California Eases Worker’s Compensation Requirements for Small Businesses

October 13, 2017

SACRAMENTO ­– Today, Governor Jerry Brown signed Senate Bill 189 into law. Senator Steven Bradford (D-Gardena) introduced SB 189 to clarify when an owner of a company may waive his or her right to workers’ compensation insurance coverage.

“Workers’ compensation insurance premium fraud makes this type of insurance more expensive for the thousands of California businesses required to have it,” said Senator Bradford. “However, the Legislature’s attempts to minimize fraud should not make life harder for small business owners. This bill balances both goals — it will ease the regulatory burdens on small businesses, while preserving safeguards against workers’ compensation insurance premium fraud.”

SB 189 sets the ownership threshold at 10% to determine which partners or members of a company’s board of directors are eligible to waive workers’ compensation insurance coverage.   SB 189 updates the State’s Labor Code to fix this problem by lowering the ownership threshold to 10% and creating an exemption for businesses whose owners practice a licensed profession, if they also have health insurance coverage.

“I thank the Governor for helping us increase the integrity within our worker’s compensation system and reducing insurance costs for the many vital small business across our state,” said Senator Bradford.