California worker’s compensation law governs payment of temporarily and permanent disability indemnity benefits to employees injured in the course of employment. Existing law ordinarily requires payments made by written instrument to be immediately negotiable and payable in cash. However, the law also provided temporary authority for employers to establish programs allowing for the deposit of disability indemnity payments into an employee’s prepaid card account. Under existing law, that authority to make such deposits was scheduled to expire on January 1, 2027.
AB 1683 removes the January 1, 2027 sunset date regarding the authority to make such deposits and makes permanent the prepaid card payment option. The law does not require employers to pay workers’ compensation benefits through prepaid cards. Instead, employers that choose to establish a compliant prepaid card program for such payments may continue doing so indefinitely.
Employers that currently use prepaid card programs for disability indemnity payments may continue those programs. Employers not using prepaid cards are not required to begin doing so.
AB 1683 amends and repeals Labor Code section 4651 to remove the sunset on the authorization for workers’ compensation disability indemnity payments through prepaid card accounts.
