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s 15583. Grounds of Objection.
The grounds of objection are as follows:
(a) The Division acted without or in excess of its jurisdiction;
(b) The Stop Order, Penalty Assessment Orders, or Notice were not properly served;
(c) The correct legal entity is not set forth in the Order or Notice.
(d) The employer was legally insured for workers' compensation;
(e) No employment relationship exists between the worker and the person assessed or enjoined;
(f) The Division committed mistake, error or omission; or
(g) The Division acted arbitrarily, capriciously and in abuse of its discretion.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15584. Matters Not Grounds for Objection.
The following reasons which may be asserted are not sufficient or valid grounds for objection:
(a) Ignorance of the law;
(b) The employer's assertion that the workers' compensation insurance premiums are excessive; or
(c) The employer's mistaken belief that he had such insurance.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15585. Proceedings Under Oath.
All testimony adduced at the hearing shall be taken under oath. The hearing officer shall administer such oath.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15586. Proceedings Shall Be Recorded.
Any proceedings heard before the Division shall be recorded.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15587. Conduct of Hearing.
Any Party to the hearing is entitled to be heard, to present evidence and to cross examine witnesses appearing at the hearing, but the Division is not bound by common law or statutory rules of evidence or procedure.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15588. Right to Subpoenas and Subpoenas Duces Tecum
(a) Subpoenas.
Upon request of any party to a hearing on a Penalty Assessment Order or Stop Order, the Division may issue subpoenas for the attendance of witnesses before the Division at the time and place of hearing. Said subpoenas shall be served in the manner provided for serving subpoenas in civil actions. The Division shall not issue subpoenas in blank.
(b) Subpoenas Duces Tecum.
Upon the request of any party to a hearing on a Penalty Assessment Order or Stop Order, accompanied by a declaration of materiality thereof in the manner provided for in Section 1985 of the Code of Civil Procedure, the Division may issue subpoenas duces tecum requiring witnesses or parties to produce any books, documents or other materials under their control which they are bound by law to produce at the time and place of hearing. Subpoenas duces tecum served hereunder shall be served as provided therefor in civil actions.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15589. Custody of Papers Filed with the Division.
Books, documents and other materials admitted into evidence may be withdrawn only on condition that an exact copy of any such books, documents or other materials sought to be removed, be offered in evidence in lieu thereof. In such event, there shall be made on the face of any such copy so admitted, a notation that the same is identical to the original withdrawn, and such notation shall be dated and signed by both the employer and the hearing officer.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15590. Decision of the Division.
(a) Stop Order. At the conclusion of a hearing on a Stop Order, the Division shall immediately affirm or dismiss said Stop Order. In addition, the Division shall issue and serve on any party to the hearing by registered or certified mail a written Notice of Findings and Findings within twenty-four (24) hours after the conclusion of such hearing.
(b) Penalty Assessment Order. The decision of the Division on any Penalty Assessment Order shall consist of Notice of Findings and written Findings which shall be served on any party to the hearing by registered or certified mail within fifteen (15) days after said hearing.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15591. Employer's Right to Writ of Review.
An employer, upon receipt of Findings affirming or modifying any Penalty Assessment Order may file a Writ of Review from any such Findings to the appropriate superior court upon the execution by such employer of a bond to the State in double the amount so found due and ordered paid by such employer conditioned that such employer will pay any judgment and costs rendered against him for such assessment.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15592. Procedures After Hearing or in the Absence of a Hearing.
(a) Where a hearing has been held and Notice of Findings and Findings have been issued and served on the uninsured employer, and after ten (10) days have expired since the issuance and service thereof, certified copies of the Penalty Assessment Order and the Findings shall be filed with the Judgment (Special) for the Uninsured Employers Fund with the clerk of the superior court who shall enter a judgment in favor of the Director of Industrial Relations as Administrator of the Uninsured Employers Fund, and against the uninsured employer in the amount shown on the Findings unless a Writ of Review has been filed within the said ten (10)-day period.
(b) Where a petition objecting to a Penalty Assessment Order has not been filed, a hearing has not been held and twenty (20) days have expired since the issuance and service of the Penalty Assessment Order, a certified copy of the Penalty Assessment Order may be filed with the Judgment (Special) for the Uninsured Employers Fund with the clerk of the superior court who shall enter a judgment in favor of the Director of Industrial Relations, as Administrator of the Uninsured Employers Fund, and against the uninsured employer in the amount shown on the assessment order.
(c) Upon the entry of a Special Judgment by the clerk of the superior court under Section 15592 (a) and (b) a Notice of Entry of Judgment (Special) for the Uninsured Employers Fund shall be filed and served upon the employer by regular first-class mail.
(d) After full payment has been made of a Judgment (Special) for the Uninsured Employers Fund, an Acknowledgment of Full Satisfaction of Judgment may be filed with the clerk of the superior court.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15593. Procedures Subsequent to Entry of Judgment.
After a Judgment (Special) has been entered and Notice of Entry of such Judgment has been mailed to the employer and he has failed or refused to pay such judgment, the Division may obtain a writ of execution thereon.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15594. Recording of Penalty Lien.
Where the employer has failed to secure the payment of compensation, the Division shall file with the county recorder of any county in which such employer's property may be located, a certificate of the amount of penalty due from such employer and such amount shall be a lien in favor of the Division from the date of such filing against the real property and personal property of the employer within the county in which such certificate is filed in accordance with Labor Code Section 3727.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15595. Cancellation of Penalty Lien.
Upon payment of the penalty assessment and upon the employer's request, the Division shall issue a certificate of cancellation of penalty assessment which may be recorded by the employer at his expense.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.







