New California Workers’ Compensation Law –
Revised Rules for Excluded Employees

There is a new law in California, Assembly Bill 2883, that will affect any company’s workers’ compensation operating within the state. Specifically, the Bill amended the requirements for including or excluding directors, officers, partners, and members of limited liability companies under workers’ compensation policies in effect January 1, 2017.

The law now includes under the Workers’ Compensation Act all officers, directors, partners, and members of LLCs. The following individuals have the ability to exclude themselves with a waiver:

  • Directors and officers who own 15% or more of the issued and outstanding stock of the corporation
  • General partners of partnerships
  • Managing members of LLCs

Any existing endorsement on any policy effective January 1, 2017, or later, both in-force and renewals, which excludes a director, officer, general partner, or managing LLC member will be removed immediately. Policies will not be endorsed to exclude any of these individuals without a fully executed waiver form from an individual eligible for exclusion.

California has provided waiver forms to be used for exclusion, and should be sent with this advisory. The waiver will be effective on the date of receipt and acceptance by the insurance carrier and will remain in effect until the individual provides a written withdrawal of the waiver.

If you have any questions, concerns, or want more information, please contact your Parker, Smith & Feek account team.

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