text:
(a) In a claim in which the uninsured employer or a substantial shareholder, as determined pursuant to this article, has caused to be recorded in a county a vesting deed conveying an ownership interest in real property after the date of the employee’s injury and prior to the recording of a certificate of lien in the county by the director pursuant to Section 3720, and provided that such property has not subsequently been transferred to a bona fide purchaser, the director may determine according to the evidence available to the director whether the transferor of such real property intended to retain a beneficial interest in the real property, such that a resulting trust for the benefit of the uninsured employer or substantial shareholder was created. A prima facie finding that the transaction created a resulting trust for the benefit of the uninsured employer or substantial shareholder may be made when the director determines that there is sufficient evidence to show either of the following circumstances are present:

(1) The recorded vesting deed indicates thereon that the transfer was made as a gift or that no transfer tax to the county was paid.

(2) The transferor made the transfer with actual intent to hinder, delay, or defraud collection of reimbursement for funds paid by the Uninsured Employers Benefits Trust Fund to or on behalf of an injured worker. A finding made pursuant to this paragraph may be made when at least three or more of the following circumstances are present:

(A) The transfer was to a personal or business associate or a relative by blood, affinity, or marriage of the transferor.

(B) The transferor maintains the real property as a place of residence or business after the transfer.

(C) The transferring parties did not employ an escrow or title company to close the transaction transferring the real property.

(D) The value of the consideration received by the transferor was not reasonably equivalent to the value of the real property transferred.

(E) The transferor failed to attend scheduled hearings and trials of the appeals board after the transfer.

(F) The transferor owns legal title to no other real property in the county.

(b) When the director determines pursuant to subdivision (a) that a transfer of real property by the uninsured employer or a substantial shareholder created a resulting trust for the benefit of such transferor, a certificate of lien recorded by the director pursuant to Section 3720 shall attach to that resulting trust in the property and shall constitute a valid lien against the property in favor of the director in the same manner as if the transfer had not occurred.

(c) When the director determines pursuant to subdivision (a) that a transfer created a resulting trust for benefit of the transferor, the director shall mail written notices of the prima facie determination of said resulting trust to the transferor and transferee at their addresses as shown on the recorded vesting deed, the official address record of the appeals board, and to any other more recent addresses the director may have. The notice shall advise the transferring parties of their right to appeal the finding, and that a lien may record and attach against the subject real property stating therein that, “THE DIRECTOR HAS MADE A PRIMA FACIE DETERMINATION PURSUANT TO LABOR CODE SECTION 3720.2 THAT THE TRANSFEREE, [FIRST AND LAST NAME], HOLDS TITLE TO THE REAL PROPERTY AT [STREET ADDRESS, CITY AND PARCEL NUMBERS] ON BEHALF OF THE TRANSFEROR, [FIRST AND LAST NAME], IN A RESULTING TRUST” in bold and uppercase letters on the certificate of lien.

(d) A person aggrieved by a prima facie finding of the director pursuant to subdivision (a) that the transferor of the property intended to retain a beneficial interest, such that a resulting trust was created, may request a hearing on the finding by filing a written request for hearing with the director. The director, through a hearing officer appointed by the director, shall hold a hearing on the matter within 20 days of the receipt of the request for hearing and shall mail a notice of time and place of hearing to the person requesting the hearing at least 10 days prior to the hearing. The hearing officer shall hear and receive evidence, and within 10 days of the hearing, file findings on whether there is sufficient evidence to constitute a prima facie case that the transfer of real property is subject to a resulting trust. The hearing officer shall serve with the findings a summary of evidence received and relied upon and the reasons for the findings. A party may at their own expense require that the hearing proceedings be recorded and transcribed.

(e) A party aggrieved by the findings of the hearing officer may within 20 days apply for a writ of mandate to the superior court. The venue shall lie in the county in which the real property is located.

(f) This section does not affect the interests, priorities, and ownership rights of bona fide encumbrancers and purchasers.

history: (History: Added by Stats. 2025, Ch. 790, Sec. 1. (SB 847) Effective January 1, 2026.)

article: 2. Uninsured Employers Fund


kind: section

code: LAB

citation: LAB § 3721

text: The director shall provide the employer with a certificate of cancellation of lien after the employer has paid to the claimant or to the Uninsured Employers Fund the amount of the compensation or benefits which has been ordered paid to the claimant, or when the application has finally been denied after the claimant has exhausted the remedies provided by law in those cases, or when the employer has filed a bond in the amount and with such surety as the appeals board approves conditioned on the payment of all sums ordered paid to the claimant, or when, after a finding that the employer was prima facie illegally uninsured, it is finally determined that the finding was in error. The recorder shall make no charge for filing the certificates of lien, for filing amended certificates of lien, or for cancellation when liens are filed in error. Cancellation of lien certificates provided to the employer may be filed for recordation by the employer at his or her expense.

history: (History: Amended by Stats. 1985, Ch. 1547, Sec. 7.)

division: 4. WORKERS' COMPENSATION AND INSURANCE

chapter: 4. Compensation Insurance and Security

article: 2. Uninsured Employers Fund

path: 4. WORKERS' COMPENSATION AND INSURANCE > 4. Compensation Insurance and Security > 2. Uninsured Employers Fund


citation: LAB § 3722

text:
(a) At the time the stop order is issued and served pursuant to Section 3710.1, the director shall also issue and serve a penalty assessment order requiring the uninsured employer to pay to the director, for deposit in the State Treasury to the credit of the Uninsured Employers Fund, the sum of one thousand five hundred dollars ($1,500) per employee employed at the time the order is issued and served, as an additional penalty for being uninsured at that time or issue and serve a penalty assessment order pursuant to subdivision (b).

(b) At any time that the director determines that an employer has been uninsured for a period in excess of one week during the calendar year preceding the determination, the director shall issue and serve a penalty assessment order requiring the uninsured employer to pay to the director, for deposit in the State Treasury to the credit of the Uninsured Employers Fund, the greater of (1) twice the amount the employer would have paid in workers’ compensation premiums during the period the employer was uninsured, determined according to subdivision (c), or (2) the sum of one thousand five hundred dollars ($1,500) per employee employed during the period the employer was uninsured. A penalty assessment issued and served by the director pursuant to this subdivision shall be in lieu of, and not in addition to, any other penalty issued and served by the director pursuant to subdivision (a).

(c) If the employer is currently insured, or becomes insured during the period during which the penalty under subdivision (b) is being determined, the amount an employer would have paid in workers’ compensation premiums shall be calculated by prorating the current premium for the number of weeks the employer was uninsured within the three-year period immediately prior to the date the penalty assessment is issued. If the employer is uninsured at the time the penalty under subdivision (b) is being determined, the amount an employer would have paid in workers’ compensation premiums shall be the product of the employer’s payroll for all periods of time the employer was uninsured within the three-year period immediately prior to the date the penalty assessment is issued multiplied by a rate determined in accordance with regulations that may be adopted by the director or, if none has been adopted, the manual rate or rates of the State Compensation Insurance Fund for the employer’s governing classification pursuant to the standard classification system approved by the Insurance Commissioner. The classification shall be determined by the director or the director’s designee at the time the penalty assessment is issued on the basis of any information available to the director regarding the employer’s operations. Unless the amount of the employer’s payroll for all periods during which the employer was uninsured within the three-year period is otherwise proven by a preponderance of evidence, the employer’s payroll for each week the employer was uninsured shall be presumed to be the state average weekly wage multiplied by the number of persons employed by the employer at the time the penalty assessment is issued. For purposes of this subdivision, “state average weekly wage” means the average weekly wage paid by employers to employees covered by unemployment insurance as reported by the United States Department of Labor for California for the 12-month period ending March 31 of the calendar year preceding the year in which the penalty assessment order is issued.

(d) If upon the filing of a claim for compensation under this division the Workers’ Compensation Appeals Board finds that any employer has not secured the payment of compensation as required by this division and finds the claim either noncompensable or compensable, the appeals board shall mail a copy of their findings to the uninsured employer and the director, together with a direction to the uninsured employer to file a verified statement pursuant to subdivision (e).

After the time for any appeal has expired and the adjudication of the claim has become final, the uninsured employer shall be assessed and pay as a penalty either of the following:

(1) In noncompensable cases, two thousand dollars ($2,000) per each employee employed at the time of the claimed injury.

(2) In compensable cases, ten thousand dollars ($10,000) per each employee employed on the date of the injury.

(e) In order to establish the number of employees the uninsured employer had on the date of the claimed injury in noncompensable cases and on the date of injury in compensable cases, the employer shall submit to the director within 10 days after service of findings, awards, and orders of the Workers’ Compensation Appeals Board a verified statement of the number of employees in his or her employ on the date of injury. If the employer fails to submit to the director this verified statement or if the director disputes the accuracy of the number of employees reported by the employer, the director shall use any information regarding the number of employees as the director may have or otherwise obtains.

(f) Except for penalties assessed under subdivision (b), the maximum amount of penalties which may be assessed pursuant to this section is one hundred thousand dollars ($100,000). Payment shall be transmitted to the director for deposit in the State Treasury to the credit of the Uninsured Employers Fund.

(g) (1) The Workers’ Compensation Appeals Board may provide for a summary hearing on the sole issue of compensation coverage to effect the provisions of this section.

