CA UPDATE: Commissioner Lara issues Order resulting in workers’ compensation premium savings for California businesses affected by COVID-19

June 17, 2020
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Commissioner Lara issues Order resulting in workers’ compensation premium savings for California businesses affected by COVID-19
Commissioner’s action mandates workers’ compensation carriers reflect reduced risk of loss in premiums due to “stay-at-home” orders

LOS ANGELES, Calif. — Insurance Commissioner Ricardo Lara today issued an Order adopting emergency workers’ compensation regulations in response to the COVID-19 pandemic. These new regulations will mandate insurance companies to recompute premium charges for policyholders to reflect reduced risk of loss consistent with Commissioner Lara’s April 13 and May 15, 2020 Bulletins, and will result in savings for many policyholders as businesses continue to struggle financially during the COVID-19 pandemic.

“California’s business owners have been hit hard by COVID-19,” said Commissioner Lara. “Workers’ compensation premiums should reflect that many employees are performing less risky duties, and my Order will provide some financial relief for employers when they need it most.”

Under these emergency regulations, employers are permitted to reclassify an employee if the employee’s duties have changed to a clerical classification that has reduced risk than the employee’s previous classification. This reclassification will reduce the employer’s premiums for employees who are a lower risk because they are now working from home even though they may not have previously done so. This change would be retroactive to March 19, 2020, the first day of the Governor’s statewide stay-at-home order, and conclude 60 days after the order is lifted.

“We applaud Commissioner Lara’s efforts to meet the needs of California’s small businesses as they continue to navigate the COVID-19 crisis,” said Mark Herbert, Vice President, California for Small Business Majority. “These new rules will allow small business owners to correctly reclassify their workforce if their duties have changed, helping businesses keep more money in their pockets as they respond to a decline in revenue and adapt their business models. These rules will also ensure small businesses are better positioned for the long-term by protecting them from future increases in workers’ compensation premiums due to COVID-19. This kind of smart action will ensure our state’s job creators and innovators have the tools they need to succeed after this crisis.”

These emergency regulations also exclude from premium calculations the payments made to an employee, including sick or family leave, while the employee is not performing duties of any kind for the employer. Typically, these payments would be used as a basis for the employer’s workers’ compensation premium. This change will lower the employer’s rate by reducing the amount of payroll assessed, and the employer will not pay premium for paid workers who are otherwise being furloughed.

“These changes provide clarity to employers while helping to share any financial costs of work-related COVID-19 cases among all employers—not just those who found themselves at the center of the epidemic,” said Mitch Steiger, Advocate for the California Labor Federation, who is also a member of the Workers’ Compensation Insurance Rating Bureau (WCIRB) Governing Board. “In doing so, both workers and employers most affected by this crisis can more quickly begin the process of recovery.”

This new regulation will also exclude claims related to a COVID-19 diagnosis from being included in future rate calculations so that employers are not penalized with higher rates due to COVID-19 claims.

Insurers will also be required to report injuries involving a diagnosis of COVID-19 which will allow the Commissioner’s statistical agent—the WCIRB—to keep track of COVID-19 injuries, and will aid in the WCIRB’s future analyses of the workplace and market impacts.

The new regulations will go into effect on July 1, 2020.

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Media note:
Link to Commissioner’s Decision and Order

Insurance Carriers’ Responses to COVID-19

We recognize this is a challenging time for everyone and MNJ Insurance Solutions remains committed to be a resource to those we serve, our clients, our prospect clients, our business partners, our insurance carriers, and our communities.

We continue to monitor the spread of COVID-19 and the impact around us.  One of the most common questions that we are receiving from our clients is “How are the insurance carriers covering COVID-19?”

Use the links below for Frequently Asked Questions, resources, and more information on how our carriers are covering COVID-19:

Our work does not stop in light of this pandemic and our team is here to answer your questions and help with you and your employees’ insurance needs.  Contact us at (714) 716-4303 if you have any questions regarding your health insurance plans and COVID-19 and we will do our best to help find solutions.

Disclaimer:  Information is subject to change at any time.  For the most current information on COVID-19 and recommendations on how to protect yourself and others during this pandemic, please visit the CDC for more details.

President Trump Announces National Guidelines to Limit Coronavirus Spread

On Monday, March 16, 2020, President Trump held a news conference to reinforce guidelines intended to slow the spread of COVID-19. He asked Americans to follow the guidelines for the next 15 days:

  • President Trump and his advisors now say to avoid social gatherings and if needed, limit gatherings to under 10 people (down from the “under 50 people” recommendation days earlier).
  • Trump emphasized the importance of self-isolation during this critical time. It was recommended children should be schooled at home, and employees should work from home.
  • Continue to wash your hands, cover your mouth when coughing or sneezing, and create social distancing of 6-feet.

This isolation strategy will hopefully contain individuals who may be carrying the virus and are not aware of it. The administration acknowledged the prevalence of young, healthy individuals without severe symptoms have been unknowingly spreading COVID-19 and want to prevent further spread of the virus.

Unfortunately, no one can be certain how long this pandemic will last. When prompted, Trump suggested the virus may “wash through” the country by July or August, if the administration’s proposed guidelines are followed.

Stay tuned for more updates from MNJ Insurance Solutions about this ongoing pandemic.

