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Bulletin Archives

Setting the Table

Thanksgiving is around the corner, and we here at Mullen & Filippi would like to take the opportunity to thank our attorneys, our staff, our clients, and you dear readers, for the contributions you make to our mission of providing top quality representation to employers, carriers, and public entities. Beyond that, we thank you doubly for the contributions you make to our lives. So set the table, pass the yams, and have the political arguments with family wrapped up by the time the pies come out.

AB 5 PASSES AND REDEFINES EMPLOYEES AND INDEPENDENT CONTRACTORS

Speaking of politics, on 9/18/2019, Governor Gavin Newsom signed Assembly Bill 5 into law on 9/18/2019, codifying the ABC test set forth in the Dynamex case by the California Supreme Court. AB 5 amended the Labor Code to add section 2750.3, which sets forth the Dynamex ABC test as the method for determining whether an individual is an independent contractor or an employee generally. AB 5 also, however, amended the definition of employee set forth at Labor Code section 3351 for workers’ compensation purposes to include those who would be found employees under the ABC test, effective 7/1/2020. The statute indicates, however, that the subdivision shall not apply retroactively. To the degree the ABC test is different than the prior Borello factors, the passage of AB 5 means that an individual providing the same work for a company could be found to be either an independent contractor or an employee depending on the year in which the work was provided.

As a reminder, the three prong ABC test indicates that a person providing labor or services for pay will generally be considered an employee unless: 

  1. The individual is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  2. The person performs work that is outside the usual course of the hiring entity’s business; and
  3. The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The question of whether an individual is an employee or an independent contractor will still remain a case by case determination, but the simplified test will likely make it much more difficult to classify workers as independent contractors. AB 5 does contain exemptions for certain professions and individuals providing certain services, allowing some workers to maintain their independent contractor status even where they would otherwise be classified as an employee under the ABC test. 

The bill could certainly affect industries that previously favored the use of independent contractors such as trucking, fitness gyms, entertainment, ride sharing, and the so-called “gig economy.” Both Uber and Lyft have publicly indicated they will challenge the new litigation and will continue to treat their drivers as independent contractors. The California Truckers’ Association filed a federal lawsuit this month challenging AB 5. 

Whatever comes of it all, it is anticipated that if the bill remains law, it will expand the scope of workers’ compensation coverage. As the dust settles and we move into 2020, employers should be very cautious if they are relying on independent contractor status to shield them from liability for industrial injuries.

EN BANC WCAB CLARIFIES MEDICAL-LEGAL LIEN CLAIMANT’S BURDEN OF PROOF

The Appeals Board issued an en banc decision on 11/14/2019 in the case of Colamonico v. Secure Transportation, finding that a medical-legal provider must show that a contested claim existed at the time expenses were incurred and that the expenses were reasonably, actually, and necessarily incurred pursuant to Labor Code 4621 for the purpose of proving or disproving a contested claim under Labor Code 4620. The WCAB also held that a defendant does not waive an objection based on Labor Code 4620 or Labor Code 4621 by not raising those objections in an Explanation of Review (EOR). 

The case involved a copy service who had issued several subpoenas on behalf of an injured worker and submitted numerous invoices to defendant for their services.The defendant issued eight EORs but did not indicate in them that payment was withheld because the expenses were not reasonably, actually, and necessarily incurred to prove or disprove a contested claim. The WCAB indicated that Labor Code 4622, which provides the framework for the payment of medical-legal expenses, is by its language not applicable unless there has been compliance with Labor Code 4620 and Labor Code 4621.  Consequently, the WCAB found that a medical-legal service provider must carry its burden of proof even if defendant does not raise the provider’s compliance with Labor Code 4620 or Labor Code 4621 as an issue in responding to bills.

TWO NEW CASE BRIEFS AVAILABLE!

Associate Partner Heather Franco of our Riverside office authored a brief that breaks down the recent 9th Circuit Court of Appeal decision finding that CIGA is not a primary payer required to reimburse Medicare for conditional payments made to treat a work injury. Ms. Franco provides a great summary of the nature of the coverage provided by CIGA in the case of insurer insolvency and analyzes the distinction the court drew between CIGA and a primary workers’ compensation plan or payer in addressing reimbursement sought under the Medicare Act.

This month Associate Attorney Ed Hummer of our Santa Rosa office also chimed in with an entertaining brief discussing just what constitutes a working day for the purpose of the 5 working day time limit employers must observe in obtaining a Utilization Review (UR) decision as to a request for treatment. Discussing the history of UR litigation generally first, he then provides a succinct analysis of the WCAB’s reasoning in the Puni Pa’u v. Department of Forestry/Cal Fire case.  The WCAB in that case excluded Saturdays and Sundays from the definition of working days for the purpose of the time limit set forth under Labor Code 4610, meaning that UR determinations can wait until Monday.  No word on whether Ed wrote the brief on a Saturday.

These articles along with others can be viewed by clicking on the following link:  https://www.mulfil.com/case-briefs/

This Bulletin was written by Jim Cotter, Associate Partner in our Oakland office.