Bill Title: Workers’ Compensation: Subsequent injuries payments.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-03-25 – Re-referred to Com. on INS.
Download: California-2025-AB1329-Amended
|
Amended
IN
Assembly
March 24, 2025 |
CALIFORNIA LEGISLATURE—
2025–2026 REGULAR SESSION
Assembly Bill
No. 1329
| Introduced by Assembly Member Ortega |
February 21, 2025 |
LEGISLATIVE COUNSEL’S DIGEST
AB 1329, as amended, Ortega.
Future of Work Commission. Workers’ Compensation: Subsequent injuries payments.
Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of employment. Existing law provides certain methods for determining workers’ compensation benefits payable to a worker or the worker’s dependents for purposes of permanent total disability or permanent partial disability that include a determination of the percentage of permanent disability incurred. Existing law requires that, for injuries incurred before January 1, 2013, in determining the percentages of permanent disability, account be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and the injured employee’s age at the time of the injury, and
requires that specified factors be considered in determining an employee’s diminished earning capacity for these purposes. For purposes of these provisions, “nature of the physical injury or disfigurement” incorporates the descriptions and measurements of physical impairment and the corresponding percentages of impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition). For injuries occurring on or after January 1, 2013, in determining the percentages of permanent disability, existing law requires the same factors be taken into account but removes from consideration the employee’s diminished future earning capacity and, instead, incorporates an adjustment factor of 1.4, as specified.
Existing law also establishes the Subsequent Injuries Benefits Trust Fund, a continuously appropriated fund.
Under existing law, if a permanently, partially disabled employee receives a subsequent compensable injury resulting in additional permanent disability, then that employee receives compensation from the Subsequent Injuries Benefits Trust Fund. Existing law requires, when applicable, the additional permanent disability resulting from the subsequent injury to be equal to 35% or more of total, when considered alone and without regard to, or adjustment for, the occupation or the age of the employee.
This bill would rename the Subsequent Injuries Benefits Trust Fund the Second-Chance Employer’s Risk Reduction Trust Fund. For purposes of determining permanent disability resulting from a subsequent injury, the bill would measure permanent disability, for injuries occurring on or after January 1, 2005, and prior to January 1, 2013, by the whole person impairment
rating as determined in accordance with the AMA Guides to the Evaluation of Permanent Impairment (5th Edition), after adjustment for diminished future earning capacity and without regard to, or adjustment for, the occupation or age of the employee. For injuries occurring on or after January 1, 2013, the bill would measure permanent disability in the same manner as an injury occurring on or after January 1, 2005, and prior to January 1, 2013, except that an adjustment for diminished future earning capacity is replaced by the 1.4 adjustment factor. The bill would state that these provisions are declarative of existing law. To the extent the bill changes the eligibility requirements for and calculation for payments made from the Second-Chance Employer’s Risk Reduction Trust Fund, the bill would make an appropriation.
The bill would, for compensable subsequent injuries occurring on or after January 1, 2026, require, for purposes of determining eligibility for and the
amount of an award of special additional compensation, the existence of the prior permanent partial disability at the time of the subsequent compensable injury to be determined by substantial evidence based on prior medical records, prior testimony, and other prior evidence that predates the subsequent compensable injury. The bill would require the administrative director to create and maintain a database of qualified medical evaluators to perform evaluations for claims filed for a subsequent compensable injury. The bill would make conforming changes.
Existing law requires the Workers’ Compensation Appeals Board (WCAB) to fix and award the amounts of special additional compensation to be paid and to direct the State Compensation Insurance Fund (SCIF) to pay the additional compensation awarded. Existing law authorizes the additional compensation to be paid only from funds appropriated for these purposes. Existing law authorizes SCIF to reimburse itself for specified
costs from this appropriation.
This bill would replace SCIF with the Director of Industrial Relations, as trustee of the Second-Chance Employer’s Risk Reduction Trust Fund, as the entity to pay the additional compensation awarded by the WCAB. The bill would delete SCIF’s authorization to reimburse itself for specified costs.
