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AB-9 Alternative workers’ compensation program: agreements.(2003-2004)

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CALIFORNIA LEGISLATURE— 2003–2004 4th Ext.

Assembly Bill
No. 9


Introduced  by  Assembly Member Richman

December 05, 2003


An act to amend Section 3201.5 of, and to repeal Section 3201.7 of, the Labor Code, relating to workers’ compensation.


LEGISLATIVE COUNSEL'S DIGEST


AB 9, as introduced, Richman. Alternative workers’ compensation program: agreements.
(1) Existing law establishes the workers’ compensation system to compensate an employee for injuries sustained in the course of his or her employment. Existing law authorizes collective bargaining agreements between a private employer or groups of employers and a recognized or certified exclusive bargaining representative that establish a dispute resolution process for workers’ compensation instead of the hearing before the Workers’ Compensation Appeals Board and its workers’ compensation administrative law judges, or that provides for other alternative workers’ compensation programs. Existing law limits the applicability of these provisions to employers engaged in construction, construction maintenance, or other related activities and who have certain amounts of workers’ compensation insurance premiums.
This bill would expand the applicability of these provisions by removing this industry limitation, and would revise the amounts of workers’ compensation insurance premiums required for these provisions to apply to an employer.
(2) Existing law requires certain information in connection with the above provisions to be submitted to the Administrative Director of the Division of Workers’ Compensation by an employer under penalty of perjury.
By expanding the definition of the crime of perjury, this bill would impose a state-mandated local program.
(3) Existing law, operative on January 1, 2004, authorizes certain labor-management agreements that provide alternative dispute resolution processes for employers or groups of employers.
This bill would repeal this authorization. (4) 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 3201.5 of the Labor Code is amended to read:

3201.5.
 (a) Except as provided in subdivisions (b) and (c), the Department of Industrial Relations and the courts of this state shall recognize as valid and binding any provision in a collective bargaining agreement between a private employer or groups of employers and a union that is the recognized or certified exclusive bargaining representative that establishes any of the following:
(1) An alternative dispute resolution system governing disputes between employees and employers or their insurers that supplements or replaces all or part of those dispute resolution processes contained in this division, including, but not limited to, mediation and arbitration. Any system of arbitration shall provide that the decision of the arbiter or board of arbitration is subject to review by the appeals board in the same manner as provided for reconsideration of a final order, decision, or award made and filed by a workers’ compensation administrative law judge pursuant to the procedures set forth in Article 1 (commencing with Section 5900) of Chapter 7 of Part 4 of Division 4, and the court of appeals pursuant to the procedures set forth in Article 2 (commencing with Section 5950) of Chapter 7 of Part 4 of Division 4, governing orders, decisions, or awards of the appeals board. The findings of fact, award, order, or decision of the arbitrator shall have the same force and effect as an award, order, or decision of a workers’ compensation administrative law judge. Any provision for arbitration established pursuant to this section shall not be subject to Sections 5270, 5270.5, 5271, 5272, 5273, 5275, and 5277.
(2) The use of an agreed list of providers of medical treatment that may be the exclusive source of all medical treatment provided under this division.
(3) The use of an agreed, limited list of qualified medical evaluators and agreed medical evaluators that may be the exclusive source of qualified medical evaluators and agreed medical evaluators under this division.
(4) Joint labor management safety committees.
(5) A light-duty, modified job or return-to-work program.
(6) A vocational rehabilitation or retraining program utilizing an agreed list of providers of rehabilitation services that may be the exclusive source of providers of rehabilitation services under this division.
(b) Nothing in this section shall allow a collective bargaining agreement that diminishes the entitlement of an employee to compensation payments for total or partial disability, temporary disability, vocational rehabilitation, or medical treatment fully paid by the employer as otherwise provided in this division. The portion of any agreement that violates this subdivision shall be declared null and void.
(c) Subdivision (a) shall apply only to the following:
(1) An employer developing or projecting an annual workers’ compensation insurance premium, in California, of two hundred fifty thousand dollars($250,000) ($50,000) or more, or any employer that paid an annual workers’ compensation insurance premium, in California, of two hundred fifty thousand dollars ($250,000) ($50,000) in at least one of the previous three years.
(2) Groups of employers engaged in a workers’ compensation safety group complying with Sections 11656.6 and 11656.7 of the Insurance Code, and established pursuant to a joint labor management safety committee or committees, that develops or projects annual workers’ compensation insurance premiums of two million dollars ($2,000,000) five hundred thousand dollars ($500,000) or more.
(3) Employers or groups of employers that are self-insured in compliance with Section 3700 that would have projected annual workers’ compensation costs that meet the requirements of, and that meet the other requirements of, paragraph (1) in the case of employers, or paragraph (2) in the case of groups of employers.
(4) Employers covered by an owner or general contractor provided wrap-up insurance policy applicable to a single construction site that develops workers’ compensation insurance premiums of two million dollars ($2,000,000) or more with respect to those employees covered by that wrap-up insurance policy.
(d) Employers and labor representatives who meet the eligibility requirements of this section shall be issued a letter by the administrative director advising each employer and labor representative that, based upon the review of all documents and materials submitted as required by the administrative director, each has met the eligibility requirements of this section.
(e) The premium rate for a policy of insurance issued pursuant to this section shall not be subject to the requirements of Section 11732 or 11732.5 of the Insurance Code.
(f) No employer may establish or continue a program established under this section until it has provided the administrative director with all of the following:
(1) Upon its original application and whenever it is renegotiated thereafter, a copy of the collective bargaining agreement and the approximate number of employees who will be covered thereby.
(2) Upon its original application and annually thereafter, a valid and active license where that license is required by law as a condition of doing business in the state.
(3) Upon its original application and annually thereafter, a statement signed under penalty of perjury, that no action has been taken by any administrative agency or court of the United States to invalidate the collective bargaining agreement.
(4) The name, address, and telephone number of the contact person of the employer.
(5) Any other information that the administrative director deems necessary to further the purposes of this section.
(g) No collective bargaining representative may establish or continue to participate in a program established under this section unless all of the following requirements are met:
(1) Upon its original application and annually thereafter, it has provided to the administrative director a copy of its most recent LM-2 or LM-3 filing with the United States Department of Labor, along with a statement, signed under penalty of perjury, that the document is a true and correct copy.
(2) It has provided to the administrative director the name, address, and telephone number of the contact person or persons of the collective bargaining representative or representatives.
(h) Commencing July 1, 1995, and annually thereafter, the Division of Workers’ Compensation shall report to the Director of the Department of Industrial Relations the number of collective bargaining agreements received and the number of employees covered by these agreements.
(i) By June 30, 1996, and annually thereafter, the Administrative Director of the Division of Workers’ Compensation shall prepare and notify Members of the Legislature that a report authorized by this section is available upon request. The report based upon aggregate data shall include the following:
(1) Person hours and payroll covered by agreements filed.
(2) The number of claims filed.
(3) The average cost per claim shall be reported by cost components whenever practicable.
(4) The number of litigated claims, including the number of claims submitted to mediation, the appeals board, or the court of appeal.
(5) The number of contested claims resolved prior to arbitration.
(6) The projected incurred costs and actual costs of claims.
(7) Safety history.
(8) The number of workers participating in vocational rehabilitation.
(9) The number of workers participating in light-duty programs.
The division shall have the authority to require those employers and groups of employers listed in subdivision (c) to provide the data listed above.
(j) The data obtained by the administrative director pursuant to this section shall be confidential and not subject to public disclosure under any law of this state. However, the Division of Workers’ Compensation shall create derivative works pursuant to subdivisions (h) and (i) based on the collective bargaining agreements and data. Those derivative works shall not be confidential, but shall be public. On a monthly basis the administrative director shall make available an updated list of employers and unions entering into collective bargaining agreements containing provisions authorized by this section.

