California employers are required to provide no-fault work injury insurance to their employees. If an injured worker files a claim, a claims administrator has a responsibility to make an initial decision within 90 days. If they fail to accept or deny the workers’ compensation claim before the deadline expires, they are liable by default. This is known as California ‘90 day rule’ for workers’ comp. Our California workers’ comp defense lawyers provide a more comprehensive overview of the state’s 90 day rule.
The 90 Day Rule: Liable by Default Without Timely Action
Once an employee files a workers’ comp claim, several different employer obligations are triggered pursuant to CA Labor Code § 5402. The state statute is very clear: “If liability is not rejected within 90 days after the date the claim form,” then “the injury shall be presumed compensable under this division.” In other words, the 90 day rule is a default liability rule. When parties fail to take timely action in a workers’ comp claim, the state simply imposes automatic liability on them. For this reason, it is imperative that any workers’ comp claim is accepted or rejected within 90 days of the official application date.
The Exception to the 90 Day Rule: New Evidence
California courts strictly apply the 90 day rule. Once automatic liability has been imposed, it is difficult to overturn. Indeed, even if an employer would have been found not liable—meaning they would have had the right to deny the workers’ compensation claim—a 90 day rule violation still carries automatic liability. The only exception to the 90-day rule is new evidence. To qualify as ‘new evidence’ for the purposes of California’s workers’ comp laws, the evidence in question must be:
- Material to the case;
- Not known to the employer or claims administrator during the 90 days; and
- Not previously discoverable by the employer or claims administrator.
In other words, ignorance of material evidence is not a valid excuse. In evaluating a workers’ comp claim, parties have a legal responsibility to use adequate due diligence. If an investigation would have easily uncovered relevant evidence to support a claim denial, but no timely investigation was conducted, that is not a valid cause to get an exception to the 90 day rule.
The Bottom Line: Employers, workers’ comp insurers, and administrators should make sure that an effective system is in place to allow for an initial decision on all claims within 90 days.