Can You Waive Your Workers’ Compensation Rights in California?

Understanding Your Rights: Can Employees Waive Workers’ Compensation in California?

When an employee wonders can employees waive workers’ compensation in California, the simple answer is no. Generally, under California law, employees cannot waive their workers’ compensation rights. Any waiver signed is typically not legally enforceable. However, there are a few exceptions that might apply.

1. General Employees: Cannot waive workers’ compensation rights.
2. Corporate Officers/Owners: May waive, but under strict conditions.
3. Unauthorized Waivers: Usually deemed illegal and unenforceable.

Workers’ compensation laws are designed to protect employees if they get injured on the job, covering medical expenses and lost wages. This article will explore these topics in detail and clarify the instances where an exception might be possible.

I’m Chris Lyle, a seasoned attorney with expertise in workers’ compensation and co-founder of CompFox, an AI-enhanced legal research platform. With years of experience, I’ve seen the challenges and intricacies surrounding questions like can employee waive workers’ compensation California and aim to simplify this complex issue for you.

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Infographic: Summary of who can waive workers’ compensation rights in California:
1. General Employees – Cannot waive.
2. Corporate Officers/Owners – May waive, with conditions.
3. Unauthorized Waivers – Illegal and unenforceable.

Understanding Workers’ Compensation in California

In California, workers’ compensation is a crucial safety net for employees who get hurt or sick because of their job. It’s not just about covering medical bills; it offers a range of benefits. Let’s break it down.

Workers’ Compensation Benefits

Workers’ compensation provides several types of benefits to help employees recover and get back on their feet:

• Medical Care: If you get hurt at work, your employer’s workers’ comp insurance covers your medical expenses. This includes doctor visits, hospital stays, surgeries, and even physical therapy. Importantly, you usually have to get treatment from a healthcare provider in your employer’s approved network.

• Temporary Total Disability (TTD): If your injury prevents you from working at all while you recover, you could receive TTD benefits. These benefits generally amount to two-thirds of your pre-tax wages.

• Temporary Partial Disability (TPD): If you can return to work but can’t earn as much as you did before because of your injury, TPD benefits can help. They typically cover two-thirds of the difference between your old and new earnings.

• Permanent Disability (PD): Sometimes, injuries result in lasting impairments. If your doctor determines that you won’t fully recover, you may receive PD benefits. The amount depends on your disability rating, which ranges from 0 to 100 percent, and your regular wages.

• Job Retraining: If you can’t go back to your old job, you might get vouchers to help pay for education or job skills training. This benefit is designed to help you find new employment.

• Death Benefits: If a work-related injury or illness leads to death, eligible dependents like a spouse or children can receive death benefits. This can help cover funeral expenses and provide financial support to the family left behind.

Real-Life Examples

Consider the case of Erica Cox, who worked for the State of California. She was awarded temporary disability benefits after a work-related injury. When the State unilaterally terminated her benefits without filing a petition, the Workers’ Compensation Appeals Board intervened and penalized the State. This case highlights the importance of workers’ compensation and the legal protections in place to ensure employees receive their due benefits.

You Have the Right to a Safe Workplace

Beyond compensation, you also have the right to a safe work environment. Employers are obligated to ensure that workplaces are free from hazards. Even inherently dangerous jobs, like construction, must meet safety standards to protect workers.

Pursuing Benefits Without Fear

It’s illegal for your employer to retaliate against you for seeking workers’ compensation benefits. If you’re worried about losing your job while pursuing a claim, know that you have legal protections. Partnering with a lawyer can help you navigate this process and protect your rights.

Understanding these benefits and rights is essential for every worker in California. Next, we’ll discuss whether employees can waive their workers’ compensation rights and what the law says about it.

Can Employees Waive Workers’ Compensation Rights in California?

Legal Restrictions on Waiving Workers’ Compensation

In California, workers’ compensation rights are designed to protect employees who get hurt or sick because of their job. According to the California Labor Code Section 3700, it is illegal for employers to require employees to sign waivers of their workers’ compensation rights. This means that if your employer asks you to sign a document that waives these rights, that document is likely unenforceable.

California law mandates that any waiver must be clear and not misleading. If a waiver is hidden in a stack of paperwork or buried in legal jargon, it does not express the intent of both parties and could be challenged as unenforceable.

