UEBTF Basics

The California workers’ compensation system is designed to protect both employees and the employers.  One way it accomplishes this is to require almost all employers to carry workers’ compensation insurance.  In the event that an employee makes a workers’ compensation claim, the insurance company will be the one to pay out the benefits to the employer and medical provider, not the employer.  This protects the employer’s bottom line while also making sure that the employee also receives the benefits that he or she is entitled to after sustaining a work-related injury.  Despite the fact that California law provides serious repercussions and penalties for employers who fail to carry workers’ compensation insurance, some employers still fail to carry it.  The Uninsured Employers Benefits Trust Fund (UEBTF) can then help provide the compensation required.

The UEBTF was set up in 1971 to make sure that even if an employer illegally fails to carry workers’ compensation insurance, he or she will still be properly cared for and receive the appropriate wage replacement or other benefits he or she may be entitled to under California law.  The UEBTF benefits the uninsured employer because it means that the employee still will not be able to directly sue the employer for his or her work-related injuries, as the injuries will still be compensated under the no-fault system established through workers’ compensation.  To receive compensation from the UEBTF, an injured employee must first go to the Workers’ Compensation Appeals Board to request a judgment for uncompensated injuries.  Once that occurs, he or she can then apply for benefits from the UEBTF.

After an employee receives compensation from the UEBTF, the process is not finished.  The UEBTF can and will seek to recover the benefits paid for the employee directly from the employer.  The UEBTF uses the funds recovered from illegally uninsured employers to help continue to fund the UEBTF.  Because the employer will not always have the cash on hand to reimburse the UEBTF for the benefits paid out, the UEBTF will typically seek to place liens on the assets and property held by the business.  Moreover, the UEBTF can seek to place liens on substantial shareholders of the business.

We have extensive experience helping our clients to understand the repercussions of failing to carry the required workers’ compensation insurance.  Call us today for a consultation

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

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