Legislature(2017 - 2018)BARNES 124
02/20/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB79 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 79 | TELECONFERENCED | |
| + | TELECONFERENCED |
[Contains mention of SB 29 and HB 69.]
HB 79-OMNIBUS WORKERS' COMPENSATION
3:19:50 PM
CHAIR KITO announced that the only 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."
3:21:04 PM
HEIDI DRYGAS, Commissioner, Department of Labor & Workforce
Development (DLWD), presented HB 79 on behalf of the governor
and thanked the committee for hearing HB 79. She remarked:
This bill will speed up resolution of disputes,
improve delivery of benefits to injured employees,
deter workers' compensation fraud, reduce
administrative costs, and provide adequate funding for
the administration of the workers' compensation
system. The legislature has consistently endeavored
to create a workers' compensation system that delivers
benefits quickly, efficiently, fairly, and predictably
to injured workers at a reasonable cost to employers,
as mandated by statute.
The system has not been significantly reformed in more
than 10 years. The improvements in this bill address
rising costs, recent legal developments, and new
approaches to improve the system's efficiency and
fairness. This bill focuses on efficiencies. The
department recognizes that benefit issues such as
reemployment benefits and medical costs do need
attention. The department is committed to addressing
those issues in another legislative session.
3:22:20 PM
MARIE MARX, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DLWD), gave an
overview of the sectional analysis for HB 79. She remarked:
The division administers the Alaska Workers'
Compensation Act. I want to begin with the intent of
the Act set out in statute, which is also the
division's mission. As the commissioner stated, it is
to ensure the quick, efficient, fair, and predictable
delivery of benefits to injured workers at a
reasonable cost to employers. Balancing these pillars
guides the division's administration.
MS. MARX stated that HB 79 would address all the statutory
pillars, with focus on fairness, quickness, and efficiency in
the workers' compensation process. It would speed up dispute
resolution in various ways and simplify and quicken the hearing
process by letting the board schedule a hearing shortly after a
claim is filed, instead of waiting for an employee to request a
hearing. Further, HB 79 would end the practice of permitting
non-attorneys, who are not bound by the rules of ethical and
professional conduct, from representing parties before the
Alaska Workers' Compensation Board.
MS. MARX clarified that a parent, guardian, or other court-
appointed representative would still be permitted to represent a
party in board proceedings. The board would continue to
consider a company, employer, or medical provider to be self-
represented when acting through an authorized employee, a
member, partner, or a corporate executive officer. Ms. Marx
offered clarification, as follows:
This change does not affect a party's ability to be
represented by an attorney, including an attorney's
ability to employ the services of paralegals and
delegating functions to them. That's governed by the
Alaska Rules of Professional Conduct. ... We permit
that, we will continue to permit that. However, other
non-attorneys may not represent a party in matters
before the board.
MS. MARX said HB 79 would streamline settlement agreements by
eliminating a requirement that the board approve attorney fees
as part of a settlement agreement when fees are the only issue
in the settlement that would require board approval. Further,
under HB 79, the process of imposing civil penalties against
uninsured employers would be streamlined by allowing the
Division of Workers' Compensation to assess the penalty directly
rather than petitioning the board to set the penalty.
3:25:14 PM
REPRESENTATIVE BIRCH offered his understanding that the Alaska
Chamber of Commerce had some concerns about the current
structure of workers' compensation. He asked to what extent the
proposed changes have been reviewed, considered, and evaluated
by employers.
3:26:11 PM
MS. DRYGAS stated that leading up to HB 79, numerous listening
sessions across the state took place in order for [the
department] to learn how to improve the system. She explained
that the department has received constant input throughout the
the process of developing HB 79. She expressed that there is a
balance between the rights of injured workers and employers'
rights to reasonable and fair costs. She informed the committee
that the department has had numerous conversations about ways to
improve the process with insurance companies, businesses, and
complainants' attorneys. She stated that these conversations
and the expertise within the departments have culminated in the
proposed bill. She mentioned that there are still ongoing
conversations.