Existing law contains a statement describing the duties of the Future of Work Commission, which was
established by Executive Order No. N-17-19, and was tasked with studying, among other measures, policies and practices that will help California’s businesses, workers, and communities thrive economically, while responding to rapid changes in technology and workplace structures and practices.
This bill would make a nonsubtantive change to that statement.
Digest Key
Vote: MAJORITY Appropriation:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 62.5 of the Labor Code is amended to read:62.5.
(a) (1) The Workers’ Compensation Administration Revolving Fund is hereby created as a special account in the State Treasury. Money in the fund may be expended by the department, upon appropriation by the Legislature, for all of the following purposes, and may not be used or borrowed for any other purpose:(A) For the administration of the workers’ compensation program set forth in this division and Division 4 (commencing with Section 3200), other than the activities financed pursuant to paragraph (2) of subdivision (a) of Section 3702.5.
(B) For the Return-to-Work Program set forth in Section 139.48.
(C) For the
enforcement of the insurance coverage program established and maintained by the Labor Commissioner pursuant to Section 90.3.
(2) The fund shall consist of surcharges made pursuant to paragraph (1) of subdivision (f).
(b) (1) The Uninsured Employers Benefits Trust Fund is hereby created as a special trust fund account in the State Treasury, of which the director is trustee, and its sources of funds are as provided in paragraph (1) of subdivision (f). Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated for the payment of nonadministrative expenses of the workers’ compensation program for workers injured while employed by uninsured employers in accordance with Article 2 (commencing with Section 3710) of Chapter 4 of Part 1 of Division 4, and shall not be used for any other purpose. All moneys collected shall be retained in
the trust fund until paid as benefits to workers injured while employed by uninsured employers. Nonadministrative expenses include audits and reports of services prepared pursuant to subdivision (b) of Section 3716.1. The surcharge amount for this fund shall be stated separately.
(2) Notwithstanding any other provision of law, all references to the Uninsured Employers Fund shall mean the Uninsured Employers Benefits Trust Fund.
(3) Notwithstanding paragraph (1), in the event that budgetary restrictions or impasse prevent the timely payment of administrative expenses from the Workers’ Compensation Administration Revolving Fund, those expenses shall be advanced from the Uninsured Employers Benefits Trust Fund. Expense advances made pursuant to this paragraph shall be reimbursed in full to the Uninsured Employers Benefits Trust Fund upon enactment of the annual Budget Act.
(4) Any moneys from penalties collected pursuant to Section 3722 as a result of the insurance coverage program established under Section 90.3 shall be deposited in the State Treasury to the credit of the Workers’ Compensation Administration Revolving Fund created under this section, to cover expenses incurred by the director under the insurance coverage program. The amount of any penalties in excess of payment of administrative expenses incurred by the director for the insurance coverage program established under Section 90.3 shall be deposited in the State Treasury to the credit of the Uninsured Employers Benefits Trust Fund for nonadministrative expenses, as prescribed in paragraph (1), and notwithstanding paragraph (1), shall only be available upon appropriation by the Legislature.
(c) (1) The Subsequent Injuries Benefits
Second-Chance Employer’s Risk Reduction Trust Fund is hereby created as a special trust fund account in the State Treasury, of which the director is trustee, and its sources of funds are as provided in paragraph (1) of subdivision (f). Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated for the nonadministrative expenses of the workers’ compensation program for workers who have suffered serious injury and who are suffering from previous and serious permanent disabilities or physical impairments, in accordance with Article 5 (commencing with Section 4751) of Chapter 2 of Part 2 of Division 4, and Section 4 of Article XIV of the California Constitution, and shall not be used for any other purpose. All moneys collected shall be retained in the trust fund until paid as benefits to workers who have suffered serious injury and who are suffering from previous and serious permanent disabilities or physical impairments.
Nonadministrative expenses include audits and reports of services pursuant to subdivision (c) of Section 4755. The surcharge amount for this fund shall be stated separately.