s 15596. Notice of Employee's Right to Workers' Compensation Benefits.
(a) Employers shall notify, orally or in writing, every new employee, either at the time the employee is hired or by the end of his first pay period, of the employee's right to receive workers' compensation benefits should he be injured on the job at any time while in such employer's employ.
(b) Employers who need not give such notice are owners or occupants of residential dwellings whose employees perform duties which are incidental to the ownership, maintenance or use of the dwelling, including the care and supervision of children or whose duties are personal and not in the course of the trade, business, profession or occupation of such owner or occupant if such employees are employed for less than fifty-two (52) hours during a ninety (90)- day period and earn less than one hundred ($100) dollars.


Note: Authority cited: Sections 55 and 3710, Labor Code. Reference: Sections 3700, 3710, 3710.1, 3710.2, 3711, 3712, 3713, 3714, 3718, 3722, 3723, 3725, 3726 and 3727, Labor Code.






s 15600. Definitions.
(a) Assessable Premium. The premium to which the assessment and/or surcharge is to be applied is the premium the insured is charged after all rating adjustments (experience rating, schedule rating, premium discounts, expense constants, retrospective rating, etc.) except for adjustments resulting from the application of deductible plans or the return of policyholder dividends.
(b) Assessment.Includes those assessments levied upon insured and self-insured employers to establish and maintain the Workers' Compensation Administration Revolving Fund, the Uninsured Employers Benefits Trust Fund, and the Subsequent Injuries Benefits Employers Trust Fund.
(c) Base Year. For purposes of calculating the self-insured employer assessment factors, that time period as provided by the Office of Self-Insurance Plans pursuant to section 15602. For public self-insured employers, the base year is a fiscal year basis. For private self-insured employers, the base year is a calendar year basis.
(d) Director. The Director of the Department of Industrial Relations.
(e) Expected total current year premium. Total direct workers' compensation premium of all insurers as reported to the Department of Insurance's designated licensed rating organization for the period of January 1 through June 30 of the year immediately preceding the assessment, and adjusted by the Department of Insurance's designated licensed rating organization, to a full year basis.
(f) Indemnity.The payments made by a self-insured employer directly to injured employees or their dependents as compensation pursuant to Labor Code divisions 4 and 4.5 including vocational rehabilitation maintenance and salary continuation payments pursuant to Labor Code sections 4800 and 4850.
(g) Inception date. The inception date of a workers' compensation insurance policy is the normal anniversary rating date of a workers' compensation insurance policy as defined in the California Workers' Compensation Insurance Manual published by the Workers' Compensation Insurance Rating Bureau.
(h) Insured employer.Any employer, including any agency or division of the State of California, who secures workers' compensation insurance coverage under provisions of subdivision (a) of Labor Code section 3700.
(i) Insurer. Any person, including the State Compensation Insurance Fund, authorized to transact workers' compensation insurance in California.
(j) Payroll. Remunerationsubject to workers' compensation insurance premium for insured employers and that remuneration to employees of a self-insured employer which would be subject to premium charges if the employer were an insured employer.
(k) Revolving Fund.The Workers' Compensation Administration Revolving Fund established pursuant to the provisions of Labor Code section 62.5.
(l) Revolving Fund Assessment.The user fee assessment levied upon insured and self-insured employers to establish and maintain the Workers' Compensation Administration Revolving Fund.
(m) Self-insured employer. Any employer who is authorized by the Director to self-insure its workers' compensation liability under subdivisions (b) or (c) of Labor Code section 3700. A self-insured employer shall include the State of California. For the limited purposes of the Targeted Inspection Assessment, the term "self-insured employer" shall not include the State of California or a public agency employer.
(n) Subsequent Injuries Fund. The Subsequent Injuries Benefits Trust Fund established pursuant to the provisions of Labor Code section 62.5.
(o) Subsequent Injuries Fund Assessment. The user fee assessment levied upon insured and self-insured employers to establish and maintain the Subsequent Injuries Benefits Trust Fund.
(p) Surcharge. Surcharge means the "State Fraud Investigation and Prosecution Surcharge" assessed under authority of Labor Code Section 62.6.
(q) Targeted Inspection Assessment. The user fee assessment levied upon self-insured employers to establish and maintain the Cal-OSHA Targeted Inspection and Consultation Fund established pursuant to the provisions of Labor Code section 62.7.
(r) Uninsured Employers Fund. The Uninsured Employers Benefits Trust Fund established pursuant to the provisions of Labor Code section 62.5.
(s) Uninsured Employers Fund Assessment. The user fee assessment levied upon insured and self-insured employers to establish and maintain the Uninsured Employers Benefits Trust Fund.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code;and Section 1872.83, Insurance Code. Reference: Sections 51, 62.5, 62.6, 3700 and 3701, Labor Code; Section 1872.83, Insurance Code.






