History of California Workers' Comp: SB 863 to Today
California's workers' compensation system has undergone dramatic changes since the landmark SB 863 reform in 2012. Understanding this history is not just academic -- the year you were injured determines which laws apply to your case, and recent changes continue to reshape what benefits injured workers receive. This article traces the major reforms from SB 863 through 2026, explaining how each change affects real claims.
Before SB 863: The Pre-Reform Landscape
To understand why SB 863 happened, you need to understand what came before it. By 2012, California's workers' comp system was widely criticized from all sides. Employers complained about the highest insurance premiums in the nation. Workers complained about a confusing, adversarial system that left them waiting years for resolution. Medical providers complained about bureaucratic delays in treatment authorization. Something had to change.
The system before SB 863 used a two-track permanent disability rating method: one based on the AMA Guides and one based on the older Schedule for Rating Permanent Disabilities. This dual system created confusion, litigation, and inconsistent outcomes. Additionally, the Supplemental Job Displacement Benefit (SJDB) voucher was a sliding scale ranging from $4,000 to $10,000 depending on the PD rating -- and it was notoriously difficult to actually use.
SB 863 (2012): The Landmark Reform
SB 863 was projected to save employers approximately $1.8 billion per year while simultaneously restructuring how benefits were delivered to injured workers. Signed by Governor Jerry Brown in September 2012, it was the most comprehensive workers' comp reform since SB 899 in 2004.
Key Changes Under SB 863
1. Simplified PD Rating System
SB 863 replaced the old two-track system with a single method based exclusively on the AMA Guides to the Evaluation of Permanent Impairment, 5th Edition, with adjustments for occupation and age. The new system was intended to be more objective and predictable. In practice, it generally resulted in lower PD ratings for many injuries -- particularly soft-tissue injuries -- compared to the pre-reform schedule. However, the maximum weekly PD benefit rate was increased by 30% to partially offset the lower ratings.
2. Independent Medical Review (IMR)
Before SB 863, treatment disputes were resolved through a lengthy process that could take months or years. SB 863 created Independent Medical Review -- a process where an independent physician reviews the insurer's Utilization Review (UR) denial and makes a binding decision. The goal was to speed up treatment authorizations. In practice, IMR has been controversial: some studies showed that IMR upheld UR denials roughly 90% of the time in early years, though the overturn rate has improved as the process matured. IMR is conducted under the framework of Labor Code §4610.5.
3. SJDB Voucher Overhaul
SB 863 replaced the old sliding-scale SJDB voucher ($4,000-$10,000) with a flat $6,000 voucher for all eligible workers, regardless of PD rating. It also created a separate $5,000 Return-to-Work Supplement paid directly by the state (not the insurer). These changes simplified the process but were viewed by many worker advocates as a reduction in benefits for higher-rated cases that previously received the $8,000-$10,000 voucher. Current SJDB details are available from the DIR Supplemental Job Displacement Benefit.
4. Increased PD Benefit Rates
To offset the impact of generally lower PD ratings under the new schedule, SB 863 increased the maximum weekly PD benefit rate by approximately 30%. This was phased in over two years. The intent was to hold total PD benefits roughly constant even with lower percentage ratings. In practice, the net effect varied by injury type -- some workers came out ahead, others received less than they would have under the old system.
AB 1124 (2015): SJDB Modifications
Assembly Bill 1124, effective in 2016, made further changes to the Supplemental Job Displacement Benefit. The bill established clearer timelines for the employer to offer modified or alternative work (thereby avoiding the SJDB obligation) and clarified the types of educational programs the voucher could be used for. It also addressed a gap in the original SB 863 voucher program by expanding the list of approved training providers and allowing the voucher to be used for computer equipment needed for training.
While AB 1124 was a modest change compared to SB 863, it was significant for workers who depended on the SJDB voucher for career retraining. The $6,000 voucher amount remained unchanged.
SB 1159 (2020): COVID-19 Presumptions
The COVID-19 pandemic forced an emergency response in workers' comp law. Governor Gavin Newsom first issued Executive Order N-62-20 in May 2020, creating a temporary presumption that workers who contracted COVID-19 during a defined period were presumed to have contracted it at work. SB 1159, signed in September 2020, codified and expanded these presumptions.
Three Categories of COVID Presumption
- Frontline Workers (Labor Code 3212.86): Healthcare workers, firefighters, peace officers, and other specified frontline workers received a presumption that COVID-19 was work-related. This was a "rebuttable presumption" -- the employer could overcome it with evidence, but the burden shifted to the employer rather than the worker.
