California Acts of the 2004 Legislative Session
SB X4-2, Chapter 2
BILL NUMBER: SBX4 2 CHAPTERED 09/13/04 CHAPTER 2 FILED WITH SECRETARY OF STATE SEPTEMBER 13, 2004 APPROVED BY GOVERNOR SEPTEMBER 13, 2004 PASSED THE SENATE AUGUST 28, 2004 PASSED THE ASSEMBLY AUGUST 27, 2004 AMENDED IN ASSEMBLY AUGUST 19, 2004 AMENDED IN SENATE JULY 7, 2004 AMENDED IN SENATE JUNE 15, 2004 AMENDED IN SENATE JUNE 1, 2004 AMENDED IN SENATE MARCH 30, 2004 AMENDED IN SENATE MARCH 3, 2004 AMENDED IN SENATE FEBRUARY 19, 2004 INTRODUCED BY Senator Speier (Principal coauthors: Assembly Members Koretz and Spitzer) NOVEMBER 19, 2003 An act to amend Sections 1871.4 and 1871.8 of the Insurance Code, to amend Sections 3700.5 and 3711 of the Labor Code, and to amend Sections 549, 550, 803, and 1524 of the Penal Code, relating to workers' compensationLEGISLATIVE COUNSEL'S DIGEST SB 2, Speier. Workers' compensation: insurance.
(1) Existing law establishes a workers' compensation system, administered by the Administrative Director of the Division of Workers' Compensation, to compensate an employee for injuries sustained in the course of employment.
Existing law prohibits knowingly making or causing to be made certain false or fraudulent statements in connection with workers' compensation, and provides for specified penalties and the payment of restitution for violating these prohibitions. Existing law also authorizes an insurer or self-insured employer to provide a notice, on or with a check for temporary disability benefits, relating to acts that constitute fraud.
This bill would, commencing January 1, 2005, revise the contents of the notice, require the notice to be provided in both English and Spanish, and would make provision of the notice mandatory.
(2) Existing law makes it a misdemeanor to fail to secure the payment of workers' compensation benefits, punishable by imprisonment in the county jail for up to one year, a fine of up to $10,000, or both.
This bill would revise the penalties applicable to the above offense, including establishing a separate term of imprisonment and fine for the 2nd and subsequent convictions, thereby imposing a state-mandated local program. The bill would give the court discretion to charge the convicted person the costs of investigation.
It would also authorize the issuance of a search warrant when the property to be seized includes an item or evidence that tends to show a violation of these provisions.
(3) Existing law authorizes the director, at any time, to require an employer to furnish a written statement showing the name of his or her insurer, or the manner in which the employer has complied with his or her obligation to secure the payment of workers' compensation.
This bill would also authorize an investigator for the Department of Insurance Fraud Bureau, or its successor, or a district attorney investigator investigating workers' compensation fraud to require an employer to furnish the written statement described above.
(4) Existing law provides for the imposition of criminal penalties, including fines, on any person or entity who solicits, accepts, or refers any business to or from any individual or entity with the knowledge that, or with reckless disregard for whether, the individual or entity intends to violate certain provisions of law relating to insurance fraud.
Existing law also imposes criminal penalties, including fines, on persons who commit certain false or fraudulent acts in connection with an insurance claim.
This bill would revise the amounts of these fines. The bill would require the court to order restitution for these violations, and would allow the costs of investigation to be charged to any person convicted of violating these prohibitions.
(5) Existing law provides for periods of limitations of time after which a criminal complaint or indictment may not be filed against a defendant. Existing law permits those limitations of time to be extended or waived for various reasons. Under existing law, for specified crimes and categories of crime there is a delay in the commencement of the time permitted for filing until the offense has been discovered, or could reasonably have been discovered.
This bill would add violations of provisions relating to transactions involving a monetary instrument that are related to criminal activity, to those for which the commencement of the applicable limitation of time commences only when the offense has been, or could reasonably have been, discovered.
(6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
1871.4. (a) It is unlawful to do any of the following:
(1) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.
(2) Present or cause to be presented a knowingly false or fraudulent written or oral material statement in support of, or in opposition to, a claim for compensation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.
(3) Knowingly assist, abet, conspire with, or solicit a person in an unlawful act under this section.
(4) Make or cause to be made a knowingly false or fraudulent statement with regard to entitlement to benefits with the intent to discourage an injured worker from claiming benefits or pursuing a claim.
For the purposes of this subdivision, "statement" includes, but is not limited to, a notice, proof of injury, bill for services, payment for services, hospital or doctor records, X-ray, test results, medical-legal expense as defined in Section 4620 of the Labor Code, other evidence of loss, injury, or expense, or payment.
(5) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any of the benefits or reimbursement provided in the Return-to-Work Program established under Section 139.48 of the Labor Code.
(6) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of discouraging an employer from claiming any of the benefits or reimbursement provided in the Return-to-Work Program established under Section 139.48 of the Labor Code.
(b) Every person who violates subdivision (a) shall be punished by imprisonment in the county jail for one year, or in the state prison, for two, three, or five years, or by a fine not exceeding one hundred fifty thousand dollars ($150,000) or double the value of the fraud, whichever is greater, or by both that imprisonment and fine.
Restitution shall be ordered, including restitution for any medical evaluation or treatment services obtained or provided. The court shall determine the amount of restitution and the person or persons to whom the restitution shall be paid. A person convicted under this section may be charged the costs of investigation at the discretion of the court.
(c) A person who violates subdivision (a) and who has a prior felony conviction of that subdivision, of former Section 556, of former Section 1871.1, or of Section 548 or 550 of the Penal Code, shall receive a two-year enhancement for each prior conviction in addition to the sentence provided in subdivision (b).
The existence of any fact that would subject a person to a penalty enhancement shall be alleged in the information or indictment and either admitted by the defendant in open court, or found to be true by the jury trying the issue of guilt or by the court where guilt is established by plea of guilty or nolo contendere or by trial by the court sitting without a jury.
(d) This section may not be construed to preclude the applicability of any other provision of criminal law that applies or may apply to a transaction.
1871.8. An insurer or self-insured employer shall provide the following notice, in both English and Spanish, to an injured worker on or with a check for temporary disability benefits:
WARNING: You are required to report to your employer or the insurance company any money that you earned for work during the time covered by this check, and before cashing this check. If you do not follow these rules, you may be in violation of the law and the penalty may be jail or prison, a fine, and loss of benefits.
ADVERTENCIA: Es necesario que usted le avise a su patron o a su compania de seguro todo dinero que usted ha ganado por trabajar, durante el tiempo cubierto por este cheque, y antes de cambiar este cheque. Si usted no sigue estos reglamentos, Usted puede estar en violacion de la ley y el castigo podria ser carcel o prision, una multa, y perdida de beneficios.
3700.5. (a) The failure to secure the payment of compensation as required by this article by one who knew, or because of his or her knowledge or experience should be reasonably expected to have known, of the obligation to secure the payment of compensation, is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, as determined by the court, that would otherwise have been due to secure the payment of compensation during the time compensation was not secured, but not less than ten thousand dollars ($10,000), or by both that imprisonment and fine.
(b) A second or subsequent conviction shall be punished by imprisonment in the county jail for a period not to exceed one year, by a fine of triple...