SEC. 2.

 Section 3201.7 of the Labor Code, as added by Chapter 639 of the Statutes of 2003, is repealed.
3201.7.(a)Except as provided in subdivision (b), the Department of Industrial Relations and the courts of this state shall recognize as valid and binding any labor-management agreement that meets all of the following requirements:

(1)The labor-management agreement has been negotiated separate and apart from any collective bargaining agreement covering affected employees.

(2)The labor-management agreement is restricted to the establishment of the terms and conditions necessary to implement this section.

(3)The labor-management agreement has been negotiated in accordance with the authorization of the administrative director pursuant to subdivision (d), between an employer or groups of employers and a union that is the recognized or certified exclusive bargaining representative that establishes any of the following:

(A)An alternative dispute resolution system governing disputes between employees and employers or their insurers that supplements or replaces all or part of those dispute resolution processes contained in this division, including, but not limited to, mediation and arbitration. Any system of arbitration shall provide that the decision of the arbiter or board of arbitration is subject to review by the appeals board in the same manner as provided for reconsideration of a final order, decision, or award made and filed by a workers’ compensation administrative law judge pursuant to the procedures set forth in Article 1 (commencing with Section 5900) of Chapter 7 of Part 4 of Division 4, and the court of appeals pursuant to the procedures set forth in Article 2 (commencing with Section 5950) of Chapter 7 of Part 4 of Division 4, governing orders, decisions, or awards of the appeals board. The findings of fact, award, order, or decision of the arbitrator shall have the same force and effect as an award, order, or decision of a workers’ compensation administrative law judge. Any provision for arbitration established pursuant to this section shall not be subject to Sections 5270, 5270.5, 5271, 5272, 5273, 5275, and 5277.

(B)The use of an agreed list of providers of medical treatment that may be the exclusive source of all medical treatment provided under this division.

(C)The use of an agreed, limited list of qualified medical evaluators and agreed medical evaluators that may be the exclusive source of qualified medical evaluators and agreed medical evaluators under this division.

