What Is a Carve-Out in a California Workers’ Compensation Case?
In California, a carve-out refers to a special agreement between unions and employers that allows them to handle workers’ compensation claims outside of the standard state process. These programs are allowed under Labor Code Section 3201.5 (construction industry) and 3201.7 (non-construction unionized employers).
Carve-outs are only available in unionized workplaces, and both the employer and union must agree to participate. Instead of going through the usual process with the Division of Workers’ Compensation (DWC), disputes are resolved through a negotiated system that often includes:
- Alternative dispute resolution (ADR)
- Agreed medical provider networks
- Private mediators or arbitrators instead of workers’ compensation judges
What Is Included in a Carve-Out Program?
Carve-out programs typically include:
- Designated medical networks for treating work injuries
- Modified timelines for handling claims
- Mediation and arbitration instead of formal court hearings
- Joint labor-management committees to oversee the process
The goal is to resolve claims faster and with less conflict. However, the rules are negotiated in advance, so the procedures may differ significantly from the traditional system.
Benefits of Carve-Outs
- Faster resolution of disputes
- Lower litigation costs
- Greater cooperation between employer and union
- Customized procedures to meet industry-specific needs
Limitations of Carve-Outs
- Only available in unionized workplaces with a valid collective bargaining agreement
- Injured workers must follow the specific rules set out in the program
- No access to the standard Workers’ Compensation Appeals Board (WCAB) process
- May limit doctor choice or procedural rights available in the regular system
Are Workers Protected in a Carve-Out System?
Yes. Although carve-outs bypass the standard system, they must be approved by the Administrative Director of the DWC and still comply with California workers’ compensation laws. Injured workers retain core rights, including access to medical treatment and disability benefits.
Should You Accept a Carve-Out?
If you are covered by a carve-out program, it is important to understand the specific terms of your collective bargaining agreement. In some cases, you may be required to use the carve-out system for handling your claim. If you have questions about your rights or feel the system is not working fairly, you may still be able to seek legal representation.The Law Offices of Norman J. Homen can help you understand your rights under a carve-out and whether your claim is being handled properly. Contact us today for a free consultation.