(2) In the event a claim is settled by the director pursuant to subdivision (e) of Section 3715 by means of a compromise and release or stipulations with request for award, the appeals board may also provide for a summary hearing on the issue of compensability.

history: (History: Amended by Stats. 2009, Ch. 640, Sec. 1. (SB 313) Effective January 1, 2011. Note: Because Ch. 640 was chaptered on November 2, 2009, its effective date is January 1, 2011, not January 1, 2010.)

article: 2. Uninsured Employers Fund


citation: LAB § 3725

text: If an employer desires to contest a penalty assessment order, the employer shall file with the director a written request for a hearing within 15 days after service of the order. Upon receipt of the request, the director shall set the matter for a hearing within 30 days thereafter and shall notify the employer of the time and place of the hearing by mail at least 10 days prior to the date of the hearing. The decision of the director shall consist of a notice of findings and findings which shall be served on all parties to the hearing by registered or certified mail within 15 days after the hearing. Any amount found due by the director as a result of a hearing shall become due and payable 45 days after notice of the findings and written findings have been mailed by registered or certified mail to the party assessed. A writ of mandate may be taken from these findings to the appropriate superior court upon the execution by the party assessed of a bond to the state in double the amount found due and ordered paid by the director, as long as the party agrees to pay any judgment and costs rendered against the party for the assessment. The writ shall be taken within 45 days after mailing the notice of findings and findings.

history: (History: Amended by Stats. 1988, Ch. 96, Sec. 13.)

article: 2. Uninsured Employers Fund


citation: LAB § 3726

text:
(a) When no petition objecting to a penalty assessment order is filed, a certified copy of the order may be filed by the director in the office of the clerk of the superior court in any county in which the employer has property or in which the employer has or had a place of business. The clerk, immediately upon such filing, shall enter judgment for the state against the employer in the amount shown on the penalty assessment order.

(b) When findings are made affirming or modifying a penalty assessment order after hearing, a certified copy of such order and a certified copy of such findings may be filed by the director in the office of the clerk of the superior court in any county in which the employer has property or in which the employer has or had a place of business. The clerk, immediately upon such filing, shall enter judgment for the state against the employer in the amount shown on the penalty assessment order or in the amount shown in the findings if the order has been modified.

(c) A judgment entered pursuant to the provisions of this section may be filed by the clerk in a looseleaf book entitled “Special Judgments for State Uninsured Employers Fund.” Such judgment shall bear the same rate of interest and shall have the same effect as other judgments and be given the same preference allowed by law on other judgments rendered for claims for taxes. The clerk shall make no charge for the service provided by this section to be performed by him.

history: (History: Amended by Stats. 1980, Ch. 852.)

article: 2. Uninsured Employers Fund


citation: LAB § 3727

text: If the director determines pursuant to Section 3722 that an employer has failed to secure the payment of compensation as required by this division, the director may file with the county recorder of any counties in which such employer’s property may be located his certificate of the amount of penalty due from such employer and such amount shall be a lien in favor of the director from the date of such filing against the real property and personal property of the employer within the county in which such certificate is filed. The recorder shall accept and file such certificate and record the same as a mortgage on real estate and shall file the same as a security interest and he shall index the same as mortgage on real estate and as a security interest. Certificates of liens may be filed in any and all counties of the state, depending upon the information the director obtains concerning the employer’s assets. The recorder shall make no charge for the services provided by this section to be performed by him. Upon payment of the penalty assessment, the director shall issue a certificate of cancellation of penalty assessment, which may be recorded by the employer at his expense.

article: 2. Uninsured Employers Fund


text: The director may withdraw a stop order or a penalty assessment order where investigation reveals the employer had secured the payment of compensation as required by Section 3700 on the date and at the time of service of such order. The director also may withdraw a penalty assessment order where investigation discloses that the employer was insured on the date and at the time of an injury or claimed injury, or where an insured employer responded in writing to a request to furnish the status of his workers’ compensation coverage within the time prescribed.

history: (History: Added by Stats. 1980, Ch. 852.)

article: 2. Uninsured Employers Fund


citation: LAB § 3728

text:
(a) The director may draw from the State Treasury out of the Uninsured Employers Benefits Trust Fund for the purposes of Sections 3716 and 3716.1, without at the time presenting vouchers and itemized statements, a sum not to exceed in the aggregate the level provided for pursuant to Section 16400 of the Government Code, to be used as a cash revolving fund. The revolving fund shall be deposited in any banks and under any conditions as the Department of General Services determines. The Controller shall draw his or her warrants in favor of the Director of Industrial Relations for the amounts so withdrawn and the Treasurer shall pay these warrants.

(b) Expenditures made from the revolving fund in payment of claims for compensation due from the Uninsured Employers Benefits Trust Fund and from the Workers’ Compensation Administration Revolving Fund for administrative and adjusting services rendered are exempted from the operation of Section 925.6 of the Government Code. Reimbursement of the revolving fund from the Uninsured Employers Benefits Trust Fund or the Workers’ Compensation Administration Revolving Fund for expenditures shall be made upon presentation to the Controller of an abstract or statement of the expenditures. The abstract or statement shall be in any form as the Controller requires.

history: (History: Amended by Stats. 2003, Ch. 228, Sec. 30. Effective August 11, 2003.)

article: 2. Uninsured Employers Fund


citation: LAB § 3730

text: When the last day for filing any instrument or other document pursuant to this chapter falls upon a Saturday, Sunday or other holiday, such act may be performed upon the next business day with the same effect as if it had been performed upon the day appointed.

article: 2. Uninsured Employers Fund


citation: LAB § 3731

text: Any stop order or penalty assessment order may be personally served upon the employer either by (1) manual delivery of the order to the employer personally or by (2) leaving signed copies of the order during usual office hours with the person who is apparently in charge of the office and by thereafter mailing copies of the order by first class mail, postage prepaid to the employer at the place where signed copies of the order were left.

article: 2. Uninsured Employers Fund


citation: LAB § 3732

text:
(a) If compensation is paid or becomes payable from the Uninsured Employers Fund, whether as a result of a findings and award, award based upon stipulations, compromise and release executed on behalf of the director, or payments voluntarily furnished by the director pursuant to Section 4903.3, the director may recover damages from any person or entity, other than the employer, whose tortious act or omission proximately caused the injury or death of the employee. The damages shall include any compensation, including additional compensation by way of interest or penalty, paid or payable by the director, plus the expense incurred by the director in investigating and litigating the workers’ compensation claim and a reasonable attorney fee for litigating the workers’ compensation claim. The director may compromise, or settle and release any claim, and may waive any claim, including the lien allowed by this section, in whole or in part, for the convenience of the director.

(b) Except as otherwise provided in this section, Chapter 5 (commencing with Section 3850) of Part 1 of Division 4 shall be applicable to these actions, the director being treated as an employer within the meaning of Chapter 5 to the extent not inconsistent with this section.

(c) Actions brought under this section shall be commenced within one year after the later of either the time the director pays or the time the director becomes obligated to pay any compensation from the Uninsured Employers Fund.

(d) In the trial of these actions, any negligence attributable to the employer shall not be imputed to the director or to the Uninsured Employers Fund, and the damages recoverable by the director shall not be reduced by any percentage of fault or negligence attributable to the employer or to the employee.

(e) In determining the credit to the Uninsured Employers Fund provided by Section 3861, the appeals board shall not take into consideration any negligence of the employer, but shall allow a credit for the entire amount of the employee’s recovery either by settlement or after judgment, as has not theretofore been applied to the payment of expenses or attorney’s fees.

(f) When an action or claim is brought by an employee, his or her guardian, conservator, personal representative, estate, survivors, or heirs against a third party who may be liable for causing the injury or death of the employee, any settlement or judgment obtained is subject to the director’s claim for damages recoverable by the director pursuant to subdivision (a), and the director shall have a lien against any settlement in the amount of the damages.

(g) No judgment or settlement in any action or claim by an employee, his or her guardian, conservator, personal representative, survivors, or heirs to recover damages for injuries, where the director has an interest, shall be satisfied without first giving the director notice and a reasonable opportunity to perfect and satisfy his or her lien. The director shall be mailed a copy of the complaint in the third-party action as soon as reasonable after it is filed with the court.

(h) When the director has perfected a lien upon a judgment or settlement in favor of an employee, his or her guardian, conservator, personal representative, survivors or heirs against any third party, the director shall be entitled to a writ of execution as a lien claimant to enforce payment of the lien against the third party with interest and other accruing costs as in the case of other executions. In the event the amount of the judgment or settlement so recovered has been paid to the employee, his or her guardian, conservator, personal representative, survivors, or heirs, the director shall be entitled to a writ of execution against the employee, his or her guardian, conservator, personal representative, survivors, or heirs to the extent of the director’s lien, with interest and other accruing costs as in the cost of other executions.

(i) Except as otherwise provided in this section, notwithstanding any other provision of law, the entire amount of any settlement of the action or claim of the employee, his or her guardian, conservator, personal representative, survivors, or heirs, with or without suit, is subject to the director’s lien claim for the damages recoverable by the director pursuant to subdivision (a).

