BILL ANALYSIS �
AB 1794
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1794 (Williams)
As Amended August 23, 2012
Majority vote
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|ASSEMBLY: |57-20|(May 30, 2012) |SENATE: |25-11|(August 28, |
| | | | | |2012) |
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Original Committee Reference: INS.
SUMMARY : Permits the Employment Development Department (EDD) to
share new hire information with the Contractors' State License
Board (CSLB) and the State Compensation Insurance Fund (SCIF).
The Senate amendments add a sunset date and language to resolve
chaptering out conflicts with AB 1845 (Solorio) an AB 174
(Monning). This bill:
1)Permits the use of new hire information provided to EDD by
members of the Joint Enforcement Strike Force on the
Underground Economy.
2)Permits the use of EDD new hire information by CSLB and SCIF
for the purpose of workers' compensation payroll reporting.
3)Establishes a January 1, 2019, sunset date on the provisions
of the bill.
4)Requires EDD, SCIF and CSLB to execute a memorandum of
understanding to share information and coordinate enforcement
actions against contractors that fail to report new hires to
EDD and accurate payroll to SCIF.
5)Resolves chaptering out conflicts.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : According to the author, this bill is intended to
curb abuses by unscrupulous contractors who intentionally
under-report or fail to report payroll, thereby defrauding
workers' compensation insurers, placing injured workers at risk,
and gaining an unfair competitive advantage over honest
AB 1794
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contractors. This bill will expand the rules that already apply
to roofing contractors by applying the same standards to all
contractors.
Existing law requires private employers to secure the payment of
workers compensation by obtaining and maintaining workers'
compensation insurance or to self-insure as an individual
employer or as one employer in a group of employers.
Contractors' license law requires every licensed contractor to
provide the CSLB a current and valid certificate of workers'
compensation insurance or certification of self-insurance, or a
statement certifying that he or she has no employees and is not
required to obtain or maintain workers compensation insurance.
While current law requires contractors to have workers
compensation insurance coverage for their as a condition of
obtaining and maintaining a license, a study by the CSLB has
revealed that approximately half of licensed contractors either
claim an exemption based on having no employees or maintain a
minimum policy under which no employees are reported to their
insurance carrier. Underreporting by contractors to obtain a
lower workers' compensation premium placed contractors who
report the number of their employees correctly at a competitive
disadvantage. The bill will allow efficient sharing of
information among regulators and will enhance their efforts to
enforce existing law.
SB 691 (Lieu) also seeks to assist the CSLB in their
investigation of worker's compensation fraud by permitting the
EDD to share employment data and information with the CSLB for
the purposes of investigating any specific workers' compensation
fraud investigation.
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086
FN: 0005751