Runner's Workers' Compensation Bill Signed Into Law
Bill will help roofers with workers’ comp costs
Sacramento – Friday, May 26th, Assemblywoman Sharon Runner’s (R-Lancaster) legislation to address the rampant fraud in the roofing industry was signed into law by Governor Schwarzenegger. The bill, AB 881, requires all C-39-licensed roofers in California to obtain Workers’ Compensation insurance policies. The measure is joint authored by Assemblywoman Runner and Assemblyman Bill Emmerson (R – Redlands).
“This is a common sense measure that will greatly help an industry with some of the highest workers’ comp rates in the nation,” Runner said. “I am glad to see that Governor Schwarzenegger agrees that the roofing industry needed some additional help even after passing a monumental workers’ comp reform in 2004.”
Currently, the roofing industry in California pays among the highest workers’ compensation rates of all industries in the state. The nature of the work requires considerable investment in order to ensure the protection and safety of industry workers and contractors. However, a high incidence of payroll reporting fraud has also helped lead to these exorbitant costs, as many roofing contractors under-report their payroll in order to secure lower workers’ premiums. Further, when roofing companies under report their payroll and carry substandard levels of workers’ compensation insurance, their employees are put at an even higher risk without appropriate insurance coverage in place.
AB 881 is an industry-supported measure to address the rampant fraud in the roofing industry. The bill requires all C-39-licensed roofers in California to obtain Workers’ Compensation insurance policies. Insurers would be required to complete an annual audit of their California policyholders, with the costs of the audit included as a portion of the insurer’s customary basic underwriting charge. Finally, The Workers’ Compensation Insurance Ratings Bureau (WCIRB) will be directed by the California Department of Insurance to gather annual statistical data for the California roofing industry and provide a written report each year to the Department of Insurance. This comprehensive approach to eliminating fraud in the roofing industry will help to increase system efficiency while also bringing costs down for California’s roofing contractors.