(j) Where the action or claim is brought by the employee, his or her guardian, conservator, personal representative, estate, survivors, or heirs, and the director has not joined in the action, and the employee, his or her guardian, conservator, personal representative, estate, survivors, or heirs incur a personal liability to pay attorney’s fees and costs of litigation, the director’s claim for damages shall be limited to the amount of the director’s claim for damages less that portion of the costs of litigation expenses determined by multiplying the total cost of litigation expenses by the ratio of the full amount of the director’s claim for damages to the full amount of the judgment, award, or settlement, and less 25 percent of the balance after subtracting the director’s share of litigation expenses, which represents the director’s reasonable share of attorney’s fees incurred.

(k) In the trial of the director’s action for damages, and in the allowance of his or her lien in an action by the employee, guardian, executor, personal representative, survivors, or heirs, the compensation paid from the Uninsured Employers Fund pursuant to an award as provided in Section 3716 is conclusively presumed to be reasonable in amount and to be proximately caused by the event or events which caused the employee’s injury or death.

(l) In the action for damages the director shall be entitled to recover, if he or she prevails, the entire amount of the damages recoverable by the director pursuant to subdivision (a), regardless of whether the damages recoverable by the employee, guardian, conservator, personal representative, survivors, or heirs are of lesser amount.

history: (History: Amended by Stats. 1989, Ch. 461, Sec. 3.)

article: 2. Uninsured Employers Fund


citation: LAB § 3733

text:
(a) The Legislature finds and declares that it is in the best interest of the State of California to provide a person, regardless of his or her citizenship or immigration status, with the benefits provided pursuant to this article, and therefore enacts this section pursuant to Section 1621(d) of Title 8 of the United States Code.

(b) A person shall not be prohibited from receiving compensation paid or payable from the Uninsured Employers Benefits Trust Fund solely because of his or her citizenship or immigration status.

(c) It is the intent of the Legislature to override Section 15740 of Article 1 of Subchapter 2.1.1 of Chapter 8 of Division 1 of Title 8 of the California Code of Regulations.

(d) The provisions of this section are declaratory of existing law.

history: (History: Added by Stats. 2015, Ch. 290, Sec. 1. (SB 623) Effective January 1, 2016.)

article: 2. Uninsured Employers Fund


citation: LAB § 3740

text: It is the intent of the Legislature in enacting this article and Article 1 (commencing with Section 3700) to provide for the continuation of workers’ compensation benefits delayed due to the failure of a private self-insured employer to meet its compensation obligations when the employers’ security deposit is either inadequate or not immediately accessible for the payment of benefits. With respect to the continued liability of a surety for claims that arose under a bond after termination of that bond and to a surety’s liability for the cost of administration of claims, it is the intent of the Legislature to clarify existing law. The Legislature finds and declares that the establishment of the Self-Insurers’ Security Fund is a necessary component of a complete system of workers’ compensation, required by Section 4 of Article XIV of the California Constitution, to have adequate provisions for the comfort, health and safety, and general welfare of any and all workers and their dependents to the extent of relieving the consequences of any industrial injury or death, and full provision for securing the payment of compensation.

history: (History: Amended by Stats. 1986, Ch. 1128, Sec. 15. Effective September 25, 1986.)

article: 2.5. Self-Insurers’ Security Fund

path: 4. WORKERS' COMPENSATION AND INSURANCE > 4. Compensation Insurance and Security > 2.5. Self-Insurers’ Security Fund


citation: LAB § 3741

text:
As used in this article:

(a) “Director” means the Director of Industrial Relations.

(b) “Private self-insurer” means a private employer which has secured the payment of compensation pursuant to subdivision (b) of Section 3700.

(c) “Insolvent self-insurer” means a private self-insurer who has failed to pay compensation and whose security deposit has been called by the director pursuant to Section 3701.5.

(d) “Fund” means the Self-Insurers’ Security Fund established pursuant to Section 3742.

(e) “Trustees” means the Board of Trustees of the Self-Insurers’ Security Fund.

(f) “Member” means a private self-insurer which participates in the Self-Insurers’ Security Fund.

history: (History: Added by Stats. 1984, Ch. 252, Sec. 5. Effective June 27, 1984.)

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3742

text:
(a) The Self-Insurers’ Security Fund shall be established as a Nonprofit Mutual Benefit Corporation pursuant to Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code and this article. If any provision of the Nonprofit Mutual Benefit Corporation Law conflicts with any provision of this article, the provisions of this article shall apply. Each private self-insurer shall participate as a member in the fund, unless its liabilities have been turned over to the fund pursuant to Section 3701.5, at which time its membership in the fund is relinquished.

(b) The fund shall be governed by a board of trustees with no more than eight members, as established by the bylaws of the Self-Insurers’ Security Fund. The director shall hold ex officio status, with full powers equal to those of a trustee, except that the director shall not have a vote. The director, or a delegate authorized in writing to act as the director’s representative on the board of trustees, shall carry out exclusively the responsibilities set forth in Division 1 (commencing with Section 50) through Division 4 (commencing with Section 3200) and shall not have the obligations of a trustee under the Nonprofit Mutual Benefit Corporation Law. The fund shall adopt bylaws to segregate the director from all matters that may involve fund litigation against the department or fund participation in legal proceedings before the director. Although not voting, the director or a delegate authorized in writing to represent the director, shall be counted toward a quorum of trustees. The remaining trustees shall be representatives of private self-insurers. The self-insurer trustees shall be elected by the members of the fund, each member having one vote. Trustees shall be elected to four-year terms, and shall serve until their successors are elected and assume office pursuant to the bylaws of the fund.

(c) The fund shall establish bylaws as are necessary to effectuate the purposes of this article and to carry out the responsibilities of the fund, including, but not limited to, any obligations imposed by the director pursuant to Section 3701.8. The fund may carry out its responsibilities directly or by contract, and may purchase services and insurance and borrow funds as it deems necessary for the protection of the members and their employees. The fund may receive confidential information concerning the financial condition of self-insured employers whose liabilities to pay compensation may devolve upon it and shall adopt bylaws to prevent dissemination of that information.

(d) The director may also require fund members to subscribe to financial instruments or guarantees to be posted with the director in order to satisfy the security requirements set by the director pursuant to Section 3701.8.

history: (History: Amended by Stats. 2012, Ch. 363, Sec. 23. (SB 863) Effective January 1, 2013.)

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3743

text:
(a) Upon order of the director pursuant to Section 3701.5, the fund shall assume the workers’ compensation obligations of an insolvent self-insurer.

(b) Notwithstanding subdivision (a), the fund shall not be liable for the payment of any penalties assessed for any act or omission on the part of any person other than the fund, including, but not limited to, the penalties provided in Section 132a, 3706, 4553, 4554, 4556, 4557, 4558, 4601.5, 5814, or 5814.1.

(c) The fund shall be a party in interest in all proceedings involving compensation claims against an insolvent self-insurer whose compensation obligations have been paid or assumed by the fund. The fund shall have the same rights and defenses as the insolvent self-insurer, including, but not limited to, all of the following:

(1) To appear, defend, and appeal claims.

(2) To receive notice of, investigate, adjust, compromise, settle, and pay claims.

(3) To investigate, handle, and deny claims.

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3744

text:
(a) (1) The fund shall have the right and obligation to obtain reimbursement from an insolvent self-insurer up to the amount of the self-insurer’s workers’ compensation obligations paid and assumed by the fund, including reasonable administrative and legal costs. This right includes, but is not limited to, a right to claim for wages and other necessities of life advanced to claimants as subrogee of the claimants in any action to collect against the self-insured as debtor. For purposes of this section, “insolvent self-insurer” includes the entity to which the certificate of consent to self-insure was issued, any guarantor of the entity’s liabilities under the certificate, any member of a self-insurance group to which the certificate was issued, and any employer who obtained employees from a self-insured employer under subdivision (d) of Section 3602.

(2) The Legislature finds and declares that the amendments made to this subdivision by the act adding this paragraph are declaratory of existing law.

(b) The fund shall have the right and obligation to obtain from the security deposit of an insolvent self-insurer the amount of the self-insurer’s compensation obligations, including reasonable administrative and legal costs, paid or assumed by the fund. Reimbursement of administrative costs, including legal costs, shall be subject to approval by a majority vote of the fund’s trustees. The fund shall be a party in interest in any action to obtain the security deposit for the payment of compensation obligations of an insolvent self-insurer.

(c) The fund shall have the right to bring an action against any person to recover compensation paid and liability assumed by the fund, including, but not limited to, any excess insurance carrier of the self-insured employer, and any person whose negligence or breach of any obligation contributed to any underestimation of the self-insured employer’s total accrued liability as reported to the director.

(d) The fund may be a party in interest in any action brought by any other person seeking damages resulting from the failure of an insolvent self-insurer to pay workers’ compensation required pursuant to this division.

(e) At the election of the Self-Insurers’ Security Fund, venue shall be in the Superior Court for the State of California, County of Sacramento, for any action under this section. All actions in which the Self-Insurers’ Security Fund and two or more members or former members of one self-insurance group are parties shall be consolidated if requested by the Self-Insurers’ Security Fund.

history: (History: Amended by Stats. 2012, Ch. 363, Sec. 24. (SB 863) Effective January 1, 2013.)

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3745

text:
(a) The fund shall maintain cash, readily marketable securities, or other assets, or a line of credit, approved by the director, sufficient to immediately continue the payment of the compensation obligations of an insolvent self-insurer pending assessment of the members. The director may establish the minimum amount to be maintained by, or immediately available to, the fund for this purpose.

