Since the workers’ compensation reforms of 2003, most California employers have seen a steady and welcome decline in their workers’ comp insurance premiums. But rates may be headed in the other direction starting in 2009.
The Workers’ Compensation Insurance Rating Bureau (WCIRB) has recommended to California Insurance Commissioner Steve Poizner that workers’ comp insurance pure premium rates increase by 16 percent for new and renewing policies, effective January 1, 2009. The WCIRB says that its proposal is based largely on data confirming a steep rise in medical costs related to comp claims. And, if workers’ comp disability payment levels are boosted, a topic under consideration in Sacramento, the WCIRB recommends an additional 3.7 percent increase.
On a positive note, even if the increase goes through, the average pure premium rate in 2009—$1.95 per $100 of payroll—will still be far below the average rate of $4.81 just before the 2003 reforms.
Also, employers should keep in mind that the WCIRB’s recommendation is only advisory and must be approved by the insurance commissioner. And, even if the increase is approved, it’s not binding on insurers—although many use it as a benchmark.
Want to know how to reduce your workers’ comp insurance premiums? Check out Understanding Workers’ Compensation: A Guide for California Employers—available for instant download now.
A Four-Step Plan
With this premium hike on the horizon, California employers should take a look at how they can get their workplace safety routine in order and qualify for the lowest workers’ comp insurance rates. Here’s a four-step program:
- Review. What safety measures have you already implemented? What are your losses? Review past claims to identify patterns and mistakes.
- Commit. Is safety a top priority for management? Brokers and insurers may be reluctant to work with prospective clients who aren’t committed to safety.
- Inspect. Are your workplace hazards related to small clean-up issues, such as debris, minor spills, or access problems? Or do your hazards relate to more systemic work-process issues such as those that could cause costly repetitive stress injuries?
- Analyze. How much money is needed to correct the problems you’ve identified? What savings are possible? Compare your premium rates to the average for other employers in your industry to get a sense of what you could be paying if you can get your workplace safety program in order.
Our subscribers often ask us if they can split up an employee’s meal break. For example, if an employee has a meeting or training session that interferes with the 30-minute lunch break, can you as an employer have the person take 15 minutes after five hours worked, and then take the other 15 minutes later on?
It’s a bad idea, to say the least. California law requires that non-exempt employees be provided with an unpaid meal period of at least 30 minutes for every five hours worked. As a general rule, this meal period must consist of uninterrupted, off-duty time during which an employee is not required to work and is free to attend to his or her personal affairs. Because the law mandates that an employee be relieved of all work-related duties during a meal period, an employer cannot require an employee to split up his or her 30-minute meal period to attend a meeting or training session.
California employers, in fact, have been advised to go one step further and take steps to ensure that employees do not even voluntarily split up their 30-minute meal period. One California Court of Appeal (in Cicairos v. Summit Logistics, Inc.) held that employers have an affirmative obligation to ensure that employees take their full 30-minute meal periods.
Don’t miss our exclusive audio conference on the important new Brinker case—it’s coming up very soon (Monday!), so don’t delay. For more information, or to register, click here.
A different California Court of Appeal recently held otherwise, distinguishing the facts of the Cicairos case. In this new case, Brinker Restaurant Corp. v. Superior Court, the court ruled that employers must make meal periods available to employees and cannot impede, discourage, or dissuade employees from taking meal periods.
However, said the Brinker court, once the employer has made the meal period available, an employer is not obligated to police the employee’s use of that time by ensuring that the employee takes the meal period. The state legislature has indicated an intent to clarify the law on this issue, and there will surely be more activity on this front in the future. At a minimum, however, you should be sure that you are doing nothing to prevent employees from taking their full 30-minute meal periods uninterrupted.
If you really need an employee to be able to split up his or her 30-minute meal period for a work-related purpose, you can ask the employee to agree to take a paid, “on-duty” meal period. But this option is available only when: (1) when the nature of the work prevents an employee from being relieved of all duty; and (2) when the employer and employee agree, in writing, to an on-duty, paid meal period. The Division of Labor Standards Enforcement (DLSE) has been very strict in its interpretation of the “nature of work” exception, taking the position that an off-duty meal period is required unless it is “virtually impossible” for the employer to provide the employee with an off-duty meal period.
We recommend that you utilize all means available to ensure that employees take an uninterrupted, off-duty meal period of at least 30 minutes. Failure to comply with meal break law exposes employers to significant liability. Labor Code 226.7 requires employers to pay employees one additional hour of pay at the employee’s regular rate of compensation for each work day that a 30-minute meal period is not provided.
Given the recent rise in legal challenges to meal break policies and practices, you should do everything possible to comply with the law, and to maintain time records so that you can prove your compliance later on.
Thanks to Sandra Rappaport, Esq., a partner at the San Francisco office of law firm Hanson Bridgett, LLP, and Elan Emanuel, a summer associate at the same firm, for their contributions to this article.
The Brinker ruling is good news for California employers, but don’t get lulled into a false sense of security. Join us on Monday for an in-depth 90-minute audio conference all about this new case. Can’t make it on Monday? Order the CD recording and listen at your convenience. Either way, you won’t want to miss it. Find out more »
Navigating the world of workers’ compensation can be tricky, even for the most experienced HR and safety professionals. But our Special Report, Understanding Workers’ Compensation: A Guide for California Employers, gives you all with the tools you need to understand and smoothly administer your organization’s workers’ compensation program, while helping you find ways to keep your comp costs low.
This report covers what you need to know about benefits and insurance coverage; what you must do when an employee gets injured; how to go about setting up a return-to-work program; the posting and notice obligations you need to comply with; how to detect workers’ comp fraud; what agencies and other resources you can turn to when you have questions; and more. The report also includes a sample return-to-work policy and a comprehensive safety checklist.
Click here to start getting your workers’ comp house in order!