(2) Notwithstanding any other law, all references to the Subsequent Injuries Fund shall mean the
Subsequent Injuries Benefits Trust Fund. Fund shall mean the Second-Chance Employer’s Risk Reduction Trust Fund.
(3) Notwithstanding paragraph (1), in the event that budgetary restrictions or impasse prevent the timely payment of administrative expenses from the Workers’ Compensation Administration Revolving Fund, those expenses shall be advanced from the Subsequent Injuries Benefits Second-Chance Employer’s Risk Reduction Trust Fund. Expense advances made pursuant to this paragraph shall be reimbursed in full to the Subsequent Injuries Benefits
Second-Chance Employer’s Risk Reduction Trust Fund upon enactment of the annual Budget Act.
(d) (1) The Occupational Safety and Health Fund is hereby created as a special account in the State Treasury. Moneys in the account may be expended by the department, upon appropriation by the Legislature, for support of the Division of Occupational Safety and Health, the Occupational Safety and Health Standards Board, and the Occupational Safety and Health Appeals Board, and the activities these entities perform as set forth in this division, and Division 5 (commencing with Section 6300).
(2) On and after the effective date of the act amending this section to add this paragraph in the 2013–14 Regular Session of the Legislature, any moneys in the Cal-OSHA Targeted Inspection and Consultation Fund and any assets, liabilities,
revenues, expenditures, and encumbrances of that fund, less five million dollars ($5,000,000), shall be transferred to the Occupational Safety and Health Fund. On June 30, 2014, the remaining five million dollars ($5,000,000) in the Cal-OSHA Targeted Inspection and Consultation Fund, or any remaining balance in that fund, shall be transferred to, and become part of, the Occupational Safety and Health Fund.
(e) The Labor Enforcement and Compliance Fund is hereby created as a special account in the State Treasury. Moneys in the fund may be expended by the department, upon appropriation by the Legislature, for the support of the activities that the Division of Labor Standards Enforcement performs pursuant to this division and Division 2 (commencing with Section 200), Division 3 (commencing with Section 2700), and Division 4 (commencing with Section 3200). The fund shall consist of surcharges imposed pursuant to paragraph (3) of subdivision
(f).
(f) (1) Separate surcharges shall be levied by the director upon all employers, as defined in Section 3300, for purposes of deposit in the Workers’ Compensation Administration Revolving Fund, the Uninsured Employers Benefits Trust Fund, the Subsequent Injuries Benefits Second-Chance Employer’s Risk Reduction Trust Fund, and the Occupational Safety and Health Fund. The total amount of the surcharges shall be allocated between self-insured employers and insured employers in proportion to payroll respectively paid in the most recent year for which payroll information is available. The director shall adopt reasonable regulations governing the manner of collection of the surcharges. The regulations shall require the surcharges to be
paid by self-insurers to be expressed as a percentage of indemnity paid during the most recent year for which information is available, and the surcharges to be paid by insured employers to be expressed as a percentage of premium. In no event shall the surcharges paid by insured employers be considered a premium for computation of a gross premium tax or agents’ commission. In no event shall the total amount of the surcharges paid by insured and self-insured employers exceed the amounts reasonably necessary to carry out the purposes of this section.
(2) The surcharge levied by the director for the Occupational Safety and Health Fund, pursuant to paragraph (1), shall not generate revenues in excess of fifty-seven million dollars ($57,000,000) on and after the 2013–14 fiscal year, adjusted for each fiscal year as appropriate to fund any increases in the appropriation as approved by the Legislature, and to reconcile any over/under assessments from
previous fiscal years pursuant to Sections 15606 and 15609 of Title 8 of the California Code of Regulations. For the 2013–14 fiscal year only, the revenue cap established in this paragraph shall be reduced by an amount equivalent to the balance transferred from the Cal-OSHA Targeted Inspection and Consultation Fund established in Section 62.7, less any amount of that balance loaned to the State Public Works Enforcement Fund, to the Occupational Safety and Health Fund pursuant to subdivision (d).
