California Workers Compensation Law Update- AB 2883

There is an upcoming change to California Workers Compensation Law (AB 2883), which will take effect January 1, 2017.  AB 2883 will change who may be excluded on a California workers compensation policy and the criteria to exclude the eligible individuals.

Please note that this law does not apply to sole proprietors.

The provisions of the change are applicable to all in-force policies effective January 1, 2017 and specifically apply to officers and members of the board of directors of private and quasi-public corporations who render actual service for pay and working members of a partnership or LLC receiving wages regardless of profits from the partnership or LLC.

The following requirements must be met:

  • Corporations: An officer or member of the board of directors must own at least 15% of the outstanding stock of the corporation and must sign a waiver of workers compensation benefits under penalty of perjury that he or she is a qualifying officer or director
  • Partnerships: For general partners of a partnership, the individual must sign a written waiver of workers compensation benefits under penalty or perjury that he or she is a qualifying general partner.
  • LLC: For managing members of a LLC, the individual must sign a written waiver of workers compensation benefits under penalty or perjury that he or she is a qualifying managing member.
  • AB 2883 has eliminated the requirement that 100% of the stock must be held by titled Officers/Directors in order for a corporate Officer/Director to be eligible for exclusion.

Waiver of exclusions must be sent in before your carrier specified due date in order to successfully exclude eligible individuals.  Not submitting the exclusions before the start of the new year may increase the payroll to your current policy, which will increase your premiums.

For any questions regarding the change, please call our Anaheim office at 714.562.5910 or our San Jose office at 408.280.5551.

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