Assembly Bill 749

Assembly Bill (AB) 749 (Calderon) was enacted on Feb. 15, 2002. It provided the first increase in workers' compensation benefits for injured workers since Jul. 1, 1996. It also contained a number of measures to reduce costs for employers and improve the efficiency of the California workers' compensation system.

NOTE: While the benefit increases enacted under AB 749 have not changed, other provisions of the law may have been substantially impacted by legislation passed after AB 749 (SB 228, SB 899). Other programmatic information provided below is historically correct, but may not reflect the current state of the workers' compensation system.

Benefit increases

The following chart shows benefit increases phased in under AB 749. The benefits apply to injuries that occur on or after January 1 of the year indicated.

*This benefit chart does not reflect changes made by SB 228 and SB 899, legislation passed after AB 749.

Class of benefits 2002 2003 2004 2005 2006
Temporary disability (TD)
Minimum Actual wages $126 $126 $126 $126 *
Maximum $490 $602 $728 $840 $840 *
Permanent disability (PD) minimums
<15% $70 $100 $105 $105 $130
15-24.75 $70 $100 $105 $105 $130
25-69.75 $70 $100 $105 $105 $130
70-99.75 $70 $100 $105 $105 $130
Permanent disability (PD) maximums
<15% $140 $185 $200 $220 $230
15-24.75 $160 $185 $200 $220 $230
25-69.75 $170 $185 $200 $220 $230
70-99.75 $230 $230 $250 $270 $270
Weeks of disability per 1% of
PD within percentage range
0-9.75 3 3 4 4 4
10-19.75 4 4 5 5 5
20-24.75 5 5 5 5 5
25-29.75 6 6 6 6 6
30-49.75 7 7 7 7 7
50-69.75 8 8 8 8 8
70-99.75 9 9 9 9 9
Death benefit maximums
Single total dependent $125,000 $125,000 $125,000 $125,000 $250,000
No total dependents and one or more partial dependents $125,000 $125,000 $125,000 $125,000 $250,000
Single total dependent and one or more partial dependents $145,000 $145,000 $145,000 $145,000 $290,000
Two total dependents $145,000 $145,000 $145,000 $145,000 $290,000
Three or more total dependents $160,000 $160,000 $160,000 $160,000 $320,000
Life pension
Weekly Wage to determine maximum life pension benefits $257.69 $257.69 $257.69 $257.69 $515.38
*Increased thereafter by the percentage increase in the state average weekly wage [LC 4453 (a) (10)] Activities and programs

AB 749 contained a number of mandates for DWC. Implementation of most of these activities required the adoption of new and/or revised rules and regulations. Information about these and other regulatory proposals currently being adopted is posted on the DWC rulemaking page.

Return to work - consultation programs
Contained in Section 139.47 of the state Labor Code, requires the development and distribution of educational materials and training programs to help employers and employee organizations as well as health care providers address accommodation of injured workers and prevent re-injuries.

Return to work - reimbursements from the return to work fund
Found in Section 139.48 of the state Labor Code, provides that employers may apply for reimbusements for wage subsidies, workplace modification costs, and workers' compensation premium reimbusements. The program will require an appropriation to take effect.

Vocational rehabilitation
Sections 4646b and 4646c of the state Labor Code were revised to provide that employers and injured workers who are represented by an attorney may settle any prospective rights to vocational rehabilitation services. This provision applies to injuries that occur on or after Jan. 1, 2003. All settlements would have to be submitted to the DWC Rehabilitation Unit for approval.

Medical issues
For injuries that occur on or after Jan. 1, 2003, various provisions of AB 749:

  • Repeal the presumption that the treating physician's report is correct. The presumption still applies if the physician was predesignated by the employee prior to the injury.
  • Provide for an additional medical/legal evaluation report if an injured worker becomes represented after receiving a panel QME report.
  • Require that DWC, in consultation with the Industrial Medical Council, the Commission on Health and Safety and Workers' Compensation, as well as other state agencies and health care researchers, begin a study on various topics related to medical quality and treatment by Jul. 1, 2003 and report their findings by Jul. 1, 2004.
  • Provide for a pharmaceutical fee schedule and an outpatient surgery facility fee schedule as well as specify the criteria and process for adopting them.
  • Streamline and simplify the Health Care Organization program to encourage its use as a way to reduce costs for employers and assure quality of care and medical case management for injured workers.
  • Provide greater protections for the confidentiality of medical information pertaining to employees who have filed a workers' compensation claim.
Changes to the DWC audit program
Major audit changes include:
  • Requires each adjusting location to be audited every five years.
  • Sets new priorities for audits. A more comprehensive audit will be performed if the audit subject fails to meet certain performance standards.
  • Provides that audit penalties be deposited in the Workers' Compensation Administrative Revolving Fund.
  • Requires that DWC publish a list ranking all insurers, self-insured employers and third party administrators audited during the period according to their performance
  • Mandates that the Uninsured Employers Fund be audited at least every five years and be included in the Audit Unit's annual report.

Enforcement of illegally uninsured employers
Requires that the labor commissioner establish and maintain a program for targeting employers in industries with the highest incident of unlawfully uninsured employers, based on data from Uninsured Employers Fund, Employment Development Department, and State Insurance Commissioner. Specifies that a report be submitted to the Legislature by Mar. 1 annually concerning the effectiveness of this program.

Court administrator
A new trial court system manager, to be appointed by governor and confirmed by the state Senate, will administer the workers' compensation adjudicatory process at the trial court level and supervise workers' compensation administrative law judges (WCALJs). Specific responsibilities of this position, which will serve at pleasure of the DWC administrative director, include: promoting uniformity and expedition of judicial proceedings; reviewing and recommending revisions to regulations governing judicial ethics; and adopting uniform rules of practice and procedure governing trial level proceedings of the WCAB. Violation of these uniform procedures could subject a WCALJ to disciplinary action.

Carve outs
The alternative dispute resolution program known as "carve outs" was expanded to the timber and aerospace industries. The State Insurance Commissioner may not disapprove any discounted premium rates established by insurers for carve out participants through January 1, 2007. A study on the long term experience of these programs will be performed.

Loss control
While requirements for all workers' compensation carriers to provide loss control services remain, the programs will work through an ombudsperson and no longer require Department of Industrial Relations (DIR) certification. The certification funding will used to increase health and safety education programs instead.

Fraud notices to employers, claims administrators, attorneys and physicians
Anti-fraud resources may be used against illegally uninsured employers. The Bureau of State Audits will be required to evaluate the effectiveness of the Fraud Assessment Commission, the Bureau of Fraudulent Claims, the Department of Insurance, and DIR, as well as local law enforcement in investigating and prosecuting workers' compensation fraud and willful failure to secure workers' compensation insurance.

September 2007