HR Specialist: California Employment Law

California employers face more laws – and more chances to get sued – than in other states. Aggressive attorneys don’t stop with federal laws like FMLA, ADA and FLSA: they use state and local living-wage statutes, rural codes, plus discrimination and other laws to sue employers for sky’s-the-limit damages. This California-specific newsletter arrives monthly to help sue-proof every aspect of HR. Written in plain English, it’s your insurance policy for staying in step with current interpretations of state and local laws – and staying out of court. Learn more about HR Specialist: California Employment Law and the free report you’ll get when you subscribe...

Steve Poizner, the California Insurance Commissioner and Republican candidate for governor, recently filed a lawsuit seeking to stop the sale of assets in the State Compensation Insurance Fund (SCIF). He contends efforts by the Legislature and Gov. Arnold Schwarzenegger to use the funds to balance the state budget are unconstitutional.

Poizner says the assets, worth $1 billion, were meant to pay for workers’ compensation claims.

Earlier this year, the state Legislature passed a bill authorizing Schwarzenegger to sell some of the fund’s assets to be used to balance the state budget. Poizner’s suit asked the Superior Court for the County of Sacramento to stop the sale.

If the sale goes forward, proceeds would be deposited in the state’s general fund.

During a news conference announcing the suit, Poizner stated, “This is wrong—it’s illegal, it will cause workers’ comp insurance rates to spike upwards and it will hurt small businesses throughout the state of California.”

Poizner argues that pulling $1 billion out of the state fund will weaken it significantly and could force the SCIF to raise rates as much as thousands of dollars per year per policy.

The suit also seeks to stop the transfer of the insurance commissioner’s powers to the director of finance. The complaint alleges that under the new law, the sale of SCIF’s assets will not need to be approved by the insurance commissioner. Instead, the director of finance need only consult with the state treasurer before selling off the assets.