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10Jan 2020

Assembly Bill (AB) 5

Assembly Bill (AB) 5 will begin to impact the California workers’ compensation market on July 1, 2020. We’re here to help you prepare for conversations with your clients by sharing with you what we know about the bill, and the initial steps we’re taking to prepare to implement it. Please note, AB 5 impacts policies beginning July 1, 2020, regardless of effective date.

To make understanding the implications of AB 5 easier, we’ve created a high-level overview of the bill and its background for context. Click here to review. Please keep in mind this overview is for informational purposes only, and is not intended as legal or professional advice.

State Fund is here to help

  • Resources – We’ll notify you of additional AB 5-specific resources which will be available on statefundca.com in early 2020.
  • Policyholder communications beginning end of March 2020 – We’ll be contacting employers who are facing the greatest likelihood of impacts (per industry segment) to help them prepare for the additional payroll they may need to report.
  • Legal and legislative developments – We’re tracking all legal and legislative developments such as related lawsuits and 2020 ballot initiatives opposing AB 5, and will keep you informed on any rulings or measures that might affect your clients’ policies.
  • State Fund procedural changes – Information will be forthcoming on any procedural changes.

One way you can help

Some employers will pay more premium as a result of AB 5. You can support your clients who are in that situation by sharing the benefits of reporting payroll for newly classified employees beginning July 1, 2020, regardless of policy effective date. Doing so will spread any financial impact across their remaining monthly payments and help them avoid unexpectedly large final bills.

Thank you in advance

We understand that AB 5 has broad implications for you and your clients and we appreciate your willingness to work closely with us over the coming months.

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