REPRESENTATIVE BIRCH commented that he wants to make sure that
businesses have a seat at the table and it's not a one-sided
program.
3:28:30 PM
MS. MARX continued her overview of HB 79. She added that with
the streamlined process of opposing civil penalties, an employer
who disputes the assessed penalty would still be permitted to
challenge the assessment before the board. She stated that the
bill would improve the delivery of medical care by requiring an
employer to preauthorize or deny medical treatment upon a
medical provider's written request within 60 days. She stated
that the timeframe was established to avoid litigation and
confusion about preauthorization. One interpretation of current
statute is that an employer's only duty is to pay a medical bill
within 30 days. A Supreme Court decision has ruled that paying
a medical bill is not "the extent of an employer's duty,"
although the decision didn't detail other aspects of the duty.
She remarked that a doctor doesn't necessarily want to move
forward with an expensive surgery before being sure he/she will
be paid; an injured worker doesn't want to move forward with an
expensive surgery not knowing who's going to pay for it.
MS. MARX noted that currently medical benefits are paid every 14
days with a 7-day grace period. The proposed bill would
simplify this by clarifying that medical benefits would be paid
every 21 days with no grace period. The bill would not change
medical bills being paid within 30 days. She emphasized the
division's commitment to addressing the issue of
misclassification. She explained that not doing so is a
disservice to workers, who can be severely injured or die as a
result of fraudulent misclassification, and companies, which can
be put out of business as a result of uninsured losses.
MS. MARX stated that HB 79 would not prevent true independent
contractors from existing and flourishing. She explained that
the narrow application proposed under HB 79 would address
independent contractor status only in regard to workers'
compensation. She added, "We must keep workers safe and law-
abiding employers should not have to pay the price for
misclassification."
3:31:44 PM
MS. MARX stated that in order to strengthen fraud provisions of
the Act, HB 79 would define when an employer's misclassification
amounts to fraud. She stated that the proposed legislation
would: impose an affirmative duty on employees receiving
benefits to report work and receipt of other types of wage-loss
replacement benefits; expand personal liability for workers'
compensation benefits; and expand civil penalties to more types
of businesses for failure to insure.
MS. MARX explained that HB 79 would close a loophole: the
Workers' Compensation Act did not include [limited liability
companies] (LLCs) in the corporations that would be liable for
not carrying insurance. This would allow corporations to be
liable for uninsured compensation. She stated that HB 79 would
define "independent contractor" instead of relying on a
convoluted multi-factor test defining "employee." The bill
would grant the division the ability to claim a lien on behalf
of the Benefits Guaranty Fund, which is the fund for injured
workers. She noted that currently an injured worker could file
a lien immediately on a claim, but the Benefits Guaranty Fund
cannot. She stated that the bill would secure compensation
benefits paid by the fund and assess civil penalties.
MS. MARX said HB 79 would expand the division's ability to
assess a civil penalty to include employers who are underinsured
because they have misclassified workers. Currently, the
division can assess a penalty when an employer fails to carry
insurance at all, but there is no recourse to bring employers
who are underinsuring into compliance. She remarked:
The bill changes the calculation and maximum civil
penalty for a failure to insure for workers'
compensation liability. Right now the maximum penalty
is $1,000 for each uninsured employee workday and this
has led to two unintended consequences: ... first,
it's resulted in astronomically high penalties that do
not withstand review on appeal, and that increases the
litigation costs ... and employer defaults; and
second, uninsured employers that do not maintain
accurate records ... are actually frequently penalized
less severely than an employer who keeps records as
required by law ... just because of the difficulty of
establishing the number of uninsured employee workdays
... without those records. So the bill corrects those
issues.
3:34:34 PM
REPRESENTATIVE KNOPP asked for an explanation of underinsured
employees.
