December is usually a very busy month for many businesses. The workers’ compensation “industry” is no different. Not only are underwriters burning the midnight oil to get quotes out for January 1 new and renewal business, but a whole host of service providers are trying to get ready for new laws that will be on the books at the beginning of the New Year. These range from new obligations under the California Consumer Privacy Act (CCPA) to revised and recast COVID-19 workplace safety reporting and notification obligations.
Employers are also coming to grips with yet another increase in assessments to fund various operations of the Department of Industrial Relations. The good news was delivered shortly after Thanksgiving. The fiscal year 2022/23 assessments will total slightly more than $1.5 billion. As is now perennially the case, the money needed for payments from the Subsequent Injury Benefits Trust Fund raise more questions, the answers to which still appear elusive. Whether policymakers will ask them and expect answers remains to be seen in 2023.
For many employers in Northern California (and San Diego), January 1 also brings increases in minimum wages of varying amounts. These cities have adopted minimum wage requirements higher than the minimum wage set by the State of California.
The statewide minimum wage increases to $15.50 regardless of the size of the business at the beginning of the year. July 1 will bring increases in many Southern California jurisdictions. These increases will increase payroll and to the exposure for workers’ comp insurance. The many different wages in cities throughout the state also increase the risk of errors in wage payments and the persistent threat of action by the Division of Labor Standards Enforcement or suits under the Labor Code Private Attorneys General Act (PAGA). It pays, in more ways than one, to be prepared for these changes.
By the end of December, we will likely have the next iteration of COVID-19 prevention safety regulations, assuming the Occupational Safety and Health Standards Board and the Office of Administrative Law cooperate. That also means the end to the COVID-19 Prevention Emergency Temporary Standard (ETS) and the obligation to pay supplemental paid sick leave mandated by the Legislature. Whether this will cause the Legislature to act again in January, as it did this year, to reinstate some form of supplement sick leave or exclusion pay retroactive to January 1, 2023 should be known fairly early in the legislative session.
So, before we close the books on 2022 there is much still to be done. And come January 1, when the 2023 edition of California’s complex and costly workers’ compensation system is opened, it will already have the Forward and the Table of Contents written – at least in draft form.
Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.