BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: September 6, 2011 2011-2012 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: Yes
Bill No: AB 1426
Author: Solorio
Version: As Amended September 1, 2011
SUBJECT
Workers' compensation: court administrator.
KEY ISSUE
Should the Legislature remove the position of court
administrator in the Division of Workers' Compensation?
PURPOSE
To abolish the position of court administrator in the Division
of Workers' Compensation and delegate the responsibilities for
that position, as specified.
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law creates the Division of Workers' Compensation
(DWC), which is charged with authority and jurisdiction vested
by law to ensure the appropriate functioning of the Workers'
Compensation system. The DWC is headed by the administrative
director and includes the Workers' Compensation Appeals Board
(WCWB), which is charged with all judicial power functions.
(Labor Code ��111, 133 & 138.1)
Existing law also creates the position of court administrator in
the DWC. The court administrator is primarily concerned with,
among other things, furthering the uniformity and expedition of
proceedings before workers' compensation administrative law
judges, and assures that workers' compensation administrative
law judges are qualified and adhere to law and regulation. The
court administrator is appointed by the Governor for a 5 year
term. This position is currently unfilled.
(Labor Code �� 110, 127.5 & 138.1)
This bill would abolish the position of court administrator and
delegate the duties of the position to the administrative
director of the Division of Workers' Compensation (DWC) and the
Workers' Compensation Appeals Board (WCAB).
Specifically, this bill would:
a) Delegate the WCAB district office procedures and rules
from the court administrator to the WCAB;
b) Require the WCAB to establish uniform WCAB district
office procedures and forms;
c) Require the administrative director establishes a
priority calendar for issues requiring an expedited hearing
and decision; and
d) Require the administrative director establishes a
priority conference calendar for issues where an employee
has an attorney and the dispute is on the nature of the
injury.
Currently, these duties are carried out by the court
administrator.
This bill would also make technical changes conforming existing
law to the removal of the position of court administrator and
provide that any regulations created by the court administrator
remain in effect unless repealed by either the administrative
director or the Workers' Compensation Appeals Board.
Hearing Date: September 6, 2011 AB 1426
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
This bill would also make findings and declarations on how the
court administrator has failed to achieve its intended goals and
inhibits the functioning of the Division of Workers'
Compensation.
This bill also provides that this act is an urgency statute
necessary for the immediate preservation of the public peace,
health, or safety within the meaning of California Constitution
due to the absence of a court administrator and the need to
streamline the adjudicatory functions of the workers'
compensation system.
COMMENTS
1. Need for this bill?
The position of court administrator was created in 2002 by AB
749 (Calderon), Statutes of 2002, Chapter 6, which was
wide-ranging and far-reaching reform of the workers'
compensation benefit delivery system. The major thrust of the
legislation was to promote cost-saving efficiencies in the
workers' compensation system, and the idea of a court
administrator fits into this vein. At the time, there was an
expectation that creating an independent, appointed position
within the Division of Workers' Compensation, independent of
the administrative director and the Workers' Compensation
Appeals Board, could yield efficiencies by ensuring uniformity
among the WCAB district offices and focusing on certain
judicial functions.
Unfortunately, according to the Department of Industrial
Relations (DIR), the position of the court administrator has
not accomplished the hoped-for efficiencies. Rather, DIR
reports that the position of court administrator has resulted
"in blurred and conflicting lines of authority and
accountability and poor coordination among the Court
Administrator, the Workers' Compensation Appeals Board, and
the Administrative Director of the Division of Workers'
Compensation." DIR also notes that:
Hearing Date: September 6, 2011 AB 1426
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
There can be uncertainty over whether the rules of the Appeals
Board, the rules of the Administrative Director, or the rules
of the Court Administrator govern any given situation. There
is duplication of authority and there are logical
inconsistencies in authority. The position adds undue
complication to the administration of the workers'
compensation system.
In short, the Department of Industrial Relations (DIR) reports
that the creation of the court administrator has exacerbated,
rather than alleviated, the problems that the court
administrator was created to solve. Therefore, DIR has
sponsored AB 1426 to remove the position of court
administrator from the Division of Workers' Compensation (DWC)
and return to the statutory framework that existed in 2002.
As this position is currently unfilled, such a move now would
allow the DWC to adjust their operations without significant
consequence, which may not be the case later.
2. Efficiencies in a post-Court Administrator Division of
Workers' Compensation:
As was discussed above, the position of the court
administrator was created in order to improve consistency at
the branch offices of the Workers' Compensation Appeals Board,
both in practices and procedures. The Department of
Industrial Relations believes that the position has failed at
doing so, and there is currently no data to contradict this,
nor is there any opposition to this measure.
However, several important questions remain.
a) The court administrator position was created in 2002
because that arrangement was failing to create
consistency and efficiency. Why would reverting to the
previous model yield a better outcome?
b) As discussed above, the regulations and rules
promulgated by the court administrator created confusion.
However, these rules will remain in effect (page 9,
lines 1-10). Will there be a review process to determine
which rules need to amended or repealed?
Hearing Date: September 6, 2011 AB 1426
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations
c) It is estimated by the Department of Industrial
Relations (DIR) and the Department of Finance that the
abolition of the court administrator position will create
approximately $302,000. Assuming that some portion of
those funds could be retained by DIR and the Division of
Workers' Compensation through the budget process, are
there any ideas on how these funds could be used to solve
the problems the court administrator failed to solve?
3. Proponent Arguments :
The sponsor of this measure, the Department of Industrial
Relations (DIR), notes that the position of court
administrator has failed to achieve the goals the position was
created to do -create and maintain consistency and uniformity
in the practices and policies of the district offices of the
WCAB. The Department further notes that the position has
confused lines of authority and undermined the efficient
administration of the workers' compensation system.
Therefore, the Department has sponsored this bill with the
hope of abolishing the position of court administrator and
return to the pre-2002 statutory structure.
4. Prior Legislation :
AB 749 (Calderon), Statutes of 2002, Chapter 6, was discussed
above.
SUPPORT
California Department of Industrial Relations (Sponsor)
Allied Managed Care
California Applicants' Attorneys Association (CAAA)
California Coalition on Workers' Compensation (CCWC)
Small Business California
OPPOSITION
None on file.
Hearing Date: September 6, 2011 AB 1426
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations
Hearing Date: September 6, 2011 AB 1426
Consultant: Gideon L. Baum Page 6
Senate Committee on Labor and Industrial Relations