in progressively higher amounts for the most serious types of violations to be set at up to five thousand dollars ($5,000) per violation. The administrative director is authorized to impose penalties pursuant to rules and regulations which give due consideration to the appropriateness of the penalty with respect to the following factors:
(1) The gravity of the violation.
(2) The good faith of the insurer, self-insured employer, or third-party administrator.
(3) The history of previous violations, if any.
(4) The frequency of the violations.
(5) Whether the audit subject has met or exceeded the profile audit review performance standard.
(6) Whether a full compliance audit subject has met or exceeded the full compliance audit performance standard.
(7) The size of the audit subject location.
(c) The administrative director shall assess penalties as follows:
(1) If, after a profile audit review, the administrative director determines that the profile audit subject met or exceeded the profile audit review performance standard, no penalties shall be assessed under this section, but the audit subject shall be required to pay any compensation due and penalties due under subdivision (d) of Section 4650 as provided in subdivision (c) of Section 129.
(2) If, after a full compliance audit, the administrative director determines that the audit subject met or exceeded the full compliance audit performance standards, penalties for unpaid or late paid compensation, but no other penalties under this section, shall be assessed. The audit subject shall be required to pay any compensation due and penalties due under subdivision (d) of Section 4650 as provided in subdivision (c) of Section 129.
(3) If, after a full compliance audit, the administrative director determines that the audit subject failed to meet the full compliance audit performance standards, penalties shall be assessed as provided in a full compliance audit failure penalty schedule to be adopted by the administrative director. The full compliance audit failure penalty schedule shall adjust penalty levels relative to the size of the audit location to mitigate inequality between total penalties assessed against small and large audit subjects. The penalty amounts provided in the full compliance audit failure penalty schedule for the most serious type of violations shall not be limited by subdivision (b), but in no event shall the penalty for a single violation exceed forty thousand dollars ($40,000).
(d) The notice of penalty assessment shall be served personally or by registered mail in accordance with subdivision (c) of Section 11505 of the Government Code. The notice shall be in writing and shall describe the nature of the violation, including reference to the statutory provision or rule or regulation alleged to have been violated. The notice shall become final and the assessment shall be paid unless contested within 15 days of receipt by the insurer, self-insured employer, or third-party administrator.
(e) In addition to the penalty assessments permitted by subdivisions (a), (b), and (c), the administrative director may assess a civil penalty, not to exceed one hundred thousand dollars ($100,000), upon finding, after hearing, that an employer, insurer, or third-party administrator for an employer has knowingly committed or performed with sufficient frequency so as to indicate a general business practice any of the following:
(1) Induced employees to accept less than compensation due, or made it necessary for employees to resort to proceedings against the employer to secure compensation.
(2) Refused to comply with known and legally indisputable compensation obligations.
(3) Discharged or administered compensation obligations in a dishonest manner.
(4) Discharged or administered compensation obligations in a manner as to cause injury to the public or those dealing with the employer or insurer.
Any employer, insurer, or third-party administrator that fails to meet the full compliance audit performance standards in two consecutive full compliance audits shall be rebuttably presumed to have engaged in a general business practice of discharging and administering its compensation obligations in a manner causing injury to those dealing with it.
Upon a second or subsequent finding, the administrative director shall refer the matter to the Insurance Commissioner or the Director of Industrial Relations and request that a hearing be conducted to determine whether the certificate of authority, certificate of consent to self-insure, or certificate of consent to administer claims of self-insured employers, as the case may be, shall be revoked.
(f) An insurer, self-insured employer, or third-party administrator may file a written request for a conference with the administrative director within seven days after receipt of a notice of penalty assessment issued pursuant to subdivision (a) or (c). Within 15 days of the conference, the administrative director shall issue a notice of findings and serve it upon the contesting party by registered or certified mail. Any amount found due by the administrative director shall become due and payable 30 days after receipt of the notice of findings. The 30-day period shall be tolled during any appeal. A writ of mandate may be taken from the findings to the appropriate superior court upon the execution by the contesting party of a bond to the state in the principal sum that is double the amount found due and ordered by the administrative director, on the condition that the contesting party shall pay any judgment and costs rendered against it for the amount.
(g) An insurer, self-insured employer, or third-party administrator may file a written request for a hearing before the Workers’ Compensation Appeals Board within seven days after receipt of a notice of penalty assessment issued pursuant to subdivision (e). Within 30 days of the hearing, the appeals board shall issue findings and orders and serve them upon the contesting party in the manner provided in its rules. Any amount found due by the appeals board shall become due and payable 45 days after receipt of the notice of findings. Judicial review of the findings and order shall be had in the manner provided by Article 2 (commencing with Section 5950) of Chapter 7 of Part 4 of Division 4. The 45-day period shall be tolled during appellate proceedings upon execution by the contesting party of a bond to the state in a principal sum that is double the amount found due and ordered by the appeals board on the condition that the contesting party shall pay the amount ultimately determined to be due and any costs awarded by an appellate court.
(h) Nothing in this section shall create nor eliminate a civil cause of action for the employee and his or her dependents.
(i) All moneys collected under this section shall be deposited in the State Treasury and credited to the Workers’ Compensation Administration Revolving Fund.
(Amended by Stats. 2002, Ch. 6, Sec. 34. Effective January 1, 2003.)
130. The appeals board and each of its members, its secretary, assistant secretaries, and workers’ compensation judges, may administer oaths, certify to all official acts, and issue subpoenas for the attendance of witnesses and the production of papers, books, accounts, documents and testimony in any inquiry, investigation, hearing or proceeding in any part of the state.
(Amended by Stats. 1985, Ch. 326, Sec. 8.)
131. Each witness who appears by order of the appeals board or any of its members, or a workers’ compensation judge, shall receive, if demanded, for his or her attendance the same fees and mileage allowed by law to a witness in civil cases, paid by the party at whose request the witness is subpoenaed, unless otherwise ordered by the appeals board. When any witness who has not been required to attend at the request of any party is subpoenaed by the appeals board, his or her fees and mileage may be paid from the funds appropriated for the use of the appeals board in the same manner as other expenses of the appeals board are paid. Any witness subpoenaed, except one whose fees and mileage are paid from the funds of the appeals board, may, at the time of service, demand the fee to which he or she is entitled for travel to and from the place at which he or she is required to appear, and one day’s attendance. If a witness demands his or her fees at the time of service, and they are not at that time paid or tendered, he or she shall not be required to attend as directed in the subpoena. All fees and mileage to which any witness is entitled under this section may be collected by action therefor instituted by the person to whom the fees