(b) The fund may assess each of its members a pro rata share of the funding necessary to carry out the purposes of this article.

(c) The trustees shall certify to the director the collection and receipt of all moneys from assessments, noting any delinquencies. The trustees shall take any action deemed appropriate to collect any delinquent assessments.

history: (History: Amended by Stats. 2012, Ch. 363, Sec. 25. (SB 863) Effective January 1, 2013.)

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3746

text: The fund shall annually contract for an independent certified audit of the financial activities of the fund. An annual report on the financial status of the fund as of June 30 shall be submitted to the director and to each member, or at the election of the fund, posted on the fund’s Internet Web site.

history: (History: Amended by Stats. 2012, Ch. 363, Sec. 26. (SB 863) Effective January 1, 2013.)

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3747

text: This article shall be known and may be referred to as the “Young-La Follette Self-Insurers’ Security Act.”

article: 2.5. Self-Insurers’ Security Fund


citation: LAB § 3750

text:
Nothing in this division shall affect:

(a) The organization of any mutual or other insurer.

(b) Any existing contract for insurance.

(c) The right of the employer to insure in mutual or other insurers, in whole or in part, against liability for the compensation provided by this division.

(d) The right to provide by mutual or other insurance, or by arrangement with his employees, or otherwise, for the payment to such employees, their families, dependents or representatives, of sick, accident, or death benefits, in addition to the compensation provided for by this division.

(e) The right of the employer to waive the waiting period provided for herein by insurance coverage.

history: (History: Enacted by Stats. 1937, Ch. 90.)

article: 3. Insurance Rights and Privileges

path: 4. WORKERS' COMPENSATION AND INSURANCE > 4. Compensation Insurance and Security > 3. Insurance Rights and Privileges


citation: LAB § 3751

text:
(a) No employer shall exact or receive from any employee any contribution, or make or take any deduction from the earnings of any employee, either directly or indirectly, to cover the whole or any part of the cost of compensation under this division. Violation of this subdivision is a misdemeanor.

(b) If an employee has filed a claim form pursuant to Section 5401, a provider of medical services shall not, with actual knowledge that a claim is pending, collect money directly from the employee for services to cure or relieve the effects of the injury for which the claim form was filed, unless the medical provider has received written notice that liability for the injury has been rejected by the employer and the medical provider has provided a copy of this notice to the employee. Any medical provider who violates this subdivision shall be liable for three times the amount unlawfully collected, plus reasonable attorney’s fees and costs.

history: (History: Amended by Stats. 1990, Ch. 997, Sec. 1.)

article: 3. Insurance Rights and Privileges


citation: LAB § 3752

text: Liability for compensation shall not be reduced or affected by any insurance, contribution or other benefit whatsoever due to or received by the person entitled to such compensation, except as otherwise provided by this division.

article: 3. Insurance Rights and Privileges


citation: LAB § 3753

text: The person entitled to compensation may, irrespective of any insurance or other contract, except as otherwise provided in this division, recover such compensation directly from the employer. In addition thereto, he may enforce in his own name, in the manner provided by this division the liability of any insurer either by making the insurer a party to the original application or by filing a separate application for any portion of such compensation.

article: 3. Insurance Rights and Privileges


citation: LAB § 3754

text: Except as provided in paragraph (12) of subdivision (f) of Section 1202.4 of the Penal Code, payment, in whole or in part, of compensation by either the employer or the insurer shall, to the extent thereof, be a bar to recovery against each of them of the amount so paid.

history: (History: Amended by Stats. 2012, Ch. 868, Sec. 2. (SB 1177) Effective January 1, 2013.)

article: 3. Insurance Rights and Privileges


citation: LAB § 3755

text:
If the employer is insured against liability for compensation, and if after the suffering of any injury the insurer causes to be served upon any compensation claimant a notice that it has assumed and agreed to pay any compensation to the claimant for which the employer is liable, such employer shall be relieved from liability for compensation to such claimant upon the filing of a copy of such notice with the appeals board. The insurer shall, without further notice, be substituted in place of the employer in any proceeding theretofore or thereafter instituted by such claimant to recover such compensation, and the employer shall be dismissed therefrom.

Such proceedings shall not abate on account of such substitution but shall be continued against such insurer.

history: (History: Amended by Stats. 1965, Ch. 1513.)

article: 3. Insurance Rights and Privileges


citation: LAB § 3756

text: If at the time of the suffering of a compensable injury, the employer is insured against liability for the full amount of compensation payable, he may cause to be served upon the compensation claimant and upon the insurer a notice that the insurer has agreed to pay any compensation for which the employer is liable. The employer may also file a copy of such notice with the appeals board.

article: 3. Insurance Rights and Privileges


citation: LAB § 3757

text: If it thereafter appears to the satisfaction of the appeals board that the insurer has assumed the liability for compensation, the employer shall thereupon be relieved from liability for compensation to the claimant. The insurer shall, after notice, be substituted in place of the employer in any proceeding instituted by the claimant to recover compensation, and the employer shall be dismissed therefrom.

article: 3. Insurance Rights and Privileges


citation: LAB § 3758

text: A proceeding to obtain compensation shall not abate on account of substitution of the insurer in place of the employer and on account of the dismissal of the employer, but shall be continued against such insurer.

article: 3. Insurance Rights and Privileges


citation: LAB § 3759

text: The appeals board may enter its order relieving the employer from liability where it appears from the pleadings, stipulations, or proof that an insurer joined as party to the proceeding is liable for the full compensation for which the employer in such proceeding is liable.

article: 3. Insurance Rights and Privileges


citation: LAB § 3760

text: Every employer who is insured against any liability imposed by this division shall file with the insurer a complete report of every injury to each employee as specified in Section 6409.1. If not so filed, the insurer may petition the appeals board for an order, or the appeals board may of its own motion issue an order, directing the employer to submit a report of the injury within five days after service of the order. Failure of the employer to comply with the appeals board’s order may be punished by the appeals board as a contempt.

history: (History: Amended by Stats. 1987, Ch. 1019, Sec. 4.)

article: 3. Insurance Rights and Privileges


citation: LAB § 3761

text:
(a) An insurer securing an employer’s liability under this division shall notify the employer, within 15 days, of each claim for indemnity filed against the employer directly with the insurer if the employer has not timely provided to the insurer a report of occupational injury or occupational illness pursuant to Section 6409.1. The insurer shall furnish an employer who has not filed this report with an opportunity to provide to the insurer, prior to the expiration of the applicable time period specified in subdivision (b) of Section 5402 for rejecting a claim, all relevant information available to the employer concerning the claim.

(b) (1) An employer shall promptly notify its insurer in writing at any time during the pendency of a claim if the employer has actual knowledge of any facts that would tend to disprove any aspect of the employee’s claim. If an employer notifies its insurer in writing that, in the employer’s opinion, no compensation is payable to an employee, at the employer’s written request, to the appeals board, the appeals board may approve a compromise and release agreement, or stipulation, that provides compensation to the employee only if there is proof of service upon the employer by the insurer, to the employer’s last known address, not less than 15 days prior to the appeals board action, of notice of the time and place of the hearing at which the compromise and release agreement or stipulation is to be approved. The insurer shall file proof of this service with the appeals board.

(2) Failure by the insurer to provide the required notice shall not prohibit the board from approving a compromise and release agreement, or stipulation. However, the board shall order the insurer to pay reasonable expenses as provided in Section 5813.

(c) In establishing a reserve pursuant to a claim that affects premiums against an employer, an insurer shall provide the employer, upon request, a written report of the reserve amount established. The written report shall include, at a minimum, the following:

(1) Estimated medical-legal costs.

(2) Estimated vocational rehabilitation costs, if any.

(3) Itemization of all other estimated expenses to be paid from the reserve.

(d) If an employer properly provides notification to its insurer pursuant to subdivision (b), and the appeals board thereafter determines that no compensation is payable under this division, the insurer shall reimburse the employer for any premium paid solely due to the inclusion of the successfully challenged payments in the calculation of the employer’s experience modification. The employee shall not be required to refund the challenged payment.

history: (History: Amended by Stats. 2022, Ch. 835, Sec. 1. (SB 1127) Effective January 1, 2023.)

article: 3. Insurance Rights and Privileges


citation: LAB § 3762

text:
(a) Except as provided in subdivisions (b) and (c), the insurer shall discuss all elements of the claim file that affect the employer’s premium with the employer, and shall supply copies of the documents that affect the premium at the employer’s expense during reasonable business hours.

(b) The right provided by this section shall not extend to any document that the insurer is prohibited from disclosing to the employer under the attorney-client privilege, any other applicable privilege, or statutory prohibition upon disclosure, or under Section 1877.4 of the Insurance Code.

(c) An insurer, third-party administrator retained by a self-insured employer pursuant to Section 3702.1 to administer the employer’s workers’ compensation claims, and those employees and agents specified by a self-insured employer to administer the employer’s workers’ compensation claims, are prohibited from disclosing or causing to be disclosed to an employer, any medical information, as defined in Section 56.05 of the Civil Code, about an employee who has filed a workers’ compensation claim, except as follows:

(1) Medical information limited to the diagnosis of the mental or physical condition for which workers’ compensation is claimed and the treatment provided for this condition.