MS. MARX responded that there are various ways employers can
fraudulently underinsure or misclassify [employees] to avoid
payment of workers' compensation payments. She noted that
employers might pay an employee "under the table" or tell the
insurance company an employee is clerical when he/she is a
roofer, in order to pay a lower premium. Employers could tell
an insurance company that employees are leased from a separate
company - also owned in full by the employer - that has no
injury history and is in a low-risk industry. The bill would
ensure a level playing field so workers are properly classified.
3:35:48 PM
REPRESENTATIVE JOSEPHSON asked how the premium for the maximum
civil penalty would be calculated under HB 79. He asked how the
penalty would deter employers from fraudulently claiming
employees are independent contractors.
MS. MARX answered that the penalty would amount to three times
the premium that would have been paid had the employer
maintained insurance as required by law. The division would
investigate and would have to find substantial evidence that the
workers were fraudulently misclassified. The division would
then calculate the penalty amount as the amount an employer
would have paid had all employees been properly classified and
insured.
REPRESENTATIVE JOSEPHSON asked for clarification whether the
penalty amount would be based on the number of months [the
employer] failed to pay the correct premium.
3:36:57 PM
MS. MARX responded that is correct. Under HB 79, the premium
would be based on the length of time the employer failed to
carry appropriate insurance. She explained that the penalty
calculation in HB 79 would require the employer's overall
payroll data to be calculated as if the employer had properly
classified its employees at the Division of Insurance's assigned
risk rates for the nature of the employer's business. The new
penalty would result in a reasonable deterrent that takes into
account the employer's business size, the nature and risk of the
employer's business, and the financial gain the employer
realized by operating without paying - in full or in part - for
workers' compensation insurance.
MS. MARX continued by saying HB 79 would also clarify that civil
penalties may not be suspended. She offered her understanding
that currently the Alaska Workers' Compensation Board often
suspends penalties, in full or in part, in response to the
astronomically high penalties that have been occurring; however,
this practice has resulted in penalties without sideboards. The
new calculation under HB 79 would put sideboards on these
assessments by tying the penalty to an employer's size, the type
of business, and the financial gain that the employer realized
by not having workers' compensation insurance. The bill would
allow an employer to enter into a payment plan to pay the civil
penalty in installments, which would ensure an employer is not
put out of business by a civil penalty assessment, though HB 79
would require interest be paid on these plans at the state rate
for judgments.
MS. MARX listed ways HB 79 would reduce administrative costs:
the bill would allow employers to pay benefits electronically,
which would deliver benefits to workers faster while saving
costs; the bill would allow the Division of Workers'
Compensation to prescribe the filing format of reports of injury
and compensation payments - currently, certain reports require a
stamped envelope; and the bill would allow the division to keep
up with technological changes, including electronic filing of
records.
MS. MARX explained that the bill would eliminate a requirement
for corporate executive officers and LLC members with at least
10 percent ownership to seek the division's approval before
opting out of workers' compensation coverage for themselves:
they are not employees of the business and therefore do not need
workers' compensation coverage. She stated that the current
application process [to opt out of coverage] is lengthy and
takes the department an enormous amount of time to review, but
[ownership] is easily verifiable through other means.
3:40:10 PM
MS. MARX noted that HB 79 would reduce administrative costs by
adding some medical publications to a list the DLWD may
incorporate into its fee schedule and regulations, including
future amended versions. The bill would provide a penalty for
insurers and employers that fail to submit proof of coverage in
a timely manner. She stated that there is currently no deadline
for reporting insurance renewals to the division and HB 79 would
reduce the division's wasted efforts investigating insured
employers that neglected to report their insurance coverage.
