A new California law updates those who qualify for workers’ compensation.
All business owners need to stay up to date on the latest laws and regulations. There is a new California law, Assembly Bill 2883, which takes effect on January 1, 2017. From that date onwards, there will be new regulations on how to exclude your officers, directors, managing members, and general partners from workers’ compensation coverage.
They must qualify by meeting the following requirements:
- For Corporations
- Paid officers and members of boards of directors of quasi-public or private corporations must own at least 15 percent of the corporation’s stock to opt out. A signed waiver, verifying eligibility for the exemption, is required to be submitted and approved by the insurance carrier prior to December 31, 2016.
For General Partnerships and/or Limited Liability Company (LLC):
- All general partner(s) of a partnership or a managing member(s) of a limited liability company (LLC) must each sign a waiver to opt out and submit the waiver form for approval prior to December 31, 2016
If these members are eligible to opt out and they would like to exclude themselves from coverage, each one of them must sign and submit a ‘waiver of coverage’ form so they can opt out. If not, they will need to be covered with the associated workers’ compensation and their annual remuneration will be used to calculate any additional premium due.
The Assembly Bill will apply to all new and renewal policies. If you need to submit a waiver of coverage form and have not received one yet, please contact Nahai Insurance office right away to have one sent to you and complete it by December 18th, 2016 so that your policy is handled quickly before the New Year. If you have already received the form directly from the insurance carrier, please advise our office if you have returned it already.
If you change insurance carriers or your business’s ownership structure changes, a new form will need to be filled out and signed by all qualified officers, directors, general partners, or LLC managing members, who elect to be excluded from coverage.