(2) Medical information regarding the injury for which workers’ compensation is claimed that is necessary for the employer to have in order for the employer to modify the employee’s work duties.

history: (History: Amended by Stats. 2013, Ch. 444, Sec. 20. (SB 138) Effective January 1, 2014.)

article: 3. Insurance Rights and Privileges


citation: LAB § 3800

text:
(a) Every county or city which requires the issuance of a permit as a condition precedent to the construction, alteration, improvement, demolition, or repair of any building or structure shall require that each applicant for the permit sign a declaration under penalty of perjury verifying workers’ compensation coverage or exemption from coverage, as required by Section 19825 of the Health and Safety Code.

(b) At the time of permit issuance, contractors shall show their valid workers’ compensation insurance certificate, or the city or county may verify the workers’ compensation coverage by electronic means.

history: (History: Amended by Stats. 1999, Ch. 982, Sec. 8. Effective January 1, 2000.)

article: 4. Construction Permit

path: 4. WORKERS' COMPENSATION AND INSURANCE > 4. Compensation Insurance and Security > 4. Construction Permit


citation: LAB § 3820

text:
(a) In enacting this section, the Legislature declares that there exists a compelling interest in eliminating fraud in the workers’ compensation system. The Legislature recognizes that the conduct prohibited by this section is, for the most part, already subject to criminal penalties pursuant to other provisions of law. However, the Legislature finds and declares that the addition of civil money penalties will provide necessary enforcement flexibility. The Legislature, in exercising its plenary authority related to workers’ compensation, declares that these sections are both necessary and carefully tailored to combat the fraud and abuse that is rampant in the workers’ compensation system.

(b) It is unlawful to do any of the following:

(1) Willfully misrepresent any fact in order to obtain workers’ compensation insurance at less than the proper rate.

(2) Present or cause to be presented any knowingly false or fraudulent written or oral material statement in support of, or in opposition to, any claim for compensation for the purpose of obtaining or denying any compensation, as defined in Section 3207.

(3) Knowingly solicit, receive, offer, pay, or accept any rebate, refund, commission, preference, patronage, dividend, discount, or other consideration, whether in the form of money or otherwise, as compensation or inducement for soliciting or referring clients or patients to obtain services or benefits pursuant to Division 4 (commencing with Section 3200) unless the payment or receipt of consideration for services other than the referral of clients or patients is lawful pursuant to Section 650 of the Business and Professions Code or expressly permitted by the Rules of Professional Conduct of the State Bar.

(4) Knowingly operate or participate in a service that, for profit, refers or recommends clients or patients to obtain medical or medical-legal services or benefits pursuant to Division 4 (commencing with Section 3200).

(5) Knowingly assist, abet, solicit, or conspire with any person who engages in an unlawful act under this section.

(c) For the purposes of this section, “statement” includes, but is not limited to, any notice, proof of injury, bill for services, payment for services, hospital or doctor records, X-ray, test results, medical-legal expenses as defined in Section 4620, or other evidence of loss, expense, or payment.

(d) Any person who violates any provision of this section shall be subject, in addition to any other penalties that may be prescribed by law, to a civil penalty of not less than four thousand dollars ($4,000) nor more than ten thousand dollars ($10,000), plus an assessment of not more than three times the amount of the medical treatment expenses paid pursuant to Article 2 (commencing with Section 4600) and medical-legal expenses paid pursuant to Article 2.5 (commencing with Section 4620) for each claim for compensation submitted in violation of this section.

(e) Any person who violates subdivision (b) and who has a prior felony conviction of an offense set forth in Section 1871.1 or 1871.4 of the Insurance Code, or in Section 549 of the Penal Code, shall be subject, in addition to the penalties set forth in subdivision (d), to a civil penalty of four thousand dollars ($4,000) for each item or service with respect to which a violation of subdivision (b) occurred.

(f) The penalties provided for in subdivisions (d) and (e) shall be assessed and recovered in a civil action brought in the name of the people of the State of California by any district attorney.

(g) In assessing the amount of the civil penalty the court shall consider any one or more of the relevant circumstances presented by any of the parties to the case, including, but not limited to, the following: the nature and seriousness of the misconduct, the number of violations, the persistence of the misconduct, the length of time over which the misconduct occurred, the willfulness of the defendant’s misconduct, and the defendant’s assets, liabilities, and net worth.

(h) All penalties collected pursuant to this section shall be paid to the Workers’ Compensation Fraud Account in the Insurance Fund pursuant to Section 1872.83 of the Insurance Code. All costs incurred by district attorneys in carrying out this article shall be funded from the Workers’ Compensation Fraud Account. It is the intent of the Legislature that the program instituted by this article be supported entirely from funds produced by moneys deposited into the Workers’ Compensation Fraud Account from the imposition of civil money penalties for workers’ compensation fraud collected pursuant to this section. All moneys claimed by district attorneys as costs of carrying out this article shall be paid pursuant to a determination by the Fraud Assessment Commission established by Section 1872.83 of the Insurance Code and on appropriation by the Legislature.

history: (History: Amended by Stats. 2002, Ch. 6, Sec. 49. Effective January 1, 2003.)

path: 4. WORKERS' COMPENSATION AND INSURANCE > 4. Compensation Insurance and Security > 5. Workers’ Compensation Misrepresentations


citation: LAB § 3822

text: The administrative director shall, on an annual basis, provide to every employer, claims adjuster, third party administrator, physician, and attorney who participates in the workers’ compensation system, a notice that warns the recipient against committing workers’ compensation fraud. The notice shall specify the penalties that are applied for committing workers’ compensation fraud. The Fraud Assessment Commission, established by Section 1872.83 of the Insurance Code, shall provide the administrative director with all funds necessary to carry out this section.

history: (History: Added by Stats. 2002, Ch. 6, Sec. 50. Effective January 1, 2003.)

article: 5. Workers’ Compensation Misrepresentations


citation: LAB § 3823

text:
(a) The administrative director, in coordination with the Bureau of Fraudulent Claims of the Department of Insurance, the Medi-Cal Fraud Task Force, and the Division of Medi-Cal Fraud and Elder Abuse of the Department of Justice, or their successor entities, shall adopt protocols, to the extent that these protocols are applicable to achieve the purpose of subdivision (b), similar to those adopted by the Department of Insurance concerning medical billing and provider fraud.

(b) An insurer, self-insured employer, third-party administrator, workers’ compensation administrative law judge, audit unit, attorney, or other person that believes that a fraudulent claim has been made by any person or entity providing medical care, as described in Section 4600, shall report the apparent fraudulent claim in the manner prescribed by subdivision (a).

(c) An insurer, self-insured employer, third-party administrator, workers’ compensation administrative law judge, audit unit, attorney, or other person that reports any apparent fraudulent claim under this section shall not be subject to any civil liability in a cause of action of any kind when the insurer, self-insured employer, third-party administrator, workers’ compensation administrative law judge, audit unit, attorney, or other person acts in good faith, without malice, and reasonably believes that the action taken was warranted by the known facts, obtained by reasonable efforts. This section does not abrogate or lessen the existing common law or statutory privileges and immunities of an insurer, self-insured employer, third-party administrator, workers’ compensation administrative law judge, audit unit, attorney, or other person.

history: (History: Amended by Stats. 2021, Ch. 554, Sec. 7. (SB 823) Effective January 1, 2022.)


citation: LAB § 3850

text:
As used in this chapter:

(a) “Employee” includes the person injured and any other person to whom a claim accrues by reason of the injury or death of the former.

(b) “Employer” includes insurer as defined in this division.

(c) “Employer” also includes the Self-Insurers’ Security Fund, where the employer’s compensation obligations have been assumed pursuant to Section 3743.

history: (History: Amended by Stats. 1984, Ch. 252, Sec. 6. Effective June 27, 1984.)

chapter: 5. Subrogation of Employer

path: 4. WORKERS' COMPENSATION AND INSURANCE > 5. Subrogation of Employer


citation: LAB § 3851

text: The death of the employee or of any other person, does not abate any right of action established by this chapter.


citation: LAB § 3852

text:
(a) The claim of an employee, including, but not limited to, any peace officer or firefighter, for compensation does not affect their claim or right of action for all damages proximately resulting from the injury or death against any person other than the employer. Except as provided in subdivision (b), an employer who pays, or becomes obligated to pay compensation, or who pays, or becomes obligated to pay salary in lieu of compensation, or who pays or becomes obligated to pay an amount to the Department of Industrial Relations pursuant to Section 4706.5, may likewise make a claim or bring an action against the third person. In the latter event the employer may recover in the same suit, in addition to the total amount of compensation, damages for which they were liable including all salary, wage, pension, or other emolument paid to the employee or to their dependents. The respective rights against the third person of the heirs of an employee claiming under Section 377.60 of the Code of Civil Procedure, and an employer claiming pursuant to this section, shall be determined by the court.

(b) (1) This subdivision applies only to an employee who is a peace officer, as defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code, or a firefighter who is employed by any of the following:

(A) A city.

(B) A county.

(C) A city and county.

(D) A fire protection district.

(2) An employer of an employee described in paragraph (1) shall be entitled to receive no more than one-third of a third-party defendant’s applicable liability insurance policy limits, if both of the following are true:

(A) The employee establishes that their total damages exceed the net recovery available after satisfaction of the employer’s claim.

(B) The total liability insurance limits available are insufficient to fully compensate the employer and employee’s proven damages.

