SB 189: Workers’ compensation: definition of employee.
- Session Year: 2017-2018
- House: Senate
- Latest Version Date: 2017-10-13
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception from the definition of an employee to apply to an officer or member of the board of directors of a quasi-public or private corporation, except as specified, who owns at least 10% of the issued and outstanding stock, or 1% of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10% of the issued and outstanding stock of the corporation and that officer or member is covered by a health care service plan or a health insurance policy, and executes a written waiver, as described above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under the laws governing workers compensation, and stating that he or she is covered by a health insurance policy or a health care service plan. The bill would expand the scope of the exception to include an officer or member of the board of directors of a cooperative corporation, as specified. The bill would also expand the definition of an employee to specifically include a person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust, and would authorize that person to also elect to be excluded from the requirement to obtain workers compensation coverage, as specified. The bill would provide that an insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. The bill would make other changes relating to the execution and acceptance of waivers.
The changes made by the bill would take effect on July 1, 2018, except as specified.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception from the definition of an employee to apply to an officer or member of the board of directors of a quasi-public or private corporation, except as specified, who owns at least 10% of the issued and outstanding stock, or 1% of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10% of the issued and outstanding stock of the corporation and that officer or member is covered by a health care service plan or a health insurance policy, and executes a written waiver, as described above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under the laws governing workers compensation, and stating that he or she is covered by a health insurance policy or a health care service plan. The bill would expand the scope of the exception to include an officer or member of the board of directors of a cooperative corporation, as specified. The bill would also expand the definition of an employee to specifically include a person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust, and would authorize that person to also elect to be excluded from the requirement to obtain workers compensation coverage, as specified. The bill would provide that an insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. The bill would make other changes relating to the execution and acceptance of waivers.
The changes made by the bill would take effect on July 1, 2018, except as specified.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception from the definition of an employee to apply to an officer or member of the board of directors of a quasi-public or private corporation, except as specified, who owns at least 10% of the issued and outstanding stock, or 1% of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10% of the issued and outstanding stock of the corporation and that officer or member is covered by a health care service plan or a health insurance policy, and executes a written waiver, as described above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under the laws governing workers compensation, and stating that he or she is covered by a health insurance policy or a health care service plan. The bill would expand the scope of the exception to include an officer or member of the board of directors of a cooperative corporation, as specified. The bill would also expand the definition of an employee to specifically include a person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust, and would authorize that person to also elect to be excluded from the requirement to obtain workers compensation coverage, as specified. The bill would provide that an insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. The bill would also provide a grace period so that written waivers that are executed on or after January 1, 2018, and are accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018. The bill would make other changes relating to the execution and acceptance of waivers.
The changes made by the bill would take effect on July 1, 2018, except as specified.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception described above from the definition of an employee to apply to an officer or member of the board of directors of a quasi-public or private corporation corporation, except as specified, who owns at least 10% of the issued and outstanding stock stock, or 1% of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10% of the issued and outstanding stock of the corporation and that officer or member is covered by a health care service plan or a health insurance policy, and executes a written waiver, as described above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under the laws governing workers compensation, and stating that he or she is covered by a health insurance policy or a health care service plan. The bill would expand the scope of the exception to include an officer or member of the board of directors of a cooperative corporation, as specified. The bill would also expand the scope of the exception to definition of an employee to specifically include a person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust, and would authorize that person to also elect to be excluded from the requirement to obtain workers compensation coverage, as specified. The bill would authorize an insurance carrier to backdate the acceptance of a waiver up to 15 days prior to the date of receipt of the waiver, and would provide that an insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. The bill would also provide a grace period so that written waivers that are executed on or after January 1, 2018, and are accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.
This bill would make the substantive changes made by the bill operative on July 1, 2018, except as specified.By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception described above to apply to an officer or member of the board of directors of a quasi-public or private corporation who owns at least 10% of the issued and outstanding stock and executes a written waiver, as described above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a written waiver of document, in writing and under penalty of perjury, both waiving his or her rights under the laws governing workers compensation, stating under penalty of perjury and stating that he or she is covered by a health insurance policy or a health care service plan. The bill would also expand the scope of the exception to include a person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust, as specified. The bill would authorize an insurance carrier to backdate the acceptance of a waiver up to 15 days prior to the date of receipt of the waiver, and would provide that an insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver.
This bill would make the substantive changes made by the bill operative on July 1, 2018, except as specified.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception described above to apply to an officer or member of the board of directors of a quasi-public or private corporation who owns at least 10% of the issued and outstanding stock and executes a written waiver, as above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is covered by a health insurance policy or a health care service plan. The bill would also expand the scope of the exception to include a person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust, as specified. The bill would authorize an insurance carrier to backdate the acceptance of a waiver up to 15 days prior to the date of receipt of the waiver, and would provide that an insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver.
This bill would make the substantive changes made by the bill operative on July 1, 2018, except as specified.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception described above to apply to an officer or member of the board of directors of a quasi-public or private corporation who owns at least 10% of the issued and outstanding stock and executes a written waiver, as above. The bill would expand the scope of the exception to apply to an owner of a professional corporation, as defined, who is a practitioner rendering the professional services for which the professional corporation is organized, and who executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is covered by a health insurance policy or a health care service plan.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, within the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law defines an employee, for purposes of the laws governing workers compensation, to include, among other persons, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Existing law excludes from that definition an officer or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers compensation, stating under penalty of perjury that he or she is a qualifying officer or director.
This bill would expand the scope of the exception described above to apply to an officer or member of the board of directors of a quasi-public or private corporation who owns at least 10% of the issued and outstanding stock and executes a written waiver, as above.
By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with paragraph (16) of subdivision (a) of Section 3352.
(d)Except as provided in paragraph (8) of subdivision (a) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with paragraph (17) of subdivision (a) of Section 3352.
(g)This section shall remain in effect only until July 1, 2018, and as of that date is repealed.
SEC. 2.Section 3351 is added to the Labor Code, to read:3351.Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with paragraph (16), (18), or (19) of subdivision (a) of Section 3352.
(d)Except as provided in paragraph (8) of subdivision (a) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with paragraph (17) of subdivision (a) of Section 3352.
(g)A person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352.
(h)This section shall become operative on July 1, 2018.
SEC. 3.Section 3352 of the Labor Code is amended to read:3352.(a)Employee excludes the following:
(1)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(2)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(3)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person of recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(4)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(5)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(6)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(7)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(8)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(A)The employment was, or was contracted to be, for less than 52 hours.
(B)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(9)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(10)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(11)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(12)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(13)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(14)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(15)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(16)(A)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 15 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(17)(A)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnerships or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(b)This section shall remain in effect only until July 1, 2018, and as of that date is repealed.
SEC. 4.Section 3352 is added to the Labor Code, to read:3352.(a)Employee, excludes the following:
(1)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(2)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(3)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person of recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(4)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(5)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(6)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(7)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(8)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(A)The employment was, or was contracted to be, for less than 52 hours.
(B)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(9)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(10)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(11)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(12)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(13)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(14)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(15)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(16)(A)(i)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation, or at least 1 percent of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10 percent of the issued and outstanding stock of the corporation and that officer or member is covered by a health insurance policy or a health care service plan, and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an officer or director of a private corporation who is the sole shareholder of the private corporation, unless the officer, director, or private corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(17)(A)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnerships or limited liability companys insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(18)(A)(i)An owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners of the professional corporation and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the owner provides the professional corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an owner of a private professional corporation who is the sole shareholder of the private professional corporation, unless the owner or private professional corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(19)(A)(i)An officer or member of the board of directors of a cooperative corporation organized pursuant to the Cooperative Corporation Law, as set forth in Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by both a health care service plan or health insurance policy, and a disability insurance policy that is comparable in scope and coverage, as determined by the Insurance Commissioner, to a workers compensation policy. The officer or member of the board of directors shall provide a copy of the waiver to all other officers and members of the board of directors of the cooperative corporation, and the cooperative corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the cooperative corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board provides the cooperative corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an officer or director of a private cooperative corporation who is the sole shareholder of the private cooperative corporation, unless the officer, director, or private cooperative corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(b)(1)This section shall become operative on July 1, 2018.
(2)A policy or contract that is entered into or renewed in compliance with this section is subject to this section as it read on the date that the policy or contract was entered into or renewed.
SEC. 5.Section 3364 of the Labor Code is amended to read:3364.Notwithstanding paragraph (3) of subdivision (a) of Section 3352, a volunteer, unsalaried member of a sheriffs reserve in any county who is not deemed an employee of the county under Section 3362.5, shall, upon the adoption of a resolution of the board of supervisors declaring that the member is deemed an employee of the county for the purposes of this division, be entitled to the workers compensation benefits provided by this division for any injury sustained by him or her while engaged in the performance of any active law enforcement service under the direction and control of the sheriff.
SEC. 6.Section 3706.5 of the Labor Code is amended to read:3706.5.The provisions of this article and Sections 4553, 4554, and 4555, and any other penalty provided by law for failure to secure the payment of compensation for employees, shall not apply to individual members of a board or governing body of a public agency or to members of a private, nonprofit organization, if the agency or organization performs officiating services relating to amateur sporting events and those members are excluded from the definition of employee pursuant to paragraph (10) of subdivision (a) of Section 3352.
