Legislature(2017 - 2018)GRUENBERG 120
04/13/2017 05:30 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB204 | |
| HB79 | |
| SB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 204 | TELECONFERENCED | |
| + | SB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 79 | TELECONFERENCED | |
HB 79-OMNIBUS WORKERS' COMPENSATION
5:58:41 PM
CHAIR CLAMAN announced that the next order of business would be
HOUSE BILL NO. 79, "An Act relating to workers' compensation;
repealing the second injury fund upon satisfaction of claims;
relating to service fees and civil penalties for the workers'
safety programs and the workers' compensation program; relating
to the liability of specified officers and members of specified
business entities for payment of workers' compensation benefits
and civil penalties; relating to civil penalties for
underinsuring or failing to insure or provide security for
workers' compensation liability; relating to preauthorization
and timely payment for medical treatment and services provided
to injured employees; relating to incorporation of reference
materials in workers' compensation regulations; relating to
proceedings before the Workers' Compensation Board; providing
for methods of payment for workers' compensation benefits;
relating to the workers' compensation benefits guaranty fund
authority to claim a lien; excluding independent contractors
from workers' compensation coverage; establishing the
circumstances under which certain nonemployee executive
corporate officers and members of limited liability companies
may obtain workers' compensation coverage; relating to the
duties of injured employees to report income or work; relating
to misclassification of employees and deceptive leasing;
defining 'employee'; relating to the Workers' Compensation
Board's approval of attorney fees in a settlement agreement; and
providing for an effective date." [Before the committee was CSHB
79(L&C), Version 30-GH1789\O.]
CHAIR CLAMAN advised he would move Amendment 5 to the bottom of
the stack of amendments, pending the committee's discussion on
Amendment 8.
[CHAIR CLAMAN passed the gavel to Vice Chair Fansler.]
5:59:41 PM
CHAIR CLAMAN moved to adopt Amendment 6, Version 30-GH1789\O.5,
Wallace, 4/4/17, which read as follows:
Page 18, line 11:
Delete "or knowingly fails to report a material
fact"
Page 18, line 23, through page 19, line 5:
Delete all material.
Renumber the following bill sections accordingly.
Page 19, lines 11 - 15:
Delete "An employee knowingly fails to report a
material fact under (a) and (b) of this section if the
employee does not disclose the receipt of unemployment
or other disability benefits or other employment, and
the employee knowingly receives compensation under
this chapter to which the employee is not entitled
because of the receipt of the other benefits or other
employment."
Page 21, line 20:
Delete "sec. 38"
Insert "sec. 37"
Page 21, line 22:
Delete "38"
Insert "37"
Page 21, line 24:
Delete "38"
Insert "37"
Page 21, line 27:
Delete "sec. 38"
Insert "sec. 37"
Page 21, line 28:
Delete "38" in both places
Insert "37" in both places
Page 21, line 30:
Delete "38"
Insert "37"
Page 22, line 18:
Delete "Section 41"
Insert "Section 40"
REPRESENTATIVE LEDOUX objected for discussion.
6:00:08 PM
CHAIR CLAMAN explained that Amendment 6 responds to written
concerns his office received from two or three lawyers involved
in Workers' Compensation matters as to "knowingly fails to
report a material fact." The lawyers noted that it could
actually put providers, and others, in a position of trying to
determine what is, or is not, a material fact. Chair Claman
noted that this particular language was a response to an Alaska
Supreme Court case, Shehata v. Salvation Army, [225 P. 3d 1106
(2010)] wherein the court found ambiguity as to whether a worker
had a duty to report whether they were trying to work and
whether it was paid or unpaid work. Amendment 6 creates the
duty to accurately disclose the work status of the worker, and
it does not create undesired duties for medical providers and
others, which was the prime objection of the lawyers writing to
the committee, he explained. After consultation with the
department, he advised that it has no objection to Amendment 6.
REPRESENTATIVE LEDOUX withdrew her objection. There being no
objection, Amendment 6 was adopted.
