Fraud Commission Approves $550,000 for District Attorneys to access WCIRB files

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 8, 2003 Share this on FacebookTweet thisEmail this to a friend

CMTA is opposed to the recent Fraud Assessment Commission's decision to spend $550,000 on a program for the District Attorneys (DAs) to access the Workers' Compensation Insurance Rating Bureau (WCIRB) files. Recent legislation (AB 749) permits the use of fraud assessment funds for the prosecution of illegally uninsured employers. However, there is no justification for creating a new and separate function that is purely investigatory for the DAs.

CMTA generally opposes allowing agencies like the DAs or other enforcement entities access to employers' data provided to other governmental agencies for specified purposes. Firewalls are especially important to avoid agency "fishing expeditions" for information that could be used to harm employers. CMTA would vigorously oppose the WCIRB sharing individual employer data without permission of the employer or by statutory authority.

But according to Les Brown, chairman of the California District Attorneys' Association Insurance Fraud Committee in a statement to the commission: "We have to move these cases fairly quickly because of a one-year statute of limitations. We don't really want to spend several weeks trying to determine whether a person has insurance or not. We want to have data readily available."

CMTA believes that the data is not needed, nor would it be conclusive, putting the "cart before the horse." As background, failure of employers to provide workers? compensation insurance coverage for their employees is a misdemeanor and provides a $1,000 fine per employee. Section 90.3 of the Labor Code specifically assigns oversight and enforcement duties to the Labor Commissioner in the Department of Industrial Relations. Therefore, under current law, any case that would rise to the level of prosecution by the DAs must have already been identified and confirmed by the Labor Commissioner, the agency responsible for this provision. AB 749 simply allows the DAs to be reimbursed for prosecuting uninsured employers out of the fraud assessment fund, it does not direct that they become investigators.

The commission's approval of $550,000 for DAs to access the WCIRB files is therefore redundant and lacks statutory authorization. The Labor Commissioner has statutory access to data from the Uninsured Employers' Fund, Employment Development Department, the rating organizations licensed by the Insurance Commissioner (i.e. WCIRB) and any other sources deemed likely to lead to the identification of unlawfully uninsured employers. Therefore, CMTA sees no justification for an expensive and separate system to determine if an employer is illegally uninsured when the Labor Commissioner can provide that exact information.

CMTA has asked the commission to reconsider their decision, urging them to rescind the approval of $550,000 to fund District Attorneys access to the WCIRB files
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