Practical Tips for Employers & Employees: Coronavirus Pandemic

In uncertain times such as these, employees are looking for guidance wherever they can find it. Listed below are practical tips Employers can help calm some of their employees’ fears by taking the following actions:

  • Communicate the future of the business with employees in meetings, on the company intranet site, in newsletters.
  • Educate employees that there are cyber criminals that may prey on individuals during times of panic and hardship.  Be careful of cyber scams.
  • Be empathetic in your communications, as every employee’s situation may be different.


In these uncertain times, it’s imperative that you communicate your business’ plans as frequently as possible. While it is impossible to control the pandemic, it is possible for you to help ease the stress your employees are experiencing.

For additional employee communications or resources regarding the COVID-19 pandemic, contact MNJ Insurance Solutions.

California: New Legislation Amends the Paid Sick Leave as of July 13, 2015

paid sick leave

California’s new paid sick leave law, the “Healthy Workplaces, Healthy Families Act of 2014” (paid sick leave law) recently went into effect on July 1, 2015. Less than two weeks later, the law has already been amended. On July 13, 2015, the California legislature passed AB 304 amending the Paid Sick Leave Law. Governor Jerry Brown signed the bill into law the same day, as the law contains an urgency clause and the changes become effective immediately. Below is a brief description of the most important changes.


Who are covered workers?

The amendments clarify that the law applies to an employee who works in California for the same employer for 30 or more days within a year.


How does the employer calculate the sick leave accrual?

The original law provided only one method of calculating the sickleave a grill. Now, with the amendment, the employer can calculate sick leave pay for nonexempt employees by one of the following:

  •  Using the same calculation used to determine the employees regular hourly rate for overtime purposes, or
  • Dividing the employees total wages (excluding overtime) by the employee’s total hours worked in the full pay cycle of the prior 90 days of employment.

Under the amendment, the employer can calculate sick leave pay for exempt employees by the following:

  •  The same method of calculating wages as it uses for other forms of paid leave, such as vacation.


Alternative accrual method:

  • The paid sick leave amendment clarifies that employers may use methods of occurring sick leave other than the “one hour of sick leave for every 30 hours worked method” (1-in-30 method) used in the original language of the law.
  • Alternative accrual method, such as accrual by pay period or by months of employment are also valid, provided that the employees receive at least 24 hours (3 days) of sick leave by the 120th calendar day of employment or the employer’s sick leave year (calendar year or otherwise).


Employers existing paid time off (PTO) or sick leave policies:

Under the amendment of the Paid Sick Leave law, sick leave policies that existed before January 1, 2015 and that use an accrual method that differed from the “1-in-30 method,” have been grandfathered IF they meet the following three conditions:

  1. Accrual occurs on a regular basis;
  2. Employees receive not less than eight hours (one day) of sick leave within the first three months of employment or sick leave year; and
  3. Employees receive at least 24 hours of sick leave within the first nine months.


Listed below are some additional minor changes and clarifications to the paid sick leave law:

  • Employers with unlimited sick leave policies can state “unlimited” on employees paycheck stubs, rather than having to list a specific number of days or hours.
  • Employers do not have an obligation to reinstate an employee sick leave upon rehire within one year, if the employer paid the employee for the accrued sick leave upon termination.
  • Employers do not have an obligation to ask employees about the reason for taking the leave.
  • The language in the law of “a year” means a year of employment, a calendar year, or another employer designated 12 month period.
  • The amendment clarifies that employees have to work for 30 days for the same employer before becoming eligible for paid sick leave.


Action items for Employers to comply with Healthy Workplace Healthy Family Act of 2014 (AB 1522):

If an employer implemented a new sick leave policy, or revise their previous sick leave or paid time off policy within the last six months, to comply with the requirements of the paid sick leave law, most likely, no immediate action is required. However, if an employer failed to revise its existing policy prior to July 1, 2015, the employer should immediately review the newly amended law to ensure their sick leave policy complies with the amended Paid Sick Leave law. Regardless of whether the employer’s policy is grandfathered or not, the newly amended law allows the employer to have an option of an accrual method that may better meet its business needs. We recommend that you have your policy reviewed by your legal counsel/Business attorney to ensure compliance and the appropriate language in your policies.

In addition, the employer must do the following to comply:

  • Display poster on paid sick leave (Spanish) (Vietnamese) where employees can read it easily.Provide written notice to employees with sick leave rights (Spanish) (Vietnamese) at the time of hire.
  • Provide for accrual of one hour for every 30 hours worked and allow use of at least 24 hours or 3 days or provide at least 24 hours or 3 days at the beginning of a 12 month period of paid sick leave for each eligible employee to use per year.
  • Allow eligible employees to use accrued paid sick leave upon reasonable request.
  • Show how many days of sick leave an employee has available. This must be on a pay stub or a document issued the same day as a paycheck.
  • Keep records showing how many hours have been earned and used for three years. Affected employers may review the AB-1522 Employment: paid sick days Affected Employers may review the text of the amendments for the additional changes


For more information:  Healthy Workplace Healthy Family Act of 2014 (AB 1522)

  • Retaliation or discrimination against an employee who requests or uses paid sick days is prohibited. An employee may file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against the employee for exercising these rights or other rights protected under the Labor Code.
  • Local offices are listed on our website at


This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.