s 15601. Determination of Revolving Fund, Subsequent Injuries Fund, and Uninsured Employers Fund Total Assessment.
On or before November 1 of each year, the Director shall, in accordance with Labor Code Section 62.5:
(a) Determine the total amount of funds appropriated for the Division of Workers' Compensation;
(b) Determine the aggregate amount of the assessment for the Subsequent Injuries Fund; and
(c) Determine the aggregate amount of the assessment for the Uninsured Employers Fund.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code. Reference: Section 62.5, Labor Code.






s 15601.5. Ascertainment of State Fraud Investigation and Prosecution Surcharge.
On or before September 1 of each year, the Director shall ascertain from the Fraud Assessment Commission the aggregate amount of the surcharge to be assessed.
The aggregate amount of the surcharge shall be allocated between insured and self-insured employers by applying the same proportional allocation and collection methodology as used to collect the Workers' Compensation Administration Revolving Fund Assessment.


Note: Authority cited: Sections 54 and 55, Labor Code. Reference: Section 62.6, Labor Code.






s 15601.6. Determination of Targeted Inspection Assessment.


Note: Authority cited: Sections 54, 55, 62.5, 62.6 and 62.7, Labor Code. Reference: Section 62.7, Labor Code.








s 15601.7. Determination of Self Insured Employers Subject to the Targeted Inspection Assessment.
On or before September 1 of each year, the Manager of Self-Insurance Plans shall identify for the Director each Private Self Insurer subject to the Targeted Inspection Assessment as determined below.
(a) The Targeted Inspection Assessment shall apply to each Self Insurer in each grouping set forth in subsection (b) that has a current 1-year average number of indemnity claims per 100 employees as calculated in subsection (e) below, that is equal to or in excess of 125 percent of the 3 year base figure determined for each grouping in subsection (d) of this section.
(b) The Manager shall categorize all private self insurers into groups for the purpose of calculating the Targeted Inspection Assessment. All private self insurers shall be categorized into groups by the first digit of their Standard Industrial Classification Code (SIC Code) as reported on Page 1 of the Self Insurer's Annual Report for the reporting period immediately prior to the current budget year. For purposes of such categorization, each private group self insurer shall be considered as a single entity. The Manager may correct the SIC Code reported for cause or where the Manager believes an error was made by the self insurer in designating their SIC Code on the Annual Report.
(c) For each SIC Code grouping set forth in subsection (a), the Manager shall calculate the historical average number of indemnity claims per 100 employees from the Consolidated Liabilities page of the full year Self Insurer's Annual Reports submitted by the members in each SIC Code group for the 3 year reporting period immediately prior to the current 1-year period used to calculate the individual self insurer's indemnity claims per 100 employees.
(d) The Manager shall calculate a figure that will be 125 percent of each SIC Code grouping's 3 year historical average number of indemnity claims per 100 employees.
(e) For each private self insurer, the Manager shall calculate an individual 1- year number of indemnity claims per 100 employees, using information reported by each self insurer on its last full year Self Insurer's Annual Report submitted for the reporting period immediately prior to the current budget year. In this calculation, the manager shall divide the total number of indemnity claims reported in the most recent claim year by the total number of California employees reported, with the result multiplied by 100. Any self insurer with less than 100 total employees shall be considered to have 100 employees for purposes of this calculation.