SEC. 7.Section 4156 of the Labor Code is amended to read:4156.Liability for compensation does not attach to any employer of a person excluded by paragraph (8) of subdivision (a) of Section 3352 from the definition of employee for an injury to or the death of a person so excluded which occurs on or after the effective date of this section if the employer elected to come under the compensation provisions of this division pursuant to subdivision (a) of Section 4151 prior to the effective date of this section by purchasing or renewing a policy providing comprehensive personal liability insurance containing a provision for coverage against liability for the payment of compensation, as defined in Section 3207 of the Labor Code, to any person defined as an employee by subdivision (d) of Section 3351 of the Labor Code, however, this section does not prohibit an employer from providing compensation pursuant to the provisions of this chapter.
SEC. 8.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with paragraph (16) of subdivision (a) of Section 3352.
(d)Except as provided in paragraph (8) of subdivision (a) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with paragraph (17) of subdivision (a) of Section 3352.
(g)This section shall remain in effect only until July 1, 2018, and as of that date is repealed.
SEC. 2.Section 3351 is added to the Labor Code, to read:3351.Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with paragraph (16), (18), or (19) of subdivision (a) of Section 3352.
(d)Except as provided in paragraph (8) of subdivision (a) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with paragraph (17) of subdivision (a) of Section 3352.
(g)A person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352.
(h)This section shall become operative on July 1, 2018.
SEC. 3.Section 3352 of the Labor Code is amended to read:3352.(a)Employee excludes the following:
(1)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(2)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(3)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person of recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(4)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(5)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(6)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(7)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(8)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(A)The employment was, or was contracted to be, for less than 52 hours.
(B)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(9)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(10)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(11)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(12)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(13)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(14)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(15)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(16)(A)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 15 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(17)(A)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnerships or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(b)This section shall remain in effect only until July 1, 2018, and as of that date is repealed.
SEC. 4.Section 3352 is added to the Labor Code, to read:3352.(a)Employee, excludes the following:
(1)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(2)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(3)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person of recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(4)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(5)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(6)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(7)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(8)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(A)The employment was, or was contracted to be, for less than 52 hours.
(B)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(9)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(10)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(11)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(12)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(13)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(14)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(15)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(16)(A)(i)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation, or at least 1 percent of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10 percent of the issued and outstanding stock of the corporation and that officer or member is covered by a health insurance policy or a health care service plan, and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an officer or director of a private corporation who is the sole shareholder of the private corporation, unless the officer, director, or private corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(17)(A)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnerships or limited liability companys insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(18)(A)(i)An owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners of the professional corporation and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the owner provides the professional corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an owner of a private professional corporation who is the sole shareholder of the private professional corporation, unless the owner or private professional corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(19)(A)(i)An officer or member of the board of directors of a cooperative corporation organized pursuant to the Cooperative Corporation Law, as set forth in Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by both a health care service plan or health insurance policy, and a disability insurance policy that is comparable in scope and coverage, as determined by the Insurance Commissioner, to a workers compensation policy. The officer or member of the board of directors shall provide a copy of the waiver to all other officers and members of the board of directors of the cooperative corporation, and the cooperative corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the cooperative corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board provides the cooperative corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an officer or director of a private cooperative corporation who is the sole shareholder of the private cooperative corporation, unless the officer, director, or private cooperative corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(b)(1)This section shall become operative on July 1, 2018.
(2)A policy or contract that is entered into or renewed in compliance with this section is subject to this section as it read on the date that the policy or contract was entered into or renewed.
SEC. 5.Section 3364 of the Labor Code is amended to read:3364.Notwithstanding paragraph (3) of subdivision (a) of Section 3352, a volunteer, unsalaried member of a sheriffs reserve in any county who is not deemed an employee of the county under Section 3362.5, shall, upon the adoption of a resolution of the board of supervisors declaring that the member is deemed an employee of the county for the purposes of this division, be entitled to the workers compensation benefits provided by this division for any injury sustained by him or her while engaged in the performance of any active law enforcement service under the direction and control of the sheriff.
SEC. 6.Section 3706.5 of the Labor Code is amended to read:3706.5.The provisions of this article and Sections 4553, 4554, and 4555, and any other penalty provided by law for failure to secure the payment of compensation for employees, shall not apply to individual members of a board or governing body of a public agency or to members of a private, nonprofit organization, if the agency or organization performs officiating services relating to amateur sporting events and those members are excluded from the definition of employee pursuant to paragraph (10) of subdivision (a) of Section 3352.
SEC. 7.Section 4156 of the Labor Code is amended to read:4156.Liability for compensation does not attach to any employer of a person excluded by paragraph (8) of subdivision (a) of Section 3352 from the definition of employee for an injury to or the death of a person so excluded which occurs on or after the effective date of this section if the employer elected to come under the compensation provisions of this division pursuant to subdivision (a) of Section 4151 prior to the effective date of this section by purchasing or renewing a policy providing comprehensive personal liability insurance containing a provision for coverage against liability for the payment of compensation, as defined in Section 3207 of the Labor Code, to any person defined as an employee by subdivision (d) of Section 3351 of the Labor Code, however, this section does not prohibit an employer from providing compensation pursuant to the provisions of this chapter.
SEC. 8.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with subdivision (p) paragraph (16) of subdivision (a) of Section 3352.
(d)Except as provided in subdivision (h) paragraph (8) of subdivision (a) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with subdivision (q) paragraph (17) of subdivision (a) of Section 3352.
(g)This section shall remain in effect only until July 1, 2018, and as of that date is repealed.
SEC. 2.Section 3351 is added to the Labor Code, to read:3351.Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with paragraph (16), (18), or (19) of subdivision (a) of Section 3352.
(d)Except as provided in paragraph (8) of subdivision (a) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with paragraph (17) of subdivision (a) of Section 3352.
(g)A person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352.
(h)This section shall become operative on July 1, 2018.
SEC. 3.Section 3352 of the Labor Code is amended to read:3352.(a)Employee excludes the following:
(a)(1)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(b)(2)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(c)(3)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from of recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(d)(4)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(e)(5)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(f)(6)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(g)(7)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(h)(8)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(1)(A)The employment was, or was contracted to be, for less than 52 hours.
(2)(B)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(i)(9)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(j)(10)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(k)(11)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(l)(12)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(m)(13)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Motor Vehicles and Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(n)(14)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(o)(15)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(p)(16)(A)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 15 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(q)(17)(A)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnership partnerships or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(b)This section shall remain in effect only until July 1, 2018, and as of that date is repealed.
SEC. 4.Section 3352 is added to the Labor Code, to read:3352.(a)Employee, excludes the following:
(1)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(2)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(3)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person of recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(4)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(5)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(6)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(7)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(8)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(A)The employment was, or was contracted to be, for less than 52 hours.
(B)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(9)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(10)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(11)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(12)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(13)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(14)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(15)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(16)(A)(i)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation, or at least 1 percent of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10 percent of the issued and outstanding stock of the corporation and that officer or member is covered by a health insurance policy or a health care service plan, and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an officer or director of a private corporation who is the sole shareholder of the private corporation, unless the officer, director, or private corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(17)(A)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnerships or limited liability companys insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(B)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(18)(A)(i)An owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners of the professional corporation and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the owner provides the professional corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an owner of a private professional corporation who is the sole shareholder of the private professional corporation, unless the owner or private professional corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(19)(A)(i)An officer or member of the board of directors of a cooperative corporation organized pursuant to the Cooperative Corporation Law, as set forth in Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by both a health care service plan or health insurance policy, and a disability insurance policy that is comparable in scope and coverage, as determined by the Insurance Commissioner, to a workers compensation policy. The officer or member of the board of directors shall provide a copy of the waiver to all other officers and members of the board of directors of the cooperative corporation, and the cooperative corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the cooperative corporations insurance carrier. The insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(ii)A written waiver that is executed pursuant to this subparagraph and is accepted by the insurance carrier on or before December 31, 2017, may be deemed to be accepted by the insurance carrier as of January 1, 2017. The written waiver shall remain in effect until the officer or member of the board provides the cooperative corporations insurance carrier with a written withdrawal of the waiver.
(B)Notwithstanding subparagraph (A), an officer or director of a private cooperative corporation who is the sole shareholder of the private cooperative corporation, unless the officer, director, or private cooperative corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(b)(1)This section shall become operative on July 1, 2018.
(2)A policy or contract that is entered into or renewed in compliance with this section is subject to this section as it read on the date that the policy or contract was entered into or renewed.
SEC. 5.Section 3364 of the Labor Code is amended to read:3364.Notwithstanding subdivision (c) paragraph (3) of subdivision (a) of Section 3352, a volunteer, unsalaried member of a sheriffs reserve in any county who is not deemed an employee of the county under Section 3362.5, shall, upon the adoption of a resolution of the board of supervisors declaring that the member is deemed an employee of the county for the purposes of this division, be entitled to the workers compensation benefits provided by this division for any injury sustained by him or her while engaged in the performance of any active law enforcement service under the direction and control of the sheriff.
SEC. 6.Section 3706.5 of the Labor Code is amended to read:3706.5.The provisions of this article and Sections 4553, 4554, and 4555, and any other penalty provided by law for failure to secure the payment of compensation for employees, shall not apply to individual members of a board or governing body of a public agency or to members of a private, nonprofit organization, if the agency or organization performs officiating services relating to amateur sporting events and such those members are excluded from the definition of employee pursuant to subdivision (j) paragraph (10) of subdivision (a) of Section 3352.
