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California’s UEF Program. Shirley H James, Manager, California Uninsured Employers Benefit Trust Fund Anthony Mischel and Fred Lonsdale, Office of Director of Industrial Relations, Legal. California UEF. Created by Legislature, 1972.

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california s uef program

California’s UEF Program

Shirley H James, Manager, California Uninsured Employers Benefit Trust Fund

Anthony Mischel and Fred Lonsdale, Office of Director of Industrial Relations, Legal

California UEF

california uef
California UEF
  • Created by Legislature, 1972.
  • The Mission of the Uninsured Employers Benefit Trust Fund:
    • Provide timely benefits to eligible injured workers; and
    • To make it prohibitively expensive for illegally uninsured employers to do business.

California UEF

hallmarks of california uef
Hallmarks of California UEF
  • Sources of Funding
  • UEF Derivatively Only Liable If Award Against Employer Not Paid
  • Employer Personally Liable to Injured Worker (IW)
  • Collection Rights By UEF
  • Enforcement Of Obligation To Be Insured

California UEF

uef funding
UEF Funding
  • Employer assessments (surcharges) provides funding for payment of benefits
    • UEF expected to contribute $ 5 million of that money
      • From collection on prior cases.
      • Penalties assessed against uninsured employers by Labor Commissioner.

California UEF

uef has derivative liability
UEF Has Derivative Liability
  • The Fund’s Liability for Benefits to IWs of Illegally Uninsured Employers Only After Award Issued Against Employer That Goes Unpaid
  • No Direct Liability Possible From UEF to IW
    • Liability is through the employer (2 preconditions)
      • Award against employer
      • Unpaid
    • UEF is not the guarantor
  • Lack of Direct Liability Has Consequences For UEF’s Procedures

California UEF

uninsured employer personally liable
Uninsured Employer Personally Liable
  • Case In Chief Is Between IW and Employer
    • IW’s goal is enforceable, civil judgment against employer
    • If an award of benefits is enforceable, the injured worker demands payment from the uninsured employer. Should the employer fail to pay, UEF must pay the award
      • Result is initial requirement to
        • Name the employer correctly, and
        • Serve the employer

California UEF

due process considerations
Due Process Considerations
  • Why Due Process Matters
    • WCAB considered judicial body
    • Employer’s personal liability adjudged
    • Property may be seized by UEF
  • When Is Due Process Preserved
    • If not in IW’s case, uncollectible judgment
    • Seems to be unique to California UEF.

California UEF

lien rights
Lien Rights
  • Liens and Penalties For Discretionary Payments
    • Advance on collectible awards
    • Extra penalty from employer to UEF for advances being necessary
  • Prejudgment Lien Rights
    • Real property liens
    • Due process considerations

California UEF

uef procedures 2
UEF Procedures –2-

California UEF

collection rights
Collection Rights
  • Can Collect All Moneys Paid
    • Including penalties UEF does not pay
  • Persons Liable With Employer
    • Partners/Community property
    • Joint venturers
    • Some shareholders of corporate employers
    • Limited Liability Company Members

California UEF

bankruptcy issues
Bankruptcy Issues
  • About Ten Percent Of Employers File Bankruptcy
    • Mostly Chapter 7 Discharges
  • Two Issues For Proceedings
    • IW’s case proceeding
    • UEF’s ability to collect
  • Dischargability
    • In Re Camilli (9th Cir.) – AZ
    • George (9th Cir.) – CA
  • Collection History

California UEF

other enforcement actions possible
Other Enforcement Actions Possible
  • Referrals of Currently Uninsured Employers To Labor Commissioner
    • Stop orders & penalties
    • Current procedures
    • Additional penalties after workers’ compensation award
  • Criminal Sanctions

California UEF

uef procedures 3
UEF Procedures –3-

California UEF

how uef operates
How UEF Operates

California UEF

with many thanks
With Many Thanks
  • Staff of Uninsured Employers Benefit Trust Fund
  • Office of The Director – Legal Unit

California UEF