The proposed legislation would phase out the Second Injury Fund,
saving the department administrative costs and reducing costs
for employers who are required to contribute to the fund. She
explained that the fund's current purpose is to encourage
employers to hire or retain individuals with disabilities;
however the fund is no longer necessary with the passage of the
Americans with Disability Act and other laws that bar employment
discrimination. She remarked:
Under the bill, the fund would not accept new claims
and ... would be phased out as current claims are
paid. So employers' required contributions to the
fund would gradually drop to zero as the claims are
paid. So far, about half the states, 19 of them, have
phased out these types of funds. Finally, HB 79
ensures adequate funding for the ... administration of
the Workers' Compensation Safety Administrative
Account, we call this WCSAA.
MS. MARX informed the committee that the WCSAA balance is
rapidly declining. In 2005, the Alaska Legislature established
programs such as the Workers' Compensation Fraud Unit and the
Medical Services Review Committee, which are funded by WSCAA.
She explained that there was no increase in the WSCAA service
fee rate to account for the costs needed to operate these
programs. She stated that the bill would allow the department
to receive a greater percentage of the annual service fees that
insurers pay. She noted that more money would not be collected
from insurers, but a greater percentage of the money collected,
which would otherwise go to the general fund, would be allocated
to the division.
3:42:56 PM
REPRESENTATIVE BIRCH asked what the percentage change would
generate in funding.
MS. MARX responded that based on fiscal year 2016 (FY 16), a .67
percent change would equate to 1.8 million dollars annually.
3:43:49 PM
REPRESENTATIVE JOSEPHSON asked if the amount employers pay to
provide workers' compensation would drop as the pool of people
paying for workers' compensation grows.
MS. MARX responded that she doesn't have official data.
Nevertheless, she stated that Representative Josephson's
assumption is correct: When more people purchase workers'
compensation [insurance] and cover their employees, the risk is
spread out; workers' compensation is an allocation of risk
spread throughout all employers.
3:44:42 PM
REPRESENTATIVE KNOPP asked if the savings of up to two million
dollars by 2023 shown on the fiscal notes is from sharing the
costs between more employers.
MS. MARX answered no. She responded that the administrative
savings would result from switching to electronic filing. She
stated that the cost of providing more coverage and sharing the
burden is negligible. The Division of Workers' Compensation
does not pay the cost of the second injury fund; rather the
division collects the funds from employers and insurance
companies and reimburses them. The fiscal note shows the money
categorized differently over the years. She explained that the
division would have no fiscal impact under HB 79 other than,
hopefully, down the road, the department would save
administrative expenses. She remarked:
Most Second Injury Fund claims are permanent total
disability, which means we generally pay it for the
life of the claimant. So if we start phasing it out
now, ... down the road we hope to save those
administration expenses.
3:46:31 PM
MS. DRYGAS stated that the administrative services director
could better speak to the details of the fiscal notes.
3:47:36 PM
CHAIR KITO opened public testimony on HB 79.
3:47:57 PM
AVES THOMPSON, Executive Director, Alaska Trucking Association,
testified on HB 79. He stated that the association represents
the interests of nearly 200 member companies statewide. He
commented that freight movement is a large portion of Alaska's
economy and affects all Alaskans. He expressed that the
association has concerns regarding the changes to AS
23.30.230(a)(11) proposed in HB 79, which would determine
whether a person is an independent contractor for the purposes
of workers' compensation coverage. He remarked:
The independent contractor or owner/operator business
model has played an important role in the trucking
industry for decades. Owner/operators serve a valued
function within the trucking industry. They are small
business owners who rely on their prudent decision
making and hard work to earn a living and build a
business. They offer professionally staffed hauling
and delivery capabilities to motor carriers. Their
revenues and profits are directly tied to their level
of effort and business judgements, that is: choosing
the right truck - such as the make, model, and
condition - for their operations; deciding how to best
finance that truck; select[ing] repair and maintenance
vendors; and deciding whether to hire drivers or
substitute drivers. Those initial decisions are only
the tip of the iceberg.
