2015 Legislative Developments: Worker’s Compensation, Unemployment & Other Employee Benefits

The California Legislature has enacted a number of new laws that will impact employers and employees in 2016. In eight installments, Kronick will provide you with helpful summaries by category. The fourth installment covers Worker’s Compensation, Unemployment and Other Employee Benefits.


IV. Worker’s Compensation, Unemployment & Other Employee Benefits

A. SB 623 (Lara): Worker’s Compensation Benefits

The bill adds sections 3733 and 4756 to the Labor Code.

The Uninsured Employers Fund and the Subsequent Injuries Benefits Trust Fund provide compensation to injured workers who are employed by an employer that lacks worker’s compensation insurance. This bill provides that an injured worker is entitled to compensation under these funds regardless of citizenship or immigration status.

B. SB 667 (Jackson): Waiting Period for Disability Benefits

The bill amends Unemployment Insurance Code sections 2608 and 2627 to provide that, beginning July 1, 2016, the seven-day waiting period for receiving benefits does not apply to subsequent applications for benefits if the applicant met the seven-day waiting period requirement on the initial application for benefits. 

In addition, the bill revises the conditions under which two consecutive periods of disability benefits are considered one disability benefit period. Existing law provides that two consecutive period of disability benefits are considered one disability benefit period they are separated by no more than 14 days. This bill expands that separation period to 60 days.

C. AB 1245 (Cooley): Unemployment Electronic Reporting and Funds Transfers

This bill amends various sections of the Unemployment Insurance Code and adds new section 1112.1 to require that all employers with 10 or more employees file all required EDD reports electronically and remit all funds through electronic transfer. The requirement takes effect on January 1, 2017.

D. AB 963 (Bonilla): Teachers’ Retirement

The bill revises the Defined Benefit Program of the State Teachers’ Retirement Plan as set forth in several Education Code sections.

Specifically, the bill revises the definition of “creditable service” to include any activities that do not meet the statutory definition of “creditable service” but were performed for an employer as defined in the Defined Benefit Program on or before December 31, 2015 and were reported as creditable service to the State Teachers’ Retirement System. Creditable service also is defined to include specified activities performed by consulting teachers in the California Peer Assistance and Review Program. The bill also revises the definition of “member” to include any person who has completed “creditable service” under the revised definition.

The bill permits any member, including a retired member, to elect to have all of that member’s creditable service subject to coverage by a different public retirement system other than the Defined Benefits Program if the member is not already excluded from coverage by the other public retirement system. Alternatively, a member who had service removed from the system and reported to a different public retirement system may elect to have all of that service, and any subsequent service, subject to coverage by the Defined Benefit program and excluded from coverage by the other public retirement system.

Finally, the bill requires employers, upon request by the system, to provide the system with information regarding the certification qualification, minimum standards, or provisions of an approved school charter for the operation of a charter school required to perform creditable service.

E. SB 546 (Leno): Health Care Coverage Rate Review

The bill amends section 1374.21 of the Health and Safety Code and adds new section 1385.045 to that code. It also amends section 10199.1 of the Insurance Code and adds new section 10181.45 5 to that code.

The bill requires large group health care service plan contracts (> 50 enrollees) to file with the Department of Managed Health Care the weighted average rate increase during the 12-month period ending January 1 of the following year. The average shall be weighted by the number of enrollees in each large group benefit design in the plan’s large group marked and adjusted to the most commonly sold large group benefit design by enrollment during the 12-month period. The required information must be submitted to the department by October 1, 2016 and on or before October 1 annually thereafter.

The bill also requires the department to conduct public meetings on an annual basis regarding large group rate changes.