What was significant in the California workers’ comp world in 2024?

If you’re involved in the California workers’ comp system as an injured worker, labor advocate or employer, you likely have strong opinions about the fairness and adequacy of the system. But clearly, workers’ comp remains a backwater issue for politicians and the public.

In the last few years, California has seen a property insurance crisis, rising costs for gas, housing, auto insurance, utility bills and food, higher unemployment than most states and increased concern about crime.

Workers’ comp gets no attention. 

But if you’re reading this, you likely care about California’s system, So, as I have done for years, here is the first half of a subjective list of what stood out in 2024.

1. Usage of the Subsequent Injuries Benefits Trust Fund has ballooned, and 2024 was a year where the costs associated with the SIBTF exceeded the costs of operating the “user-funded” Division of Workers' Compensation and the Workers' Compensation Appeals Board. 

A November 2024 California Department of Industrial Relations announcement of amounts California employers will be assessed to run DIR and DWC programs outlined a large increase in charges for the SIBTF. The letter from the DIR explaining the assessments is here.

 2. It was not a year for any grand workers’ comp deals.

Applicants' attorneys and labor advocates did get some legislative support for their proposals, but the employer/insurer coalition continued to be powerful, so the applicants' bar did not have significant successful results in 2024 in the end.

Bills passed by the Legislature but vetoed by Gov. Gavin Newsom included:

• SB 1299, a bill to create a rebuttable industrial injury presumption for agricultural workers who develop or manifest a heat illness injury working outdoors where the agricultural employer failed to comply with existing heat standards.
• SB 1058, a bill to allow certain park rangers to draw Labor Code Section 4850 salary continuation benefits.
• SB 636, a bill that would have required that beginning July 1, 2026, for private employers, only a physician licensed pursuant to California law could modify or deny requests for authorization of workers’ compensation treatment.

 Other workers’ comp-related bills that died before reaching Newsom’s desk included:

• SB 1346, where a UR denial was overturned by IMR, would have excluded that period from the 104-week TD cap.
• AB 3106, which would have required school employers to pay COVID-19 employees to stay home per certain return-to-work guidelines.
• SB 1205, originally a bill to require employers to provide TD to workers who missed time from work to attend medical appointments, was later amended to provide that an employer’s denial of an employee's request to attend scheduled treatment during work hours be deemed a Labor Code § 132A violation.

The California Applicants' Attorneys Association did have one victory: The governor did sign AB 1870, which adds to language that must be posted at jobsites. Effective Jan. 1, the poster must include language in English and Spanish informing employees of their right to consult a workers’ compensation attorney. This bill sends an important message and thus was worthwhile, though there is little evidence that many workers actually consult the posters to learn of their rights.

Other bills that passed and were signed into law addressed particular needs in the comp system. Those include the following:

• AB 2337 authorizes the use of electronic signatures on workers’ compensation documents.
• AB 171 is a trailer bill that modifies the time frame for a petition for reconsideration to be denied if not acted on from 60 days from the filing date, changing that to 60 days from the date a trial judge transmits the case to the WCAB.
• SB 1455 delays until Jan. 1, 2028, a requirement that all contractors have workers’ comp insurance unless they can prove they had no employees, and it delays the requirement for the Contractors State Licensing Board to implement a verification process.
• AB 1239 extends a sunset date on a pilot program to allow clams administrators to use debit cards to pay indemnity benefits.

Labor did have more success with bills that address particular industry-specific situations. Those include the following:

• AB 2754 amends LC § 2810 and § 2810.4 to expand joint liability provisions for misclassifying employees as independent contractors to port drayage carriers and their client employers that use contracted labor.
• AB 977 makes assault and battery against a hospital ER health care provider a crime.
• AB 1843 requires ambulance employers to provide peer representative emotional support on request.
• AB 1976 requires that Cal/OSHA draft requirements that workplace first aid kits include naloxone opioid antagonists.
• AB 2975 requires Cal/OSHA to develop workplace violence prevention standards to include a weapons screening policy.
• AB 2499 prohibits discharge, discrimination or retaliation against victims of violence or family members of victims and addresses paid sick days entitlements.
• SB 1105 allows outdoor agricultural workers to use paid sick leave to avoid smoke, heat or flooding declared as a local or state emergency and prohibits discrimination for claiming such leave.

3. The legal wars over employee misclassification continued, as AB 5 and Proposition 22 remained the subject of appellate litigation in 2024.

The app-based gig employer companies won at the California Supreme Court, which rejected arguments that Prop. 22 is unconstitutional.

The ABC employment test used by the California Supreme Court 2018 decision in Dynamex Operations West v. Superior Court was adopted by the Legislature in 2019 as AB 5, but legal challenges followed. In June 2024, the U.S. Court Of Appeals for the 9th Circuit ruled in Lydia Olson V. State of California that AB 5 was not unconstitutional as a violation of the equal protection clause. 