Note: Authority cited: Sections 54, 55, 62.7 and 62.9, Labor Code. Reference: Section 62.7 and 62.9, Labor Code.






s 15601.8. Determination of Insured Employers' Payroll and Premium Data.
On or before September 1 of each year, the Director shall request that the Department of Insurance direct the designated licensed rating organization to provide the Director with a statement for each insurer authorized to transact workers' compensation insurance in the state of California showing the total payroll and premium generated by that insurer on policies subject to an experience modification of 1.25 or more for the most recent policy year available.


Note: Authority cited: Sections 54, 55 and 62.7, Labor Code. Reference: Section 62.7, Labor Code.






s 15602. Allocation of Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and/or Fraud Surcharge Among Insured and Self-Insured Employers.
(a) Not later than November 1 of each year, the Director shall determine the proportional payroll allocation factors to use to determine the total insured employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge, and the total self-insured employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge as follows:
(1) The aggregate payroll of all insured employers shall be determined from payroll information provided by the Department of Insurance's designated licensed rating organization for the most recent period available.
(2) The aggregate payroll of all self-insured employers shall be determined from payroll information provided by the Office of Self-Insurance Plans of the Department of Industrial Relations excluding payroll of insured employees of the State of California for the most recent base year available.
(3) The total payroll information shall then be determined by combining the most recent insured employer payroll with the most recent self-insured employer payroll.
(4) The insured employer proportional payroll allocation factor shall be determined by dividing the insured employer payroll by the total combined payroll.

(5) The self-insured employer proportional payroll allocation factor shall be determined by dividing the self-insured employer payroll by the total combined payroll. The self-insured employer payroll shall not include that portion of the State of California's payroll which was covered by a policy of insurance.
(b) The total insured employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and/or Fraud Surcharge shall be determined by multiplying each respective assessment and/or surcharge by the insured employer proportional payroll allocation factor.
(c) The total self-insured employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and/or Fraud Surcharge shall be determined by multiplying each respective assessment and/or surcharge by the self-insured employer proportional payroll allocation factor.


Note: Authority cited: Sections 54, 55, 62.5 and 62.6, Labor Code. Reference: Sections 62.5 and 62.6, Labor Code.






s 15603. Determination of Insured and Self-Insured Employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge Factors.
(a) The insured employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge factors shall be determined by dividing the total amount of each respective insured employer assessment and the total amount of the insured employer surcharge, as the case may be, by the expected total current year premium, as determined by the Department of Insurance's designated licensed rating organization.
(b) The self-insured employer Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and/or Fraud Surcharge factors shall be determined by dividing the total amount of each respective self-insured employer assessment or surcharge, as the case may be, by the total amount of workers' compensation indemnity paid under California law by all self-insured employers during the most recent base year available, as determined by the Office of Self-Insurance Plans.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code. Reference: Sections 62.5 and 62.6, Labor Code.






s 15603.5. Determination of Targeted Inspection and Consultation Assessment Factors.


Note: Authority cited: Sections 54, 55 and 62.7, Labor Code. Reference: Section 62.7, Labor Code.






s 15604. Surplus in Funding.
(a) In the event of an unexpended surplus in the Workers' Compensation Administration Revolving Fund balance for a fiscal year, the balance shall be carried forward and credited to the subsequent year's Revolving Fund assessment.
(b) In the event of an unexpended surplus in the Subsequent Injuries Fund balance for a fiscal year, the balance shall be carried forward and credited to the subsequent year's Subsequent Injuries Fund Assessment.
(c) In the event of an unexpended surplus in the Uninsured Employers Fund balance for a fiscal year, the balance shall be carried forward and credited to the subsequent year's Uninsured Employers Fund Assessment.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code. Reference: Section 62.5, Labor Code.