(3) The one-third maximum allocation under this subdivision is intended to reflect a fair and equitable share of the recovery in light of the injured employee’s total damages, attorney’s fees, and costs of suit, and shall be deemed exclusive of any lien or offset by the employer.

(4) The employer’s right to reimbursement or subrogation shall be subordinate to the maximum allocation set forth in this subdivision. The maximum allocation to the employer described in this subdivision shall apply to all settlement agreements and judgments and shall take precedence over any employer lien or subrogation claim. Any remaining proceeds may then be allocated in accordance with existing lien and subrogation principles.

history: (History: Amended by Stats. 2025, Ch. 763, Sec. 1. (SB 487) Effective January 1, 2026.)


citation: LAB § 3853

text: If either the employee or the employer brings an action against such third person, he shall forthwith give to the other a copy of the complaint by personal service or certified mail. Proof of such service shall be filed in such action. If the action is brought by either the employer or employee, the other may, at any time before trial on the facts, join as party plaintiff or shall consolidate his action, if brought independently.

history: (History: Amended by Stats. 1980, Ch. 582.)


citation: LAB § 3854

text: If the action is prosecuted by the employer alone, evidence of any amount which the employer has paid or become obligated to pay by reason of the injury or death of the employee is admissible, and such expenditures or liability shall be considered as proximately resulting from such injury or death in addition to any other items of damage proximately resulting therefrom.

history: (History: Amended by Stats. 1959, Ch. 1255.)


citation: LAB § 3855

text: If the employee joins in or prosecutes such action, either the evidence of the amount of disability indemnity or death benefit paid or to be paid by the employer or the evidence of loss of earning capacity by the employee shall be admissible, but not both. Proof of all other items of damage to either the employer or employee proximately resulting from such injury or death is admissible and is part of the damages.


citation: LAB § 3856

text:
In the event of suit against such third party:

(a) If the action is prosecuted by the employer alone, the court shall first order paid from any judgment for damages recovered the reasonable litigation expenses incurred in preparation and prosecution of such action, together with a reasonable attorney’s fee which shall be based solely upon the services rendered by the employer’s attorney in effecting recovery both for the benefit of the employer and the employee. After the payment of such expenses and attorney’s fees, the court shall apply out of the amount of such judgment an amount sufficient to reimburse the employer for the amount of his expenditure for compensation together with any amounts to which he may be entitled as special damages under Section 3852 and shall order any excess paid to the injured employee or other person entitled thereto.

(b) If the action is prosecuted by the employee alone, the court shall first order paid from any judgment for damages recovered the reasonable litigation expenses incurred in preparation and prosecution of such action, together with a reasonable attorney’s fee which shall be based solely upon the services rendered by the employee’s attorney in effecting recovery both for the benefit of the employee and the employer. After the payment of such expenses and attorney’s fee the court shall, on application of the employer, allow as a first lien against the amount of such judgment for damages, the amount of the employer’s expenditure for compensation together with any amounts to which he may be entitled as special damages under Section 3852.

(c) If the action is prosecuted both by the employee and the employer, in a single action or in consolidated actions, and they are represented by the same agreed attorney or by separate attorneys, the court shall first order paid from any judgment for damages recovered, the reasonable litigation expenses incurred in preparation and prosecution of such action or actions, together with reasonable attorneys’ fees based solely on the services rendered for the benefit of both parties where they are represented by the same attorney, and where they are represented by separate attorneys, based solely upon the service rendered in each instance by the attorney in effecting recovery for the benefit of the party represented. After the payment of such expenses and attorneys’ fees the court shall apply out of the amount of such judgment for damages an amount sufficient to reimburse the employer for the amount of his expenditures for compensation together with any other amounts to which he may be entitled as special damages under Section 3852.

(d) The amount of reasonable litigation expenses and the amount of attorneys’ fees under subdivisions (a), (b), and (c) of this section shall be fixed by the court. Where the employer and employee are represented by separate attorneys they may propose to the court, for its consideration and determination, the amount and division of such expenses and fees.

history: (History: Repealed and added by Stats. 1959, Ch. 1255.)


citation: LAB § 3857

text: The court shall, upon further application at any time before the judgment is satisfied, allow as a further lien the amount of any expenditures of the employer for compensation subsequent to the original order.


citation: LAB § 3858

text:
(a) Except as provided in subdivision (b), after payment of litigation expenses and attorney’s fees fixed by the court pursuant to Section 3856 and payment of the employer’s lien, the employer shall be relieved from the obligation to pay further compensation to or on behalf of the employee under this division up to the entire amount of the balance of the judgment, if satisfied, without any deduction. No satisfaction of such judgment in whole or in part, shall be valid without giving the employer notice and a reasonable opportunity to perfect and satisfy their lien.

(b) In any case governed by subdivision (b) of Section 3852, the employer’s lien or subrogation rights shall be limited to the portion of the recovery allocated to the employer and the employer shall have no right to assert any credit or offset against future workers’ compensation benefits owed to the employee, including, but not limited to, temporary disability, permanent disability, medical treatment, or vocational rehabilitation. The recovery allocated to the employer under subdivision (b) of Section 3852 shall not affect or diminish the employer’s obligation to provide any compensation under this division.

history: (History: Amended by Stats. 2025, Ch. 763, Sec. 2. (SB 487) Effective January 1, 2026.)


citation: LAB § 3859

text:
(a) (1) Except as provided in paragraph (2), a release or settlement of any claim under this chapter as to either the employee or the employer is not valid without the written consent of both. Proof of service filed with the court is sufficient in any action or proceeding where such approval is required by law.

(2) The written consent of the employer is not required in a claim that is subject to subdivision (b) of Section 3852.

(b) (1) Notwithstanding anything to the contrary contained in this chapter, an employee may settle and release any claim they may have against a third party without the consent of the employer. Except as provided in paragraph (2), a settlement or release shall be subject to the employer’s right to proceed to recover compensation they have paid in accordance with Section 3852.

(2) In any case governed by subdivision (b) of Section 3852, a settlement or release shall limit the employer’s claim for reimbursement to the portion of the settlement allocated to the employer pursuant to subdivision (b) of Section 3852.

history: (History: Amended by Stats. 2025, Ch. 763, Sec. 3. (SB 487) Effective January 1, 2026.)


citation: LAB § 3860

text:
(a) (1) Except as provided in paragraph (2), a release or settlement under this chapter, with or without suit, is not valid or binding as to any party thereto without notice to both the employer and the employee, with opportunity to the employer to recover the amount of compensation the employer has paid or become obligated to pay and any special damages to which the employer may be entitled under Section 3852, and opportunity to the employee to recover all damages the employee has suffered and with provision for determination of expenses and attorney’s fees as herein provided.

(2) If the employee is a peace officer, as defined in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code, or a firefighter, a release or settlement, with or without suit, subject to subdivision (b) of Section 3852, is not valid or binding unless it provides that the employer shall not receive more than one-third of the third-party insurance limits.

(b) (1) Except as provided in paragraph (2) and Section 3859, the entire amount of the settlement, with or without suit, is subject to the employer’s full claim for reimbursement for compensation the employer has paid or become obligated to pay and any special damages to which the employer may be entitled under Section 3852, together with expenses and attorney’s fees, if any, subject to the limitations in this section set forth.

(2) Pursuant to subdivision (b) of Section 3852, the employer’s claim for reimbursement shall be limited to the portion of the settlement allocated to the employer. The employer shall have no right to assert any credit or offset against future workers’ compensation benefits.

(c) If settlement is effected, with or without suit, solely through the efforts of the employee’s attorney, then prior to the reimbursement of the employer, as provided in subdivision (b) hereof, there shall be deducted from the amount of the settlement the reasonable expenses incurred in effecting settlement, including costs of suit, if any, together with reasonable attorney’s fees to be paid to the employee’s attorney, for services rendered in securing and effecting settlement for the benefit of both the employer and the employee.

(d) If settlement is effected, with or without suit, solely through the efforts of the employer’s attorney, then, prior to the reimbursement of the employer as provided in subdivision (b) hereof, there shall be deducted from the amount of the settlement the reasonable expenses incurred in effecting settlement, including costs of suit, if any, together with reasonable attorney’s fees to be paid to the employer’s attorney, for services rendered in securing and effecting settlement for the benefit of both the employer and the employee.

(e) If both the employer and the employee are represented by the same agreed attorney or by separate attorneys in effecting a settlement, with or without suit, prior to reimbursement of the employer, as provided in subdivision (b) hereof, there shall be deducted from the amount of the settlement the reasonable expenses incurred by both the employer and the employee or on behalf of either, including costs of suit, if any, together with reasonable attorney’s fees to be paid to the respective attorneys for the employer and the employee, based upon the respective services rendered in securing and effecting settlement for the benefit of the party represented. If both parties are represented by the same attorney, by agreement, the attorney’s fees shall be based on the services rendered for the benefit of both.

