Which statement best describes LC 3301 ‘Specified Sponsors Not Employers’?

• A. All Sponsors Are Employers
• B. Specified Sponsors Are Not Employers In Certain Cases
• C. Sponsors Cannot Engage In Referrals
• D. Public Agencies Are Not Employers

Answer: (B)

In group self-insurance plans, a sponsor is the entity that administers and funds the plan for a set of employers, but the workers’ actual employment relationship is with their employer, not the sponsor. California Labor Code 3301 designates specified sponsors as not being employers for workers’ compensation purposes, though there can be rare situations where that status might differ. The key idea is the separation of roles: the sponsor handles administration and funding of the SIP, while the member employers are the ones who hire and pay the workers and bear the core employer responsibilities. So, stating that specified sponsors are not employers in certain cases captures this relationship and the typical legal status of sponsors within a SIP. The other options don’t reflect this relationship: sponsors are not automatically employers, the concept isn’t about referrals, and it isn’t specifically about public agencies.