s 15605. Collection of the Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge from Self-Insured Employers.
(a) The Director designates the Manager of Self-Insurance Plans to collect the Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and/or Fraud Surcharge from self-insured employers on the Director's behalf.
(b) No later than December 1 of each year, the Manager of Self-Insurance Plans shall bill each self-insured employer for the amount of the individual self-insured employer's Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and/or Fraud Surcharge. The billing shall identify each assessment and/or surcharge separately and shall include the calculations utilized to determine each assessment factor. Each individual assessment and/or surcharge shall be determined by multiplying the self-insured employer assessment factor by the total amount of worker's compensation indemnity paid and reported by each self-insured employer on its Self-Insurer's Annual Report during the base year, as determined by the Office of Self-Insurance Plans. The Self-Insurer's Annual Report shall include all indemnity payments as defined in section 15600 (e).
(c) The amount of any assessment and/or surcharge shall be paid to the Office of Self-Insurance Plans within 30 days of the billing. Upon the request of any Joint Powers Authority, the Manager may agree to bill the Joint Powers Authority directly for the total amount of each assessment and/or surcharge owed by its public agency members.
(d) In the event the Manager collects funds in excess of the total self-insured employer assessment in the (1) Revolving Fund Assessment; (2) Subsequent Injuries Fund Assessment: (3) Uninsured Employers Fund Assessment; and/or (4) Fraud Surcharge, such excess funds shall be paid over to the Director to be held in a trust account and credited to the next year's respective assessments and/or surcharge on self-insured employers.
(e) Should the Manager determine that any self-insured employer has understated or overstated its total payroll or indemnity paid on the self-insured employer's annual report, the Manager may issue a corrected billing.
(f) If an employer has paid the assessments and/or surcharge as an insured employer, and during the year of such assessments and/or surcharge is granted a certificate of consent to self-insure, the newly self-insured employer is not required to pay an additional assessments and/or surcharge as a self-insured employer for the current assessments and/or surcharge year. Such an employer shall submit to the Manager a copy of the assessments and/or surcharge billing paid as insured employer in lieu of payment as a self-insured employer.
(g) A self-insured employer that does not have a self-insurers' annual report on file with the Office of Self-Insurance Plans which covers the base year of the assessments and/or surcharge, and that did not pay the assessments and/or surcharge for the base year as an insured employer, shall pay the assessments and/or surcharge through the Office of Self-Insurance Plans.
(1) To enable the Manager to determine such self-insured employer's liability for the assessments and/or surcharge, each such self-insured employer shall file a report prescribed by the Manager, setting forth such self-insured employer's total annual payroll for the base year, and the total workers' compensation premium paid for each calendar quarter of the preceding year.
(2) The Manager shall bill the self-insured employer by applying the self-insured employer assessment factors to the last annual premium paid by the self-insured employer until the self-insured employer's experience as a self-insured employer exceeds two complete calendar years for private self-insured employers or two complete fiscal years for public self-insured employers.
(h) A self-insured employer that ceases to be self-insured and ceases to operate as a functioning employer with no legal requirement to secure the payment of compensation, but continues to have open workers' compensation claims arising from the period of self-insurance, shall continue to be liable for assessments and/or surcharge for a period of 3 calendar years following the termination, revocation, or surrender of the employer's certificate of consent to self-insure. The Manager shall bill the former self-insured employer in accordance with this Section.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code; and Section 1872.83, Insurance Code. Reference: Sections 62.5 and 62.6, Labor Code; and Section 1872.83, Insurance Code.






s 15605.5. Collection of Targeted Inspection Assessment from Self-Insured Employers.


Note: Authority cited: Sections 54, 55 and 62.7, Labor Code. Reference: Section 62.7, Labor Code.






s 15606. Collection of Advances Against Insured Employers.
(a) Not later than December 1 of each year, the Director shall notify each workers' compensation insurer, of the amounts due from the insurer on behalf of its policyholders for, respectively, the Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and the Fraud Surcharge levied pursuant to the authority of Labor Code Sections 62.5 and 62.6 and these regulations. The notice shall include a bill that sets forth separately the total amounts of the assessments and the surcharge.
(b) The Insurer advances against the Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge amounts shall be calculated by multiplying the insurer's California direct written workers' compensation premium as reported in the most recent year's financial statement on file with the Insurance Commissioner, multiplied by the ratio of the expected total current year premium to the total direct written workers' compensation premium of all insurers as reported in the latest year's annual financial statements on file with the Insurance Commissioner by the respective factors determined pursuant to subsection (a) of Section 15603 of these regulations.
(c) Where the amount of the assessments or surcharge owed is less than $5.00 the Director may elect not to bill the insurer therefor.
(d) Each insurer shall pay to the Director one half of the amounts billed under subsection (a) on behalf of its insured employers on or before the following January 1. Each insurer shall pay the balance of the assessments and surcharge to the Director on the following April 1.
(e) Upon agreement of the affected insurers, the Director may elect to consolidate in one billing the assessments and surcharge of all insured employers that are insured by insurers under the same management, direction and control.
(f) In the event the Director collects advances from insurers in excess of the total assessments and surcharge due from insured employers in the (1) Revolving Fund Assessment; (2) Subsequent Injuries Fund Assessment: (3) Uninsured Employers Fund Assessment; and/or (4) Fraud Surcharge, the excess funds shall be held by the Director in a trust account and credited to the subsequent year's total respective assessments and surcharge on insured employers.
(g) Commencing with the assessment payment due April 1, 1993, the insurer shall submit a summary report on a form provided by the Director, which includes the following information: (1) the total amount of assessments and surcharges billed insured employers by the insurer; (2) the respective factors used by the insurer in assessing and surcharging insured employers.
(h) The summary report due April 1, 1993 shall include the information specified in this subsection for all workers' compensation insurance policies with an inception date between August 1, 1990 and December 31, 1991. Commencing April 1, 1994, the summary report shall include the information specified in this subsection for all workers' compensation insurance policies with an inception date in the next preceding calendar years.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code; and Section 1872.83, Insurance Code. Reference: Sections 62.5 and 62.6, Labor Code; and Section 1872.83, Insurance Code.






