Under California law, all employers (with very few exceptions) are required to carry workers’ compensation insurance. This law is meant to ensure that all employees injured on the job will receive fair compensation. Even if an employer does not carry the mandatory insurance, an employee with a work-related injury is still entitled to compensation for medical treatment and other related benefits. In the case where an employee is injured while working for an uninsured employer, the employee may apply for benefits from the Uninsured Employers Benefits Trust Fund (UEBTF), which is funded through a tax that is placed on every workers’ compensation policy premium in the state of California, as well as fines and penalties collected from any illegally uninsured employers.
The UEBTF is a fund held by the State of California to make sure that employees with work-related injuries can still obtain the monetary benefits they would receive if they had been working for an employer who held the required workers’ compensation insurance. The UEBTF was established in 1971 in an effort to make sure that employees with work-related injuries receive compensation even if their employer was illegally uninsured. An employee who receives a work-related injury may seek a judgment from the Workers’ Compensation Appeals Board (WCAB) for the amount of their medical costs and other injuries as allowed by California workers’ compensation law. After an employee receives an award from the WCAB, then he or she may apply to the UEBTF for compensation if the employer was not insured at the time of the injury, and the employer fails to pay the award within 10 days.
If an employee successfully receives compensation from the UEBTF, that does not mean that the uninsured employer is off the hook for the costs of the employee’s medical care or other expenses. After the UEBTF expends funds to compensate the employee, the UEBTF will then seek to be reimbursed for those expenses paid by the UEBTF from the uninsured employer. It does this by seeking to place a lien on the assets owned by the uninsured business. The business will receive a Special Notice of Lawsuit before the UEBTF becomes a party. After the UEBTF becomes a party, a lien can be placed by the UEBTF on all assets of the business and any substantial shareholders. Recoveries from illegally uninsured employers are another source of funding for the UEBTF.
If you are facing a lien or action from the UEBTF call me today at (714) 516-8188. I look forward to discussing this process with you and helping your business with the complicated issues associated with it