(D)Joint labor management safety committees.

(E)A light-duty, modified job, or return-to-work program.

(F)A vocational rehabilitation or retraining program utilizing an agreed list of providers of rehabilitation services that may be the exclusive source of providers of rehabilitation services under this division.

(b)Nothing in this section shall allow a labor-management agreement that diminishes the entitlement of an employee to compensation payments for total or partial disability, temporary disability, vocational rehabilitation, or medical treatment fully paid by the employer as otherwise provided in this division; nor shall any agreement authorized by this section deny to any employee the right to representation by counsel at all stages during the alternative dispute resolution process. The portion of any agreement that violates this subdivision shall be declared null and void.

(c)Subdivision (a) shall apply only to the following:

(1)An employer developing or projecting an annual workers’ compensation insurance premium, in California, of fifty thousand dollars ($50,000) or more, and employing at least 50 employees, or any employer that paid an annual workers’ compensation insurance premium, in California, of fifty thousand dollars ($50,000), and employing at least 50 employees in at least one of the previous three years.

(2)Groups of employers engaged in a workers’ compensation safety group complying with Sections 11656.6 and 11656.7 of the Insurance Code, and established pursuant to a joint labor management safety committee or committees, that develops or projects annual workers’ compensation insurance premiums of five hundred thousand dollars ($500,000) or more.

(3)Employers or groups of employers, including cities and counties, that are self-insured in compliance with Section 3700 that would have projected annual workers’ compensation costs that meet the requirements of, and that meet the other requirements of, paragraph (1) in the case of employers, or paragraph (2) in the case of groups of employers.

(d)Any recognized or certified exclusive bargaining representative in an industry not covered by Section 3201.5, may file a petition with the administrative director seeking permission to negotiate with an employer or group of employers to enter into a labor-management agreement pursuant to this section. The petition shall specify the bargaining unit or units to be included, the names of the employers or groups of employers, and shall be accompanied by proof of the labor union’s status as the exclusive bargaining representative. The current collective bargaining agreement or agreements shall be attached to the petition. The petition shall be in the form designated by the administrative director. Upon receipt of the petition, the administrative director shall promptly verify the petitioner’s status as the exclusive bargaining representative. If the petition satisfies the requirements set forth in this subdivision, the administrative director shall issue a letter advising each employer and labor representative of their eligibility to enter into negotiations, for a period not to exceed one year, for the purpose of reaching agreement on a labor-management agreement pursuant to this section. The parties may jointly request, and shall be granted, by the administrative director, an additional one-year period to negotiate an agreement.

(e)No employer may establish or continue a program established under this section until it has provided the administrative director with all of the following:

(1)Upon its original application and whenever it is renegotiated thereafter, a copy of the labor-management agreement and the approximate number of employees who will be covered thereby.

(2)Upon its original application and annually thereafter, a statement signed under penalty of perjury, that no action has been taken by any administrative agency or court of the United States to invalidate the labor-management agreement.

(3)The name, address, and telephone number of the contact person of the employer.

(4)Any other information that the administrative director deems necessary to further the purposes of this section.

(f)No collective bargaining representative may establish or continue to participate in a program established under this section unless all of the following requirements are met:

(1)Upon its original application and annually thereafter, it has provided to the administrative director a copy of its most recent LM-2 or LM-3 filing with the United States Department of Labor, where such filing is required by law, along with a statement, signed under penalty of perjury, that the document is a true and correct copy.

(2)It has provided to the administrative director the name, address, and telephone number of the contact person or persons of the collective bargaining representative or representatives.

(g)Commencing July 1, 2005, and annually thereafter, the Division of Workers’ Compensation shall report to the Director of Industrial Relations the number of labor-management agreements received and the number of employees covered by these agreements.

(h)By June 30, 2006, and annually thereafter, the administrative director shall prepare and notify Members of the Legislature that a report authorized by this section is available upon request. The report based upon aggregate data shall include the following:

(1)Person hours and payroll covered by agreements filed.

(2)The number of claims filed.

(3)The average cost per claim shall be reported by cost components whenever practicable.

(4)The number of litigated claims, including the number of claims submitted to mediation, the appeals board, or the court of appeal.

(5)The number of contested claims resolved prior to arbitration.

(6)The projected incurred costs and actual costs of claims.

(7)Safety history.

(8)The number of workers participating in vocational rehabilitation.

(9)The number of workers participating in light-duty programs.

(10)Overall worker satisfaction.

The division shall have the authority to require employers and groups of employers participating in labor-management agreements pursuant to this section to provide the data listed above.

(i)The data obtained by the administrative director pursuant to this section shall be confidential and not subject to public disclosure under any law of this state. However, the Division of Workers’ Compensation shall create derivative works pursuant to subdivisions (f) and (g) based on the labor-management agreements and data. Those derivative works shall not be confidential, but shall be public. On a monthly basis, the administrative director shall make available an updated list of employers and unions entering into labor-management agreements authorized by this section.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.