2. California UEF California’s UEF Program Shirley H James, Manager, California Uninsured Employers Benefit Trust Fund Anthony Mischel and Fred Lonsdale, Office of Director of Industrial Relations, Legal

3. California UEF Created by Legislature, 1972. The Mission of the Uninsured Employers Benefit Trust Fund: Provide timely benefits to eligible injured workers; and To make it prohibitively expensive for illegally uninsured employers to do business.

4. California UEF Hallmarks of California UEF Sources of Funding UEF Derivatively Only Liable If Award Against Employer Not Paid Employer Personally Liable to Injured Worker (IW) Collection Rights By UEF Enforcement Of Obligation To Be Insured

5. California UEF UEF Funding Employer assessments (surcharges) provides funding for payment of benefits UEF expected to contribute $ 5 million of that money From collection on prior cases. Penalties assessed against uninsured employers by Labor Commissioner.

6. California UEF UEF Has Derivative Liability The Fund’s Liability for Benefits to IWs of Illegally Uninsured Employers Only After Award Issued Against Employer That Goes Unpaid No Direct Liability Possible From UEF to IW Liability is through the employer (2 preconditions) Award against employer Unpaid UEF is not the guarantor Lack of Direct Liability Has Consequences For UEF’s Procedures

7. California UEF Uninsured Employer Personally Liable Case In Chief Is Between IW and Employer IW’s goal is enforceable, civil judgment against employer If an award of benefits is enforceable, the injured worker demands payment from the uninsured employer. Should the employer fail to pay, UEF must pay the award Result is initial requirement to Name the employer correctly, and Serve the employer

8. California UEF Due Process Considerations Why Due Process Matters WCAB considered judicial body Employer’s personal liability adjudged Property may be seized by UEF When Is Due Process Preserved If not in IW’s case, uncollectible judgment Seems to be unique to California UEF.

9. California UEF Procedures For Joining UEF

10. California UEF Lien Rights Liens and Penalties For Discretionary Payments Advance on collectible awards Extra penalty from employer to UEF for advances being necessary Prejudgment Lien Rights Real property liens Due process considerations

11. California UEF UEF Procedures –2-

12. California UEF Collection Rights Can Collect All Moneys Paid Including penalties UEF does not pay Persons Liable With Employer Partners/Community property Joint venturers Some shareholders of corporate employers Limited Liability Company Members

13. California UEF Bankruptcy Issues About Ten Percent Of Employers File Bankruptcy Mostly Chapter 7 Discharges Two Issues For Proceedings IW’s case proceeding UEF’s ability to collect Dischargability In Re Camilli (9 th Cir.) – AZ George (9 th Cir.) – CA Collection History

14. California UEF Other Enforcement Actions Possible Referrals of Currently Uninsured Employers To Labor Commissioner Stop orders & penalties Current procedures Additional penalties after workers’ compensation award Criminal Sanctions

15. California UEF UEF Procedures –3-

16. California UEF How UEF Operates

17. California UEF With Many Thanks Staff of Uninsured Employers Benefit Trust Fund Office of The Director – Legal Unit