California AB 1683: How Prepaid Cards Change Workers’ Compensation Payments
Understand your rights and options under California’s new workers’ compensation prepaid card law.
See if you qualify for compensation →California AB 1683 allows workers’ compensation payments to be made through prepaid cards, changing how employees receive their benefits.
This new law, signed on July 6, 2026, gives California employees more flexibility in how they access disability indemnity payments. If you receive workers’ compensation, you may now have the option to get your payments on a prepaid card instead of a paper check or direct deposit.
Understanding how this law works, what it means for your payments, and what protections are in place is important for all California workers. This article breaks down the key points, answers common questions, and links to the official law so you can make informed decisions.
What Does California AB 1683 Change About Workers’ Compensation Payments?
California AB 1683 changes the way workers’ compensation disability indemnity payments can be delivered by allowing the use of prepaid cards as a payment method.
Before this law, most workers’ compensation payments were made by paper check or direct deposit. Now, employers and insurance carriers may offer prepaid cards as an additional option for employees to receive their benefits. This is designed to make payments faster and more accessible, especially for workers who may not have traditional bank accounts.
The law aims to modernize payment systems and reduce delays that sometimes occur with mailed checks. However, it is important to note that the law does not require employees to use prepaid cards; it simply allows this as an option. Employees should review their choices carefully and confirm any details with their employer or claims administrator before making a decision.
- Prepaid cards are now a legal payment option for workers’ compensation in California.
- Employees can still choose direct deposit or checks if preferred.
- Employers must follow all requirements set by the law.
AB 1683 adds prepaid cards as a new, optional way to receive workers’ compensation benefits.
Sources: Official source
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Consult a Lawyer →How Do Prepaid Cards for Workers’ Compensation Work?
Prepaid cards for workers’ compensation work by allowing your disability payments to be loaded onto a card you can use for purchases, ATM withdrawals, and bill payments.
When you choose the prepaid card option, your benefits are deposited directly onto the card, similar to how direct deposit works with a bank account. You can then use the card at stores, online, or to withdraw cash. This can be helpful for employees who do not have a checking account or want faster access to their funds.
It is important to check for any fees, limits, or restrictions that may apply to the prepaid card. Some cards may charge for ATM withdrawals or balance inquiries, while others may offer free services. Always read the terms and conditions provided by your claims administrator or card issuer.
- Funds are loaded onto the card as soon as your payment is processed.
- You can use the card anywhere major debit cards are accepted.
- Some cards may have fees or limits—review the cardholder agreement.
Prepaid cards can offer faster, more flexible access to your workers’ compensation payments.
Sources: Official source
Are you eligible to receive workers’ compensation payments on a prepaid card under AB 1683?
Are you currently receiving or expecting to receive workers’ compensation payments in California?
Has your employer or insurer offered you the option to receive payments via a prepaid card?
What Are the Benefits and Drawbacks of Receiving Workers’ Compensation on a Prepaid Card?
Receiving workers’ compensation payments on a prepaid card offers several benefits, such as faster access to funds and convenience for those without bank accounts.
Prepaid cards can reduce the risk of lost or stolen checks and may allow you to use your money immediately upon deposit. For employees who do not have a bank account or prefer not to use one, prepaid cards provide an alternative that does not require opening a new account. This can be especially useful for seasonal or temporary workers.
However, there are also drawbacks to consider. Some prepaid cards may charge fees for ATM withdrawals, balance checks, or inactivity. Not all merchants accept prepaid cards, and there may be limits on how much you can withdraw at once. If you rely on cash or need to pay bills that require a check, you may find a prepaid card less convenient. One non-obvious tradeoff is that prepaid cards may not offer the same fraud protections as traditional bank accounts, so it’s important to review the card’s security features.
- Faster access to funds compared to mailed checks.
- No need for a traditional bank account.
- Potential fees and limits may apply.
- May not be accepted everywhere.
- Fraud protections can vary by card issuer.
Weigh the convenience of prepaid cards against possible fees and acceptance issues before choosing.
Sources: Official source
What Protections and Requirements Apply Under AB 1683?