- Outbreak Employees (Labor Code 3212.88): Workers at sites experiencing a COVID-19 "outbreak" (defined as a specific number of positive cases within a 14-day period) received a similar rebuttable presumption. This captured workers in warehouses, food processing plants, and other congregate settings.
- General Workforce: Workers who did not fall into the above categories could still file COVID-19 workers' comp claims but had to prove causation under standard rules -- that they more likely than not contracted COVID at work rather than in the community.
SB 1159's main provisions expired in January 2025. However, claims filed under the presumption while it was active remain valid and continue to be processed. Workers who contracted long COVID through workplace exposure may still have ongoing claims for treatment and disability.
Annual Changes: TD Rate Increases (2012-2026)
One of the most visible ongoing changes in California workers' comp is the annual increase in temporary disability rates. Under DIR Temporary Disability Rates, the maximum and minimum TD rates are adjusted each January 1 based on the State Average Weekly Wage (SAWW).
| Year | Max TD Rate | Min TD Rate | Notable Event |
|---|---|---|---|
| 2012 | $1,066.72 | $160.19 | SB 863 signed into law |
| 2014 | $1,128.43 | $169.26 | SB 863 fully implemented |
| 2016 | $1,178.82 | $176.82 | AB 1124 effective |
| 2018 | $1,251.38 | $187.71 | Steady annual increases |
| 2020 | $1,356.31 | $203.44 | COVID-19 pandemic; SB 1159 |
| 2022 | $1,539.71 | $230.95 | Post-pandemic rate acceleration |
| 2024 | $1,680.29 | $252.04 | Continued upward trend |
| 2026 | $1,764.11 | $264.61 | Current rate |
The 65% increase in the maximum TD rate from 2012 to 2026 reflects both wage growth and the SAWW formula. For injured workers, this means that a claim filed today provides significantly more in weekly TD benefits than a claim filed even five years ago.
Other Significant Changes (2012-2026)
Electronic Filing & EAMS
The WCAB has progressively moved toward electronic filing through the Electronic Adjudication Management System (EAMS). This shift has streamlined case management, reduced paperwork delays, and made it easier for attorneys and self-represented workers to track case status online. Most filings are now done electronically, though some paper filings are still accepted.
Heat Illness Prevention Updates
California has strengthened its heat illness prevention standards multiple times since 2012, most recently in response to extreme heat events affecting outdoor workers in agriculture, construction, and other industries. Updated Cal/OSHA regulations now require employers to provide water, shade, and rest breaks when temperatures exceed certain thresholds, and to have written heat illness prevention plans. For workers who suffer heat-related injuries, these updated standards create stronger evidence for workers' comp claims by establishing clear employer duties. More information is available through Cal/OSHA Safety & Health.
Presumption Expansions
Beyond COVID-19, California has expanded injury presumptions for specific occupations over the past decade. These include expanded cancer presumptions for firefighters, PTSD presumptions for first responders, and cumulative injury presumptions for healthcare workers exposed to infectious diseases. Each presumption shifts the burden of proof from the worker to the employer, making it easier for qualifying workers to establish that their condition is work-related.
Telehealth in Workers' Comp
The pandemic accelerated the adoption of telehealth in workers' comp. California now allows certain workers' comp medical evaluations to be conducted via telehealth, including some QME appointments (with limitations). This has improved access for injured workers in rural areas and reduced travel burdens for those with mobility limitations.
How These Changes Affect Your Claim Today
If you were injured in 2026, here is what the current legal landscape means for your claim:
- PD Rating: Your permanent disability will be calculated using the post-SB 863 schedule, based on the AMA Guides, 5th Edition, with adjustments for occupation and age. Understanding how this schedule works is essential -- see our PD rating guide.
- TD Benefits: You are eligible for up to $1,764 per week in temporary disability (or your actual two-thirds rate if lower). TD is capped at 104 weeks for most injuries. See our guide on temporary vs. permanent disability.
- Treatment Disputes: If your insurer denies treatment, you appeal through the IMR process. While IMR upholds denials in a majority of cases, overturn rates have improved, and having a well-documented medical case with strong physician support increases your chances.
- SJDB Voucher: If your employer cannot offer you modified or alternative work, you are entitled to a flat $6,000 SJDB voucher for retraining, plus a $5,000 return-to-work supplement from the state.
- COVID Claims: The SB 1159 presumption has expired, but if you believe you contracted COVID-19 at work, you can still file a claim -- you will just need to prove causation under standard workers' comp rules.
