Time Limits in Workers’ Compensation

Most people understand that there are time limits in almost all types of legal cases, ranging from prosecution of domestic assault to suing for breach of contract.  Workers’ compensation is no exception.  There are time limits that need to be observed at many stages of the workers’ compensation case.  As an employer, you need to be familiar with some of these time limits to make sure you are properly observing the law and understand your rights and responsibilities.

The first time limit you should be aware of concerns the reporting of the injury.  When your employee sustains a work related injury, he or she is obligated by law to report that injury to you.  The employer is obligated to report the injury to the employer within thirty days of sustaining the injury or becoming aware of the injury.  The employee needs to fill out a DWC-1 claim form providing details about the injury.

Another essential time limit to be aware of is that reporting an injury to the employer is not the same as filing a claim for workers’ compensation benefits.  Under California labor code 4906(g), the injured employee is obligated to file an Application for Adjudication of Claim and Declaration with the workers’ compensation appeals board to start the case.  The worker must file this application within one year of the job-related injury or illness.  If the employee fails to meet this time limit, he or she may lose the right to file a case at all.  Once the case is commenced, there is no time limit on how long the case can last.  In the optimal circumstance, the procedure will go smoothly and it can be concluded without too much trouble.  The increasing use of alternative dispute resolution helps conclude cases quicker and with more efficiency than in the past.  If no settlement can be reached, however, the case can last for months or even longer.

There are some limited circumstances when the statute of limitations may be extended.  One common situation when this may happen is where the injured employee is under eighteen at the time he or she is injured on the job.  In that case, the statute of limitations is “tolled” and does not start to run until the injured employee turns eighteen.  Another common exception is for repetitive stress injuries, such as carpal tunnel syndrome.  In those types of cases, the statute of limitations starts to run from the date the employee became aware of the injury and also became aware the injury was a result of employment.

We have extensive experience with helping our clients understand the necessary procedures in workers’ compensation case.  Call us today to discuss your case and what we can do to help.

Can I Opt Out of Workers’ Compensation Insurance?

Employers know that they need to take precautions to make sure their business is adequately protected.  Employers need to carry a variety of types of insurance, ranging from fire insurance to insurance on any vehicles.  Workers’ compensation insurance is another important component to protect your business.  Workers’ compensation provides insurance coverage in the event that your employee sustains a work related injury.  Despite its protections, some employers find the cost of workers’ compensation insurance too heavy a price to pay for that protection.  This leads many employers to wonder whether they can opt out of carrying workers’ compensation insurance.

California labor code section 3700 provides that if a business employs one or more employees, that business is required to carry workers’ compensation insurance.  It is important to note that this requirement includes some workers that you would not ordinarily believe would fall under this requirement, such as nannies or handymen.    It also should be noted that due to recent changes in the law, executive officers and directors of corporations must also be included in workers’ compensation coverage unless the corporation is completely owned by the directors and officers.  In that circumstance, they can opt to be excluded from coverage.  Except for those circumstances, all employers are required to carry workers’ compensation insurance and can face hefty penalties for failure to comply.

In some cases, an employer may decide to self-insure.  Self-insurance requires that you receive state approval.  The business must have a net worth of at least five million dollars with a net annual income of at least five hundred thousand dollars.  The employer must also post a security deposit.  Although this generally means that only larger businesses are able to meet the requirements, some small employers in the same homogeneous industry pool their workers’ compensation liabilities.  If the employer is self-insured, workers’ compensation claims may be administered directly by the employer or the employer may contact with a third party administrator to handle the administration of the case.

If you have questions about whether your business is required to carry workers’ compensation insurance, contact us today.  We can talk to you about your rights and responsibilities.

Third-Party Claims

California’s workers’ compensation system is a “no fault” system.  This means that in order to recover wages and medical costs under a workers’ compensation claim, an employee is not required to prove that his or her injury is a result of the employer’s intentional or negligent conduct.  In the majority of workers’ compensation cases, there are only two parties to the case: the injured worker and the employer together with the workers’ compensation insurance provider.  However, in some cases, there will be a third party involved.  There are some cases where the employee’s injury is a result of not simple common work place conditions, but because of the negligent or intentional conduct of a third person.  Common examples include faulty equipment or a car accident caused by the negligence of the other driver.  In both of those cases, as long as the worker is acting in the course and scope of employment, the injury would be compensable under the workers’ compensation system.  However, the inquiry does not end there.  Instead, the employer and often the insurance company will bring an action against the third party to recover the costs for wages and medical benefits that had to be paid out to the injured employee as a result of the third party’s conduct.  It is important to note, however, that the case against the third party is a separate action from the workers’ compensation case.  The workers’ compensation case between the employee and the employer proceeds like normal through the typical workers’ compensation system.  The claim against the third party, however, will go through civil court just like any other tort case.  It is not uncommon for the employer to need two different attorneys, as one would be familiar with workers’ compensation while the other will be an attorney who focuses on tort cases.  Particularly when the third party claim includes a product liability case (such as where equipment is faulty), it is likely an employer will need to hire another attorney for that, as it is a specialized area of law that not all attorneys practice or are familiar with.