s 15607. Collection of Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge from Insured Employers.
(a) Every insurer shall collect the Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud Surcharge required by this article and Labor Code Sections 62.5 and 62.6, respectively, from each employer insured by it by applying a separate charge to all workers' compensation insurance policies issued by such insurer with an inception date in the year beginning January 1 after the determinations required by Sections 15601 and 15601.5 of these regulations. The amount of the assessment and surcharge shall be determined by multiplying the insured employer's estimated annual assessable premium by the assessment factors determined by the Director pursuant to subsection (a) of section 15603. The assessment factors in effect on the inception date of the policy shall be used to calculate the separate charges relative to that policy, including any additional or return premium.
(b) The respective amounts of the Revolving Fund Assessment, Subsequent Injuries Fund Assessment, Uninsured Employers Fund Assessment, and Fraud surcharge shall each be rounded to the nearest whole dollar, and be respectively shown in the policy as "Workers' Compensation Administration Revolving Fund Assessment (amount)," "Subsequent Injuries Benefits Trust Fund Assessment (amount)," "Uninsured Employers Benefits Trust Fund Assessment (amount)," and "State Fraud Surcharge (amount)".
(c) Commencing with policies effective on and after January 1, 1993, the insured employer's separate charges calculated under subsection (a) above shall be collected in full with the initial payment of assessable premium. If additional premium becomes due under the policy, the final amount of the separate charges shall be adjusted with the final premium bill for the policy. In the case of a retrospective rated policy, the respective assessment and/or surcharge should be applied to the policy premium at issuance, with recalculation at audit, and application of the factors to any retrospective adjustment premium.
(d) Notwithstanding the requirements of this Section, an insurer may elect not to bill an insured employer for the assessments and surcharge for the additional premium due under the policy if the amount of the additional assessments or surcharge does not exceed $10.00. In the event a return premium is due the employer, the insurer shall return a pro rata share of assessments and surcharge previously paid by the employer unless the assessments and surcharge overpayment does not exceed $10.00.
(e) A self-insurer whose certificate has been revoked during the base year or during the calendar year prior to the current assessments and/or surcharge billing by the Manager shall be exempt from payment of the assessments and/or surcharge as a self-insurer.
(f) If an employer has paid the assessments and/or surcharge as a self-insured employer, and during the year of such assessment and/or surcharge obtains a policy of workers' compensation insurance, the newly insured employer is not required to make assessments and/or surcharge payments as an insured employer for that year's assessments and/or surcharge. Such an employer shall submit to the insurer a copy of the assessments and/or surcharge billing paid as a self-insured employer, in lieu of payment as an insured employer.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code; and Section 1872.83, Insurance Code. Reference: Sections 62.5 and 62.6, Labor Code; and Section 1872.83, Insurance Code.






s 15607.5. Collection of Targeted Inspection Assessment from Insured Employers.


