Last week, Governor Brown signed into California law extensive changes to the workers’ compensation system which protects employees injured while at work. The new law aims to reduce costs to employers, increase benefits to disabled workers, and eliminate inefficiencies and waste in the system. The Governor’s office estimates that the law will reduce the costs of workers’ compensation losses by close to $1 billion. The full text of this new law, Senate Bill 863, is available at

As a reminder, real estate brokers are highly encouraged to provide workers’ compensation coverage for their real estate salespersons without charging the salespersons for the premium costs. The California Labor and Workforce Development Agency has taken the position that a real estate salesperson is generally an “employee” for workers’ compensation insurance purposes. For more information, C.A.R. offers members a legal article on Workers’ Compensation. Also, for information on worker’s compensation coverage from our endorsed insurance broker, RealCare Insurance, click here.

Major highlights of the new workers’ compensation law, which will generally take effect on January 1, 2013, include, but are not limited to, the following:

  • Increases total permanent disability benefits by about $740 million per year, as well as revises the procedures for determining an employee’s eligibility for permanent disability  indemnity;
  • Provides that no permanent disability indemnity payment is required if the employer has offered the employee a position that pays at least 85% of the compensation paid to the employee at the time of injury or if the employee works in a position that pays 100% of the compensation paid to the employee at the time of injury as specified;
  • Provides funding for a $120 million return-to-work program appropriated from the Workers’ Compensation Administration Revolving Fund;
  • Provides a permanent partial disability employee with a voucher up to $6,000 as a supplemental job displacement benefit to cover education-related retraining and skill enhancement expenses as specified. Vouchers are not required if an employer offers employment;
  • Makes certain changes for private self-insured employers and the Self-Insurers’ Security Fund;
  • Limits an employer’s requirement to provide home health care services as medical treatment for an injured worker under certain circumstances;
  • Implements independent medical and bill review processes, which will also be used to resolve disputes over a utilization review decision for injuries as specified. The cost of the independent medical review and the administration of the independent medical review system will be borne by employers;
  • Establishes official fee schedules as follows: (1) an official medical fee schedule for reasonable maximum fees for certain medical goods and services; (2) an official medical fee schedule based on Medicare’s Resource-Based Relative Value Scale for physicians and nonphysician practitioners, which will become maximum reasonable fees commencing 2014; and (3) a payment schedule, by July 1, 2013, for home health care services not otherwise covered;
  • Requires that a chiropractic doctor is certified in California workers’ compensation to be a qualified medical evaluator (i.e., eliminates eligibility based on postgraduate study);
  • Requires, starting 2014, changes to medical provider networks, such as requiring a treating physician to give a written acknowledgement that the physician is a member of a medical provider network, and requiring every medical provider network to have at least one medical access assistant to help injured employees find an available physician;
  • Prohibits an interested party for certain workers’ compensation services from providing referrals as specified, which will be a misdemeanor and subject to civil penalty up to $15,000 per offense;
  • Prohibits a qualified medical evaluator from conducting evaluations at more than 10 locations;
  • Revises dispute resolution procedures, such as when an employee is represented by an attorney;
  • Establishes a secondary review process for billing disputes related to medical or legal expenses;
  • Revises procedures for allowing specified expenses as liens, such as requiring payment of a lien to be made only to the person entitled to payment (not assignee) except as specified, requiring certain declarations to be made under penalty of perjury, requiring a $150 filing fee for liens filed on or after January 1, 2013, and a $100 activation fee for certain liens filed before January 1, 2013; and
  • Amends legal proceeding procedures, such as by allowing an appeals board to receive reports of vocational experts as evidence, and requiring employers to pay for a language interpreter if the injured employee or deponent is not proficient in English.