What AB 1576 does
An act to amend Sections 4751, 4753.5, 4754, and 4755 of, and to add Section 4754.1 to, the Labor Code, relating to workers’ compensation, and making an appropriation therefor.
Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of employment. Existing law provides certain methods for determining workers’ compensation benefits payable to a worker or the worker’s dependents for purposes of permanent total disability or permanent partial disability that include a determination of the percentage of permanent disability incurred. Existing law requires that, for injuries incurred before January 1, 2013, in determining the percentages of permanent disability, account be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and the injured employee’s age at the time of the injury, and requires that specified factors be considered in determining an employee’s diminished earning capacity for these purposes. For purposes of these provisions, “nature of the physical injury or disfigurement” incorporates the descriptions and measurements of physical impairment and the corresponding percentages of impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition). For injuries occurring on or after January 1, 2013, in determining the percentages of permanent disability, existing law requires the same factors be taken into account but removes from consideration the employee’s diminished future earning capacity and, instead, incorporates an adjustment factor of 1.4, as specified.
Existing law also establishes the Subsequent Injuries Benefits Trust Fund, a continuously appropriated fund. Under existing law, if a permanently, partially disabled employee receives a subsequent compensable injury resulting in additional permanent disability, then that employee receives compensation from the Subsequent Injuries Benefits Trust Fund. Existing law requires, when applicable, the additional permanent disability resulting from the subsequent injury to be equal to 35% or more of total, when considered alone and without regard to, or adjustment for, the occupation or the age of the employee.
For purposes of determining permanent disability resulting from a subsequent injury, this bill would measure permanent disability, for injuries occurring on or after January 1, 2005, and prior to January 1, 2013, by the whole person impairment rating as determined in accordance with the AMA Guides to the Evaluation of Permanent Impairment (5th Edition), after adjustment for diminished future earning capacity and without regard to, or adjustment for, the occupation or age of the employee. For injuries occurring on or after January 1, 2013, the bill would measure permanent disability in the same manner as an injury occurring on or after January 1, 2005, and prior to January 1, 2013, except that an adjustment for diminished future earning capacity is replaced by the 1.4 adjustment factor. The bill would state that these provisions are declarative of existing law. To the extent the bill changes the eligibility requirements for and calculation for payments made from the Subsequent Injuries Benefits Trust Fund, the bill would make an appropriation.
This bill would, for compensable subsequent injuries occurring on or after January 1, 2027, require, for purposes of determining eligibility for and the amount of an award of special additional compensation, the existence of the prior permanent partial disability at the time of the subsequent compensable injury to be determined by substantial evidence, based on medical records, testimony, or other evidence, that the prior permanent partial disability predated the subsequent compensable injury and that the prior permanent partial disability resulted in loss of earnings, interfered with work activities, or otherwise impacted the ability of the employee to perform work activities or activities of daily living. The bill would require the administrative director to create and maintain a database of qualified medical evaluators to perform evaluations for claims filed for a subsequent compensable injury. The bill would make conforming changes.
Existing law requires the WCAB to fix and award the amounts of special additional compensation to be paid and to direct the State Compensation Insurance Fund (SCIF) to pay the additional compensation awarded. Existing law authorizes the additional compensation to be paid only from funds appropriated for these purposes. Existing law authorizes SCIF to reimburse itself for specified costs from this appropriation.
This bill would replace SCIF with the Director of Industrial Relations, as trustee of the Subsequent Injuries Benefits Trust Fund, as the entity to pay the additional compensation awarded by the WCAB. The bill would delete SCIF’s authorization to reimburse itself for specified costs.
Summary from the Legislative Counsel's Digest of the amended assembly text, April 20, 2026. Read the full text on leginfo.
How it got here
Assemblymember Ortega introduced AB 1576 on January 12, 2026. The text was amended 1 time, and heard in 6 committee hearings before its final floor votes.
- Assembly Floor, May 26, 2026: 48 ayes, 19 noes.
Committee votes along the way:
- Assembly Insurance, April 22, 2026: Do pass and be re-referred to the Committee on [Appropriations], 13-3.
- Assembly Appropriations, May 14, 2026: Do pass., 11-4.
- Senate Labor, Public Employment and Retirement, June 17, 2026: Do pass, but first be re-referred to the Committee on [Appropriations], 4-1.
- Senate Appropriations, June 29, 2026: Placed on suspense file, 7-0.
Who supports and opposes AB 1576
The Senate Committee on Labor, Public Employment and Retirement analysis dated June 16, 2026 lists 1 organization in support and 65 in opposition. When Assembly Insurance first listed positions on April 21, 2026, the count was 1 in support and 59 opposed. By the Senate Committee on Labor, Public Employment and Retirement analysis of June 16, 2026 it was 1 to 65.
In support: California Applicants' Attorneys Association.
Opposed: ABC California; Acclamation Insurance Management Services; Allied Managed Care; American Property Casualty Insurance Association; Associated General Contractors, California; Associated General Contractors-San Diego Chapter; Brea Chamber of Commerce; California Alliance of Self-insured Groups; and 57 more.
Read the Senate Committee on Labor, Public Employment and Retirement analysis.
What happens next
It is in Senate Appropriations. The last recorded action was on August 13, 2026.
The Governor can sign the bill, veto it, or let it become law without a signature. Until the decision, sign and veto request letters are the remaining channel, and the Department of Finance's enrolled bill report carries weight on anything with a fiscal effect. If signed, most provisions take effect January 1, and implementation moves to the agencies named in the bill.
What it means for financial services organizations
This is the stage where language still changes. Amendments taken in committee are the ones that reach the Governor, so an organization with a stake in the drafting has a reason to be in that conversation now rather than after the vote.
The financial services group at Capitol Axis handles that for financial services clients.
Questions about AB 1576
What does AB 1576 do?
This bill would, for compensable subsequent injuries occurring on or after January 1, 2027, require, for purposes of determining eligibility for and the amount of an award of special additional compensation, the existence of the prior permanent partial disability at the time of the subsequent compensable injury to be determined by substantial evidence, based on medical records, testimony, or other evidence, that the prior permanent partial disability predated the subsequent compensable injury and that the prior permanent partial disability resulted in loss of earnings, interfered with work act
Has AB 1576 passed the California Legislature?
It is in Senate Appropriations. The last recorded action was on August 13, 2026.
Who supports and opposes AB 1576?
The Senate Committee on Labor, Public Employment and Retirement analysis dated June 16, 2026 lists 1 organizations in support and 65 in opposition. Supporters include California Applicants' Attorneys Association. Opponents include ABC California; Acclamation Insurance Management Services; Allied Managed Care.
What happens next with AB 1576?
It still has committee and floor votes ahead of it. Amendments taken now are the ones that reach the Governor, so this is the stage where language changes are still possible.