BILL ANALYSIS �
SB 1177
Page 1
SENATE THIRD READING
SB 1177 (Leno)
As Amended June 19, 2012
Majority vote
SENATE VOTE :37-0
PUBLIC SAFETY 6-0 INSURANCE 12-0
-----------------------------------------------------------------
|Ayes:|Ammiano, Knight, Cedillo, |Ayes:|Solorio, Hagman, |
| |Hagman, Mitchell, Skinner | |Bradford, |
| | | |Charles Calderon, Carter, |
| | | |Feuer, |
| | | |Beth Gaines, Hayashi, |
| | | |Miller, Olsen, Skinner, |
| | | |Wieckowski |
-----------------------------------------------------------------
SUMMARY : Provides that where an employer is convicted of a
crime against an employee, the restitution order shall not be
offset by workers' compensation payments unless the employer has
paid workers' compensation insurance premiums in accordance with
the law. Specifically, this bill :
1)Provides that where an employer is convicted of a crime
against an employee, the restitution order shall not be offset
by workers' compensation insurance payments unless the court
finds substantial evidence that all insurance premiums have
been made in full accordance with the law.
2)Makes technical, non-substantive changes.
EXISTING LAW :
1)States it is the unequivocal intention of the people of the
State of California that all persons who suffer losses as a
result of criminal activity shall have the right to
restitution from the persons convicted of the crimes for
losses they suffer. Restitution shall be ordered from the
convicted persons in every case, regardless of the sentence or
disposition imposed, in which a crime victim suffers a loss,
unless compelling and extraordinary reasons exist to the
contrary.
SB 1177
Page 2
2)Declares legislative intent that a crime victim who incurs an
economic loss as a result of the commission of a crime shall
receive restitution directly from the convicted defendant.
3)Requires full victim restitution for economic losses
determined by the court.
4)States that economic losses include, but are not limited to,
the following: full or partial payment for the value of
stolen or damaged property; medical expenses; mental health
counseling expenses; wages or profits lost due to injury
incurred by the victim, and if the victim is a minor, wages or
profits lost by the minor's parent, parents, guardian, or
guardians, while caring for the injured minor; wages or
profits lost by the victim, and if the victim is a minor,
wages or profits lost by the minor's parent, parents,
guardian, or guardians, due to time spent as a witness or in
assisting the police or prosecution; noneconomic losses,
including, but not limited to, psychological harm, for felony
violations of Penal Code Section 288; interest at the rate of
10% per annum; actual and reasonable attorney's fees and other
collection costs; relocation expenses incurred by an adult
victim; expenses to install or increase residential security;
expenses to retrofit a residence or vehicle, or both, to make
the residence accessible to or the vehicle operational by the
victim, where the victim suffers permanent disability as a
direct result of the crime; and, expenses to monitor and
repair the credit report of a victim of identity theft.
5)Defines a "victim" for purposes of restitution, as including
any of the following:
a) The immediate surviving family of the actual victim;
b) Any corporation, business trust, estate, trust,
partnership, association, joint venture, government,
governmental subdivision, agency, or instrumentality, or
any other legal or commercial entity when that entity is a
direct victim of a crime; and,
c) Any person who has sustained economic loss as the result
of a crime and who satisfies any of the following
conditions:
SB 1177
Page 3
i) At the time of the crime was the parent,
grandparent, sibling, spouse, child, or grandchild of the
victim;
ii) At the time of the crime was living in the household
of the victim;
iii) At the time of the crime was a person who had
previously lived in the household of the victim for a
period of not less than two years in a relationship
substantially similar to a relationship listed above;
iv) Is another family member of the victim, including,
but not limited to, the victim's fianc� or fianc�e, and
who witnessed the crime; or,
v) Is the primary caretaker of a minor victim.
6)Provides that a criminal restitution order shall be
enforceable as though it were a civil judgment.
7)States that the determination of the amount of restitution
ordered shall not be affected by the indemnification or
subrogation rights of any third party.
8)Vests authority in the Legislature to create and enforce a
system for workers' compensation making adequate provisions
for the comfort, health, safety, and general welfare of any
and all workers and those dependent upon them for support to
the extent of relieving from the consequences of any injury or
death incurred or sustained by workers in the course of their
employment, irrespective of the fault of any party.
9)Provides that in the event of a compensable industrial injury,
workers' compensation is the sole and exclusive remedy of the
employee or his or her dependents against the employer, and
that the employee or the employee's dependents cannot bring a
civil action for damages against the employer, except under
specified circumstances.
10)Provides that an employer is liable for a death benefit to
the dependents of an employee who dies as a result of a
work-related injury, and that, except in certain situations,
SB 1177
Page 4
the death benefit is a dependent's exclusive remedy against
the employer for the employee's work-related death.
11)Specifies exceptions to the general rule that workers
compensation is the exclusive remedy for an industrial injury,
including:
a) Where the employee's injury or death is proximately
caused by a willful physical assault by the employer;
b) Where the employee's injury is aggravated by the
employer's fraudulent concealment of the existence of the
injury and its connection with the employment;
c) Where the employer fails to secure workers' compensation
coverage for his or her employees; and,
d) Where the employee's injury or death is proximately
caused by the employer's knowing removal of, or knowing
failure to install, a point of operation guard on a power
press.
12)Provides that when an injury causes death the employer shall
be liable for all of the following:
a) Reasonable expenses of the employee's burial, as
specified; and,
b) A death benefit, to be allowed to the dependents when
the employee leaves any person dependent upon him or her
for support, as specified.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS : According to the author, "SB 1177 will enable more
victims and victims' families - in the event of a serious
workplace injury or death where the employer is criminally
responsible - to receive full restitution from the convicted
employer.
"Under California law, an employer may be charged criminally
when an employee is killed or seriously injured on the job. Upon
conviction, the employer will be ordered to pay restitution to
SB 1177
Page 5
the victim or victim's family, which can include medical
expenses and lost future wages.
"If the victim or victim's family receives workers' compensation
benefits from the employer's insurer, the employer will
typically seek to reduce its restitution obligation to the
victim or victim's family by arguing that the employer is
entitled to an 'offset' for those benefits - that is, the
employer will assert that restitution owed should be reduced
(offset) by the amount of any workers' compensation insurance
payments made to the victim or family.
"However, in some cases, the convicted employer has also been
defrauding its workers' compensation insurance carrier by, for
example, underreporting or failing to report the employee's
wages. Despite this, the employer may still claim a workers'
compensation offset to the restitution ordered by the court.
"Employers who are following the law are at a competitive
disadvantage when less scrupulous employers cut corners for
their employee's workplace safety and workers compensation
coverage. In addition, criminally negligent employers are
getting the extra benefit of restitution offsets when they have
defrauded their workers' compensation insurer.
"SB 1177 is necessary to clearly state in statute that an offset
is prohibited unless the employer can prove that as of the date
of the workplace injury or death all policy premiums actually
owed were paid. Without offering such evidence to the court, the
employer will be required to pay full restitution to the victim
or victim's family without any offset for workers' compensation
insurance payments."
Please see the policy committee analysis for a full discussion
of this bill.
Analysis Prepared by : Sandy Uribe / PUB. S. / (916) 319-3744
FN: 0004348
SB 1177
Page 6