What is the UEBTF

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

Key New Laws for Employers from 2016

This past year saw many new laws come into effect, passed by the California legislature, or signed into law by the Governor. Understanding changes in the law is vital to keeping your business in compliance and avoiding penalties, both civil and criminal.

AB 622 came into effect on January 1, 2016, and is now codified in California Labor Code 2814. This law was passed in an effort to prevent discrimination against those who are not permitted to work under federal law, as is the case for undocumented immigrants. Pursuant to Labor Code 2814, an employer may not use the E-Verify system to check whether an employee is authorized to work before making an offer an employment, unless such a check is required by federal law. The employer is still permitted to use the system to check the employment status of employees already employed by the employer.

Another new law is AB 2883, which will go into effect on January 1, 2017. This law creates a large change for small businesses and closely held corporations. The law currently in place states that although employers must carry workers’ compensation insurance for all employees, “employee” did not include offers or directors of private corporations where those officers were the sole shareholders, or all working members of a partnership or a limited liability company. The new law, however, revises these exemptions. As of January 1, 2017, the exemption for officers or members of the board of directors only applies if the member owns at least 15% of the corporation’s stock, or in the case of the general member of a partnership or managing member of an LLC, that the person elects to be excluded by executing a document affirming that he is a qualifying office, director, general partner, or managing member. This document is signed under the penalty of perjury.

Next, SB 623 modifies that benefits can be received under the Uninsured Employers Benefits Trust Fund and the Subsequent Injuries Benefits Trust fund. California law states that immigration status shall not have an impact on an injured workers’ ability to file for workers’ compensation. Under this new law, immigration status also will not act as a bar to applying for benefits under the UEBTF or the SIBTF.

Finally, under SB 560, the Contractors State License Board may now inspect certain job sites. This law allows the Board to conduct investigations and enforcement of licensees to make sure that they are carrying valid and current workers’ compensation insurance. The Board must also provide information regarding licensees to the Employment Development Department.

It is of central importance that your business conforms to the changing landscape of the law. Call me today at (714) 516-8188 for an appointment to discuss your business’s compliance with California Labor Code.

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