The Workers’ Compensation Insurance Rating Bureau (WCIRB) has outlined several significant legislative updates signed into law by Governor Gavin Newsom. These laws, effective mostly from January 1, 2025, impact how businesses manage workers’ compensation claims and compliance. Understanding these changes is critical for employers to avoid penalties, streamline processes, and protect their workforce.
Key Legislative Changes
Here’s a breakdown of the key bills:
Assembly Bill 171: This bill mandates that petitions for reconsideration are automatically deemed denied if the Workers’ Compensation Appeals Board (WCAB) does not act on them within 60 days. This change is in effect until July 1, 2026. Trial judges must now notify all parties when a case is transmitted to the WCAB.
Assembly Bill 1239: Extends the provision allowing workers’ compensation indemnity payments to be deposited in prepaid card accounts until January 1, 2027. For businesses, this could streamline compensation payments to employees, enhancing efficiency.
Assembly Bill 1870: Employers are now required to post workers’ compensation information in prominent locations. The notice must inform employees where to report injuries, their rights to select and change treating physicians, and protections against retaliation or discrimination. It also emphasizes that employees can consult a licensed attorney about their rights.
Assembly Bill 2337: All workers’ compensation-related documents requiring signatures may now be submitted with an electronic signature, making the process easier for businesses that handle large volumes of claims.
Senate Bill 1455: This bill extends the Contractors State License Board (CSLB) sunset date to January 1, 2029, and moves the deadline for contractors to comply with SB 216 (requiring workers’ comp insurance for certain contractors) from 2026 to 2028. The law affects businesses in the construction industry and those that deal with subcontractors or contract work.
Vetoed Bills
Some notable bills were vetoed by Governor Newsom:
Senate Bill 636: This would have required physicians conducting medical utilization reviews to be licensed in California, ensuring more localized oversight of medical reviews. However, it was vetoed, and current rules remain.
Senate Bill 1299: This bill would have created a presumption that heat-related injuries to agricultural workers arose from employment. It aimed to offer more protection to farmworkers but was ultimately vetoed.
What Should Business Owners Do?
As these laws are set to take effect, employers must prepare by:
Reviewing Compliance: Ensure your business complies with the new posting requirements under AB 1870, especially for reporting injuries and informing workers about their rights.
Adopting Digital Solutions: With AB 2337 allowing electronic signatures, consider transitioning to a digital document management system. This will help streamline your workers’ compensation processes and reduce paperwork.
Assessing Contractor Relationships: If you’re in the construction or related industries, verify that your contractors are compliant with workers’ compensation insurance requirements, as SB 1455 pushes deadlines but still enforces strict standards.
Enhancing Risk Management: As legislation continues to evolve, it’s crucial to stay on top of changes and ensure that your risk management strategies are up-to-date, particularly in high-risk industries like construction and agriculture. This includes ensuring adequate workers’ compensation coverage and reviewing internal safety protocols.
Educating Employees: Proactively educate your workforce about their rights under workers’ comp laws. This helps foster a culture of safety and ensures employees know how to report injuries or seek legal counsel if necessary.
Why These Changes Matter
The new laws are designed to improve the workers’ compensation system by simplifying processes, ensuring transparency, and protecting both employers and employees. For business owners, staying compliant with these updates is crucial for mitigating legal risks and avoiding penalties. Additionally, the extension of deadlines for certain laws offers some breathing room for businesses to adapt to new regulations.
Final Thoughts
As a business owner, adapting to changes in workers’ compensation law is essential for protecting both your company and your employees. By staying informed and making necessary adjustments, you can ensure that your business remains compliant while also maintaining a safe and supportive workplace.
For further assistance on how these laws might impact your business, or for help securing business insurance, contact Abdul, a Business Development Manager at Acrisure, at 916-778-5979. Abdul can assist with both business and personal insurance needs, such as home, auto, or life insurance.