CA Workers’ Compensation Employee Definition New Changes and Exclusions

California SB 189, (Bradford) is effective beginning on January 1, 2018, makes certain changes to the definition of employee, and exclusions from the definition of employee, as set forth in Labor Code sections 3351 and 3352.

Current law defines an employee, for purposes of the laws governing workers’ compensation, to include, among other persons:

 Officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay, and

 All working members of a partnership or limited liability company receiving wages irrespective of profits from the partnership or limited liability company.

Current law excludes from the definition of employee:

 An officer or member of the board of directors of a quasi-public or private corporation who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers’ compensation stating under penalty of perjury that he or she is a qualifying officer or director, and

 An individual who is a general partner of a partnership or a managing member of a limited liability company who executes a written waiver of his or her rights under the laws governing workers’ compensation stating under the penalty of perjury that he or she is a qualifying general partner or managing member.

Effective January 1, 2018, SB 189 (Bradford) makes the following changes to the waiver provisions of Labor Code section 3352 that pertain to an officer or member of the board of directors who owns at least 15% of the issued and outstanding stock of the corporation, or an 2 individual who is a general partner of a partnership or a managing member of a limited liability company, adding:

 A written waiver of workers’ compensation coverage that is executed pursuant to Labor Code Section 3352(a)(16) and (17), including, but not limited to, a written waiver that was executed prior to January 1, 2017, and accepted by the insurer on or before December 31, 2017, may be deemed to be accepted by the insurer as of January 1, 2017, and remains in effect until there is a written withdrawal by:

– the officer or member of the board of directors of a corporation,

– the general partner of a partnership, or

– the managing member of a limited liability company.

For further information please download the WCIRB November 14, 2017 Bulletin. The bulletin, further explains Trusts, Officers and Members of Boards of Directors, Sole Shareholders of a Private Corporation, General Partners or Managing Members of a Limited Liability Corporation, Professional Corporations, Sole Shareholders of a Private Professional Corporation and Cooperative Corporations.

Download the WCIRB FREQUENTLY ASKED QUESTIONS (FAQs)

Included in the document is a SAMPLE WAIVER FORM (Effective July 1, 2018).

Source: Workers’ Compensation Insurance Bureau