(f) The amount of expenses and attorney’s fees referred to in this section shall, on settlement of suit, or on any settlement requiring court approval, be set by the court. In all other cases these amounts shall be set by the appeals board. If the employer and the employee are represented by separate attorneys they may propose to the court or the appeals board, for consideration and determination, the amount and division of those expenses and fees.

history: (History: Amended by Stats. 2025, Ch. 763, Sec. 4. (SB 487) Effective January 1, 2026.)


citation: LAB § 3861

text:
(a) Except as provided in subdivision (b), the appeals board is empowered to and shall allow, as a credit to the employer to be applied against their liability for compensation, such amount of any recovery by the employee for their injury, either by settlement or after judgment, as has not theretofore been applied to the payment of expenses or attorneys’ fees, pursuant to the provisions of Sections 3856, 3858, and 3860, or has not been applied to reimburse the employer.

(b) In a claim subject to subdivision (b) of Section 3852, the employer shall not assert, claim, or enforce any credit or offset against any future workers’ compensation benefits, including, but not limited to, future indemnity, medical, and vocational rehabilitation benefits, based on the employee’s civil recovery from a third-party tortfeasor. The appeals board is not empowered and shall not allow such a credit to be applied to the employer.

history: (History: Amended by Stats. 2025, Ch. 763, Sec. 5. (SB 487) Effective January 1, 2026.)


citation: LAB § 3862

text:
(a) Except as provided in subdivision (b), an employer entitled to and who has been allowed and has perfected a lien upon the judgment or award in favor of an employee against any third party for damages occasioned to the same employer by payment of compensation, expenses of medical treatment, and any other charges under this act, may enforce payment of the lien against the third party, or, in case the damages recovered by the employee have been paid to the employee, against the employee to the extent of the lien, in the manner provided for enforcement of money judgments generally.

(b) Pursuant to subdivision (b) of Section 3852, the employer’s claim for reimbursement shall be limited to the portion of the settlement allocated to the employer. The employer shall have no right to assert any credit or offset against future workers’ compensation benefits.

history: (History: Amended by Stats. 2025, Ch. 763, Sec. 6. (SB 487) Effective January 1, 2026.)


citation: LAB § 3864

text: If an action as provided in this chapter prosecuted by the employee, the employer, or both jointly against the third person results in judgment against such third person, or settlement by such third person, the employer shall have no liability to reimburse or hold such third person harmless on such judgment or settlement in absence of a written agreement so to do executed prior to the injury.

history: (History: Added by Stats. 1959, Ch. 955.)


citation: LAB § 3865

text: Any judgment or settlement of an action as provided for in this chapter is, upon notice to the court, subject to the same lien claims of the Employment Development Department as are provided for in Chapter 1 (commencing with Section 4900) of Part 3, and shall be allowed by the court as it determines necessary to avoid a duplication of payment as compensation to the employee for lost earnings.

history: (History: Added by Stats. 1989, Ch. 1280, Sec. 1.)


citation: LAB § 4050

text: Whenever the right to compensation under this division exists in favor of an employee, he shall, upon the written request of his employer, submit at reasonable intervals to examination by a practicing physician, provided and paid for by the employer, and shall likewise submit to examination at reasonable intervals by any physician selected by the administrative director or appeals board or referee thereof.

history: (History: Amended by Stats. 1965, Ch. 1513.)

chapter: 7. Medical Examinations

path: 4. WORKERS' COMPENSATION AND INSURANCE > 7. Medical Examinations


citation: LAB § 4051

text: The request or order for the medical examination shall fix a time and place therefor, due consideration being given to the convenience of the employee and his physical condition and ability to attend at the time and place fixed.

history: (History: Enacted by Stats. 1937, Ch. 90.)


citation: LAB § 4052

text: The employee may employ at his own expense a physician, to be present at any examination required by his employer.


citation: LAB § 4053

text: So long as the employee, after written request of the employer, fails or refuses to submit to such examination or in any way obstructs it, his right to begin or maintain any proceeding for the collection of compensation shall be suspended.


citation: LAB § 4054

text: If the employee fails or refuses to submit to examination after direction by the appeals board, or a referee thereof, or in any way obstructs the examination, his right to the disability payments which accrue during the period of such failure, refusal or obstruction, shall be barred.


citation: LAB § 4055

text: Any physician who makes or is present at any such examination may be required to report or testify as to the results thereof.


text: Any party who subpoenas records in any proceeding under this division shall concurrent with service of the subpoena upon the person who has possession of the records, send a copy of the subpoena to all parties of record in the proceeding.

history: (History: Amended by Stats. 1999, Ch. 444, Sec. 7. Effective January 1, 2000.)


citation: LAB § 4056

text: No compensation is payable in case of the death or disability of an employee when his death is caused, or when and so far as his disability is caused, continued, or aggravated, by an unreasonable refusal to submit to medical treatment, or to any surgical treatment, if the risk of the treatment is, in the opinion of the appeals board, based upon expert medical or surgical advice, inconsiderable in view of the seriousness of the injury.


citation: LAB § 4060

text:
(a) This section shall apply to disputes over the compensability of any injury. This section shall not apply where injury to any part or parts of the body is accepted as compensable by the employer.

(b) Neither the employer nor the employee shall be liable for any comprehensive medical-legal evaluation performed by other than the treating physician, except as provided in this section. However, reports of treating physicians shall be admissible.

(c) If a medical evaluation is required to determine compensability at any time after the filing of the claim form, and the employee is represented by an attorney, a medical evaluation to determine compensability shall be obtained only by the procedure provided in Section 4062.2.

(d) If a medical evaluation is required to determine compensability at any time after the claim form is filed, and the employee is not represented by an attorney, the employer shall provide the employee with notice either that the employer requests a comprehensive medical evaluation to determine compensability or that the employer has not accepted liability and the employee may request a comprehensive medical evaluation to determine compensability. Either party may request a comprehensive medical evaluation to determine compensability. The evaluation shall be obtained only by the procedure provided in Section 4062.1.

(e) The notice required by subdivision (d) shall be accompanied by the form prescribed by the administrative director for requesting the assignment of a panel of qualified medical evaluators.

history: (History: Amended by Stats. 2011, Ch. 544, Sec. 3. (AB 335) Effective January 1, 2012.)

article: 2. Determination of Medical Issues

path: 4. WORKERS' COMPENSATION AND INSURANCE > 7. Medical Examinations > 2. Determination of Medical Issues


citation: LAB § 4061

text:
This section shall not apply to the employee’s dispute of a utilization review decision under Section 4610, nor to the employee’s dispute of the medical provider network treating physician’s diagnosis or treatment recommendations under Sections 4616.3 and 4616.4.

(a) Together with the last payment of temporary disability indemnity, the employer shall, in a form prescribed by the administrative director pursuant to Section 138.4, provide the employee one of the following:

(1) Notice either that no permanent disability indemnity will be paid because the employer alleges the employee has no permanent impairment or limitations resulting from the injury or notice of the amount of permanent disability indemnity determined by the employer to be payable. If the employer determines permanent disability indemnity is payable, the employer shall advise the employee of the amount determined payable and the basis on which the determination was made, whether there is need for future medical care, and whether an indemnity payment will be deferred pursuant to paragraph (2) of subdivision (b) of Section 4650.

(2) Notice that permanent disability indemnity may be or is payable, but that the amount cannot be determined because the employee’s medical condition is not yet permanent and stationary. The notice shall advise the employee that his or her medical condition will be monitored until it is permanent and stationary, at which time the necessary evaluation will be performed to determine the existence and extent of permanent impairment and limitations for the purpose of rating permanent disability and to determine whether there will be the need for future medical care, or at which time the employer will advise the employee of the amount of permanent disability indemnity the employer has determined to be payable.

(b) If either the employee or employer objects to a medical determination made by the treating physician concerning the existence or extent of permanent impairment and limitations or the need for future medical care, and the employee is represented by an attorney, a medical evaluation to determine permanent disability shall be obtained as provided in Section 4062.2.

(c) If either the employee or employer objects to a medical determination made by the treating physician concerning the existence or extent of permanent impairment and limitations or the need for future medical care, and if the employee is not represented by an attorney, the employer shall immediately provide the employee with a form prescribed by the medical director with which to request assignment of a panel of three qualified medical evaluators. Either party may request a comprehensive medical evaluation to determine permanent disability or the need for future medical care, and the evaluation shall be obtained only by the procedure provided in Section 4062.1.

(d) (1) Within 30 days of receipt of a report from a qualified medical evaluator who has evaluated an unrepresented employee, the unrepresented employee or the employer may each request one supplemental report seeking correction of factual errors in the report. Any of these requests shall be made in writing. A request made by the employer shall be provided to the employee, and a request made by the employee shall be provided to the employer, insurance carrier, or claims administrator at the time the request is sent to the evaluator. A request for correction that is made by the employer shall also inform the employee of the availability of information and assistance officers to assist him or her in responding to the request, if necessary.

(2) The permanent disability rating procedure set forth in subdivision (e) shall not be invoked by the unrepresented employee or the employer when a request for correction pursuant to paragraph (1) is pending.

(e) The qualified medical evaluator who has evaluated an unrepresented employee shall serve the comprehensive medical evaluation and the summary form on the employee, employer, and the administrative director. The unrepresented employee or the employer may submit the treating physician’s evaluation for the calculation of a permanent disability rating. Within 20 days of receipt of the comprehensive medical evaluation, the administrative director shall calculate the permanent disability rating according to Section 4660 or 4660.1, as applicable, and serve the rating on the employee and employer.