(3) A separate surcharge shall be levied by the director upon all employers, as defined in Section 3300, for purposes of deposit in the Labor Enforcement and Compliance Fund. The total amount of the surcharges shall be allocated between employers in proportion to payroll respectively paid in the most recent year for which payroll information is available. The director shall adopt reasonable regulations governing the manner of collection of the
surcharges. In no event shall the total amount of the surcharges paid by employers exceed the amounts reasonably necessary to carry out the purposes of this section.
(4) The surcharge levied by the director for the Labor Enforcement and Compliance Fund shall not exceed forty-six million dollars ($46,000,000) in the 2013–14 fiscal year, adjusted as appropriate to fund any increases in the appropriation as approved by the Legislature, and to reconcile any over/under assessments from previous fiscal years pursuant to Sections 15606 and 15609 of Title 8 of the California Code of Regulations.
(5) The regulations adopted pursuant to paragraph (1) to (4), inclusive, shall be exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
SEC. 2.
Section 4751 of the Labor Code is amended to read:4751.
(a) If an employee who is permanently partially disabled receives a subsequent compensable injury resulting in additional permanent partial disability so that the degree of disability caused by the combination of both disabilities is greater than that which would have resulted from the subsequent injury alone, and the combined effect of the last injury and the previous disability or impairment is a permanent disability equal to 70 percent or more of total,(1) The
previous disability or impairment affected a hand, an arm, a foot, a leg, or an eye, and the permanent disability resulting from the subsequent injury affects the opposite and corresponding member, and such latter permanent disability, when considered alone and without regard to, or adjustment for, the occupation or age of the employee, is equal to 5 percent or more of the total, or (b) total.
(2) The
permanent disability resulting from the subsequent injury, when considered alone and without regard to to, or adjustment for for, the occupation or the age of the employee, is equal to 35 percent or more of total.
(b) For purposes of paragraphs (1) and (2) of subdivision (a), the term “permanent disability” in relation to subsequent compensable injuries occurring on or after January 1, 2005, and prior to January 1, 2013, shall be measured by the whole person impairment
rating, also referred to as the impairment standard, as determined in accordance with the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment, 5th Edition, after adjustment for diminished future earning capacity and without regard to, or adjustment for, the occupation or age of the employee.
(c) For purposes of paragraphs (1) and (2) of subdivision (a), the term “permanent disability” in relation to subsequent compensable injuries occurring on or after January 1, 2013, shall be measured by the whole person impairment rating, also referred to as the impairment standard, as determined in accordance with the AMA Guides to the Evaluation of Permanent Impairment, 5th Edition, after multiplication by the adjustment factor referred to in subdivision (b) of Section 4660.1 and without regard to, or adjustment for,
the occupation or age of the employee.
(d) Subdivisions (b) and (c) are declarative of existing law.
SEC. 3.
Section 4753.5 of the Labor Code is amended to read:4753.5.
In any hearing, investigation, or proceeding, the state shall be represented by the Attorney General, or the attorneys of the Department of Industrial Relations, as appointed by theSEC. 4.
Section 4754 of the Labor Code is amended to read:4754.
The appeals board shall fix and award the amounts of special additional compensation to be paid under this article, and shall direct theSEC. 5.
Section 4754.1 is added to the Labor Code, to read:4754.1.
(a) This section shall apply to compensable subsequent injuries occurring on or after January 1, 2026.(b) For purposes of determining eligibility for, and the amount of an award of, special additional compensation to be paid under this article, the existence of prior permanent partial disability that existed at the time of the subsequent compensable injury shall be determined by substantial evidence based on prior medical records, prior testimony, and other prior evidence, that predates the subsequent compensable injury.
(c) Medical-legal evidence in a proceeding filed for compensation pursuant to this article may only be obtained in the manner set forth in Article 2
(commencing with Section 4060) of Chapter 7 of Part 1 of this Division.
