalty assessment
is issued multiplied by a rate determined in accordance with
regulation that may be adopted by the Labor Commissioner or, if none
has been adopted, the average insurer rate per one hundred dollars
($100) of payroll as reported in the most recent summary of the
insurer uniform experience rating plan published by the rating
organization designated pursuant to Section 11734 of the Insurance
Code .
(d) If upon the filing of a claim for compensation under this
division the Workers' Compensation Appeals Board finds that any
employer has not secured the payment of compensation as required by
this division and finds the claim either noncompensable or
compensable, the appeals board shall mail a copy of their findings to
the uninsured employer and the director, together with a direction
to the uninsured employer to file a verified statement pursuant to
subdivision (e).
After the time for any appeal has expired and the adjudication of
the claim has become final, the uninsured employer shall be assessed
and pay as a penalty either of the following:
(1) In noncompensable cases, two thousand dollars ($2,000) per
each employee employed at the time of the claimed injury.
(2) In compensable cases, ten thousand dollars ($10,000) per each
employee employed on the date of the injury.
(e) In order to establish the number of employees the uninsured
employer had on the date of the claimed injury in noncompensable
cases and on the date of injury in compensable cases, the employer
shall submit to the director within 10 days after service of
findings, awards, and orders of the Workers' Compensation Appeals
Board a verified statement of the number of employees in his or her
employ on the date of injury. If the employer fails to submit to the
director this verified statement or if the director disputes the
accuracy of the number of employees reported by the employer, the
director shall use any information regarding the number of employees
as the director may have or otherwise obtains.
(f) Except for penalties assessed under subdivision (b), the
maximum amount of penalties which may be assessed pursuant to this
section is one hundred thousand dollars ($100,000). Payment shall be
transmitted to the director for deposit in the State Treasury to the
credit of the Uninsured Employers Fund.
(g) (1) The Workers' Compensation Appeals Board may provide for a
summary hearing on the sole issue of compensation coverage to effect
the provisions of this section.
(2) In the event a claim is settled by the director pursuant to
subdivision (e) of Section 3715 by means of a compromise and release
or stipulations with request for award, the appeals board may also
provide for a summary hearing on the issue of compensability.