CA Workers' Comp Fund wants Reporting Reforms

January 3, 2005 ( - The California State Compensation Insurance Fund has filed a lawsuit to make sure that workers' compensation insurance adequately covers staff from outsourcing firms.

In challenging a 2004 ruling by California Insurance Commissioner John Garamendi, the quasi-state agency wants staff contracting companies to specify workers’ duties and to carry the workers on their workers’ compensation policy, according to a Sacramento Bee report. The State Fund complained that staffing firms do not always list the appropriate job descriptions, key criteria in determining premiums.

Garamendi ruled last fall that Staff Resources Inc. can cover its clients on the firm’s blanket policy.

In a lawsuit filed in Sacramento Superior Court, the state’s largest workers’ compensation insurer said it has the legal authority to require businesses to carry separate policies for workers from employee leasing companies. State Fund has done so since 2003 “to help protect the financial condition and, in certain instances, to combat fraud and abuse,” the lawsuit asserted, according to the Bee report.

“We need to know whom we’re insuring,” Jim Zelinski, a State Fund spokesman, told the Bee. “We believe it’s appropriate to know the number and nature of their (clients’) employees.”

Staff Resources, an international management recruiting and outplacement company, questioned State Fund’s requirement.