Ongoing business decisions must be made regarding
fueling times; vendor software use, including routing
programs; insurance coverages; and a wide variety of
other needed products and services. One of the most
critical decisions that an owner/operator makes is
their selection of a motor carrier partner. They must
select a carrier whose operations and procedures fit
the contractor's business plan. Then, as the business
grows, the owner/operator must decide the utility of
acquiring additional trucks and hiring more drivers
and decide whether to partner with multiple carriers.
Motor carriers can rely on the owner/operators'
independent motivation and business skills without
having to apply the constant and detailed control
necessary with carrier/employee drivers.
The basic bargain the owner/operator strikes with each
of its motor carrier customers turns on the potential
for mutual profit. If the owner/operator works hard
and makes smart decisions, he or she profits. The
motor carrier profits by professional, timely, and
efficient delivery of freight by this self-motivated
independent contractor. The motor carrier can ...
conserve its management resources for other key tasks,
such as business generation, customer service, and
financial management. Owner/operators are an
effective method for the industry to quickly respond
to changing customer or market demands by allowing
expansion and contraction of the workforce.
MR. THOMPSON noted that equipment and driver leasing in the
trucking business is heavily regulated by both federal statute
in 49 U.S. § Code 14102, and U.S. Department of Transportation
(DOT) regulation in 49 CFR Part 376.
3:51:22 PM
MR. THOMPSON stated that the proposed changes to the workers'
compensation statute essentially preclude the use of
owner/operators in the trucking business in a number of ways.
First, the determining factors proposed under HB 79, paragraph
(11), subparagraph (A), on page 16 would rule out an
owner/operator who works primarily for one motor carrier.
Second, paragraph (11), subparagraph (E), would leave an open
interpretation of the direction of the motor carrier to the
contractor or owner/operator. He said the bill does not
demonstrate that directions are often given to an owner/operator
as a result of customer demands or legal requirements. Third,
paragraph (11), subparagraph (F), would prohibit a motor carrier
from hiring an owner/operator to haul a load of freight. He
recommended that the bill should provide an exemption in AS
23.30.230(a) that would exempt truck drivers from the provisions
of HB 79. This exemption would establish the truck driver
owner/operator business model in Alaska law. He also
recommended the adoption of a distinct truck driver/independent
contractor/owner/operator definition and set of tests. He
stated that the association has provided language to the
commissioner of DLWD to accomplish the recommendations, and has
provided other proposed changes to the language in HB 79 that
would address the association's other concerns. He remarked,
"We are happy to work with the proposers of the changes to
assist in clarifying the issues."
3:54:14 PM
SHELLY ERICKSON testified on HB 79. She stated that the small
business she owns received a claim against its workers'
compensation policy. She remarked:
It has been frustrating that the State of Alaska laws
in this area appear to be in favor of the employee no
matter what the situation, and I believe that these
issues need to be addressed also when you're dealing
with fraud.
MS. ERICKSON expressed that laws are needed to protect small
businesses from the abuse of employees that don't follow the
safety policies or [use safety] gear as instructed. She
analyzed that current law assumes the business is irresponsible.
She suggested that all newly hired employees need to release
their workers' compensation records, because specialized
businesses need to know beforehand whether an employee "should
not have been there in the first place." She stated her belief
that current law assumes boat owners negligent even if a
deckhand was in the wrong. She stated that the biggest expense
of her small business's workers' compensation insurance rate is
fraud. She offered her opinion that there need to be fair
consequences to employers and employees; right now it is a one-
sided system working against the employers. She expressed that
currently people are desperate in their private lives and are
looking for ways to get money by getting around the law,
including through fraudulent workers' compensation cases. She
remarked, "If the law cannot be written so these issues can be
fixed within the ... insurance industry, then the state needs to
provide a place for the abuse that is happening within the law
to be addressed and make it fair for both sides."