(d) The administrative director shall create and maintain a database of qualified medical evaluator physicians who have the necessary training and expertise to perform evaluations for claims filed pursuant to Section 4751. This database shall be used by the medical director to fulfill requests for a panel of qualified medical evaluators filed pursuant to subdivision (c).
(e) The Director of Industrial Relations shall have authority to issue regulations as necessary for the implementation and orderly and effective administration of this article.
SEC. 6.
Section 4755 of the Labor Code is amended to read:4755.
(a) The(b) Expenditures made from the revolving fund in payments on claims for any additional compensation and for adjusting services are
exempted from the operation of Section 16003 of the Government Code. Reimbursement of the revolving fund for these expenditures shall be made upon presentation to the Controller of an abstract or statement of the expenditures. The abstract or statement shall be in any form as the Controller requires.
(c) The director shall assign claims adjustment services and legal representation services respecting matters concerning subsequent injuries. The director or his or her their representative may make these service assignments within the department, or he or she
they may contract for these services with the State Compensation Insurance Fund, for a fee in addition to that authorized by Section 4754, except insofar as these matters might conflict with the interests of the State Compensation Insurance Fund. The administrative costs associated with these services shall be reimbursed from the Workers’ Compensation Administration Revolving Fund, except when a budget impasse requires advances as provided in subdivision (d) of Section 62.5. To the extent permitted by state law, the director may contract for audits or reports of services under this section.
SEC. 7.
Section 4756 of the Labor Code is amended to read:4756.
(a) The Legislature finds and declares that it is in the best interest of the State of California to provide a person, regardless of(b) A person shall not be prohibited from receiving compensation paid or payable from the Subsequent Injuries Benefits
Second-Chance Employer’s Risk Reduction
Trust Fund solely because of his or her
their citizenship or immigration status.
(c) It is the intent of the Legislature to override Section 15740 of Article 1 of Subchapter 2.1.1 of Chapter 8 of Division 1 of Title 8 of the California Code of Regulations.
(d) The provisions of this section are declaratory of existing law.
(a)On August 14, 2019, the Governor signed Executive Order No. N-17-19 establishing the Future of Work Commission, which was tasked with studying, among other matters, “the potential jobs of the future and opportunities to shape those jobs for the improvement of life for all of California,” “policies and practices that will help California’s businesses, workers, and communities thrive economically, while responding to rapid changes in technology and workplace structures and practices,” “policies and practices that will close the employment and wage gap for Californians,” “strategies for engaging employers in the creation of good, high-wage jobs of the future,” and “workforce development, training, education, and apprenticeship programs for
the jobs of the future.”
(b)In March 2021, the Future of Work Commission issued its report, “A New Social Compact for Work and Workers,” recommending that, among other actions, California help (1) ensure the creation of sufficient numbers of jobs for everyone who wants to work, including by extending financial and technical assistance to mission-oriented businesses, (2) eliminate working poverty, including by creating supports for workers to organize in unions and worker associations as well as supporting “high-road” employment, (3) create a 21st-century worker benefits model and safety net, including by developing a portable benefits platform and encouraging apprenticeship and other skill-building programs, (4) raise the standard and share of quality jobs, including by creating a California Job Quality Incubator to support the increase of
high-quality jobs, and (5) futureproof California with jobs and skills to prepare for technology, climate, and other shocks, including by providing incentives to the private sector to invest in worker training.
(c)The Legislature finds and declares that a California-focused federated worker cooperative system may advance these objectives by encouraging the expansion of democratically run high-road cooperative businesses that promote equitable economic development, reduce inequality, and increase access to living-wage jobs. Worker cooperatives have been shown to convey wealthbuilding and other significant benefits to workers, including autonomy from larger economic forces, more resiliency during economic downturns, lower workforce turnover, greater voice in health, safety, and other workplace issues, and more equitable pay. The
Legislature wishes to study how a federated worker cooperative system could advance the goals of the Future of Work Commission, particularly as they apply to historically underresourced communities.