6:03:53 PM
CHAIR CLAMAN moved to adopt Amendment 7, written by Chair
Claman, which read as follows:
Page 4, line 7, following "partnership,":
Delete "or"
Page 9, line 27, following "self-represented,":
Insert "or"
Page 9, line 28:
Delete "or by a parent of"
Insert "a parent if the party is"
Page 11, lines 26 - 27:
Delete "if an employer controverts the employee's
right to compensation"
Insert "of the controversion"
Page 14, following line 23:
Insert a new bill section to read:
"* Sec. 27. AS 23.30.205(e) is amended to read:
(e) An employer or the employer's carrier shall
notify the commissioner of labor and workforce
development of any possible claim against the second
injury fund as soon as practicable, but in no event
later than 100 weeks after the employer or the
employer's carrier has knowledge of the injury or
death or after the deadline for submitting a claim for
reimbursement in (g) of this section."
Renumber the following bill sections accordingly.
Page 14, lines 25 - 28:
Delete all material and insert:
"(g) An employer or the employer's carrier must
establish all requirements for reimbursement in this
section, including notice of any possible claim and
the payment of compensation in excess of 104 weeks,
before submitting a claim for reimbursement to the
second injury fund. Notwithstanding (a) and (b) of
this section, a claim for reimbursement may not be
submitted for an injury or death that occurs after
August 31, 2017, and must be submitted before
October 1, 2019. An employer that qualifies for
reimbursement under this section will continue to
receive reimbursement payments on claims accepted by
the fund, or ordered by the board, until the fund's
liabilities for the claim are extinguished."
Page 21, line 20:
Delete "38"
Insert "39"
Page 21, line 22:
Delete "38"
Insert "39"
Page 21, line 24:
Delete "38"
Insert "39"
Page 21, line 27:
Delete "38"
Insert "39"
Page 21, line 28:
Delete both occurrences of "38"
Insert "39" in both places
Page 21, line 30:
Delete "38"
Insert "39"
Page 21, line 31:
Delete "29"
Insert "30"
Page 22, line 1:
Delete "29"
Insert "30"
Page 22, line 3:
Delete both occurrences of "29"
Insert "30" in both places
Page 22, line 5:
Delete "29"
Insert "30"
Page 22, following line 5:
Insert a new subsection to read:
"(d) The amendments to AS 23.30.205, added by
secs. 27 and 28 of this Act, apply to notice of any
possible claim and a claim for reimbursement submitted
on or after the effective date of secs. 27 and 28 of
this Act."
Page 22, line 18:
Delete "Section 41 of this Act takes"
Insert "Sections 27, 28, and 42 of this Act take"
Page 22, line 19:
Delete all material and insert:
"* Sec. 44. Section 31 of this Act takes effect
September 1, 2017."
Page 22, line 20:
Delete "29"
Insert "30"
REPRESENTATIVE REINBOLD objected.
CHAIR CLAMAN related that Amendment 7 was requested by the
Department of Labor & Workforce Development (DLWD), and Ms. Marx
would present the amendment.
6:04:26 PM
MARI MARX, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DLWD), advised that
the Department of Law (DOL) brought this issue to the attention
of DLWD, and Kimber Rodger would explain the basis of its
concern.
6:04:50 PM
KIMBER RODGERS, Assistant Attorney General, Labor and State
Affairs Section, Department of Law, referred to Amendment 7,
page 1, lines 1-13, and explained that they are technical
changes to correct language issues. The real substance involves
the second injury fund within Amendment 7, page 1, lines 11-22,
and page 2, lines 4-14, and she advised that the idea was that
they clarify some procedures and extend deadlines for phasing
out the second injury fund. The new section, Section 27, ends
the requirement that employers provide notice of any possible
second injury fund claims because their claims could no longer
be submitted to the fund. She referred to Amendment 7, [page 2,
lines 4-14], and the new subsection (g), and advised that it
explains what is required to submit a claim for reimbursement to
the second injury fund, such that it does not permit claims to
be based on a subsequent injury or death that occurs after
August 31, 2017; and requires that employers file their claims
for reimbursement before October 1, 2019, and she noted that the
new addition of the section required some renumbering of
sections.
