BILL ANALYSIS �
AB 454
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 454 (Dickinson) - As Amended: April 2, 2013
Policy Committee: InsuranceVote:9 -
1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides that when temporary disability benefits (TD)
or permanent disability benefits (PD) are due to an injured
worker who earned less than the prevailing wage, but the work
performed was under a contract that was subject to a federal,
state, city, or county prevailing wage requirement, the benefits
shall be calculated using the applicable prevailing wage,
instead of the actual wages paid.
FISCAL EFFECT
To the extent this legislation increases the amount of
disability benefits paid to injured workers, it would result in
increased costs to the State Compensation Insurance Fund (SCIF)
and other workers' compensation fund insurers. It is unknown
how many injured workers would be affected by this legislation
or what the increase would be in their benefits.
COMMENTS
1)Rationale . According to the author, some employers take
advantage of workers who may not know about their rights to
receive a prevailing wage for work performed pursuant to
certain public works contracts. These employers pay below the
prevailing wage, even after bidding on a contract where they
included the higher wages as a part of their cost structure.
While there is a wage remedy for workers who are denied their
lawful wage, there is no similar remedy in cases where such a
worker is injured. The bill is intended to cure this lack of
remedy.
AB 454
Page 2
2)Prevailing wage . Pursuant to the laws of a number of
governmental jurisdictions, including state and local laws in
California, certain public works projects are subject to
requirements that the workers who perform the labor on the
projects are paid a wage based on the prevailing wage level in
the locality where the work is performed. The wage for any
particular class of worker in any particular locality is
determined in advance and readily available to a contractor
who is bidding on or performing work on the public works
project.
3)State Compensation Insurance Fund (SCIF) . California employers
must provide workers' compensation benefits to their employees
under state labor law. Employers must purchase workers'
compensation insurance from either a licensed insurance
company, or through SCIF, or employers may choose to
self-insure, which means they use a pay-as-you go model,
paying benefits to and on behalf of workers as the costs are
incurred. SCIF, created by the Legislature in 1914, is the
insurer of last resort in California's private insurance
market and is now the largest workers' compensation insurer in
the country.
While SCIF was created by the Legislature, it is not part of
state government. It is a quasi-state agency with a board of
directors appointed by the governor and the Legislature (11
total members, nine appointed by the governor and two
appointed by the Legislature). SCIF is a non-profit,
independent organization funded by premiums paid by businesses
purchasing workers compensation insurance policies.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081