Buzz Around California’s AB 1897 Has Been Amazing

January 20, 2015 By JL Risk Management Consultants

Big Buzz Around California’s AB 1897 and Temporary Employment Agencies

The Buzz around California’s AB 1897. Please note that this article will likely apply to other states than just California. Senate Bill AB 1897 has caused quite a stir in California. Our California clients have begun to pay attention in a big way since January 1st. There are pages and pages of analyses on AB 1897.

Map Of Buzz Around California's AB 1897 With Location Icon

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I first heard of the bill at the National Workers Comp and Disability Conference last November. When I first heard of AB 1897, I thought the presenters were just being too paranoid. That was until I actually read the bill.

I then started receiving emails from California companies and multi-state companies with interests in the state.

A great summary of the bill, its effects, and a few strategies to avert a claim from a temporary employee or employees were written by CalChamber. If you read the bottom of page 2 of the guide, there can be catastrophic results such as a class action lawsuit.

[From The CalChamber guide: ]

Basically, if the labor contractor fails to pay its employees properly or fails to provide workers’ compensation coverage for those employees, the client employer will now be legally responsible.

Why do I reference California so often on Workers Compensation? The laws and rules from the state often end up as similar concerns in other states. As we often say at J&L Insurance Consultants, what happens in California will be coming to a state near you in the future. California remains the Work Comp pacesetter for change.

Making sure your temporary employee provider has a legitimate policy in place is tantamount to not paying for employees your company did not realize it had in place.

Reviewing your contracts with your temporary service provider and verifying their Workers Comp policy in effect is going to be very important in the future.

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Safety and EMods – Highlights From My Presentation From Today

October 10, 2012 By JL Risk Management Consultants

Presentation Highlights – Safety and EMods Are Very Related

How Safety and EMods intermingle was the basis for most of the highlights from my presentation. The NC Mid State Safety Council was kind enough to ask me to do a presentation on how safety programs impact an employer’s bottom line from a Workers Comp standpoint. I am the Treasurer for the organization.

The highlights from my presentation were (you may want to print this one):

Safety Departments can be easily scored by their E-Mods. It is the same as a personal credit score but much harder to improve quickly.
Self Insureds do have an EMod, better known as an LDF (Loss Development Factor). If your company is self insured and does not have an LDF, you are operating a blind WC budget
Due to the economy, there are now temporary employment agencies that may not have their WC policy in force. In this case, the employer will often get stuck with the bill if a temporary employee is injured on the job.
Subcontractors that are operating without a valid insurance policy or with an expired policy actually become employees as the Workers Comp courts are going to go up the Ladder of Insurance (c) to make sure the injured employee will receive WC benefits
Calling the carrier (not the agent) that is listed on the WC certificate of insurance is a good idea just to make sure there is coverage in place for temporary agencies and subcontractors
Do not use your company’s Workers Comp funds to pursue a fraud prosecution.
Workers Comp supplements paid to an injured employee will only make them much more resistant to return to
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The Four Ways To Cut Work Comp Costs from a claims standpoint are:
- Filing First Report of Injury to carrier immediately
- Medical treatment network in place
- Return to Work program in place
- Treat the injured employee as if they are still on the job as they are still your employee
North Carolina Scheduled Rating Plan – discounts are available if a great safety program is in place and your carrier understands your company’s safety measures
An example of how not having a medical network in place = $1.1 million dollar claim
The new NCCI split points can be a benefit or a curse to a safety program
- High EMod companies are going to take a hit
- Lower Emod companies will experience a benefit
- Safety programs and professionals will be worth their weight in gold for the next few years
Bottom Line – Safety is going to be heavily judged by their WC E-Mod even though the safety department may not be involved in some of the WC decisions

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Temporary Agencies and Your Workers Compensation

September 18, 2007 By JL Risk Management Consultants

Temporary Agencies vs. Workers Comp

Temporary agencies or temp agencies have long affected the WC rating system.

Picture of Temporary Agencies Hand walking Up Coin Stair

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Another of the major concerns when I spoke at the NC Mid-State Safety Council quarterly meeting was temporary agencies.

The three main concerns I have with temp agencies are:

In the past temporary agencies would open and close every three years to avoid an experience rating or E-Mod calculation. This harms the way the Workers Comp system is supposed to work. By not having an E-Mod besides 1.0, the temporary agencies that had a horrendous claims history paid no more than the safer ones.
If the temps working for you do not have Workers Comp coverage due to the temp agency lapsing their policy, the TEMP EMPLOYEES WILL BE YOUR RESPONSIBILITY due to the ladder of insurance – see last post.
You may not know the policy/cert has lapsed or had voids in coverage. There is no mechanism to inform you of the lapse.

Employers have unwittingly been on the hook for major claims, as the temps are now covered by their policy. One way to upset an insurance carrier is to have coverage for employees that were not counted in your payroll. Your company may likely face a cancellation in this situation.