SEC. 7.Section 4156 of the Labor Code is amended to read:4156.No liability for compensation shall Liability for compensation does not attach to any employer of a person excluded by subdivision (h) paragraph (8) of subdivision (a) of Section 3352 from the definition of employee for an injury to or the death of a person so excluded which occurs on or after the effective date of this section if such the employer elected to come under the compensation provisions of this division pursuant to subdivision (a) of Section 4151 prior to the effective date of this section by purchasing or renewing a policy providing comprehensive personal liability insurance containing a provision for coverage against liability for the payment of compensation, as defined in Section 3207 of the Labor Code, to any person defined as an employee by subdivision (d) of Section 3351 of the Labor Code; provided, however, nothing in this section shall Code, however, this section does not prohibit an employer from providing compensation pursuant to the provisions of this chapter.
SEC. 8.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SECTION 1.Section 3351 of the Labor Code is amended to read:3351.Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:(a)Aliens and minors.(b)All elected and appointed paid public officers.(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with subdivision (p), (r), or (s) of Section 3352.(d)Except as provided in subdivision (h) of Section 3352, 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.(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with subdivision (q) of Section 3352.(g)A person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352.SEC. 2.Section 3352 of the Labor Code is amended to read:3352.Employee excludes the following:(a)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.(b)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.(c)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.(d)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.(e)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.(f)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.(g)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.(h)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:(1)The employment was, or was contracted to be, for less than 52 hours.(2)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).(i)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.(j)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.(k)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.(l)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.(m)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.(n)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.(o)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.(p)(1)(A)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation, or 1 percent of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10 percent of the issued and outstanding stock of the corporation and that officer or member is covered by a health insurance policy or a health care service plan, and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.(B)Notwithstanding subparagraph (A), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, and that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.(C)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.(2)Notwithstanding paragraph (1), an officer or director of a private corporation who is the sole shareholder of the private corporation, unless the officer, director, or private corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.(q)(1)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnerships or limited liability companys insurance carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.(2)Notwithstanding paragraph (1), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, and that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.(3)A written waiver that is executed pursuant to this subdivision, including, but not limited to, a written waiver that was executed prior to January 1, 2017, shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.(r)(1)(A)An owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners of the professional corporation and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.(B)Notwithstanding subparagraph (A), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, and that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.(C)A written waiver that is executed pursuant to this paragraph shall remain in effect until the owner provides the professional corporations insurance carrier with a written withdrawal of the waiver.(2)Notwithstanding paragraph (1), an owner of a private professional corporation who is the sole shareholder of the private professional corporation, unless the owner or private professional corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.(s)(1)(A)An officer or member of the board of directors of a cooperative corporation organized pursuant to the Cooperative Corporation Law, as set forth in Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health care service plan or a health insurance policy and by disability insurance. The officer or member of the board of directors shall provide a copy of the waiver to all other officers and members of the board of directors of the cooperative corporation, and the cooperative corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the cooperative corporations insurance carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.(B)Notwithstanding subparagraph (A), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.(C)A written waiver that is executed pursuant to this paragraph shall remain in effect until the officer or member of the board provides the cooperative corporations insurance carrier with a written withdrawal of the waiver.(2)Notwithstanding paragraph (1), an officer or director of a private cooperative corporation who is the sole shareholder of the private cooperative corporation, unless the officer, director, or private cooperative corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with subdivision (p) (p), (r), or (s) of Section 3352.
(d)Except as provided in subdivision (h) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with subdivision (q) of Section 3352.
(g)(1)All persons who hold A person who holds the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352. This subdivision shall be operative on July 1, 2018.
(2)(A)With respect to an employers workers compensation policy that is initially in effect prior to January 1, 2018, a person described in paragraph (1) is included within the definition of an employee on and after July 1, 2018, or on and after the date of the renewal of the policy, whichever is later.(B)With respect to an employers workers compensation policy that is initially in effect on or after January 1, 2018, a person described in paragraph (1) is included within the definition of an employee on and after July 1, 2018.SEC. 2.Section 3352 of the Labor Code is amended to read:3352.Employee excludes the following:
(a)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(b)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(c)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(d)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(e)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(f)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(g)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(h)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(1)The employment was, or was contracted to be, for less than 52 hours.
(2)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(i)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(j)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(k)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(l)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(m)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(n)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(o)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(p)(1)(A)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation corporation, or 1 percent of the issued and outstanding stock of the corporation if that officers or members parent, grandparent, sibling, spouse, or child owns at least 10 percent of the issued and outstanding stock of the corporation and that officer or member is covered by a health insurance policy or a health care service plan, and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section subdivision is not covered by workers compensation benefits.
(B)Notwithstanding subparagraph (A), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, and that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.
(C)A written waiver that is executed pursuant to this paragraph, including, but not limited to, a written waiver that was executed prior to January 1, 2017, shall remain in effect until the officer or member of the board of directors provides the corporations insurance carrier with a written withdrawal of the waiver.
(2)Notwithstanding paragraph (1), an officer or director of a private corporation who is the sole shareholder of the private corporation, unless the officer, director, or private corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(q)(1)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnership partnerships or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section subdivision is not covered by workers compensation benefits.
(2)Notwithstanding paragraph (1), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, and that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.
(3)A written waiver that is executed pursuant to this subdivision, including, but not limited to, a written waiver that was executed prior to January 1, 2017, shall remain in effect until the general partner provides the partnerships insurance carrier or the managing member provides the limited liability companys insurance carrier with a written withdrawal of the waiver.
(r)(1)On and after July, 1, 2018, an (A)An owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners of the professional corporation and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier and shall remain effective until the owner provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section subdivision is not covered by workers compensation benefits.
(2)(A)With respect to an employers workers compensation policy that is initially in effect prior to January 1, 2018, a person described in paragraph (1) is excluded from the definition of an employee on and after July 1, 2018, or on and after the date of the renewal of the policy, whichever is later.(B)With respect to an employers workers compensation policy that is initially in effect on or after January 1, 2018, a person described in paragraph (1) is excluded from the definition of an employee on and after July 1, 2018.(3)Nothing in this subdivision shall be construed to prohibit an insurance carrier, at its election, from complying with this subdivision prior to July 1, 2018, by accepting a waiver of workers compensation coverage executed by a person who is otherwise qualified to waive that coverage pursuant to this subdivision. If an insurer elects to accept that waiver prior to July 1, 2018, the waiver shall be effective upon acceptance.(B)Notwithstanding subparagraph (A), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, and that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.
(C)A written waiver that is executed pursuant to this paragraph shall remain in effect until the owner provides the professional corporations insurance carrier with a written withdrawal of the waiver.
(2)Notwithstanding paragraph (1), an owner of a private professional corporation who is the sole shareholder of the private professional corporation, unless the owner or private professional corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
(s)(1)(A)An officer or member of the board of directors of a cooperative corporation organized pursuant to the Cooperative Corporation Law, as set forth in Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code, who executes a document, in writing and under penalty of perjury, both waiving his or her rights under this chapter and stating that he or she is covered by a health care service plan or a health insurance policy and by disability insurance. The officer or member of the board of directors shall provide a copy of the waiver to all other officers and members of the board of directors of the cooperative corporation, and the cooperative corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the cooperative corporations insurance carrier. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this subdivision is not covered by workers compensation benefits.
(B)Notwithstanding subparagraph (A), a written waiver that is executed on or after January 1, 2018, pursuant to this subdivision, that is accepted by the insurance carrier on or before December 31, 2018, shall be deemed to be accepted by the insurance carrier as of January 1, 2018.
(C)A written waiver that is executed pursuant to this paragraph shall remain in effect until the officer or member of the board provides the cooperative corporations insurance carrier with a written withdrawal of the waiver.
(2)Notwithstanding paragraph (1), an officer or director of a private cooperative corporation who is the sole shareholder of the private cooperative corporation, unless the officer, director, or private cooperative corporation has elected to be subject to liability for workers compensation pursuant to subdivision (a) of Section 4151.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with subdivision (p) of Section 3352.
(d)Except as provided in subdivision (h) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with subdivision (q) of Section 3352.
(g)(1)All persons who hold the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352. This subdivision shall be operative on July 1, 2018.
(2)(A)With respect to an employers workers compensation policy that is initially in effect prior to January 1, 2018, a person described in paragraph (1) is included within the definition of an employee on and after July 1, 2018, or on and after the date of the renewal of the policy, whichever is later.
(B)With respect to an employers workers compensation policy that is initially in effect on or after January 1, 2018, a person described in paragraph (1) is included within the definition of an employee on and after July 1, 2018.
SEC. 2.Section 3352 of the Labor Code is amended to read:3352.Employee excludes the following:
(a)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(b)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(c)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(d)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(e)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(f)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(g)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(h)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(1)The employment was, or was contracted to be, for less than 52 hours.
(2)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(i)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(j)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(k)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(l)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(m)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(n)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(o)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(p)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section is not covered by workers compensation benefits.
(q)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnership or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section is not covered by workers compensation benefits.
(r)(1)On and after July, 1, 2018, an owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a written waiver of document, in writing and under penalty of perjury, both waiving his or her rights under this chapter stating under penalty of perjury chapter and stating that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners and of the professional corporation and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier and shall remain effective until the owner provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section is not covered by workers compensation benefits.
(2)(A)With respect to an employers workers compensation policy that is initially in effect prior to January 1, 2018, a person described in paragraph (1) is excluded from the definition of an employee on and after July 1, 2018, or on and after the date of the renewal of the policy, whichever is later.
(B)With respect to an employers workers compensation policy that is initially in effect on or after January 1, 2018, a person described in paragraph (1) is excluded from the definition of an employee on and after July 1, 2018.
(3)Nothing in this subdivision shall be construed to prohibit an insurance carrier, at its election, from complying with this subdivision prior to July 1, 2018, by accepting a waiver of workers compensation coverage executed by a person who is otherwise qualified to waive that coverage pursuant to this subdivision. If an insurer elects to accept that waiver prior to July 1, 2018, the waiver shall be effective upon acceptance.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Employee means every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes:
(a)Aliens and minors.
