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Legislative Update June 2004

By Chris Hoffman and Amy Doherty - Fisher & Phillips LLP

Assembly Bill 3021 - New Employer Reporting Mandate

This bill imposes another reporting requirement by mandating that employers include in their wage and contribution reports information relating to the number of jobs the employer maintained in California, the United States, and worldwide.

Assembly Bill 2696 – Family Leave Plain Language Requirement

This bill seeks to assist businesses in complying with complicated and confusing family leave requirements by requiring the Employment Development Department (EDD) to write the regulations implementing the new paid benefits for family leave law in plain, simple language.

Senate Bill 899 - Workers’ Compensation Reform

Governor Schwarzenegger recently signed SB 899, legislation that provides for reform of California’s workers’ compensation system. This legislation attempts to address the cost drivers within the system that have increased California’s workers’ compensation costs in recent years such as excessive litigation, subjective medical standards, and doctor shopping. Specifically, reforms contained in this package will fundamentally change the system for determining the level of injury and the amount of disability assigned to that injury. California’s existing disability system is wrought with subjectivity that leads to questionable and inconsistent disability ratings.

Key points of the package include:

Requiring that disability reports be based on the standards from the American Medical Associations 5^th Edition of Impairment standards and that the disability schedule be objective and consistent;

Ensuring that employers are only responsible for the portion of the injured workers’ disability that is the result of their existing job;

Closing a loophole that allowed multiple disability awards in excess of 100% of disability;

Creating a new medical network for employers to control unnecessary medical utilization in the workers comp system that provides that injured workers’ be treated by a network chosen by the employer. However, there are extensive provisions to allow injured workers’ who are dissatisfied with their care to change doctors within the network and ultimately to ask for an independent medical review;

Ensuring that medical treatment follows nationally recognized guidelines;

Clear parameters for what is acceptable treatment for injured workers in the workers’ compensation system;

Reducing excessive litigation by reducing the friction in the permanent disability system, ensuring that medical decisions are resolved by doctors -- not lawyers and judges;

Requires that the causes of an injury or illness be classified as either work related and or not work related for the purposes of determining disability. Requires doctors to address this issue in medical reports; and

Excludes workers' compensation from penalty enforcement under SB 796, the "Sue Your Boss" law signed by former Governor Davis in 2003.

With some exceptions, the changes affect all pending claims but do not require revising or reopening any past decisions. These changes will also require that the Division of Workers Compensation (DWC) issue regulations revising the content of the workers' compensation poster and the pamphlets. Until that time, keep your 2004 Employee Poster on display and continue to use your current supply of workers' compensation pamphlets.

Fisher & Phillips LLP is a national law firm representing employers exclusively in labor and employment matters. Chris Hoffman and Amy Doherty work in the San Diego office of Fisher & Phillips LLP and can be reached at (619) 881-1960.

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