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NWCDC Temp Nation – California AB 1897


California AB 1897 Changes The Temporary Employee – Employer Relationship

The upcoming effects of California AB 1897 caught me slightly by surprise.  Many states had discussed laws that reinforced the ladder of insurance.   This new statute addressed it directly.

Picture of Judge California AB 1897 NWCDC

I tried to blog live on many of the sessions at the NWCDC in Las Vegas last week.  However, internet connectivity, power plugs, etc. made it a little tough in a few instances.  I wrote this session out by hand.    It was one of the most important ones for employers, especially California employers.

Many states are passing laws currently that make temporary agencies and client-employers equally responsible for providing Workers Compensation benefits for an injured employee.   These types of laws will quickly erode the hallmark of the temporary agency being the responsible party for their workers’ benefits resulting from a WC accident.

As I have pointed out very often in this blog, California will usually be the first state at enacting rules and laws that will be coming to your state(s) very soon.

California AB 1897 seems to be one of the first of its kind.   California AB 1897 does not let the employer off the hook for Workers Compensation benefits for temporary employees that were hired through an agency.

Businessman Pointing California AB 1897 Employee Interview

Some of the important aspects of the new law are:

  • Effective January 1st, 2015
  • One of the exceptions were key employees such as executive temps.
  • Temporary agency,  PEO, or leasing employer cannot be self insured
  • All parties are equally responsible for employee safety
  • Some of the exclusions are:
    • Small business  – 25 or less employees
    • Business facility with 5 or less temporary workers
    • Local government

The presenters, who I will add into this article or add in a completely different article, recommended that the temporary agency contracts need to be reviewed very extensively as to the responsible party for WC benefits for an injured temporary worker.

This was one of the sessions that should have been given some attention with the advent of co-responsibility between employer and temp agency.   You may want to check the upcoming employment law changes in your state as the presenters had acknowledged other states were considering similar law changes to California AB 1897.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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