(b)All elected and appointed paid public officers.
(c)All officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. An officer or member of a board of directors may elect to be excluded from coverage in accordance with subdivision (p) of Section 3352.
(d)Except as provided in subdivision (h) of Section 3352, 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.
(e)All persons incarcerated in a state penal or correctional institution while engaged in assigned work or employment as defined in paragraph (1) of subdivision (a) of Section 10021 of Title 8 of the California Code of Regulations, or engaged in work performed under contract.
(f)All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company. A general partner of a partnership or a managing member of a limited liability company may elect to be excluded from coverage in accordance with subdivision (q) of Section 3352.
(g)(1)All persons who hold the power to revoke a trust, with respect to shares of a private corporation held in trust or general partnership or limited liability company interests held in trust. To the extent that this person is deemed to be an employee described in subdivision (c) or (f), as applicable, the person may also elect to be excluded from coverage as described in subdivision (c) or (f), as applicable, if that person otherwise meets the criteria for exclusion, as described in Section 3352. This subdivision shall be operative on July 1, 2018.
(2)(A)With respect to an employers workers compensation policy that is initially in effect prior to January 1, 2018, a person described in paragraph (1) is included within the definition of an employee on and after July 1, 2018, or on and after the date of the renewal of the policy, whichever is later.
(B)With respect to an employers workers compensation policy that is initially in effect on or after January 1, 2018, a person described in paragraph (1) is included within the definition of an employee on and after July 1, 2018.
SECTION 1.SEC. 2.Section 3352 of the Labor Code is amended to read:3352.Employee excludes the following:
(a)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(b)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(c)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(d)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(e)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(f)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(g)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(h)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(1)The employment was, or was contracted to be, for less than 52 hours.
(2)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(i)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(j)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(k)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(l)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(m)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(n)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(o)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(p)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section is not covered by workers compensation benefits.
(q)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnership or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section is not covered by workers compensation benefits.
(r)An (1)On and after July, 1, 2018, an owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier and shall remain effective until the owner provides the insurance carrier with a written withdrawal of the waiver. On and after July 1, 2018, the insurance carrier, with the consent of the individual executing the waiver, may elect to backdate the acceptance of the waiver up to 15 days prior to the date of receipt of the waiver. The insurance carrier, insurance agent, or insurance broker is not required to investigate, verify, or confirm the accuracy of the facts contained in the waiver. There is a conclusive presumption that a person who executes a waiver pursuant to this section is not covered by workers compensation benefits.
(2)(A)With respect to an employers workers compensation policy that is initially in effect prior to January 1, 2018, a person described in paragraph (1) is excluded from the definition of an employee on and after July 1, 2018, or on and after the date of the renewal of the policy, whichever is later.
(B)With respect to an employers workers compensation policy that is initially in effect on or after January 1, 2018, a person described in paragraph (1) is excluded from the definition of an employee on and after July 1, 2018.
SEC. 2.SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Employee excludes the following:
(a)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(b)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(c)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(d)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(e)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(f)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(g)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(h)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(1)The employment was, or was contracted to be, for less than 52 hours.
(2)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(i)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(j)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(k)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(l)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(m)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Motor Vehicles and Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(n)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(o)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(p)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 10 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver.
(q)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnership or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver.
(r)An owner of a professional corporation, as defined in Section 13401 of the Corporations Code, who is a practitioner rendering the professional services for which the professional corporation is organized and who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that he or she is covered by a health insurance policy or a health care service plan. The owner shall provide a copy of the waiver to all other owners and the professional corporation shall keep a copy of the waiver on file. The waiver is effective upon the date of receipt and acceptance by the professional corporations insurance carrier and shall remain effective until the owner provides the insurance carrier with a written withdrawal of the waiver.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Employee excludes the following:
(a)A person defined in subdivision (d) of Section 3351 who is employed by his or her parent, spouse, or child.
(b)A person performing services in return for aid or sustenance only, received from any religious, charitable, or relief organization.
(c)A person holding an appointment as deputy clerk or deputy sheriff appointed for his or her own convenience, and who does not receive compensation from the county or municipal corporation or from the citizens of that county or municipal corporation for his or her services as the deputy. This exclusion is operative only as to employment by the county or municipal corporation and does not deprive that person from recourse against a private person employing him or her for injury occurring in the course of, and arising out of, the employment.
(d)A person performing voluntary services at or for a recreational camp, hut, or lodge operated by a nonprofit organization, exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, of which he or she or a member of his or her family is a member and who does not receive compensation for those services, other than meals, lodging, or transportation.
(e)A person performing voluntary service as a ski patrolman who does not receive compensation for those services, other than meals or lodging or the use of ski tow or ski lift facilities.
(f)A person employed by a ski lift operator to work at a snow ski area who is relieved of, and is not performing any, prescribed duties, while participating in recreational activities on his or her own initiative.
(g)A person, other than a regular employee, participating in sports or athletics who does not receive compensation for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, or other expenses incidental thereto.
(h)A person described in subdivision (d) of Section 3351 whose employment by the employer to be held liable, during the 90 calendar days immediately preceding the date of injury, for injuries as described in Section 5411, or during the 90 calendar days immediately preceding the date of the last employment in an occupation exposing the employee to the hazards of the disease or injury, for diseases or injuries as described in Section 5412, comes within either of the following descriptions:
(1)The employment was, or was contracted to be, for less than 52 hours.
(2)The employment was, or was contracted to be, for wages of not more than one hundred dollars ($100).
(i)A person performing voluntary service for a public agency or a private, nonprofit organization who does not receive remuneration for the services, other than meals, transportation, lodging, or reimbursement for incidental expenses.
(j)A person, other than a regular employee, performing officiating services relating to amateur sporting events sponsored by a public agency or private, nonprofit organization, who does not receive remuneration for these services, other than a stipend for each day of service no greater than the amount established by the Department of Human Resources as a per diem expense for employees or officers of the state. The stipend shall be presumed to cover incidental expenses involved in officiating, including, but not limited to, meals, transportation, lodging, rule books and courses, uniforms, and appropriate equipment.
(k)A student participating as an athlete in amateur sporting events sponsored by a public agency or public or private nonprofit college, university, or school, who does not receive remuneration for the participation, other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.
(l)A law enforcement officer who is regularly employed by a local or state law enforcement agency in an adjoining state and who is deputized to work under the supervision of a California peace officer pursuant to paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
(m)A law enforcement officer who is regularly employed by the Oregon State Police, the Nevada Department of Motor Vehicles and Public Safety, or the Arizona Department of Public Safety and who is acting as a peace officer in this state pursuant to subdivision (a) of Section 830.39 of the Penal Code.
(n)A person, other than a regular employee, performing services as a sports official for an entity sponsoring an intercollegiate or interscholastic sports event, or any person performing services as a sports official for a public agency, public entity, or a private nonprofit organization, which public agency, public entity, or private nonprofit organization sponsors an amateur sports event. For purposes of this subdivision, sports official includes an umpire, referee, judge, scorekeeper, timekeeper, or other person who is a neutral participant in a sports event.
(o)A person who is an owner-builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self-help housing program, as defined in Section 50087 of the Health and Safety Code, sponsored by a nonprofit corporation.
(p)An officer or member of the board of directors, as described in subdivision (c) of Section 3351, if he or she owns at least 15 10 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. The waiver shall be effective upon the date of receipt and acceptance by the corporations insurance carrier and shall remain effective until the officer or member of the board of directors provides the insurance carrier with a written withdrawal of the waiver.
(q)An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. The waiver shall be effective upon the date of receipt and acceptance by the partnership or limited liability companys insurance carrier and shall remain effective until the general partner or managing member provides the insurance carrier with a written withdrawal of the waiver.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| Oct 13, 2017 | Chaptered by Secretary of State. Chapter 770, Statutes of 2017. |
| Oct 13, 2017 | Approved by the Governor. |
| Sep 21, 2017 | Enrolled and presented to the Governor at 5:30 p.m. |
| Sep 14, 2017 | Assembly amendments concurred in. (Ayes 39. Noes 0.) Ordered to engrossing and enrolling. |
| Sep 12, 2017 | Ordered to special consent calendar. |
| Sep 11, 2017 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 11, 2017 | Read third time. Passed. Ordered to the Senate. |
| Sep 7, 2017 | Read third time and amended. |
| Aug 24, 2017 | Read second time. Ordered to third reading. |
| Aug 23, 2017 | From committee: Do pass. (Ayes 15. Noes 0.) (August 23). |
| Aug 21, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| Jul 18, 2017 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 17, 2017 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 12. Noes 0.) (July 12). |
| Jul 7, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS. |
| Jul 10, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS. |
| Jun 1, 2017 | Referred to Com. on INS. |
| May 23, 2017 | In Assembly. Read first time. Held at Desk. |
| May 22, 2017 | Read third time. Passed. (Ayes 37. Noes 0. Page 1134.) Ordered to the Assembly. |
| May 9, 2017 | Read second time. Ordered to third reading. |
| May 8, 2017 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| May 4, 2017 | Set for hearing May 15. |
| May 3, 2017 | May 8 hearing postponed by committee. |
| May 1, 2017 | Set for hearing May 8. |
| Apr 26, 2017 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 853.) (April 26). Re-referred to Com. on APPR. |
| Apr 13, 2017 | Set for hearing April 26. |
| Apr 5, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on L. & I.R. |
| Feb 9, 2017 | Referred to Com. on L. & I.R. |
| Jan 27, 2017 | From printer. May be acted upon on or after February 26. |
| Jan 26, 2017 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 14, 2017 | Special Consent Calendar SB189 | Senate Floor |
Passed |
|
| Sep 11, 2017 | SB 189 Bradford Senate Third Reading By DALY | Assembly Floor |
Passed |
|
| Aug 23, 2017 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jul 12, 2017 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Insurance |
Passed |
|
| May 22, 2017 | Senate 3rd Reading SB189 Bradford | Senate Floor |
Passed |
|
| Apr 26, 2017 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Labor and Industrial Relations |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Medical Association | ** Support | Sep 11, 2017 |
| California Professional Association Of Specialty Contractors | ** Support | Sep 11, 2017 |
| California Radiological Society | ** Support | May 10, 2017 |
| California Society Of Pathologists | ** Support | May 10, 2017 |
| CALPASC | ** Support | Jul 10, 2017 |
| Family Business Association of California | ** Support | Sep 11, 2017 |
| Small Business California | ** Support | Sep 11, 2017 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
UNFINISHED BUSINESS
Bill No: SB 189
:
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 4/26/17
AYES: Bradford, Stone, Atkins, Jackson, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 37-0, 5/22/17
AYES: Allen, Atkins, Bates, Beall, Berryhill, Bradford, Cannella, De León, Dodd, Gaines, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Newman, Nguyen, Nielsen, Portantino, Roth, Skinner, Stern, Stone, Vidak, Wieckowski, Wiener, Wilk
NO VOTE RECORDED: Anderson, Fuller, Pan
ASSEMBLY FLOOR: 78-0, 9/11/17 - See last page for vote
SOURCE: California Medical Association
DIGEST:
This bill lowers the ownership threshold for waiving workers’ compensation coverage from 15% to 10%, and also creates specific waiving provisions for professional corporations, worker-owned cooperatives, and closely-held family businesses.
