Workers’ Compensation Changes in 2020

Workers’ compensation rules, laws, and regulations change every year to keep up with employment trends and demands. Some changes can occur on a nationwide stage while others are unique to an individual state. What have been some of the most notable updates and issues for workers’ comp cases in California during 2020?

Gig Economy Classifications

Many economists are saying that we are currently in a “gig economy,” which means many people are making their income by accepting quick jobs from contracts, rather than getting full-time employment from a single employer. Popular services like Uber, Postmates, and more are all clear examples of the gig economy’s growth. Unfortunately, running contracted jobs for rideshare and foodshare companies means that many people were technically independent contractors with limited employment benefits.

Arguably the biggest change to California workers’ comp in 2020 is the reclassification of many people who work in the gig economy. AB 5 was passed last year and went into effect on January 1^st. It requires that companies use the ABC test to prove that a worker is an independent contractor, not an employee.

Under the ABC test, the employer must show that the worker does all three of the following:

• A) Works without the control or direction of the hirer
• B) Performs work not typically considered part of the hirer’s business model
• C) Often performs work of the same sort for the hirer but in another course of employment

With this legal change, the majority of people using an app to get “gigs” should technically be employees now, which opens them up to receiving workers’ compensation coverage. For example, rideshare drivers need to use a company’s app to accept and finish jobs, complete fares that are the core of the hirer’s business model, and are not established or certified as taxi drivers, so the employer does not pass the ABC test at any stage.

Workers’ Compensation Benefit Increase

Workers’ compensation benefits are paid weekly and are subject to caps and minimums. In other words, a workers’ comp recipient can only earn so much or so little through the program or insurance policy. The caps and minimum requirements are updated often to reflect cost-of-living changes and inflation.

In 2020, the following benefits increases occurred:

• Maximum weekly pay: $1,299.43, up from $1,251.38 (about a 4% increase)
• Minimum weekly pay: $194.91, up from $187.71 (also about a 4% increase)

However, the increased caps and minimums apply to workers’ compensation claims filed after January 1^st, 2020. Claims filed before that date will still be paid at the previously determined weekly value. Also, partial disability benefits have not increased.