Looking Ahead: The Future of California Workers' Comp
Several trends and legislative proposals suggest where California workers' comp may head in the coming years:
- Gig economy coverage: As the gig economy grows, pressure is mounting to expand workers' comp coverage to independent contractors in certain industries. AB 5 (2019) reclassified many gig workers as employees, but the battle continues with Proposition 22 and ongoing litigation
- Mental health claims: Proposals to expand coverage for work-related PTSD, anxiety, and depression beyond the currently covered occupations (mostly first responders) are advancing through the legislature
- Wildfire presumptions: With California's increasing wildfire seasons, legislators are considering expanded presumptions for workers exposed to wildfire smoke and fire conditions
- IMR reform: Critics continue to push for changes to the IMR process, arguing that the current system too often upholds denials of medically necessary treatment
- Benefit adequacy: Advocacy groups are pushing for higher PD benefit rates and an increase to the $6,000 SJDB voucher, which has not been adjusted since 2013
For the latest updates on how these changes may affect your claim, visit our 2026 workers' comp changes page. For a comprehensive overview of how the current system works, see our complete workers' comp guide.
Why History Matters for Your Claim
The date of your injury determines which version of the law applies. If you were injured before SB 863 took full effect, different PD rating rules, SJDB amounts, and procedural rules may apply. An experienced workers' comp attorney will know exactly which laws govern your case based on your date of injury -- and how to use them to your advantage. This is not just a history lesson; it directly affects what benefits you receive.
Frequently Asked Questions
How did SB 863 change workers' comp in California?
SB 863, signed into law in 2012, was the most significant workers' comp reform in a generation. It simplified the permanent disability rating system by replacing the old two-track system with a single schedule, created Independent Medical Review (IMR) for treatment disputes, increased the maximum PD rate by 30%, changed the SJDB voucher from a sliding scale to a flat $6,000, and eliminated the return-to-work supplement's employer component. Overall, it was designed to save employers money while restructuring how benefits were delivered to injured workers.
What are COVID presumption laws and do they still apply?
SB 1159 (2020) created a rebuttable presumption that certain workers who contracted COVID-19 did so on the job -- meaning the employer's insurer had to prove it was NOT work-related, rather than the worker proving it was. This applied to healthcare workers, first responders, and workers at outbreak sites. The law's main provisions expired in January 2025, though existing claims filed under the presumption remain valid. Workers who contracted COVID on the job after the expiration must prove industrial causation under standard rules.
How have TD rates changed over the years?
Temporary disability rates have increased substantially since 2012. The maximum TD rate was $1,066.72 per week in 2012 when SB 863 was enacted. By 2026, the maximum has risen to $1,764.11 per week -- an increase of approximately 65%. These annual increases are tied to the State Average Weekly Wage (SAWW) and are adjusted automatically each January 1. The minimum TD rate has also increased, from $160.19 in 2012 to $264.61 in 2026.
Will California workers' comp laws change again soon?
Workers' comp reform is an ongoing process in California. Current legislative discussions include proposals to further streamline the IMR process, increase PD benefit rates, expand presumptions for certain occupations (such as wildfire responders), and address the growing issue of workplace injuries in the gig economy. While no major reform bill has passed since SB 863, incremental changes happen nearly every legislative session. Staying informed about these changes is important for understanding your rights.
Does the year I was injured affect my benefits?
Yes, significantly. The law in effect on your date of injury generally controls which benefit rates, PD rating schedule, and procedural rules apply to your case. For example, a worker injured in 2011 would have their PD calculated under the pre-SB 863 schedule, while a worker injured in 2013 uses the new schedule. TD rates, PD rates, and the SJDB voucher amount all depend on when you were injured. This is one reason it is important to work with an attorney who understands the specific laws applicable to your date of injury.
Have Questions About How the Law Affects Your Claim?
Whether your injury is recent or years old, the specific laws that apply to your case matter. Our free consultation will identify exactly which rules govern your claim and ensure you are receiving every benefit you are entitled to under the applicable law. We have practiced through every reform from SB 863 to today.
Legal Disclaimer: This article provides a general historical overview of California workers' compensation legislative changes. It is not legal advice. The specific laws, rates, and procedures that apply to your case depend on your date of injury and individual circumstances. Legislative summaries are simplified for readability and may not capture every nuance of the actual legislation. Contact our office for a free consultation about how current law applies to your specific claim.
David Lamonica (State Bar #165205) has practiced California workers' compensation law through multiple legislative reforms, including SB 863, AB 1124, and SB 1159. His deep understanding of both current and historical law ensures clients receive every benefit they are entitled to regardless of when their injury occurred.