MICHAEL SULLIVAN & ASSOCIATES BLOG

Insurance Code § 676.8 establishes the conditions under which an insurer may cancel a workers' compensation insurance policy. Among those conditions, IC 676.8(b)(2) permits cancellation based on a failure "to permit the insurer to audit payroll as required by the terms of the policy or of a previous policy issued by the insurer, or to pay any additional premium as a result of an audit of payroll as required by the terms of the policy or of a previous policy." When cancellation is based on that ground, IC 676.8(c) requires at least 10 days' advance written notice. A companion statute, IC 11760.1, permits collection of a premium penalty when an employer fails to provide access to payroll records after the insurer's third request during a period of at least 90 days.

SPECIAL REPORT

Labor Code § 5909 governs the time within which the WCAB must act on a petition for reconsideration. Under the former version of the statute, a petition for reconsideration "is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date of filing." Under this provision, if a petition for reconsideration is not acted on within the 60-day period, it is deemed denied by operation of law.

The Workers' Compensation Appeals Board (WCAB) is a creature of statute, and its subject matter jurisdiction is limited to the grants of authority conferred by the Legislature. Although it generally has jurisdiction over all injuries occurring within California, it has limited jurisdiction for injuries occurring outside of the state.

Subject matter jurisdiction over injuries occurring outside California is governed primarily by two statutes. Labor Code § 3600.5(a) extends jurisdiction to out-of-state injuries when the employee was hired or is regularly working in California. LC 5305 separately confers jurisdiction when the employee is a California resident at the time of injury and the contract of hire was made in California. The residency requirement of LC 5305 has long been recognized as unconstitutional, leaving the contract of hire as its operative element in practice. So, the Labor Code gives the appeals board jurisdiction over claims for out-of-state injuries when either (1) the contract for hire was made in California, or (2) the out-of-state injured worker is regularly employed in California.

Injuries sustained during an employee's commute to or from work generally are not compensable under the "going and coming" rule, which deems that such injuries do not arise out of and in the course of employment. The rule, however, has been described as having a "tortuous history," and has numerous exceptions, which make it difficult to uniformly apply. (Price v. WCAB (1984) 37 Cal. 3d 559, 565.)

SPECIAL REPORT

A workers' compensation compromise and release (C&R) agreement is not enforceable until approved by the Workers' Compensation Appeals Board^[1] (LC 5001). Under CCR 10700, the WCAB is affirmatively required to inquire into the adequacy of all C&R agreements and may set a hearing to take evidence when necessary to determine whether a settlement should be approved or disapproved.

The doctrines of res judicata and collateral estoppel can bar parties from re-litigating claims and issues that were decided previously in workers' compensation proceedings. Res judicata, or claim preclusion, acts to bar claims that were, or should have been, advanced in a previous suit involving the same parties. It arises if a second suit: (1) involves the same cause of action; (2) is between the same parties; and (3) occurs after a final judgment on the merits. (DKN Holdings LLC v. Faerber (2015) 61 Cal. 4th 813, 824.)

The utilization review (UR) process begins when a claims administrator receives a completed request for authorization from a treating physician. Under the updated UR regulations that became effective April 1, 2026, California Code of Regulations (CCR), Title 8, § 9792.6.1(u) defines what constitutes a valid "request for authorization," and specifies the conditions under which a request is deemed "completed" for purposes of triggering the UR clock. CCR 9792.9.1(b) addresses the claims administrator's obligations on receipt of a request that does not meet the definition of a completed request.

Once a qualified medical evaluator (QME) has been selected in a represented case, California Code of Regulation (CCR) 34(b) explains that any subsequent evaluation may be performed at a different medical office of the selected QME if that office is listed with the medical director and is "within a reasonable geographic distance from the injured worker's residence." Labor Code § 4062.3(k) further directs that, after a medical evaluation is prepared, the parties "shall utilize the same medical evaluator who prepared the previous evaluation to resolve the medical dispute" to the extent possible. Together, those provisions reflect a strong preference for continuity of the medical-legal evaluator, and they set the framework for disputes that arise when a QME relocates his or her practice.