MS. RODGERS referred to Amendment 7, page 3, lines 25-29, and
explained that it adds a new subsection to the applicability
section, and clarifies that the second injury fund amendments
apply to notices of any possible claim and claim to
reimbursement submitted after the effective date of Sections 27
and 28, with the effective date of those sections being an
immediate effective date. She advised that this is provided in
Amendment 7, [page 3, line 31, and page 4, lines 1-2], where an
immediate effective date is necessary so that these sections
will take effect before the injury or death deadline date after
August 31, 2017.
MS. RODGERS remarked that Amendment 7 [page 4, lines 4-6],
provides for a new effective date of September 1, 2017 for
renumbered Section 31. She explained that Section 31 amends AS
23.30.247(c) to remove a provision allowing employers to ask
about a person's prior health or disability history in order to
document that employer's knowledge of a pre-existing condition
for a possible second injury fund reimbursement if the person
was later injured at work, she explained. As of September 1,
2017, this provision will no longer be needed because "a
subsequent injury or death had occurred at that time" will not
qualify for a second injury fund reimbursement. Therefore, she
noted, those questionnaires will no longer be necessary.
6:08:38 PM
REPRESENTATIVE REINBOLD withdrew her objection on Amendment 7.
There being no objection, Amendment 7 was adopted.
[VICE CHAIR FANSLER passed the gavel back to Chair Claman.]
6:09:02 PM
REPRESENTATIVE REINBOLD moved to adopt Amendment 8, Version 30-
GH1789\O.10, Wallace, 4/13/17, which read as follows:
Page 16, line 28:
Delete "three"
Insert "two"
Page 16, line 29, following "person":
Insert "is responsible for the satisfactory
completion of services that the person has contracted
to perform and is subject to liability for a failure
to complete the contracted work, or"
Page 17, line 1, following "location":
Insert "or a business mailing address"
Page 17, line 4:
Following "person":
Insert "provides contracted services for two or
more different customers within a 12-month period or"
Following "in":
Insert "any kind of"
Page 17, line 6:
Delete ";"
Insert "."
Page 17, lines 7 - 13:
Delete all material.
REPRESENTATIVE FANSLER objected.
6:09:12 PM
REPRESENTATIVE REINBOLD stressed that her name should have been
printed on Amendment 8 and asked that everyone write her name on
the document "because that's a big deal to me."
REPRESENTATIVE REINBOLD explained that Amendment 8 revises [Sec.
28, AS 23.30.230(a)(11)(H), page 16, line 28], and adds
provisions that an independent contractor "meet at least two of
the three listed criteria" to satisfy the definition of an
independent contractor. She explained that this amendment
loosens the language to ensure that independent contractors are
not held to strict eligibility standards that may be difficult
to overcome depending on the business size, operation, and
services offered. She advised that this amendment provides
flexibility in determining what constitutes an independent
contractor. It is important to foster small business
opportunities including those offered by independent contractors
in the time of Alaska's financial uncertainty. She related that
Independent contracting opportunities keep Alaskan businesses in
the business of providing services and professional services to
Alaskan and non-Alaskan businesses. She described Amendment 8
as a "win-win for everybody," and urged the committee's support.
She then thanked Chair Claman, committee members, the National
Federation of Independent Business (NFIB), and others opposing
parts of a "soon to be withdrawn" amendment, and the committee
staff in working closely with her office to make this a win-win
for everyone.
6:11:02 PM
CHAIR CLAMAN related that the committee received letters of
support from three different groups, and also support from the
American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO).
REPRESENTATIVE KOPP remarked that he fully supports the
amendment.
6:11:32 PM
REPRESENTATIVE FANSLER withdrew his objection. There being no
objection, Amendment 8 was adopted.
6:11:47 PM
REPRESENTATIVE LEDOUX moved to adopt Amendment 9, Version 30-
GH1789\O.9, Wallace, 4/11/17, which read as follows:
Page 10, line 14:
Delete "21st [14TH]"
Insert "14th"
Page 10, line 17:
Delete "21 [14] days"
Insert "14 days or twice a month"
Page 10, line 18, following "period.":
Insert "If the first installment of compensation
due under this subsection is not paid within 14 days
or a subsequent installment due under this subsection
is not paid every 14 days or twice a month, a grace
period will not be allowed and an additional amount
will become due under (e) of this section."