Assembly Amendments
expand the number of business structures who could waive workers’ compensation coverage and set an implementation date of July 1, 2018.
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Permits an officer or member of the board of directors to opt out of a workers’ compensation policy if he or she owns at least 15 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. (Labor Code §§3351 & 3352)
- Permits an individual who is a general partner of a partnership or a managing member of a limited liability company to opt out of a workers’ compensation policy if he or she executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member.
(Labor Code §3352) - Requires that the waiver be effective upon the date of receipt by the corporation’s insurance carrier and remain effective until the officer, member of the board of directors, general partner, or managing partner provides the insurance carrier with a written withdrawal of the waiver. (Labor Code §3352)
- Defines a “professional corporation” as a corporation that is engaged in rendering professional services, or services that can only be performed by someone who is licensed, registered, or certified by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act. (Corporations Code §13401)
This bill:
- Decreases the threshold for ownership for an officer or member of the board of directors to waive workers’ compensation coverage from at least 15 percent to at least 10 percent and clarifies that the shares can be held in a revocable trust.
- Permits a member of a board of directors to waive workers’ compensation coverage if he or she owns 1% and is the parent, grandparent, sibling, spouse, or child of a partner or board member who owns at least 10% of the company and is covered by a health insurance policy or health care service plan.
- Expands the grounds for waiving workers’ compensation coverage to include owners of a professional corporation if the owner is a practitioner of the professional services for which the professional corporation was created and the owner is covered by a health insurance policy or health care service plan.
- Expands the grounds for waiving workers’ compensation coverage to include board members of a worker-owned cooperative if the board member is covered by both a health care service plan or health insurance policy, and a disability insurance policy that is comparable in scope and coverage, as determined by the Insurance Commissioner, to a workers’ compensation policy.
- Clarifies that an owner of a company who is the sole shareholder is not an employee.
- Declares that an insurer has no duty to verify the underlying facts contained in the waiver.
- States that once an owner/employee has executed a waiver of workers' compensation coverage, it is conclusively presumed that the person is not covered for workers' compensation benefits.
- Provides that a policy that is entered into or renewed in compliance with the law is subject to the rules for waivers by eligible employees then in force at the time the policy was entered into or renewed.
- Delays the effective date of the changes in law, with respect to employees eligible to waive workers' compensation coverage, proposed by the bill until July 1, 2018.
Comments
- Revisiting AB 2883 (Assembly Insurance Committee, Chapter 205, Statutes of 2016)
Last year, the Legislature passed and the Governor signed AB 2883, an important workers’ compensation anti-fraud bill. Specifically, AB 2883 is cracking down on a specific type of workers’ compensation premium fraud: employers providing their employees with a de minimus ownership stake in the company or giving the employee a fictional position and title on the company’s board of directors to skirt workers’ compensation requirements. As has been noted in past analyses, such fraudulent workers’ compensation schemes result in increased premiums for all employers, but particularly in high-hazard industries, such as construction and agriculture.
Since the passage and implementation of AB 2883, however, stakeholders have noted some challenges with the current structure under AB 2883. Specifically, several stakeholders have noted that the 15% ownership threshold excludes many companies with involved, engaged employee-owners, such as companies with seven or more owners. These impacts were particularly challenging for professional corporations, such as medical practices, and closely-held family corporations.
SB 189 seeks to address stakeholder concerns in several ways. First, SB 189 lowers the ownership threshold for waiving workers’ compensation for an officer or a member of the board of directors to 10%, which will help small businesses with seven or more owners/partners. Second, SB 189 expands the above-discussed waiver process to family members of the board member who holds at least 10% of the corporation, bringing closely-held family corporations into the provisions of SB 189. Third, SB 189 allows owners of professional corporations, which includes physicians, dentists, veterinarians, and marriage therapists, to waive workers’ compensation if they are practicing and are covered by health insurance or a health care service plan. Finally, SB 189 permits board members of a worker-owned cooperative to waive workers’ compensation coverage if they are able to secure comparable coverage through a disability insurance policy.
- A Brief Word on SB 189 Implementation
In order to avoid the implementation challenges that plagued AB 2883, SB 189 needed to be structured in an unusual manner. First, the bill declares that neither the insurer nor the insurance broker has the responsibility to verify the underlying facts contained in the waiver. In the case of corporate structures where the facts are self-evident and support the waiving of workers’ compensation coverage, this language allows brokers and insurance carriers to expeditiously do so. However, this language does not prohibit a carrier or broker from verifying the facts in the voucher either upon inception, renewal, or during an audit. Rather, it allows insurance carriers and brokers to focus resources on waivers that may not be legally valid.
Second, the waiver “grandfathers” in prior waivers from AB 2883. This means that, for professional corporations that had waived under AB 2883, or any other corporate structure that was able to waive coverage under AB 2883, the waiver remains in effect. Moreover, SB 189 gives carriers the ability to backdate waivers to the beginning of 2017, relieving the ongoing implementation challenges facing insurance carriers.
Finally, SB 189 has a delayed implementation until July 1, 2018. Unless an insurance policy incepts or renews on or after July 1, 2018, the new Labor Code provisions created by SB 189 will not apply. Rather, the Labor Code provisions that existed when the policy was created will apply. This ensures that insurance carriers and brokers have sufficient time to implement SB 189, as well as ensure that small businesses receive the services they need.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Assembly Appropriations Committee, any costs to Department of Industrial Relations are expected to be minor and absorbable (Workers' Compensation Administration Revolving Fund).
California Medical Association (source)
California Professional Association of Specialty Contractors
Family Business Association of California
Small Business California
OPPOSITION: (Verified 9/11/17)
None received
ARGUMENTS IN SUPPORT: Proponents note that last year the Governor signed AB 2883, which was an important anti-fraud measure that seeks to inhibit a specific type of workers’ compensation insurance premium fraud. Proponents argue that, while AB 2883 was an important reform measure, it has had some unintended consequences on a wide variety of stakeholders, including small businesses with 7 or more owners, professional corporations, family-owned small businesses, and other unique corporate structures. Proponents argue that, by reducing the ownership threshold to 10%, addressing the unique concerns of professional corporations, and also serving as a vehicle for further discussion, SB 189 seeks to ensure that the anti-fraud provisions of AB 2883 remain strong and intact, while also addressing implementation challenges for a wide variety of stakeholders.
ASSEMBLY FLOOR: 78-0, 9/11/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Brough
9/11/17 21:38:26
**** END ****
SENATE THIRD READING
STR Bill Id:SB 189
Author:(Bradford)
As Amended Ver:September 7, 2017
Majority vote
SENATE VOTE: 37-0
Committee | Votes | Ayes | Noes |
Insurance | 12-0 | Daly, Melendez, Bigelow, Caballero, Chu, Cooley, Cooper, Dababneh, Dahle, Frazier, Gipson, Voepel |
|
Appropriations | 15-0 | Gonzalez Fletcher, Bigelow, Bocanegra, Bonta, Brough, Calderon, Chau, Eggman, Fong, Friedman, Gallagher, Gray, Jones-Sawyer, Obernolte, Reyes |
|
SUMMARY: Modifies the eligibility for owners of businesses who are also employees of those businesses to voluntarily opt out of the law's mandate that all employees be covered by workers' compensation protections. Specifically, this bill:
- Decreases the threshold for ownership for an officer or member of the board of directors to opt out of a workers' compensation policy from at least 15% to at least 10%.
- Expands the grounds for opting out of workers' compensation coverage to include owners of a professional corporation if the owner is a practitioner of the professional services for which the professional corporation was created and the owner is covered by a health insurance policy or health care service plan.
- Expands the grounds for opting out of workers' compensation coverage to include close relatives of owners who have at least 10% ownership, if that close relative owns at least 1% of the company, and shows proof of being covered by a health care coverage plan.