We have extensive experience helping our clients understand third party claims in workers’ compensation cases.  Call us today to talk about your case.

Beware of Incorrect Worker Classification

Employers know that there are many administrative responsibilities they must give special attention to.  This includes such issues as paying taxes, making sure you comply with any local ordinances, and keeping your inventory up to date, just to name a few.  Employers are also free to determine how they want to accomplish their work.  Employers can hire employees to work directly for their business.  Alternatively, they can retain the services of an independent contractor.  It is essential that employers properly classify their workers.

Under the California workers’ compensations system, an employer is required to provide workers’ compensation insurance for all employees.  The failure to provide the required insurance can result in hefty civil penalties and in some cases, even criminal charges.  However, an employer is not required to provide workers’ compensation insurance for independent contractors.  To that end, many employers end up classifying all of their workers as independent contractors to try to get out of providing insurance and benefits.  Like the failure to provide insurance coverage at all, the misclassification of workers as independent contractors can carry heavy repercussions.  If it is discovered that a worker is misclassified, California law provides that an employer may have to go back and pay unpaid payroll taxes that were avoided because of the misclassification. California law also provides for civil penalties starting at $5,000 for each misclassification and go up from there.  Moreover, the misclassified worker can seek up to three years of back wages, including unpaid overtime.

It is clear that employers need to be diligent in their proper classification.  However, there is not exactly a set definition of “independent contractor” versus “employee,” although employee is defined in labor code section 3351. That said, there are several issues the court will examine when trying to decide whether a worker is an independent contractor.  One of the most important issues is what type of control the worker has on how his or her work is completed.  For example, if the employer sets specific times when the worker must do the work as well as a particular place, that indicates the worker is actually an employee.  Another indication is if the employer provides the tools and equipment necessary to complete the work, the worker may actually be an employee and not an independent contractor.

We have experience assisting our clients understand worker classification.  Contact us today to talk about your business and what we can do to help make sure you are in full compliance with the law

Why Do We Have Workers’ Compensation?

Conscientious employers take many measures to make sure that their employees are safe in the work place.  Providing training, keeping equipment in good repair, and forming safety committees are just a few ways that employers can help keep their workers safe.  In the event that a work related injury occurs despite these measures, the workers’ compensation system comes into play.  The workers’ compensation system is a complex series of statutes and case law that has evolved over time.  Understanding why we have this system can help employers and employees alike better comprehend their rights and responsibilities in the context of workers’ compensation.

Workers’ compensation provides protection for both employees and employers.  When an employee sustains a work related injury, it could mean that he or she is completely unable to work and provide for his or her family.  With workers’ compensation, the employee is able to still receive income.  The employee can also receive reimbursement for reasonable medical expenses.  This is designed to help the employee heal so he or she can return to work as soon as possible.  With workers’ compensation, the employee is also protected from the employer taking retaliatory action due to filing a workers’ compensation claim.

An employer also enjoys protection under this system.  The California workers’ compensation system is a “no fault” system.  This means that the employee does not have to prove that the injury occurred as a result of the negligent or intentional conduct of the employer.  The other side to this, however, is that the employee is typically barred from filing a tort claim against the employer to recover for the injuries.  Instead, the employee must seek recompense for injuries through workers’ compensation.  This protects the employer from repetitive or even frivolous law suits.

It is important to remember that for many years, there were no health or safety standards for work place conditions.  As a result, employees were frequently injured or even killed on the job, and their families would have no method of redress.  The workers’ compensation system helps make sure that employers are incentivized to keep their business safe, and employees are not able to make a “double recovery” by suing in tort as well as receiving benefits.

We have extensive experience with the workers’ compensation system and explaining an employer’s rights and responsibilities.  Contact us today for a consultation.

