In addition to the workers’ compensation bill discussed in this Bulletin, there are a number of other bills on Gov. Davis’s desk that could impact your employment practices. Here’s a quick summary of what they are: AB 1715 invalidates arbitration agreements affecting employment claims under the Fair Employment and Housing Act that are made a condition of employment; AB 76 requires employers of one or more employees to take steps to prevent sex harassment by nonemployees; AB 274 creates a presumption that an adverse action taken within 60 days of an employee’s complaint about employment conditions is taken in retaliation; AB 1093 creates a statewide living wage of $10 per hour if health insurance is provided or $12 per hour without benefits; AB 1133 increases the penalties available when a judgment for unpaid wages isn’t satisfied within six months; SB 478 would require employers to allow workers who were crime victims to be absent to attend proceedings about the crime; and SB 2 would require that starting Jan. 1, 2006, employers with 200 or more employees in California pay a fee to fund health care benefits for workers unless the employer can provide proof that it offers health care coverage to employees and their beneficiaries. The law will apply to employers with 50-199 employees in 2007.
Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.
Key Provisions of the Assembly’s Workers’ Compensation Reform Bill
Here’s a summary of those provisions that directly impact employers. Gov. Davis has indicated he will sign the bill.
- Rate setting and filing. For the period Jan. 1 through Dec. 31, 2004, insurers may not use rates any higher than the rates that were in effect on July 1, 2003. The legislation also requires the Insurance Commissioner to maintain information on its website comparing the rates of the 50 companies writing the highest volume of business in California, thus giving employers a tool to compare rates and coverage.
- Medical utilization. The Division of Workers’ Compensation must adopt a medical utilization schedule that, among other things, caps the number of chiropractic and physical therapy visits at 24 each. Plus, every employer must establish a utilization review process, either directly or through its insurer. The utilization review program must comply with specific time frames for making decisions regarding medical treatment recommendations.
- Vocational rehabilitation repealed. The legislation repeals the existing vocational rehabilitation law, which allowed up to $16,000 in benefits for worker retraining. The bill replaces the vocational rehab program with a voucher system for education-related retraining or skill enhancement for injured workers with permanent partial disability who don’t return to work for the employer within 60 days of temporary disability termination. The new program applies only to injuries suffered on or after Jan. 1, 2004. Vouchers are worth between $4,000 and $10,000 depending on the severity of the injury. Within 10 days of the last temporary disability payment, employers must provide notice of these new rights to the employee by certified mail. An employer won’t be liable for the supplemental job displacement benefit if it offers, and the employee rejects, modified or alternative work that meets the employee’s work restrictions and lasts at least 12 months. Jim Libien, a workers’ comp attorney with the Walnut Creek office of Laughlin, Falbo, Levy and Moresi, points out that the new law gives employers just 30 days after temporary disability payments end to make the offer, so employers will have to be vigilant to avoid missing the deadline.
- Payments. Employers would now have 45 days, instead of the current 60 days, to submit payment to a physician who has provided medical treatment to an injured worker, and penalties for late payment are increased. Government employers have 60 days to submit payment. In addition, employers must begin accepting electronic claims for payment by July 1, 2006, and such payments would be due within 15 days of being submitted.
- IIPP reviews. Workers’ comp insurers must conduct a detailed review of an employer’s injury and illness prevention program (IIPP) within four months of the start of the initial policy term.3