- Authorizes a trustee of a revocable trust that holds a business entity in trust, to the extent the trustee meets the ownership requirements of the bill, to waive workers' compensation coverage in the same manner as if the business entity was not held in trust.
- Authorizes an officer of member of the board of directors of a cooperative corporation, if the corporation is organized pursuant to the California Cooperative Corporation Law, who shows proof that he or she is covered by a health care coverage plan and by disability insurance that meets the coverage standards of a workers' compensation policy, to waive workers' compensation coverage.
- Clarifies that an owner of a company who is the sole shareholder is not an employee.
- Declares that an insurer has no duty to verify the underlying facts contained in the waiver.
- States that once an owner/employee has executed a waiver of workers' compensation coverage, it is conclusively presumed that the person is not covered for workers' compensation benefits.
- Provides that a policy that is entered into or renewed in compliance with the law is subject to the rules for waivers by eligible employees then in force at the time the policy was entered into or renewed.
- Delays the effective date of the changes in law, with respect to employees eligible to waive workers' compensation coverage, proposed by the bill until July 1, 2018.
EXISTING LAW:
- Defines who qualifies as an "employee" – generally anyone regardless of job title or ownership interest who is paid wages by an employer – for workers' compensation purposes, and mandates that every employer provide workers' compensation coverage for all employees either by purchasing a policy of workers' compensation insurance, or obtaining a certificate of self-insurance from the Department of Industrial Relations.
- Authorizes an officer of a corporation, or a member of the board of directors of a corporation, if that person owns at least 15% of the issued and outstanding stock of the corporation, or a person who is a general partner or managing partner of a partnership, to execute a waiver of workers' compensation coverage.
- Requires a waiver of coverage by a qualified person to state under penalty of perjury that the person so waiving is a qualified officer or director of the corporation, or qualified general or managing partner of the partnership.
- Specifies that the waiver is effective upon receipt and acceptance by the corporation's insurer, and remains effective until the insurer is provided with a written withdrawal of the waiver.
FISCAL EFFECT: Any costs to Department of Industrial Relations are expected to be minor and absorbable (Workers' Compensation Administration Revolving Fund).
COMMENTS:
- Purpose. According to the author, this bill is intended to further the process of modernizing the laws that authorize certain employees to opt out of workers' compensation coverage, started last year with AB 2883 (Committee on Insurance), Chapter 205, Statutes of 2016. Creating exceptions to fundamental California law that all employees are entitled to the protections of the workers' compensation laws involves a careful balance, and this bill continues that process.
- Background. Last year, the Legislature passed and the Governor signed AB 2883, an important workers' compensation anti-fraud bill. Specifically, AB 2883 was intended to crack down on a specific type of workers' compensation premium fraud: employers providing their employees with a de minimus ownership stake in the company, or giving the employee a fictional position and title on the company's board of directors, to skirt workers' compensation requirements. (For example, a janitor is conferred the title of Vice-President of Sanitation Operations, and then excluded from the company's workers' compensation policy.) A second type of fraud involved employees who had, at some point, opted out without a formal written waiver, and then later claimed coverage that the insurer became obligated to provide. As has been noted in past analyses, these fraudulent workers' compensation schemes result in increased premiums for all employers, but particularly in high-hazard industries, such as construction and agriculture.
Since the passage and implementation of AB 2883, however, stakeholders have noted some challenges with the current structure under AB 2883. Specifically, several stakeholders have noted that the 15% ownership threshold excludes many companies with involved, engaged employee-owners, such as companies with seven or more owners. These impacts were particularly challenging for professional corporations, such as medical practices, and closely-held family corporations.
This bill seeks to address stakeholder concerns in several ways. First, this bill lowers the ownership threshold for waiving workers' compensation for an officer or a member of the board of directors to 10%, which will help small businesses with seven or more owners/partners. Second, this bill allows owners of professional corporations, which includes physicians, dentists, veterinarians, and marriage therapists, to waive workers' compensation if they are practicing and are covered by health insurance or a health care service plan. Third, this bill provides additional opt out options for members of cooperative corporations and close relatives of 10% owners of other companies.
- Workers' compensation covers employees. Unless an owner of a company voluntarily chooses to become an employee and accept wages, that owner is not covered by workers compensation insurance. The status of owner, by itself, does not implicate the waiver or opt-out rules being addressed by the bill. It is only when that owner chooses to be an employee of the entity, and take wages (as opposed to relying on profits), that the issue of whether waiving workers' compensation protections is raised. The policy balance, therefore, becomes when is it appropriate to allow an employee to decide (free of any duress or improper pressure) to waive something as fundamental as the protection of California's workers' compensation laws. AB 2883 and this bill are designed to address that balance.
- Backdating waivers. The bill allows for backdating waivers by up to 15 days. When placing a workers' compensation policy the insurance agent and employer may need to act timely to ensure that the employer does not face a gap in coverage after the previous policy expires, but before the new policy takes effect. This may necessitate immediately binding coverage. In this circumstance, it may not be feasible to comply with the waiver formalities "on the spot." Therefore, in order to better effectuate the intent of the parties to the insurance policy, the bill allows a leeway to complete the waiver process, but make it effective from the inception of the policy.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0001986
SENATE THIRD READING
STR Bill Id:SB 189
Author:(Bradford)
As Amended Ver:August 21, 2017
Majority vote
SENATE VOTE: 37-0
Committee | Votes | Ayes | Noes |
Insurance | 12-0 | Daly, Melendez, Bigelow, Caballero, Chu, Cooley, Cooper, Dababneh, Dahle, Frazier, Gipson, Voepel | |
Appropriations | 15-0 | Gonzalez Fletcher, Bigelow, Bocanegra, Bonta, Brough, Calderon, Chau, Eggman, Fong, Friedman, Gallagher, Gray, Jones-Sawyer, Obernolte, Reyes |
SUMMARY: Modifies the eligibility for owners of businesses who are also employees of those businesses to voluntarily opt out of the law's mandate that all employees be covered by workers' compensation protections. Specifically, this bill:
- Decreases the threshold for ownership for an officer or member of the board of directors to opt out of a workers' compensation policy from at least 15% to at least 10%.
- Expands the grounds for opting out of workers' compensation coverage to include owners of a professional corporation if the owner is a practitioner of the professional services for which the professional corporation was created and the owner is covered by a health insurance policy or health care service plan.
- Expands the grounds for opting out of workers' compensation coverage to include close relatives of owners who have at least 10% ownership, if that close relative owns at least 1% of the company, and shows proof of being covered by a health care coverage plan.
- Authorizes a trustee of a revocable trust that holds a business entity in trust, to the extent the trustee meets the ownership requirements of the bill, to waive workers' compensation coverage in the same manner as if the business entity was not held in trust.
- Authorizes an officer of member of the board of directors of a cooperative corporation, if the corporation is organized pursuant to the California Cooperative Corporation Law, who shows proof that he or she is covered by a health care coverage plan and by disability insurance, to waive workers' compensation coverage.
- Provides that a waiver of workers' compensation coverage executed any time during 2018 is effective as of January 1, 2018.
- Clarifies that an owner of a company who is the sole shareholder is not an employee.
- Declares that an insurer has no duty to verify the underlying facts contained in the waiver.
- States that once an owner/employee has executed a waiver of workers' compensation coverage, it is conclusively presumed that the person is not covered for workers' compensation benefits.
- Delays the effective date of the changes in law proposed by the bill until July 1, 2018.
EXISTING LAW:
- Defines who qualifies as an "employee" – generally anyone regardless of job title or ownership interest who is paid wages by an employer – for workers' compensation purposes, and mandates that every employer provide workers' compensation coverage for all employees either by purchasing a policy of workers' compensation insurance, or obtaining a certificate of self-insurance from the Department of Industrial Relations.
- Authorizes an officer of a corporation, or a member of the board of directors of a corporation, if that person owns at least 15% of the issued and outstanding stock of the corporation, or a person who is a general partner or managing partner of a partnership, to execute a waiver of workers' compensation coverage.
- Requires a waiver of coverage by a qualified person to state under penalty of perjury that the person so waiving is a qualified officer or director of the corporation, or qualified general or managing partner of the partnership.
- Specifies that the waiver is effective upon receipt and acceptance by the corporation's insurer, and remains effective until the insurer is provided with a written withdrawal of the waiver.
FISCAL EFFECT: Any costs to Department of Industrial Relations are expected to be minor and absorbable (Workers' Compensation Administration Revolving Fund).
COMMENTS:
- Purpose. According to the author, this bill is intended to further the process of modernizing the laws that authorize certain employees to opt out of workers' compensation coverage, started last year with AB 2883 (Insurance Committee), Chapter 205, Statutes 2016. Creating exceptions to fundamental California law that all employees are entitled to the protections of the workers' compensation laws involves a careful balance, and this bill continues that process.
- Background. Last year, the Legislature passed and the Governor signed AB 2883, an important workers' compensation anti-fraud bill. Specifically, AB 2883 was intended to crack down on a specific type of workers' compensation premium fraud: employers providing their employees with a de minimus ownership stake in the company, or giving the employee a fictional position and title on the company's board of directors, to skirt workers' compensation requirements. (For example, a janitor is conferred the title of Vice-President of Sanitation Operations, and then excluded from the company's workers' compensation policy.) A second type of fraud involved employees who had, at some point, opted out without a formal written waiver, and then later claimed coverage that the insurer became obligated to provide. As has been noted in past analyses, these fraudulent workers' compensation schemes result in increased premiums for all employers, but particularly in high-hazard industries, such as construction and agriculture.