Origin and Purpose of Workers’ Compensation

The majority of employers take many measures to help make sure their employees are as safe as possible at work.  Employers may decide to provide extra safety training, purchase and install safety technology, or form safety committees, just to name a few examples.  Unfortunately, despite the most diligent efforts, it is likely that at some point, an employee will sustain a work-related injury.  When that happens, the employee may file for workers’ compensation.

The modern workers’ compensation system can trace its origin to the Workers’ Accident Insurance system that was put into place by Otto von Bismark in 1881.  The motivation behind enacting this system was what was referenced as the “unholy trinity” of tort defenses that were available at that time, including contributory negligence, assumption of risk, and the fellow servant rule.  In other words, it was much more difficult for injured employees to be compensated if they were injured on the job.

Different states here in the United States started implementing workers’ compensation systems before the turn of the century, with the first state-wide system being instituted by Maryland in 1902.  Workers’ compensation provided a much needed outlet for injured employees to seek compensation for industrial injuries.  The workers’ compensation system is designed to protect both the employer and the injured employee.  Workers’ compensation in California is a “no fault” system.  This means that the injured employee does not have to prove the injury was a result of negligence or intentional acts on behalf of the employer.  Similarly, the employer is protected from law suits from the employee, with only a few exceptions.

It is no secret that at the turn of the century, industrial working conditions for most Americans were quite dangerous, with few regulations in place to require employers make sure their workers were safe.  Especially in factories or manual labor fields, it was common for employees to sustain truly horrific injuries.  By instituting worker’s compensation, employers were motivated to make sure their businesses were as safe as possible for their employees.  In addition, employers could feel at ease knowing that their employees could not sue for negligence if the employee sustained an injury because the employer overlooked some safety measure.

We have extensive experience helping our clients understand the workers’ compensation system.  Call us today to talk about what we can do to help you.

Who Chooses the Doctor?

The workers’ compensation system provides important rights and responsibilities for both employees and employers.  Employees can rest easy knowing that they can receive benefits and medical care costs if they suffer a work-related injury.  Employers can also feel a sense of relief knowing that the workers’ compensation system means that the employee cannot sue for the injury, except in certain limited circumstances.  Despite these reassuring facts, workers’ compensation does require several important procedural steps.  One of the most obvious is that the injured employee will have to get medical attention.  As the medical diagnoses and care are clearly an integral part of the workers’ compensation case, employers may wonder who gets to choose the doctor for the employee?

The medical care provider plays an essential role in the workers’ compensation case.  The doctor will diagnose the condition and determine if the injury was a result of working conditions.  The doctor will also decide how long the employee must stay out of work and what accommodations are necessary when the employee does return to the work force.  The doctor will also decide when the employee’s medical condition has stabilized and whether the employee has any permanent disability.

Before an injury occurs, an employee has the right to “predesignate” his or her personal doctor.  This means that if and when the employee sustains a work related injury, he or she can go directly to that personal, pre-designated physician for treatment.  California labor code 4600 requires employers to give employees the necessary paperwork to predesignate a treating physician.

If an employee has failed to predesignate a health care provider, then he or she will likely not be able to choose the initial physician that he or she sees for treatment of the industrial injury.  Typically the workers’ compensation insurance provider or the employer itself will have a “medical provider network.”  The employee will need to choose a doctor who is included in that network.  There are some important exceptions to this general rule.  First, if the employee needs emergency care, it is not required that he or she use a physician including in the medical provider network.  In addition, if the employer has failed to provide certain required notices or information, the employee may also not be required to use a doctor in the MPN.

We have extensive experience helping our clients understand the workers’ compensation process and how it can impact their business.  Contact us today for a consultation to talk about your business.

Handymen, Nannies, Small Businesses, and Workers’ Compensation

Millions of Americans run their own small business.  Whether that business is the primary source of income for the family or just a side job to help provide supplemental income, business owners are all well aware that there are many regulations surrounding formation and running a business.  In addition, many people choose to employ other individuals for help around the house, including nannies and handymen.  Whether you have a small business or you employ others to help you around the house, it is important that you understand your rights and responsibilities regarding workers’ compensation.

California labor code provides that employers are obligated to carry workers’ compensation insurance.  This is true even if the business has only one employee.  This is also true of businesses which are located outside the state of California but still do business in this state.  In other words, if your business is located in Oregon but you sometimes do business in California, you are stills subject to the California requirement that you carry workers’ compensation insurance.  For a sole proprietorship, the law does not usually require workers; compensation if the business has no employees.  The important exception to this is for roofing contractors.  All C-39 roofing contractors in California are required to carry workers’ compensation insurance and file a valid certification with the state.