Even during the COVID-19 pandemic, when some employers required workers to sign waivers saying they wouldn’t file workers’ compensation claims if they got sick, these waivers were likely illegal and unenforceable. If you signed such a waiver and then contracted COVID-19 at work, you might still be entitled to benefits.

Exceptions and Special Cases

While most employees cannot waive their workers’ compensation rights, there are some exceptions:

1. Sole Proprietors:
If you own a sole proprietorship, you are automatically excluded from workers’ compensation coverage. Since California labor code considers spouses as co-owners, they can also be excluded.

2. Corporate Officers and Managing Members:
Corporate officers, directors, and managing members can be excluded from workers’ compensation coverage under certain conditions. For public or quasi-public corporations, an officer can be excluded if they own at least 10% of company stock or at least 1% combined with a health insurance policy.

3. Limited Liability Companies (LLCs):
Working members of an LLC can also be excluded if they sign a written waiver.

4. General Partners:
General partners in partnerships can be excluded by filling out the appropriate waiver form with their insurance carrier.

To execute a valid waiver, these individuals must often have comparable health and disability insurance policies. They must fill out specific waiver forms that align with the legal entity type of the company they work for.

In summary, while it is generally illegal for most employees to waive their workers’ compensation rights, there are specific cases where exclusions apply, mainly for business owners and corporate officers. These exclusions require proper documentation and often comparable insurance coverage.

How to Be Exempt from Workers’ Compensation in California

Exemption Criteria

In California, getting an exemption from workers’ compensation can be a bit tricky. But if you meet specific criteria, you can avoid the requirement. Here’s what you need to know:

1. No Employees: If you don’t have any employees, you can be exempt. This includes Home Improvement Salespersons (HIS).

2. Specific Classifications: Certain contractor classifications like C-8 Concrete, C-20 Warm-Air Heating, C-22 Asbestos Abatement, C-39 Roofing, and C-61/D-49 Tree Service cannot be exempt.

3. Out-of-State Contractors: If you’re an out-of-state contractor working in California with employees from another state, you need to provide a certificate of insurance from your home state’s workers’ compensation insurance carrier.

Filing the Exemption Form

To file for an exemption, you’ll need to submit a form to the Contractors State License Board (CSLB). Here’s how to do it:

1. Complete the Form: Use the online submission process to fill out the Exemption from Workers’ Compensation Insurance form. Make sure you’re the owner, partner, officer, director, member, or manager of the business.

2. Required Fields: Carefully fill out all required fields. Using the “Back” and “Next” buttons at the bottom of each page ensures your information is saved correctly. Avoid using your browser’s back arrow, as it will erase your data.

3. Print or Save the Document: Once you complete the form, print, email, or save it to your device. You cannot submit the form online.

4. Mail the Form: Send the completed form, along with any required certificates (for out-of-state contractors), through the mail to the CSLB.

5. Confirmation Email: If you provide an email address, you’ll receive a confirmation email with a copy of your submission for your records.

The exemption process is there to make sure only those who truly qualify can opt out of workers’ compensation insurance. If you meet the criteria and follow the steps carefully, you can successfully file for an exemption under the Business and Professions Code Section 7125.

Next, let’s explore who can be excluded from workers’ compensation coverage and the specific requirements based on business type.

Who Can Be Excluded from Workers’ Compensation Coverage?

Exclusion Requirements by Business Type

Corporations
Corporate officers and directors can be excluded from workers’ compensation coverage if they meet specific ownership thresholds. An officer or director must own at least 10% of the corporation’s stock. Alternatively, if they are a direct relative (parent, grandparent, sibling, spouse, or child) of someone with at least 10% ownership, they only need to own 1% of the stock. If the ownership is below 10%, the officer or director must also have health insurance.

Professional Corporations
For professional corporations, there is no ownership percentage requirement. However, the owner must be a practitioner providing the services for which the professional corporation is organized and must have health insurance.

Cooperative Corporations
Similar to professional corporations, there is no ownership percentage requirement for cooperative corporations. However, officers or directors must have health insurance and a disability insurance policy that provides the same coverage as a workers’ compensation policy. Before submitting a waiver form, cooperative corporations must get written approval from the California Department of Insurance (CDI) to ensure their disability policy meets the new law’s requirements.

Corporations with a Sole Shareholder/Owner
If a corporation has a sole shareholder or owner, they are automatically excluded from workers’ compensation coverage unless they specifically elect to be covered. No waiver is needed in this case.

