California Workers Compensation for Officers, Directors & Partners
When people think of workers compensation, their first thought is usually of a construction or factory accident. But according to the Bureau of Labor Statistics, approximately 20-25% of all workplace injuries and illnesses occur in office environments, challenging the perception that workplace injuries primarily affect manual laborers.
In 2017 California passed new legislation that extended mandatory workers compensation benefits to certain previously unprotected employees of a company. With the passage and signing of Assembly Bill 2883 a company’s officers, directors and partners are now required to be covered under the employer’s workers’ compensation policy.
Prior to the passage of this legislation, the officers, directors and working partners of a company were not required to be covered under the business’s workers’ compensation policy – unless they “opted in” to be covered (and were not listed on an insurance endorsement limiting or restricting their coverage).
However, now officers, directors and partners are required to be covered under every employer’s workers’ compensation policy – unless they fall into a small category of excluded employees. To be “excluded” from workers compensation coverage, a company’s officers, directors, and partners can only “opt out” of coverage IF they sign a waiver (under penalty of perjury) AND they file the waiver with their employer’s workers compensation insurer.
White Collar Workplace Injury Statistics
The American Society of Safety Engineers reports that office workers are two to two-and-a-half times more likely to suffer a disabling injury from a fall than non-office workers. Repetitive stress injuries, particularly carpal tunnel syndrome and other musculoskeletal disorders, account for about 34% of all lost workday injuries in office settings according to OSHA data.
Other common white-collar workplace injuries include back strains (15% of office worker claims), often from improper lifting or poor ergonomics; slip and fall accidents (12% of claims), frequently occurring in lobbies, break rooms, and parking lots; and eye strain from computer use, affecting approximately 50% of office workers to some degree.
The National Institute for Occupational Safety and Health (NIOSH) reports that work-related stress conditions and mental health claims are increasing among white-collar workers, with psychological claims now representing approximately 8% of all workers’ compensation claims in professional office environments. Additionally, the rise of remote work has introduced new concerns, with home office injuries accounting for an increasing percentage of white-collar workers’ compensation claims since 2020.
Law Requires Workers Compensation for Officers, Directors & Partners
Under the old workers compensation law (prior to 2017) officers, directors and partners were generally automatically excluded from workers compensation benefits unless they “opted in”. But under the new law, officers, directors and partners are automatically included in workers compensation benefits unless they specifically “opted out”.
And, according to the Department of Industrial Relations, the American Insurers Association, and the Association of California Insurance Companies, this law applies to workers compensation policies already “in-force”, in addition to any newly issued policies.
In 2017 notices were issued to all workers’ compensation insurers so that they would know and understand the new legal requirement of providing workers compensation coverage to their officers, directors and partners. And the insurers were required to identify and provide notice to any and every employer that may have employees that were previously excluded from coverage and are affected by the new law.
However, the workers compensation insurers – and many employers – are not happy about that change in law because it will add extra costs for them. So, unfortunately, certain unscrupulous employers may not advise their officers, directors and working partners that the law has changed in the event that they are injured or made ill in the workplace. So, because many employers may try to avoid this responsibility, it is essential to discuss your case with an experienced workers compensation attorney.
At Cantrell Green in Long Beach, CA, our workers’ compensation attorneys help business leaders understand their rights and obligations under these complex regulations. Proper compliance proves crucial, as failure to maintain required coverage can result in significant penalties.
Workers Compensation for Officers Under Assembly Bill 2883
Essentially, Assembly Bill 2883 established stricter requirements for workers’ compensation exemptions. Corporate officers or directors must now own at least 15% of the corporation’s stock to be eligible for exemption. Additionally, they must file a written waiver under penalty of perjury stating their eligibility for exemption.
Partners and LLC members seeking exemption must be general partners of a partnership or managing members of an LLC. The law eliminated automatic exemptions previously available to these individuals, requiring documented proof of their status and ownership.
These changes reflect California’s commitment to ensuring workplace injury protection extends to all employees, regardless of their position within the company. The requirements help prevent misclassification and ensure proper coverage.
To properly exempt eligible officers, directors, or partners, specific documentation must be filed with the insurance carrier. The waiver must be signed under penalty of perjury and include detailed information about the individual’s ownership percentage and role within the company.
Insurance carriers must receive and accept these waivers before exemption becomes effective. Any officers, directors, or partners not meeting exemption criteria must be included in the company’s workers’ compensation coverage and factored into premium calculations.
The law requires periodic verification of exemption eligibility, as changes in ownership percentages or roles may affect an individual’s exempt status. Maintaining accurate records proves crucial for compliance.
Consequences of Workers Compensation Non-Compliance
Failing to maintain required workers’ compensation coverage for officers, directors, or partners can result in significant penalties for a company. These may include fines of up to $100,000, stop work orders, and potential criminal charges for willful non-compliance.
Additionally, officers, directors, or partners injured while improperly exempt may face difficulties accessing medical treatment and wage replacement benefits. Proper coverage protects both the company and its leadership from potentially devastating financial consequences.
The Labor Commissioner’s Office actively enforces these requirements through regular audits and investigations of reported violations. Companies should maintain thorough documentation of compliance efforts.
Best Long Beach Workers Compensation Attorneys
If you are an injured employee, officer, director or partner – and you live or work in Long Beach, Orange County or the Los Angeles area – we offer a free consultation with an experienced Workers Compensation attorney. Call us today and we will help you understand your rights and collect the maximum workers’ compensation or disability benefits for which you qualify.
Long Beach Workers Compensation Attorneys: 562-622-4800
Long Beach Workers Compensation attorneys serving Los Angeles, Orange County & Southern California, including:Anaheim, Carson, Bellflower, Compton, Downey, Fullerton, Garden Grove, Huntington Beach, La Habra, La Mirada, Lakewood, Lomita, Long Beach, San Pedro, Santa Ana, Torrance, Wilmington, Whittier & Yorba Linda.

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