(f) Any comprehensive medical evaluation concerning an unrepresented employee which indicates that part or all of an employee’s permanent impairment or limitations may be subject to apportionment pursuant to Sections 4663 and 4664 shall first be submitted by the administrative director to a workers’ compensation judge who may refer the report back to the qualified medical evaluator for correction or clarification if the judge determines the proposed apportionment is inconsistent with the law.

(g) Within 30 days of receipt of the rating, if the employee is unrepresented, the employee or employer may request that the administrative director reconsider the recommended rating or obtain additional information from the treating physician or medical evaluator to address issues not addressed or not completely addressed in the original comprehensive medical evaluation or not prepared in accord with the procedures promulgated under paragraph (2) or (3) of subdivision (j) of Section 139.2. This request shall be in writing, shall specify the reasons the rating should be reconsidered, and shall be served on the other party. If the administrative director finds the comprehensive medical evaluation is not complete or not in compliance with the required procedures, the administrative director shall return the report to the treating physician or qualified medical evaluator for appropriate action as the administrative director instructs. Upon receipt of the treating physician’s or qualified medical evaluator’s final comprehensive medical evaluation and summary form, the administrative director shall recalculate the permanent disability rating according to Section 4660 or 4660.1, as applicable, and serve the rating, the comprehensive medical evaluation, and the summary form on the employee and employer.

(h) (1) If a comprehensive medical evaluation from the treating physician or an agreed medical evaluator or a qualified medical evaluator selected from a three-member panel resolves any issue so as to require an employer to provide compensation, the employer shall commence the payment of compensation, except as provided pursuant to paragraph (2) of subdivision (b) of Section 4650, or promptly commence proceedings before the appeals board to resolve the dispute.

(2) If the employee and employer agree to a stipulated findings and award as provided under Section 5702 or to compromise and release the claim under Chapter 2 (commencing with Section 5000) of Part 3, or if the employee wishes to commute the award under Chapter 3 (commencing with Section 5100) of Part 3, the appeals board shall first determine whether the agreement or commutation is in the best interests of the employee and whether the proper procedures have been followed in determining the permanent disability rating. The administrative director shall promulgate a form to notify the employee, at the time of service of any rating under this section, of the options specified in this subdivision, the potential advantages and disadvantages of each option, and the procedure for disputing the rating.

(i) No issue relating to a dispute over the existence or extent of permanent impairment and limitations resulting from the injury may be the subject of a declaration of readiness to proceed unless there has first been a medical evaluation by a treating physician and by either an agreed or qualified medical evaluator. With the exception of an evaluation or evaluations prepared by the treating physician or physicians, no evaluation of permanent impairment and limitations resulting from the injury shall be obtained, except in accordance with Section 4062.1 or 4062.2. Evaluations obtained in violation of this prohibition shall not be admissible in any proceeding before the appeals board.

history: (History: Amended by Stats. 2013, Ch. 287, Sec. 4. (SB 375) Effective January 1, 2014.)

article: 2. Determination of Medical Issues


text: The treating physician primarily responsible for managing the care of the injured worker or the physician designated by that treating physician shall, in accordance with rules promulgated by the administrative director, render opinions on all medical issues necessary to determine eligibility for compensation. In the event that there is more than one treating physician, a single report shall be prepared by the physician primarily responsible for managing the injured worker’s care that incorporates the findings of the various treating physicians.

history: (History: Added by Stats. 1993, Ch. 121, Sec. 31. Effective July 16, 1993.)

article: 2. Determination of Medical Issues


citation: LAB § 4062

text:
(a) If either the employee or employer objects to a medical determination made by the treating physician concerning any medical issues not covered by Section 4060 or 4061 and not subject to Section 4610, the objecting party shall notify the other party in writing of the objection within 20 days of receipt of the report if the employee is represented by an attorney or within 30 days of receipt of the report if the employee is not represented by an attorney. These time limits may be extended for good cause or by mutual agreement. If the employee is represented by an attorney, a medical evaluation to determine the disputed medical issue shall be obtained as provided in Section 4062.2, and no other medical evaluation shall be obtained. If the employee is not represented by an attorney, the employer shall immediately provide the employee with a form prescribed by the medical director with which to request assignment of a panel of three qualified medical evaluators, the evaluation shall be obtained as provided in Section 4062.1, and no other medical evaluation shall be obtained.

(b) If the employee objects to a decision made pursuant to Section 4610 to modify, delay, or deny a request for authorization of a medical treatment recommendation made by a treating physician, the objection shall be resolved only in accordance with the independent medical review process established in Section 4610.5.

(c) If the employee objects to the diagnosis or recommendation for medical treatment by a physician within the employer’s medical provider network established pursuant to Section 4616, the objection shall be resolved only in accordance with the independent medical review process established in Sections 4616.3 and 4616.4.

history: (History: Amended by Stats. 2012, Ch. 363, Sec. 28. (SB 863) Effective January 1, 2013.)

article: 2. Determination of Medical Issues


text:
(a) If an employee is not represented by an attorney, the employer shall not seek agreement with the employee on an agreed medical evaluator, nor shall an agreed medical evaluator prepare the formal medical evaluation on any issues in dispute.

(b) If either party requests a medical evaluation pursuant to Section 4060, 4061, or 4062, either party may submit the form prescribed by the administrative director requesting the medical director to assign a panel of three qualified medical evaluators in accordance with Section 139.2. However, the employer may not submit the form unless the employee has not submitted the form within 10 days after the employer has furnished the form to the employee and requested the employee to submit the form. The party submitting the request form shall designate the specialty of the physicians that will be assigned to the panel.

(c) Within 10 days of the issuance of a panel of qualified medical evaluators, the employee shall select a physician from the panel to prepare a medical evaluation, the employee shall schedule the appointment, and the employee shall inform the employer of the selection and the appointment. If the employee does not inform the employer of the selection within 10 days of the assignment of a panel of qualified medical evaluators, then the employer may select the physician from the panel to prepare a medical evaluation. If the employee informs the employer of the selection within 10 days of the assignment of the panel but has not made the appointment, or if the employer selects the physician pursuant to this subdivision, then the employer shall arrange the appointment. Upon receipt of written notice of the appointment arrangements from the employee, or upon giving the employee notice of an appointment arranged by the employer, the employer shall furnish payment of estimated travel expense.

(d) The evaluator shall give the employee, at the appointment, a brief opportunity to ask questions concerning the evaluation process and the evaluator’s background. The unrepresented employee shall then participate in the evaluation as requested by the evaluator unless the employee has good cause to discontinue the evaluation. For purposes of this subdivision, “good cause” shall include evidence that the evaluator is biased against the employee because of his or her race, sex, national origin, religion, or sexual preference or evidence that the evaluator has requested the employee to submit to an unnecessary medical examination or procedure. If the unrepresented employee declines to proceed with the evaluation, he or she shall have the right to a new panel of three qualified medical evaluators from which to select one to prepare a comprehensive medical evaluation. If the appeals board subsequently determines that the employee did not have good cause to not proceed with the evaluation, the cost of the evaluation shall be deducted from any award the employee obtains.

(e) If an employee has received a comprehensive medical-legal evaluation under this section, and he or she later becomes represented by an attorney, he or she shall not be entitled to an additional evaluation.

history: (History: Amended by Stats. 2004, Ch. 34, Sec. 16. Effective April 19, 2004.)

article: 2. Determination of Medical Issues


text:
(a) Whenever a comprehensive medical evaluation is required to resolve any dispute arising out of an injury or a claimed injury occurring on or after January 1, 2005, and the employee is represented by an attorney, the evaluation shall be obtained only as provided in this section.

(b) No earlier than the first working day that is at least 10 days after the date of mailing of a request for a medical evaluation pursuant to Section 4060 or the first working day that is at least 10 days after the date of mailing of an objection pursuant to Sections 4061 or 4062, either party may request the assignment of a three-member panel of qualified medical evaluators to conduct a comprehensive medical evaluation. The party submitting the request shall designate the specialty of the medical evaluator, the specialty of the medical evaluator requested by the other party if it has been made known to the party submitting the request, and the specialty of the treating physician. The party submitting the request form shall serve a copy of the request form on the other party.

(c) Within 10 days of assignment of the panel by the administrative director, each party may strike one name from the panel. The remaining qualified medical evaluator shall serve as the medical evaluator. If a party fails to exercise the right to strike a name from the panel within 10 days of assignment of the panel by the administrative director, the other party may select any physician who remains on the panel to serve as the medical evaluator. The administrative director may prescribe the form, the manner, or both, by which the parties shall conduct the selection process.

(d) The represented employee shall be responsible for arranging the appointment for the examination, but upon his or her failure to inform the employer of the appointment within 10 days after the medical evaluator has been selected, the employer may arrange the appointment and notify the employee of the arrangements. The employee shall not unreasonably refuse to participate in the evaluation.

(e) If an employee has received a comprehensive medical-legal evaluation under this section, and he or she later ceases to be represented, he or she shall not be entitled to an additional evaluation.

(f) The parties may agree to an agreed medical evaluator at any time, except as to issues subject to the independent medical review process established pursuant to Section 4610.5. A panel shall not be requested pursuant to subdivision (b) on any issue that has been agreed to be submitted to or has been submitted to an agreed medical evaluator unless the agreement has been canceled by mutual written consent.

history: (History: Amended by Stats. 2012, Ch. 363, Sec. 29. (SB 863) Effective January 1, 2013.)

article: 2. Determination of Medical Issues