Limited Liability Companies (LLCs)
Managing members of LLCs can elect to be excluded from coverage without any ownership percentage threshold.

Partnerships
General partners in a partnership can choose to be excluded from workers’ compensation coverage, regardless of ownership percentage.

Trusts
Individuals who hold the power to revoke a trust, with respect to shares of a private corporation, general partnership interest, or limited liability company interests held in trust, can also elect exclusion if they meet the criteria under Labor Code Sections 3351 and 3352.

Process for Filing Exclusion Waivers

To exclude eligible individuals from workers’ compensation coverage, you need to follow these steps:

1. Verify Eligibility
   Check the specific requirements for your business entity type to confirm who can be excluded.

2. Download and Complete the Waiver Form
   Each eligible individual must fill out and sign a waiver form under penalty of perjury.

3. Submit the Waiver Form
   Submit the completed waiver form to your assigned underwriter. If you don’t have an assigned underwriter, contact customer support at (888) 782-8338 for assistance.

4. For Cooperative Corporations
   Before submitting the waiver form, contact the California Department of Insurance at [email protected] to gain written approval that your disability policy meets CDI requirements.

By following these steps, you can ensure that the exclusion process is completed correctly, allowing eligible individuals to opt out of workers’ compensation coverage as per California Labor Code regulations.

Next, let’s address some frequently asked questions about waiving workers’ compensation rights.

Frequently Asked Questions about Waiving Workers’ Compensation Rights

Can you waive workers’ compensation rights in most situations?

No, you generally cannot waive your workers’ compensation rights in California. According to the California Labor Code, it’s illegal for employers to require employees to sign a waiver of their workers’ compensation rights. Even if an employee unknowingly signs such a waiver, it is usually unenforceable. This law ensures that employees are protected and can access the benefits they deserve if they get injured or sick due to their job.

How can officers be excluded from workers’ compensation in California?

Corporate officers and directors can be excluded from workers’ compensation coverage, but certain conditions must be met. Here’s how:

1. Ownership Stake: The officer must own at least 10% of the company’s stock. Alternatively, if they own at least 1% and are covered by a health insurance policy, they can be excluded if a direct relative owns at least 10% of the company stock.

2. Written Waiver: The officer must fill out and sign a written waiver form. This form is then submitted to the insurance carrier to officially opt out.

3. Professional Corporations: Owners can also be excluded if they are covered by a health insurance policy and fill out the necessary waiver.

4. Cooperative Corporations: Officers or board members can be excluded if they have a health insurance policy and a disability insurance policy comparable to a standard workers’ comp policy. They must also complete a waiver form.

What are the requirements for a business to be exempt from workers’ compensation?

To qualify for an exemption from workers’ compensation, a business must meet specific criteria. Here’s what you need to know:

1. No Employees: The business must not have any employees. If there are no employees, the business can file for an exemption.

2. Specific Classifications: Certain classifications, such as sole proprietors and specific contractor roles, can be exempt. For example, sole proprietors are automatically excluded from workers’ comp requirements.

3. CSLB Form: The business must file an exemption form with the California Contractors State License Board (CSLB). This form needs to be filled out by an owner, partner, officer, director, member, or manager of the business.

4. Out-of-State Contractors: If you are an out-of-state contractor working in California, you must provide a certificate of insurance from your state’s workers’ compensation insurance carrier along with the exemption form.

By understanding these requirements, businesses can navigate the exemption process effectively and ensure compliance with California’s labor laws.

Conclusion

Workers’ compensation is crucial for protecting employees who get hurt or sick because of their job. It ensures they receive necessary medical care and financial support during recovery. This system is particularly important in California, where laws are designed to safeguard workers’ rights.

Legal compliance is essential for both employers and employees. Employers must adhere to the regulations to avoid legal issues, while employees should understand their rights to ensure they are not taken advantage of. Waiving workers’ compensation rights is generally illegal in California, and any such waiver is likely unenforceable.

At CompFox, we specialize in providing comprehensive legal research tools to help you navigate the complexities of workers’ compensation laws in California. Our AI-enhanced case law research system can save you time and ensure you have the most relevant information at your fingertips.

For more detailed insights and resources on California Workers’ Compensation, visit our dedicated service page.

Understanding and adhering to workers’ compensation laws not only protects employees but also helps businesses maintain a compliant and safe working environment. Stay informed, stay compliant, and always prioritize the well-being of your workforce.