California AB 1683 includes requirements to protect employees who choose to receive workers’ compensation payments via prepaid cards.
Employers and insurance carriers must follow all applicable laws and regulations regarding payment methods. This may include providing clear disclosures about fees, ensuring employees have access to their full payment amount, and offering alternative payment options. Employees cannot be forced to accept a prepaid card if they prefer another method, such as direct deposit or check.
The law may also require that prepaid cards used for workers’ compensation do not have unreasonable fees or restrictions. Employees should always receive information about their rights and options in writing. If you have concerns about your payment method, contact your claims administrator or the California Division of Workers’ Compensation for help.
- Employers must offer prepaid cards as an option, not a requirement.
- Clear disclosures about fees and terms are required.
- Employees retain the right to choose their payment method.
AB 1683 aims to protect employees’ rights and ensure fair access to their benefits.
Sources: Official source
How Can Employees Choose or Change Their Workers’ Compensation Payment Method?
Employees can choose or change their workers’ compensation payment method by notifying their employer or claims administrator of their preferred option.
If you want to receive your payments on a prepaid card, you may need to complete a form or provide consent in writing. If you later decide you prefer direct deposit or a paper check, you can usually request a change by contacting your claims administrator. Make sure to ask about any deadlines or processing times for switching payment methods.
It’s a good idea to review all available options before making a choice. Ask about any fees, access to funds, and how to report lost or stolen cards. If you have trouble changing your payment method, you can seek help from the California Division of Workers’ Compensation or a qualified professional.
- Notify your employer or claims administrator to select or change your payment method.
- Ask about forms, deadlines, and processing times.
- Keep records of your requests and communications.
You have the right to choose or change your workers’ compensation payment method at any time.
Sources: Official source
Comparison: Prepaid Cards vs. Direct Deposit vs. Paper Checks for Workers’ Compensation
Employees receiving workers’ compensation in California now have three main payment options: prepaid cards, direct deposit, and paper checks, each with unique advantages and drawbacks.
Prepaid cards offer speed and convenience, especially for those without bank accounts, but may come with fees or acceptance issues. Direct deposit is often the fastest and most secure option for those with bank accounts, while paper checks may be preferred by those who want a physical record or do not trust electronic payments.
When choosing a payment method, consider your access to banking services, how quickly you need funds, and any potential fees. For example, some workers in rural areas may find prepaid cards more practical if they lack easy access to banks, while others may value the security and record-keeping of direct deposit.
- Prepaid cards: Fast, convenient, no bank account needed, possible fees.
- Direct deposit: Fastest, secure, requires a bank account.
- Paper checks: Physical record, may be slower, risk of loss or theft.
Choose the payment method that best fits your financial needs and lifestyle.
Sources: Official source
Frequently asked questions
Can I refuse to receive my workers’ compensation payments on a prepaid card?
Yes, you can refuse to receive your workers’ compensation payments on a prepaid card. The law allows prepaid cards as an option, but you cannot be forced to use one; you may choose direct deposit or a paper check instead.
Are there fees for using a prepaid card for workers’ compensation?
There may be fees for using a prepaid card for workers’ compensation, such as ATM withdrawal or inactivity fees. Always review the cardholder agreement and ask your claims administrator for a fee schedule.
How do I switch from a prepaid card to direct deposit or a check?
You can switch from a prepaid card to direct deposit or a check by contacting your employer or claims administrator and requesting the change. Make sure to ask about any forms or deadlines.
Is my money safe on a prepaid card?
Your money is generally safe on a prepaid card, but protections may differ from traditional bank accounts. Check the card’s security features and report lost or stolen cards immediately.
What should I do if I lose my prepaid card?
If you lose your prepaid card, report it to the card issuer or your claims administrator right away. They can help you block the card and issue a replacement.
Where can I find the official text of California AB 1683?
You can find the official text of California AB 1683 on the California Legislative Information website at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB1683. Always review the official source for the most accurate and up-to-date information.
Does this law apply to all types of workers’ compensation payments?
California AB 1683 applies to workers’ compensation disability indemnity payments, but you should check with your claims administrator to confirm how it applies to your specific situation.
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