It is also important to understand your obligation regarding workers’ compensation insurance if you use the services of a nanny or a handyman.  Under California labor code 3352(h), “any person employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant” is classified as an employee.  This means that you may be required to carry workers’ compensation insurance for your nanny or handyman.  California law goes on to state that if the person has worked less than 52 hours in the 90 days before the injury was sustained or earned less than $100 in wages during that time, the person is not an employee for worker’s compensation purposes.

We have extensive experience helping our clients understand the rights and responsibilities concerning workers’ compensation insurance.  Contact us today to talk about your options.

Corporations and Workers’ Compensation

Small businesses form the backbone of the American economy.  Millions of people very year start their own business.  When forming a business, a founder has a wide variety of choices concerning the type of business organization.  A business can be a sole proprietorship, a limited liability corporation, a limited partnership, or even a hybrid of more than one of these types.  There are benefits and drawbacks to each type of business structure.  If you are thinking of choosing a corporation as the structure for your business, you need to understand how workers’ compensation interacts with the rules for corporation formation.

One thing that business owners in California need to understand is that almost all employers are required to carry workers’ compensation insurance pursuant to California labor code 3700.  Failure to carry the required insurance can result in severe civil and even criminal penalties for the business owners.  Corporations are not exempt from this requirement.  Forming a business as a corporation can provide important shelters from liability as well as tax advantages, but these advantages do not include de facto exclusion from the requirement to carry workers’ compensation insurance.

Moreover, some relatively recent changes to the California labor code provides that executive officers and directors of corporations must be included in the workers’ compensation insurance coverage.  The exception to this is if the corporation is fully owned by the directors and officers.  If that is the case, the directors and officers may elect to be excluded from workers’ compensation coverage and benefits.  For this to apply the person must be a sole shareholder who is an officer or director of a private corporation.  In that case, that person is excluded from the legal definition of “employee.” Any director or officer wishing to opt out will have to fill out specific paperwork to accomplish this.  The document is executed under the penalty of perjury, and states that he or she meets the qualifications under the California labor code for being exempt from the insurance requirements.  For officers or members of the board of directors of a cooperative corporation and for owners of a professional corporation, there are additional waiver requirements that must be met.

.We have extensive experience helping our clients understand their rights and responsibilities with regard to California’s workers’ compensation insurance requirements.  Call us today for a consultation.

When Is Self-Insurance Allowed

Workers’ compensation is an important part of our legal system.  It provides support and financial assistance for injured employees.  It also provides immunity from additional tort law suits to the employer, except in limited circumstances.  California has the largest workers’ compensation system in the United States.  Under California law, employers are required to carry workers’ compensation insurance.  There are severe civil and criminal consequences for employers who fail to fulfill this responsibility.  There are a few narrow exceptions to this rule, including self-insurance.

Self-insurance means that the employer has assumed the financial risk associated with providing workers’ compensation benefits to their employees who sustain work-related injuries.  Workers’ compensation benefits can include not only the cost of medical treatment for the worker, but also other monthly benefits.  Clearly, this can represent a significant financial burden, especially for smaller businesses.

California law provides that there are strict requirements before a business can qualify to self-insure instead of purchasing a workers’ compensation insurance policy.  A business wanting to qualify for self-insurance must apply to the California Office of Self-Insurance Plans.  The business will have to provide particular information and evidence to support the application. First, the business must have been a legally authorized business form for at least three years.  Next, the business will have to provide three years of certified, independently audited financial statements with the application.  The business will also have to demonstrate it has an acceptable credit rating for three years preceding applying for self-insurance. If the company has subsidiaries, each subsidiary must file its own application.  The application may be filed separately or together with the parent company’s application.  If a current existing company that already has been approved for self-insurance creates a new subsidiary or affiliate, a new application can be filed.  If the parent company can demonstrate solvency, the subsidiary is automatically self-insured for 180 days.  The parent company must file an application for a permanent certificate during that time.

Once an employer is approved by the state to be self-insured, the employer is still subject to state audits.  The audits check for the accuracy of claims reserving practices as well as the correctness of the reported workers’ compensation liabilities.

If you have questions about workers’ compensation and your rights and responsibilities as a business owner, contact us today.  We can talk to you about your business and the workers’ compensation process.

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