Since the passage and implementation of AB 2883, however, stakeholders have noted some challenges with the current structure under AB 2883. Specifically, several stakeholders have noted that the 15% ownership threshold excludes many companies with involved, engaged employee-owners, such as companies with seven or more owners. These impacts were particularly challenging for professional corporations, such as medical practices, and closely-held family corporations.
This bill seeks to address stakeholder concerns in several ways. First, this bill lowers the ownership threshold for waiving workers' compensation for an officer or a member of the board of directors to 10%, which will help small businesses with seven or more owners/partners. Second, this bill allows owners of professional corporations, which includes physicians, dentists, veterinarians, and marriage therapists, to waive workers' compensation if they are practicing and are covered by health insurance or a health care service plan. Third. This billprovides additional opt out options for members of cooperative corporations and close relatives of 10% owners of other companies.
- Workers' compensation covers employees. Unless an owner of a company voluntarily chooses to become an employee and accept wages, that owner is not covered by workers compensation insurance. The status of owner, by itself, does not implicate the waiver or opt-out rules being addressed by the bill. It is only when that owner chooses to be an employee of the entity, and take wages (as opposed to relying on profits), that the issue of whether waiving workers' compensation protections is raised. The policy balance, therefore, becomes when is it appropriate to allow an employee to decide (free of any duress or improper pressure) to waive something as fundamental as the protection of California's workers' compensation laws. AB 2883 and this bill are designed to address that balance.
- Backdating waivers. The bill allows for backdating waivers. When placing a workers' compensation policy the insurance agent and employer may need to act timely to ensure that the employer does not face a gap in coverage after the previous policy expires, but before the new policy takes effect. This may necessitate immediately binding coverage. In this circumstance, it may not be feasible to comply with the waiver formalities "on the spot." Therefore, in order to better effectuate the intent of the parties to the insurance policy, the bill allows a leeway to complete the waiver process, but make it effective from the inception of the policy. In addition, authorizing the full year of backdating is intended to function as a delayed implementation option for those insurers not ready to implement the bill's changes immediately, but be flexible enough for those that want immediate implementation.
- Early waivers. The primary reason that the bill's modified rules governing eligibility to waive workers' compensation coverage are delayed until July 1, 2018, is that many insurers have suggested that the logistics of modifying their systems to accommodate the new rules requires additional time. On the other hand, some insurers believe that they can be operational earlier, and that preventing them from accepting waivers after January 1, 2018 but before July 1, 2018 will cause a different set of problems. The author has agreed to accept an amendment that clarifies that an insurer may accept a waiver prior to July 1, 2018.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0001446
Date of Hearing: August 23, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
SBPCA Bill Id:SB 189
Author:(Bradford) – As Amended Ver:August 21, 2017
Policy Committee: | Insurance | Vote: | 12 - 0 |
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill modifies the eligibility for owners of businesses who are also employees of those businesses to voluntarily opt out of being covered by workers’ compensation protections.
Specifically, this bill allows individuals who own at least a 10% share of a corporation (instead of 15% under current law) to be excluded from being an employee for purposes of workers' compensation coverage, creates a voluntary exemption for owners of professional corporations, and makes related and conforming changes.
FISCAL EFFECT:
Any costs to Department of Industrial Relations are expected to be minor and absorbable (Workers' Compensation Administration Revolving Fund).
COMMENTS:
- Purpose. This bill addresses the process by which owners of businesses can seek waivers from the requirement to carry workers' compensation insurance. It follows anti-fraud reforms enacted last year through AB 2883 (Committee on Insurance), Chapter 205, Statutes of 2016. This bill responds to challenges identified in AB 2883 implementation, and attempts to balance fraud prevention with the interests of those seeking legitimate waivers.
- Background. AB 2883 attempted to curtail specific types of workers' compensation fraud. It addressed situations whereby employers would attempt to wrongly classify employees as owners or board members in order to skirt workers' compensation requirements, as well as situations where employees opted out of coverage without a formal written waiver and later claimed coverage. Stakeholders have identified specific challenges the way AB 2883 impacts certain small businesses, such as partnerships and professional corporations. For instance, it required a minimum 15% ownership stake in order to qualify for a waiver. Professional corporations, such as medical practices, and owners of small, privately held companies have noted challenges with this structure, which in some cases requires them to purchase workers' compensation insurance they are unlikely to claim against. This bill would allow such individuals to opt out of workers' compensation coverage provided they sign a written waiver and meet other criteria.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: July 12, 2017
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
SBPCA Bill Id:SB 189
Author:(Bradford) – As Amended Ver:July 10, 2017
SENATE VOTE: 37-0
SUBJECT: Workers’ compensation: definition of employee
SUMMARY: Modifies the eligibility for owners of businesses who are also employees of those businesses to voluntarily opt out of the law’s mandate that all employees be covered by workers’ compensation protections. Specifically, this bill:
- Decreases the threshold for ownership for an officer or member of the board of directors to opt out of a workers’ compensation policy from at least 15 percent to at least 10 percent.
- Expands the grounds for opting out of workers’ compensation coverage to include owners of a professional corporation if the owner is a practitioner of the professional services for which the professional corporation was created and the owner is covered by a health insurance policy or health care service plan.
- Authorizes a trustee of a revocable trust that holds a business entity in trust, to the extent the trustee meets the ownership requirements of the bill, to waive workers’ compensation coverage in the same manner as if the business entity was not held in trust.
- Provides that a waiver of workers’ compensation coverage can be made effective up to 15 days prior to execution of the waiver.
- Declares that an insurer has no duty to verify the underlying facts contained in the waiver.
- States that once an owner/employee has executed a waiver of workers’ compensation coverage, it is conclusively presumed that the person is not covered for workers’ compensation benefits.
- Delays the effective date of the changes in law proposed by the bill until July 1, 2018.
EXISTING LAW:
- Defines who qualifies as an “employee” – generally anyone regardless of job title or ownership interest who is paid wages by an employer – for workers’ compensation purposes, and mandates that every employer provide workers’ compensation coverage for all employees either by purchasing a policy of workers’ compensation insurance, or obtaining a certificate of self-insurance from the Department of Industrial Relations.
- Authorizes an officer of a corporation, or a member of the board of directors of a corporation, if that person owns at least 15% of the issued and outstanding stock of the corporation, or a person who is a general partner or managing partner of a partnership, to execute a waiver of workers’ compensation coverage.
- Requires a waiver of coverage by a qualified person to state under penalty of perjury that the person so waiving is a qualified officer or director of the corporation, or qualified general or managing partner of the partnership.
- Specifies that the waiver is effective upon receipt and acceptance by the corporation’s insurer, and remains effective until the insurer is provided with a written withdrawal of the waiver.
FISCAL EFFECT: Undetermined
COMMENTS:
- Purpose. According to the author, this bill is intended to further the process of modernizing the laws that authorize certain employees to opt out of workers’ compensation coverage, started last year with AB 2883 (Committee on Insurance) – Statutes 2016, Chapter 205. Creating exceptions to fundamental California law that all employees are entitled to the protections of the workers’ compensation laws involves a careful balance, and SB 189 continues that process.
- Background. Last year, the Legislature passed and the Governor signed AB 2883, an important workers’ compensation anti-fraud bill. Specifically, AB 2883 was intended to crack down on a specific type of workers’ compensation premium fraud: employers providing their employees with a de minimus ownership stake in the company, or giving the employee a fictional position and title on the company’s board of directors, to skirt workers’ compensation requirements. (For example, a janitor is conferred the title of Vice-President of Sanitation Operations, and then excluded from the company’s workers’ compensation policy.) A second type of fraud involved employees who had, at some point, opted out without a formal written waiver, and then later claimed coverage that the insurer became obligated to provide. As has been noted in past analyses, these fraudulent workers’ compensation schemes result in increased premiums for all employers, but particularly in high-hazard industries, such as construction and agriculture.
Since the passage and implementation of AB 2883, however, stakeholders have noted some challenges with the current structure under AB 2883. Specifically, several stakeholders have noted that the 15% ownership threshold excludes many companies with involved, engaged employee-owners, such as companies with 7 or more owners. These impacts were particularly challenging for professional corporations, such as medical practices, and closely-held family corporations.
SB 189 seeks to address stakeholder concerns in several ways. First, SB 189 lowers the ownership threshold for waiving workers’ compensation for an officer or a member of the board of directors to 10%, which will help small businesses with 7 or more owners/partners. Second, SB 189 allows owners of professional corporations, which includes physicians, dentists, veterinarians, and marriage therapists, to waive workers’ compensation if they are practicing and are covered by health insurance or a health care service plan. Finally, SB 189 will serve as a vehicle for continuing to explore changes to the AB 2883 statutory structure.
- Workers’ compensation covers employees. Unless an owner of a company voluntarily chooses to become an employee and accept wages, that owner is not covered by workers compensation insurance. The status of owner, by itself, does not implicate the waiver or opt-out rules being addressed by the bill. It is only when that owner chooses to be an employee of the entity, and take wages (as opposed to relying on profits), that the issue of whether waiving workers’ compensation protections is raised. The policy balance, therefore, becomes when is it appropriate to allow an employee to decide (free of any duress or improper pressure) to waive something as fundamental as the protection of California’s workers’ compensation laws. AB 2883 and SB 189 are designed to address that balance.
- Backdating waivers. The bill allows for a 15-day backdating period. When placing a workers’ compensation policy the insurance agent and employer may need to act timely to ensure that the employer does not face a gap in coverage after the previous policy expires, but before the new policy takes effect. This may necessitate immediately binding coverage. In this circumstance, it may not be feasible to comply with the waiver formalities “on the spot.” Therefore, in order to better effectuate the intent of the parties to the insurance policy, the bill allows a leeway to complete the waiver process, but make it effective from the inception of the policy.
