Happy Friday, dear readers!

Remember that wacky bill I wrote about previously, AB 2883 – The one that makes it harder for officers and business owners to opt out of workers’ compensation coverage? Well, California is a magical place.  In some states, bad ideas get shrugged off – state legislatures might even splash cold water on their faces and say “Come on, Phil, get it together – this is bush league!”  Well, in California, bad ideas are nurtured and grown into horrible ideas, at which point they are harvested and processed into laws.

Now that AB 2883 is law, going into effect January 1, 2017, the Department of Insurance has issued a press release advising insurers of the additional documentation necessary to maintain the opt-outs of owners and officers.  Presumably, failure to comply would make the owner or officer an illegally uninsured employer of him or herself.  Absent a falling out or a very disgruntled officer… who would file the claim?

Anywho, in light of other news, namely the $34.9 million issued as grants to fight workers’ compensation fraud, it made your humble blogger realize something: there are a whole lot of people that would prefer to opt out of workers’ compensation.

Owners, officers, and employees, often enough, would prefer not to be stuck in the comp system.  Think about it – why do officers and employees opt out?  Probably because the money used to ensure coverage can be more efficiently used for general health insurance and as savings.  Perhaps that money could be used to keep the lights on in the business – officers and owners of various ventures might realize that if they had to pay to insure themselves under the comp system, they might be out of the job.

While, previously, the law afforded ample opportunity to get out of Dodge for the business owners, the same was not the case for employees.  How often have you had a file land on your desk where the employer protests that the alleged employee was an independent contractor?  Sometimes, the ONLY Borello factor was that the parties agreed, at the time of hire, to an IC status arrangement.

So, with all this “fraud” and misclassification of employees going on, WHY do so many employees agree to be labeled independent contractors (at least, until they file their claims for WC or whatever else)?  It’s because the employees, employers, officers, managers, owners, etc. are all in the exact same boat: there are only so many dollars, and owners and employees both would rather have the money in hand than the benefits of the workers’ comp system (until they get hurt, of course).  Many jobs can offer higher wages or employee status but not both.

Your humble blogger submits that with AB 2883, California is headed in the wrong direction.  Instead of allowing more Californians to have choice and control, California is creating more headaches (at best) and more ruin (at worst) for smaller businesses.  In a state large and diverse enough to have industries practicing the ancient trades of farming and the futuristic developments of Silicon Valley, is Sacramento really competent to make rules to serve everyone?

And on that lovely note – have a good weekend!