3:56:49 PM
REPRESENTATIVE BIRCH thanked Ms. Erickson for her testimony. He
stated that he has heard similar concerns. He asked whether her
suggested modifications to HB 79 have been addressed with any
local or elected officials.
MS. ERICKSON responded that she has not been able to get very
far. She stated that her insurance agency has also come up
against a wall when addressing employee fraud. She offered her
understanding that no one is willing to deal with it. She
stated that she has sent a letter regarding SB 29, HB 69, and
[HB 79], but her efforts to talk to individuals about the issue
have been unsuccessful. She opined that this is because nobody
thinks an employee could be fraudulent.
REPRESENTATIVE BIRCH asked Mr. Scott Jordan if there is a
mechanism that effectively deals with fraud in small businesses.
He noted that there are a lot of independent business owners in
the state that are unable to join the conversation in the middle
of the work week. He asked Mr. Jordan how he draws in
commentary from small business owners to make sure the community
and government are responsive.
4:00:28 PM
SCOTT JORDAN, Director, Division of Risk Management, Department
of Administration, responded that he might not be the best
person to answer the question. He explained that [the division]
serves as a self-insurer for workers' compensation for State of
Alaska employees.
REPRESENTATIVE BIRCH commented that there is a reasonable
framework in place to deal with worker's compensation. He
acknowledged that Mr. Jordan deals mostly with State of Alaska
employees, but asked for a larger context for small businesses
and trade associations. He asked what the magnitude is of the
state's risk: How many employees are involved and what benefit
costs are associated with workers' compensation?
MR. JORDAN answered that there are approximately 17,000 full-
time employees, excluding University of Alaska employees,
railroad employees, and some smaller corporations' employees.
He stated that the division pays out $26 - $30 million per year
in benefits; of that, 65 percent is medical, the rest is time-
loss benefits.
REPRESENTATIVE BIRCH asked how many of the 17,000 employees that
represents.
MR. JORDAN answered it's about 1,200 employees per year. For
the last 15 years, about 1,200 employees have turned in workers'
compensation claims.
REPRESENTATIVE BIRCH asked how that compares to the [private]
industry.
MR. JORDAN stated that he can't answer that.
4:03:21 PM
CHAIR KITO asked Ms. Marx how the independent contractor
language identified in HB 79 on page 17, beginning on line 9 was
developed.
MS. MARX stated that it has been an ongoing process. She noted
that there is a misclassification work-group to combat the fraud
issue, as many states have done, which brings in all types of
state agencies to work together. She remarked, "I'd say the
last 10 years, this has been a hot issue nationwide." Most
states have tried to get away from convoluted multi-factor
balancing tests and get to a clearer definition of independent
contractor. She explained that the division has looked at all
50 states' tests, all of which are a little different. She
stated that the Internal Revenue Service (IRS) has a 20-factor
balancing test, which is not the same as the language in HB 79.
The IRS's goal is to collect tax payments, whereas the Division
of Workers' Compensation's goal is narrower: to prevent
workplace injuries and protect employers from uninsured losses.
She said the department and drafters of HB 79 considered
language from all states and came up with a list of things that
help identify what is a separate business.
CHAIR KITO asked if applying this language would determine
whether the individual or the employer would be responsible for
getting a workers' compensation policy.
MS. MARX answered yes. The definition sets forth what is an
independent contractor. She explained that independent
contractors are not employees and workers' compensation only
applies to employees. She noted that most individuals are
considered either an employee or an independent contractor,
although individuals could be considered volunteers or
trespassers. If an individual is considered an independent
contractor, he/she would not have to carry workers' compensation
coverage for himself/herself. She stated that the department
encourages people to get coverage because uninsured losses can
financially devastate an employer.
4:07:06 PM
REPRESENTATIVE BIRCH asked if the Alaska Trucking Association
was involved in the department's outreach.