REPRESENTATIVE FANSLER objected for purposes of discussion.
6:12:02 PM
REPRESENTATIVE LEDOUX explained that when she introduced the now
adopted Amendment 2 [on 4/5/17], it provided that if [an
employer or insurer] had not paid workers' compensation benefit
to a worker within 14 days, no grace period would be allowed and
the late benefit would be penalized under this section. Since
the adoption of Amendment 2, she remarked, a representative from
the National Federation of Independent Business (NFIB) pointed
out that some businesses, including the State of Alaska, pay
their employees twice per month and it would be difficult to
change the benefits to a 14 day period within the computer
systems of people paying on a bi-monthly pay period. Amendment
9 changes it to every 14 days, or twice per month, she
explained.
REPRESENTATIVE REINBOLD commented that she likes the 7-day grace
period aspect and she would like feedback from those being
impacted.
REPRESENTATIVE LEDOUX pointed out that the 7 day grace period
was already eliminated [within the adoption of Amendment 2], and
Amendment 9 simply moves the time period from every 14 days to
twice per month. She reiterated to Representative Reinbold that
the discussion was not about the previously deleted 7 day grace
period.
REPRESENTATIVE REINBOLD argued that the amendment went from 14
days to 21 days.
6:14:01 PM
CHAIR CLAMAN disagreed and advised that the amendment changes
the 21 days to 14 days, [or twice per month].
REPRESENTATIVE REINBOLD after re-reading the amendment agreed
that Chair Claman and Representative LeDoux were correct. She
commented that she did not know whether anyone would like to
testify, but she would not fight it because Representative
LeDoux had the votes.
REPRESENTATIVE EASTMAN commented that he likes the idea of
Amendment 9, and suggested that under its current construction,
an employer could probably do what was unintended by this
amendment due to the word "or," and pay the money twice on day
30 and would be in compliance.
REPRESENTATIVE LEDOUX answered that she supposed it could be
read in that manner, although, that certainly wasn't the purpose
of the amendment, but Representative Eastman may have a point.
CHAIR CLAMAN referred to Representative Eastman's suggestion and
said that because the employer was not paying for past time and
was paying for the time going forward, that if the employee
received a full month at one time the employee probably would
have no objection. Although, he commented, the odds that an
employer would actually choose to pay in one lump sum is pretty
unlikely.
6:17:23 PM
MS. MARX answered that the language is "very broad" and is open
to multiple interpretations, and the division would probably
have difficulties in calculating penalties. Whereas, the
division could easily calculate when penalties may be due with a
set date, and every employer having the same due date. The
language "twice per month," she related, could be read to be two
days in one month period, a 30 day or a 31 day period.
6:18:11 PM
REPRESENTATIVE LEDOUX, noting that the division knows where the
committee wants to go with this language and is aware of the
problem, asked the language the division would suggest.
MS. MARX related that originally the compensation was paid
within 14 days with a grace period of 7 days, meaning an
employer actually had 21 days in which to pay. She opined, that
the administration changed it, and the feeling is to back to the
way it was before, "but changing it here." She explained. "So
here, I think the intent is to pay 14 days, and 'this right
here' adding twice per month, I'm not sure that that would meet
that intent to pay that 14 days."
CHAIR CLAMAN pointed out that it is not an attempt to make it 14
days, it's an attempt to recognize that many employers pay twice
per month. He commented that while technically a possibility,
in the real world no employer would pay the entire payment for
one month on the last two days of the month.
MS. MARX related that in her experience as a hearing officer, 9
out of 10 employers would follow the intent, and 1 out of 10
would construe the language against the intent, and it would
happen often enough that it would be a concern. She remarked
that in a perfect world, the fraud unit would not be in
existence.
6:20:49 PM
COMMISSIONER HEIDI DRYGAS, Department of Labor & Workforce
Development, clarified that there are different systems when
paying workers' compensation benefits. Typically, it is not the
employer paying the benefits - it's the insurer, and to have an
insurer pay every 14 days or every 21 days is a reasonable part
of its responsibilities. She commented that there are some
self-insured employers in this state. The workers' compensation
benefits system versus regular wages and benefits paid to
working employees are completely different and, she opined, the
attempt to try to fit it into an employer's version of how
employees are paid may not be necessary.
