The Division of Workers’ Compensation announced the approval of a labor-management “carve-out” agreement between the City of Los Angeles and the Los Angeles Police Protective League.
The agreement covers an estimated 10,000 union members.
Provisions of workers’ compensation reform legislation, implemented through Labor Code Sections 3201.5 and 3201.7, allow employers and unions to form a labor-management alternative workers’ compensation program also known as a carve-out. A key feature of most carve-outs is an alternative dispute resolution process.
Senate Bill (SB) 983, first provided for carve-outs in the construction industry and closely related industries. Later legislation, Assembly Bill (AB) 749, provided for carve-outs in the aerospace and timber industries, and then SB 228 repealed AB 749 and provided for carve-outs in all other industries in addition to construction, which is still covered by the initial legislation. SB 899, provided that the employer and union may negotiate any aspect of benefit delivery under certain conditions.
There are 57 active labor-management carve-out agreements in California, including 27 that cover public safety unions, 21 in the construction industry, and nine in other industries.
The requirements to participate and the elements required to be in carve-out programs are contained in Labor Code section 3201.5 for the construction industry and Labor Code section 3201.7 for all other industries, as well as California Code of Regulations, title 8, sections 10200-10204.
A carve-out establishes an alternative dispute resolution process that is negotiated by labor and management. Employers and/or unions usually employ and compensate ombudsmen, mediators, and arbitrators in the dispute resolution process. In some cases, employers and/or union members act as ombudsmen and mediators.
Legislative statute requires that an appeals process be maintained in a carve-out. Therefore, the arbitrator’s decision may be appealed to the reconsideration unit of the Workers’ Compensation Appeals Board and, ultimately, to the state courts of appeal.
Reports covering prior years of the program, which has been in force for construction trades since 1993 and for non-construction workforces since 2004, are available on DWC’s website.