Amended  IN  Senate  April 09, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 880

Introduced by Senator Bradford Pan

January 10, 2018

An act to amend Section 139.43 amend, repeal, and add Section 4651 of the Labor Code, relating to workers’ compensation.


LEGISLATIVE COUNSEL'S DIGEST


SB 880, as amended, Bradford Pan. Workers’ compensation.
Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment. Existing law prohibits a disability indemnity payment from being made by any written instrument unless it is immediately negotiable and payable in cash, on demand, without discount, at some established place of business in the state.
This bill would, until January 1, 2023, authorize the State Compensation Insurance Fund (SCIF), with the written consent of the employee, to deposit temporary disability indemnity payments for the employee in a prepaid card account that meets specified requirements, including, among other things, allowing the employee reasonable access to in-network automatic teller machines. The bill would require SCIF to issue a report on or before December 1, 2022, to the Legislature regarding payments made to those prepaid card accounts, as specified.

Existing law prohibits a person or entity, other than physicians or attorneys, from advertising, printing, displaying, publishing, distributing, or broadcasting in any manner a statement concerning services or benefits to be provided to an injured worker, which is paid for by that person or entity that is false, misleading, or deceptive. Violation of these provisions is a misdemeanor punishable by incarceration in the county jail for not more than one year, or by a fine not exceeding $10,000, or by both that imprisonment and fine.

This bill would make technical, nonsubstantive changes to the above provision and would delete an obsolete provision.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 4651 of the Labor Code is amended to read:

4651.
 (a) No (1) A disability indemnity payment shall not be made by any written instrument unless it is immediately negotiable and payable in cash, on demand, without discount discount, at some established place of business in the state.

Nothing in this section shall

(2) This section does not prohibit an employer from depositing the disability indemnity payment in an account in any bank, savings and loan association association, or credit union of the employee’s choice in this state, provided the employee has voluntarily authorized the deposit, nor shall does it prohibit an employer from electronically depositing the disability indemnity payment in an account in any bank, savings and loan association, or credit union, that the employee has previously authorized to receive electronic deposits of payroll, unless the employee has requested, in writing, that disability indemnity benefits not be electronically deposited in the account.
(3) (A) The State Compensation Insurance Fund (SCIF) may commence a program under which SCIF deposits temporary disability indemnity payments in a prepaid card account for the employee. The employee shall provide written consent for SCIF to use a prepaid card account for the employee’s temporary disability payments. The prepaid card account shall meet the applicable requirements of Section 1339.1 of the Unemployment Insurance Code. For purposes of this section, the terms “prepaid card” and “prepaid card account” have the same meanings as defined in Section 1339.1 of the Unemployment Insurance Code. For purposes of this section, a prepaid card shall also meet all of the following requirements:
(i) Allow the employee to withdraw the entire balance on the card in one transaction without incurring fees.
(ii) Allow the employee reasonable access to in-network automatic teller machines (ATMs).
(iii) Allow the employee to make point-of-sale purchases without incurring fees from the financial institution.
(iv) Prohibit a link to any form of credit, including a loan against future payments or a cash advance on future payments.
(B) The fees associated with the use of the prepaid card shall be disclosed to the employee in writing. The only permissible fees associated with the use of a prepaid card are those for a replacement card provided through expedited delivery, out-of-network ATM fees on the third and subsequent withdrawal per deposit, and fees associated with foreign transactions.
(C) If an employee has consented to use the prepaid card payment system under this section, either SCIF or the employee may opt to change the method of payment to another method consistent with this section by providing 30 days’ written notice to the other party.
(D) On or before December 1, 2022, SCIF shall issue a report to the Legislature on payments made to prepaid card accounts including, but not limited to, the following:
(i) The number of employees who elected to receive their temporary disability indemnity payments in a prepaid card account.
(ii) The cash value of the temporary disability benefits sent to prepaid card accounts.
(iii) The number of employees who opted to change the method of payment from a prepaid card account to either a written instrument or electronic deposit.
(E) The report issued pursuant to subparagraph (D) shall comply with Section 9795 of the Government Code.
(b) It is not a violation of this section if a delay in the negotiation of a written instrument is caused solely by the application of state or federal banking laws or regulations.

(c)On or before July 1, 2004, the administrative director shall present to the Governor recommendations on how to provide better access to funds paid to injured workers in light of the requirements of federal and state laws and regulations governing the negotiability of disability indemnity payments. The administrative director shall make specific recommendations regarding payments to migratory and seasonal farmworkers. The Commission on Health and Safety and Workers’ Compensation and the Employment Development Department shall assist the administrative director in the completion of this report.

(c) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 2.

 Section 4651 is added to the Labor Code, to read:

4651.
 (a) A disability indemnity payment shall not be made by any written instrument unless it is immediately negotiable and payable in cash, on demand, without discount, at some established place of business in the state.
(b) This section does not prohibit an employer from depositing the disability indemnity payment in an account in any bank, savings and loan association, or credit union of the employee’s choice in this state, provided the employee has voluntarily authorized the deposit, nor does it prohibit an employer from electronically depositing the disability indemnity payment in an account in any bank, savings and loan association, or credit union that the employee has previously authorized to receive electronic deposits of payroll, unless the employee has requested, in writing, that disability indemnity benefits not be electronically deposited in the account.
(c) It is not a violation of this section if a delay in the negotiation of a written instrument is caused solely by the application of state or federal banking laws or regulations.
(d) This section shall become operative on January 1, 2023.

SECTION 1.Section 139.43 of the Labor Code is amended to read:
139.43.

(a)A person or entity shall not advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast in any manner, any statement concerning services or benefits to be provided to an injured worker, that is paid for directly or indirectly by that person or entity and is false, misleading, or deceptive, or that omits material information necessary to make the statement therein not false, misleading, or deceptive.

(b)The administrative director shall adopt regulations governing advertising by persons or entities other than physicians and attorneys with respect to services or benefits for injured workers. In promulgating regulations pursuant to this subdivision, the administrative director shall review existing regulations, including those adopted by the State Bar, to identify those regulatory approaches that may serve as a model for regulations required by this subdivision.

(c)A violation of subdivision (a) is a misdemeanor, punishable by incarceration in the county jail for not more than one year, or by a fine not exceeding ten thousand dollars ($10,000), or both.

(d)This section shall not apply to physicians or attorneys. It is the intent of the Legislature to exempt physicians and attorneys from this section because the conduct regulated by this section, with respect to physicians and attorneys, is governed by other provisions of law.