6:21:41 PM
REPRESENTATIVE LEDOUX asked Mr. DeWitt's perspective on the
amendment.
6:22:05 PM
DANNY DeWITT, State Director, National Federation of Independent
Business (NFIB), related that he is not an expert in workers'
compensation and advised that 14 days plus 14 days equals 28
days and most months have 31 days which causes math
difficulties. He related that he does not have a solution but
offered concern that without the grace period, it could create a
significant problem for folks paying on the 1st and 15th of the
month.
6:23:10 PM
REPRESENTATIVE LEDOUX remarked that as Commissioner Drygas
pointed out, everyone is covered through workers' compensation
insurance, or through those who might be self-insured. She
commented that she did not know whether anyone was available
from the workers' compensation carriers to testify, but it
wouldn't appear to actually impact Mr. DeWitt's clients, and it
might impact the workers' compensation insurance carrier.
MR. DeWITT explained that everything an insurance company has to
do is charged in premiums which directly affects his clients.
He offered concern that if a payment was made on the 14th, the
next payment would be on the 28th, which means three days into
the next month which puts everyone on a 54 year payment cycle,
rather than a 52 year cycle.
CHAIR CLAMAN commented that Mr. DeWitt may be getting his math
wrong but he wasn't going to quarrel with the math.
MR. DeWITT advised that he appreciates Representative LeDoux's
intent, but it begs the question of whether the math works,
which is why a grace period is necessary.
6:25:19 PM
CHAIR CLAMAN clarified that the issue Commissioner Drygas raised
was that it gets referred to the workers' compensation carrier.
The workers' compensation carrier is accustomed to the 14 days
rule, might prefer the 14 days rule, and might prefer not to get
confused by the twice per month rule, he said.
REPRESENTATIVE LEDOUX commented that at this point she was not
particularly interested in Amendment 9.
REPRESENTATIVE EASTMAN noted that if 14 days poses a math
problem, whether 16 days or 17 days would solve the problem.
MR. DeWITT stated that he was hesitant to respond and underlined
that "I really don't know enough of the technical issues," but
if forced to respond, would think that 16 days would work
because it would cover one month.
REPRESENTATIVE REINBOLD reiterated that a grace period is
important and then read to the committee [Amendment 9, page 1,
lines 10-13].
6:27:28 PM
REPRESENTATIVE LEDOUX, in reference to Mr. DeWitt's comments and
the 16 days, commented that she was unsure it was mathematically
better. In response to Representative Reinbold's comments, she
pointed out there is not a grace period when paying someone's
salary and she could not see why there should be a grace period
with workers' compensation benefits. Representative LeDoux then
remarked that if she had her druthers, she would like to
withdraw the amendment and as the bill progresses, that an
insurance carrier advise as to whether adopting this amendment
would become a data nightmare and how to solve the data
nightmare.
6:29:05 PM
REPRESENTATIVE LEDOUX withdrew Amendment 9.
6:29:14 PM
CHAIR CLAMAN asked Representative Reinbold, in light of the
committee action on Amendment 8, whether she preferred to not
offer Amendment 5.
REPRESENTATIVE REINBOLD related her appreciation with the AFL-
CIO, NFIB, Chair Claman's office, and the passage of Amendment
8, and opined that the parties came to a "great compromise," and
said she would not to make a motion to adopt Amendment 5.
6:29:52 PM
REPRESENTATIVE LEDOUX noted that the department did not weigh in
on Amendment 8, and asked whether the department accepted the
committee's action.
CHAIR CLAMAN advised that Commissioner Drygas gave him a "thumbs
up" to indicate that the department was good with Amendment 8.
REPRESENTATIVE LEDOUX stated that she was both impressed and
amazed that this was accomplished and thanked everyone who
worked on this bill to come up with a "win-win for everybody."
REPRESENTATIVE KOPP commented that this is a "great example" of
the public and private sector working together toward the common
goal of taking care of employees.
6:30:56 PM
REPRESENTATIVE FANSLER moved to report CSHB 79, Version 30-
GH1789\O, as amended, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 79(JUD) passed out of the House Judiciary
Standing Committee.