And in July 2024, Uber, Lyft and DoorDash won a big victory for their business models. On July 25, the California Supreme Court issued its ruling in Hector Castellanos v. State of California, rejecting arguments that Prop. 22 is unconstitutional.

The outcome was not unexpected, as observers of the oral argument before the court noted that it seemed unsympathetic to the arguments challenging the constitutionality of the 2020 initiative called the “Protect App-Based Drivers and Services Act," which became Business and Professions Code Sections 7448-7467.

The court rejected the argument that the initiative was prohibited by Article XIV Section 4 of the California Constitution, which provides for legislative plenary power over California’s workers’ compensation system. In so doing, it held that the section does not prevent “the people’s initiative power.” 

Under the terms of Prop. 22, amendments would take a seven-eighths majority of both houses of the California Legislature. That would be practically impossible, of course.

The California Supreme Court declined to rule on hypotheticals such as how it would deal with an act of the Legislature providing workers’ compensation to app-based drivers.

Challenging Prop. 22 has been a major priority of the California labor movement. But for the foreseeable future, it appears that app-based drivers will be covered only by the scheme set up under Prop. 22. It’s an inferior benefit system.

However, other companies are losing in litigation to avoid the application of AB 5 and the ABC test to their businesses. For example, in March 2024, in a ruling by Judge Roger Benitez of the U.S. District Court Southern District, the California Trucking Association and an owner-operators association failed in their effort to be exempted from AB5.

4. Some new regulations were adopted by the DWC in 2024, and more regulatory changes are in development.

After multiple comment periods, new QME process regulations were adopted, effective Feb. 26, 2024. Those regs deal with QME appointment rules, reappointment denial criteria, continuing education and report writing requirements, etc.

Perhaps the most important feature is Section 33 (a), which was amended to change from 60 to 90 days the time allowed for scheduling the initial appointment after a request is made for the appointment. Those regs are here. 

In December 2024, the DWC adopted an amended Physician Fee Schedule and Pharmaceutical Fee Schedule, which, among other things, addresses fees for compounded drugs and physician dispensing. These regs, adopted after multiple amendments, are effective July 1, 2025. They are here.

Proposed new utilization review regulations were still pending at the end of the year after a public hearing set on July 25, 2024. 

In December 2024, the DWC posted a forum containing draft Supplemental Job Displacement Benefits regs. Those regs propose to tighten requirements for return-to-work counselors and specify what educational program providers can be used.

This follows the 2024 indictments of several prominent vocational counselors and vocational school owners. Key stakeholder groups submitted comments in the forum. These regs, which are not yet at the formal rulemaking stage, can be seen here.

The DWC held meetings with some stakeholders about other possible changes to MPN regulations, though those have not entered the rulemaking phase yet.

5. In the California appellate courts, there were few groundbreaking workers’ comp case law developments.

Other than the Hector Castellanos Prop. 22 case, there are a few 2024 Court of Appeal and WCAB en banc decisions worth noting.

• 3 Stonedeggs Inc. V. WCAB (3rd DCA) found that a worker involved in an accident driving from a remote forest firefighting camp without employer permission was not barred as a deviation from employment and was covered under the commercial traveler rule; at mid-year, the defendant was seeking California Supreme Court review.
• Vigil v. County of Kern (June 2024 WCAB en banc) clarifies what is required for rebuttals under Athens Administrators v. WCAB (Kite) to the Combined Values Chart.
• Hidalgo v. Roman Catholic Bishop, Gonzalez v. The Bicycle Casino, and Ledezma v. Kareem (WCAB en banc) awarded costs and sanctions against an applicant's attorney for pleadings filed with willful intent to disrupt or delay.
• Chavez V. Alco Harvesting (2nd DCA June 2024) was a widow’s civil action against an employer for husband’s COVID death. The court allowed the suit to proceed under the fraudulent concealment exception to the workers’ comp exclusive remedy doctrine.
• Mayor v. WCAB (1st DCA) held that the WCAB exceeded its jurisdiction in granting a petition for recon after the 60-day period under LC 5909, though it did not receive the petition until after the 60 days had elapsed; note that the California Supreme Court has now agreed to hear this case.
• Reed v. San Bernardino County (WCAB significant panel decision) held that an order taking a case off calendar is not a final order for purposes of reconsideration.
• American Building Innovation v. Balfour Beatty (4th DCA), in which a subcontractor who failed to maintain workers’ comp coverage was not entitled to bring an action to collect on its work.
• SIBTF v. WCAB (Vargas) (2nd DCA), in which the SIBTF must prove entitlement to a Social Security offset.

Next time, we will dive into the second half of the 2024 Top 10 list.

Julius Young is an applicants' attorney and a partner for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his Workers Comp Zone blog on the firm's website.