BILL ANALYSIS �
AB 1794
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ASSEMBLY THIRD READING
AB 1794 (Williams)
As Amended May 25, 2012
Majority vote
INSURANCE 10-2 BUSINESS & PROFESSIONS 8-0
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|Ayes:|Solorio, Bradford, |Ayes:|Hayashi, Bill Berryhill, |
| |Charles Calderon, Carter, | |Allen, Butler, Eng, Hill, |
| |Feuer, Hayashi, Olsen, | |Ma, Smyth |
| |Skinner, Torres, | | |
| |Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines, Miller | | |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Gatto, Ammiano, Hill, | | |
| |Lara, Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
| | | | |
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SUMMARY : Requires contractors to notify their workers'
compensation insurer within 20 days of hiring a new employee.
Specifically, this bill :
1)Provides that it is cause for disciplinary action by the
Contractor's State License Board (CSLB) for a contractor to
fail to notify its workers' compensation insurer within 20
days of hiring a new employee.
2)Specifies that the remedy established for violations of this
provision shall be in addition to any other remedies otherwise
available.
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3)Requires an insurer that issues a workers' compensation policy
to a contractor to require the contractor/policyholder to
notify it of the hiring of a new employee within 20 days.
4)Extends the sunset date, to January 1, 2015, of the expanded
contractor payroll audit provision.
EXISTING LAW :
1)Provides for the licensing and regulation of contractors by
the CSLB.
2)Requires each contractor to file with the CSLB proof of
compliance with the requirement of maintaining workers'
compensation coverage, or, unless the contractor is a roofing
contractor, file a declaration certifying that the contractor
has no employees.
3)Requires roofing contractors to additionally file proof of
maintaining compliance with workers' compensation coverage
requirements even if the contractor has no employees.
4)Requires workers' compensation insurers that insure roofing
contractors to conduct an annual payroll audit of the
contractor, but sunsets this provision on January 1, 2013.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor and absorbable costs to the CSLB.
COMMENTS : According to the author, the bill is intended to curb
abuses by unscrupulous contractors who intentionally
under-report or fail altogether to report payroll, thereby
defrauding workers' compensation insurers, placing injured
workers at risk, and gaining an unfair competitive advantage
over honest contractors.
This bill expands upon rules that already apply to roofing
contractors by applying them to all contractors, and
additionally adopts the 20-day reporting requirement for all
contractors. While roofing contractors have had a higher
profile of "underground economy" activity in recent years (see
AB 2219 (Knight) of this legislative session), the CSLB believes
that underreporting is a serious problem across all license
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classifications.
Labor organizations and the CSLB support the bill because of the
history of underreporting in this industry, and the potential
that the enhanced enforcement tools will provide a level playing
field for honest contractors, who suffer from unfair competition
from contractors who are cheating on their workers' compensation
premiums.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0003987