Note: Authority cited: Sections 54, 55 and 62.7, Labor Code. Reference: Section 62.7, Labor Code.






s 15608. Assessment and/or Surcharge Collection in Excess of Insured Employer Assessment Advance.
If the summary report required by subsections (g) and (h) of Section 15606 of these regulations shows that the insurer has collected assessments and surcharges from employers in excess of the advances paid to the Director for policies incepting in the calendar year covered by the summary report, the insurer shall pay the excess amount to the Director upon submission of the summary report. The Director shall hold any excess amounts in a trust account and either credit the respective amounts to any deficiency in the current assessments and surcharge, or, if there is no deficiency, to the subsequent year's respective assessments and/or surcharges on insured employers.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code; and Section 1872.83, Insurance Code. Reference: Sections 62.5 and 62.6, Labor Code; and Section 1872.83, Insurance Code.






s 15609. Credit for Undercollection.
(a) When an insurer demonstrates to the Director, within one year of the final audit conducted for premium adjustments for the policies with inception dates in the year subject to assessment, that the total assessments and/or surcharges, respectively, collected from its insured employers is less than the respective assessment and surcharge amounts advanced by the insurer under Section 15606 for that assessment year, the Director shall credit the amount of the difference against the subsequent year's respective advances due from the insurer on behalf of its insured employers.
(b) No insurer shall receive any credit for any portion of an undercollection against advances paid by that insurer that is due to the insurer's failure to properly bill a policyholder for the appropriate assessments and/or surcharges applicable to the premium for that policyholder's policy.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code; and Section 1872.83, Insurance Code. Reference: Sections 62.5 and 62.6, Labor Code; and Section 1872.83, Insurance Code.






s 15610. Collections of 1995 Interim Targeted Inspection Assessment.


Note: Authority cited: Sections 54, 55 and 62.7, Labor Code; and Section 1872.83, Insurance Code. Reference: Section 62.5, Labor Code; and Section 1872.83, Insurance Code.






s 15611. Collection of Interim Assessments.
(a) Notwithstanding the provisions of this subchapter, if the Director determines that there are insufficient funds to support the Workers' Compensation Administration Revolving Fund, the Subsequent Injuries Fund or the Uninsured Employers Fund for fiscal year 2003-2004, or any fiscal year thereafter, the Director may collect a single interim assessment for these respective funds, in an amount determined by the Director, to provide sufficient funding for these funds.
(b) Any assessment collected under this Section shall not reduce the amount to be collected in the subsequent year's assessments, except as provided by Section 15608 of these regulations.
(c) Any assessment collected under this Section shall be included on the next annual report required under Section 15606(g) of these regulations.


Note: Authority cited: Sections 54, 55 and 62.5, Labor Code. Reference: Section 62.5, Labor Code.







s 15710. Definitions.
The following definitions are applicable to this group. Terms not defined here but used in the Labor Code shall have their meaning as so used. All references to the code or to code sections refer to the California Labor Code unless otherwise stated.
(a) Prima facie illegally uninsured. In addition to examples provided in the code, an employer against which there is any evidence from which, after considering any contradicting evidence except any testimony or statements by the employer or related persons, a reasonable person could conclude that the employer, as of the time of the injury, had not secured the payment of compensation as provided by code Section 3700.
(b) Prima facie a parent. A corporation against which there is any evidence from which, after considering any contradictory evidence except testimony or statements of shareholders, officers or beneficial owners of the parent or its subsidiary, a reasonable person could conclude that the corporation had been at the time of the injury or has been at any subsequent time the parent of a corporation which, as of the time of the injury, had not secured the payment of compensation as provided by code Section 3700.
(c) Prima facie a substantial shareholder. A person against which there is any evidence from which, after considering any contradictory evidence except testimony or statements of that person or of related persons or other shareholders, a reasonable person could conclude that the person had been at the time of the injury or has been at any subsequent time a substantial shareholder in a corporation or the parent of a corporation, which corporation, as of the time of the injury, had not secured the payment of compensation as provided by code Section 3700.
(d) Prima facie case. A case for which there is any evidence from which, after considering any contradictory evidence, a reasonable person could conclude that the case were established as likely to be true.
(e) Director. The Director of Industrial Relations or his designated agents or delegates.
(f) Illegally uninsured. The status of having employees, one of whom was injured arising out of and in the course of the employee's employment at a time when the employer had not secured the payment of compensation as required by code Section 3800.
(g) Appeals board. The California Workers Compensation Appeals Board.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.







s 15711. Delegation of Authority.
The director delegates authority to the Chief of the Claims Bureau of the Uninsured Employers Fund to make the determination under Labor Code Sections 3715(c), 3720(c), and 3720.1(a), to reconsider determinations made pursuant to code Sections 3715(c) and 3720.1(a), to file liens, to remove liens erroneously filed, to remove liens pursuant to code Section 3720(c), to collect funds on liens, refund funds erroneously collected, issue the notices pursuant to code Section 3715(d), and otherwise to administer the program relating to liens issued prior to the issuance of findings and awards of the appeals board, in appeals board cases involving illegally uninsured employers. The Chief of the Claims Bureau may, as he or she deems necessary, delegate all or any part of the authority granted herein to the area supervisors within the Claims Bureau.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.