- Early waivers. The primary reason that the bill’s modified rules governing eligibility to waive workers’ compensation coverage are delayed until July 1, 2018, is that many insurers have suggested that the logistics of modifying their systems to accommodate the new rules requires additional time. On the other hand, some insurers believe that they can be operational earlier, and that preventing them from accepting waivers after January 1, 2018 but before July 1, 2018 will cause a different set of problems. The author has agreed to accept an amendment that clarifies that an insurer may accept a waiver prior to July 1, 2018.
- Technical amendment. Insurers support the requirement that the particulars contained in a waiver of coverage be made under penalty of perjury. However, concern has been expressed that the bill’s addition of a requirement that a person opting out be covered by health insurance may have inadvertently modified the requirement. The author has agreed to a technical amendment that clarifies that both the acknowledgement of waiving workers’ compensation rights and the health insurance requirement be pursuant to the penalty of perjury.
REGISTERED SUPPORT / OPPOSITION:
Support
California Medical Association, sponsor
CALPASC
Family Business Association of California (FBA)
Opposition
None received
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
THIRD READING
Bill No: SB 189
:
SENATE LABOR & IND. REL. COMMITTEE: 5-0, 4/26/17
AYES: Bradford, Stone, Atkins, Jackson, Mitchell
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SOURCE: California Medical Association
DIGEST:
This bill specifies how officers and members of boards of directors at private corporations and managing members and general partners of Limited Liability Companies (LLCs) elect to not be covered by workers’ compensation policies.
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Permits an officer or member of the board of directors to opt out of a workers’ compensation policy if he or she owns at least 15 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. (Labor Code §§3351 & 3352)
- Permits an individual who is a general partner of a partnership or a managing member of a limited liability company to opt out of a workers’ compensation policy if he or she executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member. (Labor Code §3352)
- Requires that the waiver be effective upon the date of receipt by the corporation’s insurance carrier and remain effective until the officer, member of the board of directors, general partner, or managing partner provides the insurance carrier with a written withdrawal of the waiver. (Labor Code §3352)
- Defines a “professional corporation” as a corporation that is engaged in rendering professional services, or services that can only be performed by someone who is licensed, registered, or certified by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act. (Corporations Code §13401)
This bill:
- Decreases the threshold for ownership for an officer or member of the board of directors to opt out of a workers’ compensation policy from at least 15 percent to at least 10 percent.
- Expands the grounds for opting out of workers’ compensation coverage to include owners of a professional corporation if the owner is a practitioner of the professional services for which the professional corporation was created and the owner is covered by a health insurance policy or health care service plan.
Background
Revisiting AB 2883 (Committee on Insurance, Chapter 205, Statutes of 2016)
Last year, the Legislature passed and the Governor signed AB 2883, an important workers’ compensation anti-fraud bill. Specifically, AB 2883 is cracking down on a specific type of workers’ compensation premium fraud: employers providing their employees with a de minimus ownership stake in the company or giving the employee a fictional position and title on the company’s board of directors to skirt workers’ compensation requirements. As has been noted in past analyses, such fraudulent workers’ compensation schemes result in increased premiums for all employers, but particularly in high-hazard industries, such as construction and agriculture.
Since the passage and implementation of AB 2883, however, stakeholders have noted some challenges with the current structure under AB 2883. Specifically, several stakeholders have noted that the 15% ownership threshold excludes many companies with involved, engaged employee-owners, such as companies with seven or more owners. These impacts were particularly challenging for professional corporations, such as medical practices, and closely-held family corporations.
SB 189 seeks to address stakeholder concerns in several ways. First, SB 189 lowers the ownership threshold for waiving workers’ compensation for an officer or a member of the board of directors to 10%, which will help small businesses with seven or more owners/partners. Second, SB 189 allows owners of professional corporations, which includes physicians, dentists, veterinarians, and marriage therapists, to waive workers’ compensation if they are practicing and are covered by health insurance or a health care service plan. Finally, SB 189 will serve as a vehicle for continuing to explore changes to the AB 2883 statutory structure.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
California Medical Association (source)
California Professional Association of Specialty Contractors
California Radiological Society
California Society of Pathologists
Small Business California
None received
ARGUMENTS IN SUPPORT: Proponents note that last year the Governor signed AB 2883, which was an important anti-fraud measure that seeks to inhibit a specific type of workers’ compensation insurance premium fraud. Proponents argue that, while AB 2883 was an important reform measure, it has had some unintended consequences on a wide variety of stakeholders, including small businesses with seven or more owners, professional corporations, family-owned small businesses, and other unique corporate structures. Proponents argue that, by reducing the ownership threshold to 10%, addressing the unique concerns of professional corporations, and also serving as a vehicle for further discussion, SB 189 seeks to ensure that the anti-fraud provisions of AB 2883 remain strong and intact, while also addressing implementation challenges for a wide variety of stakeholders.
5/10/17 14:29:25
**** END ****
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Steven Bradford, Chair
2017 - 2018 Regular
Bill No: SB 189 Hearing Date: April 26, 2017
Author: | Bradford | ||
Version: | April 5, 2017 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Gideon L. Baum | ||
Subject: Workers’ compensation: definition of employee
KEY ISSUE
Should the Legislature specify how officers and members of boards of directors at private corporations and managing members and general partners of Limited Liability Companies (LLCs) elect to not be covered by workers’ compensation policies?
ANALYSIS
Existing law:
- Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
- Permits an officer or member of the board of directors to opt out of a workers’ compensation policy if he or she owns at least 15 percent of the issued and outstanding stock of the corporation and executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying officer or director. (Labor Code §§3351 & 3352)
- Permits an individual who is a general partner of a partnership or a managing member of a limited liability company to opt out of a workers’ compensation policy if he or she executes a written waiver of his or her rights under this chapter stating under penalty of perjury that the person is a qualifying general partner or managing member.
(Labor Code §3352) - Requires that the waiver be effective upon the date of receipt by the corporation’s insurance carrier and remain effective until the officer, member of the board of directors, general partner, or managing partner provides the insurance carrier with a written withdrawal of the waiver. (Labor Code §3352)
- Defines a “professional corporation” as a corporation that is engaged in rendering professional services, or services that can only be performed by someone who is licensed, registered, or certified by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act. (Corporations Code §13401)
This bill:
- Decreases the threshold for ownership for an officer or member of the board of directors to opt out of a workers’ compensation policy from at least 15 percent to at least 10 percent.
- Expands the grounds for opting out of workers’ compensation coverage to include owners of a professional corporation if the owner is a practitioner of the professional services for which the professional corporation was created and the owner is covered by a health insurance policy or health care service plan.
COMMENTS
1. Revisiting AB 2883 (Chapter 205, Statutes of 2016)
Last year, the Legislature passed and the Governor signed AB 2883, an important workers’ compensation anti-fraud bill. Specifically, AB 2883 is cracking down on a specific type of workers’ compensation premium fraud: employers providing their employees with a de minimus ownership stake in the company or giving the employee a fictional position and title on the company’s board of directors to skirt workers’ compensation requirements. As has been noted in past analyses, such fraudulent workers’ compensation schemes result in increased premiums for all employers, but particularly in high-hazard industries, such as construction and agriculture.
Since the passage and implementation of AB 2883, however, stakeholders have noted some challenges with the current structure under AB 2883. Specifically, several stakeholders have noted that the 15% ownership threshold excludes many companies with involved, engaged employee-owners, such as companies with 7 or more owners. These impacts were particularly challenging for professional corporations, such as medical practices, and closely-held family corporations.
SB 189 seeks to address stakeholder concerns in several ways. First, SB 189 lowers the ownership threshold for waiving workers’ compensation for an officer or a member of the board of directors to 10%, which will help small businesses with 7 or more owners/partners. Second, SB 189 allows owners of professional corporations, which includes physicians, dentists, veterinarians, and marriage therapists, to waive workers’ compensation if they are practicing and are covered by health insurance or a health care service plan. Finally, SB 189 will serve as a vehicle for continuing to explore changes to the AB 2883 statutory structure.
2. Proponent Arguments:
Proponents note that last year the Governor signed AB 2883, which was an important anti-fraud measure that seeks to inhibit a specific type of workers’ compensation insurance premium fraud. Proponents argue that, while AB 2883 was an important reform measure, it has had some unintended consequences on a wide variety of stakeholders, including small businesses with 7 or more owners, professional corporations, family-owned small businesses, and other unique corporate structures. Proponents argue that, by reducing the ownership threshold to 10%, addressing the unique concerns of professional corporations, and also serving as a vehicle for further discussion, SB 189 seeks to ensure that the anti-fraud provisions of AB 2883 remain strong and intact, while also addressing implementation challenges for a wide variety of stakeholders.
The Sustainable Economies Law Center (SELC) takes a ‘support if amended’ position. Specifically, SELC notes that many worker-owned cooperatives, where the owners are employees and make decisions collectively, were previously able to waive workers’ compensation coverage. However, under the new requirements created by AB 2883, worker-owned cooperatives are not explicitly mentioned as an entity where owners may waive their workers’ compensation coverage. Therefore, SELC urges that SB 189 is amended to allow owners of a worker-owned collective to waive workers’ compensation coverage like an LLC.
3. Opponent Arguments:
None received.
4. Prior Legislation:
AB 2883 (Assembly Committee on Insurance), Chapter 205, Statutes of 2016, is discussed above.
SUPPORT
California Medical Association (Sponsor)
California Professional Association of Specialty Contractors
Small Business California
OPPOSITION
None received.
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Bill Author
Bill Co-Author(s):