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Industry Insights

Kammerer: The Workers' Compensation Exemption From CCPA

  • State: California
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There appears to be confusion within the workers’ compensation community as to whether workers’ compensation claims-related activities are exempt from the provisions of the California Consumer Privacy Act (CCPA).

Lori C. Kammerer

Lori C. Kammerer

One reason for the confusion is that workers’ compensation exemptions from the CCPA are not stated expressly but are nevertheless contained in Assembly Bill 25 (Chau), which was enacted in 2019. This exemption was continued in Assembly Bill 1281 (Chau), which was enacted into law in 2020. The exemptions must be extended by the Legislature.

Among other things, Assembly Bill 25 amended Section 1798.145 of the Civil Code, creating an unequivocal exemption from CCPA for activities pertaining to the delivery of workers’ compensation benefits to injured workers. Three separate provisions of Section 1798.145 of the Civil Code combine to establish the workers’ compensation exemption.

The first clause appears in subdivision (a) of Civil Code §1798.145, specifying that the obligations imposed by the CCPA shall not restrict the ability of a business to “comply with federal, state or local laws” or “exercise or defend legal claims.”

Obviously, a business must have the ability to comply with myriad state laws (and the state Constitution) that govern extensively the administration of the workers’ compensation system in California. This principle is set forth in the exemptions stated in §1798.145(a).

Further, a workers’ compensation claim is a legal claim, and the CCPA does not restrict the ability of a business to defend legal claims.

The second and third provisions further establishing that workers’ compensation-related activities are exempted from the CCPA are contained in subdivision (h) of §1798.145. That subdivision specifies that the CCPA does not apply to personal information that is collected by a business about a natural person when the person is an employee of the business.

Subdivision (h) of §1798.145 also specifies that the CCPA does not apply to personal information that is necessary for the business to retain to administer benefits for a person when the person is an employee of the business.

Potential expiration of WC exemptions from CCPA

The exemptions from the CCPA for workers’ compensation-related claims discussed above are set to expire, either on Jan. 1, 2022, or Jan. 1, 2023, depending on the success or failure of Proposition 24 (digital privacy), which is a proposed initiative statute on today's ballot. Originally, AB 25 contained a “sunset clause” providing that the provisions of Civil Code § 1798.145 pertaining to various exemptions from CCPA would expire on Jan. 1, 2021.

On Sept. 29, Gov. Gavin Newsom signed into law AB 1281, which extends the sunset date for Civil Code § 1798.145 to Jan. 1, 2022. The idea behind including a sunset clause in these bills was to encourage stakeholders to hammer out additional exemptions on other privacy issues under the CCPA on which the parties were unable to reach full agreement.

Into the mix came Proposition 24, which contains identical exemption language pertaining to workers’ compensation and other business activities, but it includes a sunset date on the exemptions of Jan. 1, 2023. If Proposition 24 passes, then the workers’ compensation exemption set forth in Civil Code § 1798.145 will expire on Jan. 1, 2023.

In either case, the workers’ compensation community will have either one or two years within which to resolve any remaining issues concerning CCPA exemptions.

For more than 28 years and through the past seven governors’ administrations, Lori C. Kammerer has advanced the interests of businesses in the California Legislature and with the state's top regulatory officials. Kammerer represented the business community as executive director of the California Coalition on Workers' Compensation from 1987-2002. In 2002, she founded Kammerer & Company Inc., a full-service government relations and advocacy firm, and serves as its principal legislative advocate for businesses and trade associations.

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