s 15720. Determinations.
The director shall make all determinations under code Section 3715(c) of whether a person involved in a claim before the Appeals Board is prima facie illegally insured. The director may make determinations pursuant to code Section 3715(c) in any case in which the director, as administrator of the Uninsured Employers Fund, has been joined or otherwise made a party. In all cases where the employer or alleged employer is a corporation and where the director has not petitioned the appeals board to make a determination under code Section 3717.2 or, pending a determination in such cases, the director may make determinations pursuant to code Section 3720.1 of status of prima facie a parent or prima facie a substantial shareholder. The director shall record written reasons for his determinations. These reasons shall be included with the notice of determination.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.







s 15721. Negative Inferences.
If information or documentary proof has been requested by the director from the alleged uninsured employer, and the alleged uninsured employer has not supplied such information or documents, and if the information, documents or copies thereof can reasonably be assumed to be in the possession or control of the alleged uninsured employer, the director shall infer from the failure to comply with the request that the documents do not exist, or that the information or the contents of the documents establish that the alleged uninsured employer was illegally uninsured, or that there was substantial shareholder or parent status, whichever is applicable.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.






s 15722. Reconsideration of Section 3715 (c) Determinations; Finality.
Upon receipt of written protest or application for reconsideration from an aggrieved person, of a determination that an employer was prima facie illegally uninsured, the Chief of the Claims Bureau, Uninsured Employers Fund, on the director's behalf, shall informally reconsider the determination. The aggrieved person shall furnish a statement of reasons why the determination was in error, and any evidence in support of the position of the aggrieved person. The Chief of the Claims Bureau may uphold, rescind, or alter the original determination. The decision after reconsideration shall be mailed to the aggrieved person and to other persons to whom the original notice was sent, within five working days after receipt of the protest or application for reconsideration. A request of the reconsideration under this section shall be a prerequisite to filing of a petition with the appeals board pursuant to code Section 3715(d). For purposes of the time within which the petition must be filed with appeals board, the determination shall not be considered to be final until after the decision after reconsideration is mailed.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.







s 15723. Reconsideration of Section 3720.1(a) Determinations; Finality.
Upon receipt of written protest or application for reconsideration from an aggrieved person of a determination that a person was prima facie, a parent or a substantial shareholder, the Chief of the Claims Bureau, Uninsured Employers Fund, on the director's behalf, shall informally reconsider the determination. The aggrieved person shall furnish a statement of reasons why the determination was in error, and any evidence in support of the position of the aggrieved person. The Chief of the Claims Bureau may uphold, rescind, or alter the original determination. The decision after reconsideration shall be mailed to the aggrieved person, and to other persons to whom the original notice was sent, within five working days after receipt of the protest or application for reconsideration. A request for reconsideration under this section shall be a prerequisite to a filing of a request for a hearing pursuant to code Section 3720.1.
(b). A request for hearing filed prior to a protest or application for reconsideration shall be deemed a request for reconsideration. The time for filing a request shall not begin to run until the notice of decision after reconsideration is issued.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.







s 15730. Administrative Hearing.
Upon the petition of an aggrieved person, if the petition is not treated as a request for informal reconsideration pursuant to Section 15723, the director shall hold a hearing to review prima facie substantial shareholder or parent status.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.







s 15731. Delegation of Authority.
The director delegates authority to the Chief Counsel of the Department of Industrial Relations to appoint hearing officers and to issue the notices for hearings being held pursuant to code section 3720.1(b). The hearing officer appointed shall not have been involved in the representation of the director before the appeals board in that particular case.


Note: Authority cited: Sections 54, 55, 59, 3702.10, 3710 and 3715, Labor Code. Reference: Sections 3715, 3717.2, 3720, 3720.1 and 3721, Labor Code.







s 15732. Conduct of Hearing.
(a) Hearing Officer. The hearing officer shall have full authority as the director would to make all decisions necessary for the proper conduct of the hearing and for the making of a decision thereon. Not limiting the foregoing, the hearing officer may administer oaths, take testimony, admit or exclude evidence, schedule the hearing, continue or adjourn the hearing, require a statement of contentions, issue a subpoena and subpoena duces tecum for the attendance of a person and the production of testimony, books, or documents, and to decide when the case is submitted for decision. (continued)