MS. MARX responded that the process has been going on for years;
during that time, comments were provided at listening sessions,
at board meetings, and through personal phone calls. She stated
that a bill with similar language last year was passed by the
House, and the department received a lot of feedback in that
process. She noted that the department has met with the Alaska
Trucking Association and other groups and is refining the
definition based on comments and feedback received. She
remarked, "We do not want to prevent true independent
contractors from operating. We want them to operate. We just
want to make sure that those employers who are following the law
operate on the same level playing field as those that do not."
REPRESENTATIVE BIRCH encouraged Ms. Marx to reach out to the
organizations and businesses that have a lot of independent
contractors because those organizations and businesses will be
impacted the most. He reflected on Mr. Jordan's previous
statement that 1,200 out of 17,000 employees - 7 percent - have
filed claims amounting to $26 - $30 million per year. He asked
how that compares to the broad employee base, and he expressed
that 7 percent seems large to him.
MS. MARX responded that among the hundreds of thousands of
employees in Alaska, about 20,000 workplace injuries are
reported: of those, 1,200 end up having claims filed and
disputed.
4:10:35 PM
REPRESENTATIVE BIRCH asked if the aforementioned 1,200 claims
come from state employees alone or from the entire workforce in
Alaska.
MS. MARX commented that the terms are confusing. She explained
that insurance companies consider injuries claims; however, when
she refers to the 1,200 claims, she means an application for
benefits because something was unpaid. She offered her
understanding that Mr. Jordan was referring to an injury where
[the Division of Risk Management] pays benefits, not an injury
with disputed benefits.
REPRESENTATIVE BIRCH asked for an "apples-to-apples" comparison
of State of Alaska's employee injuries and its safety in the
work environment. He noted that there is a proliferation of
chiropractors in Anchorage. He stated his desire to understand
whether the State of Alaska provides a safe workplace for its
employees. He reiterated that 7 percent of employees seems
large. He asked to see how the State of Alaska compares to the
state-wide industry as a whole.
MS. MARX stated that injury claim statistics would come from the
Division of Risk Management; the Research & Analysis [section]
within DLWD keeps track of the comparison data and injury data
in conjunction with the U.S. Department of Labor Statistic
Bureau. She explained that the Department of Workers'
Compensation administers reports of injuries and claims.
4:13:33 PM
REPRESENTATIVE KNOPP commented that the legislation would mostly
affect the private sector.
MS. MARX agreed.
REPRESENTATIVE KNOPP suggested that statute should define the
minimum requirement for any employee injury to be reported.
MS. MARX responded that the statute requires all injuries to be
reported. She conveyed that an injured worker got a small cut
on his thumb, put a Band-Aid on it, and went on his way. Later,
the wound became infected and needed significant medical care.
Because of such circumstances, all injuries - whether or not
they require medical care - need to be reported. She concluded
that this leads to the high number of reports of injury.
REPRESENTATIVE KNOPP expressed that HB 79 would have a lot of
effect on labor. He explained that if a leased truck was
getting $130 per hour and switched to a prevailing wage, then
the owner/operator would no longer have to pay himself the
prevailing wage rate or carry workers' compensation for himself,
which could increase the expenses to $170 per hour. He offered
his understanding that those in the trucking industry share this
concern. He stated that there may be unforeseen consequences of
defining the employee/employer relationship. He asked if the
practice of using professional term employees (PTE) is still in
the marketplace today.
4:16:59 PM
MS. DRYGAS stated she is not familiar with PTEs. She addressed
Mr. Thompsons's concerns by stating that the department is
hearing from the industry. She expressed that tackling worker
misclassification is very difficult. She remarked, "It's
important, it's necessary, but we want to make sure we ... are
casting the net ... only as wide as ... is necessary." She
noted that the department has talked to Mr. Thompson and
reviewed his proposals, and the department has met with [the
National Federation of Independent Business] (NFIB) and a
homebuilders' association and is addressing their concerns. She
acknowledged that there is more refinement to do.
4:18:01 PM
REPRESENTATIVE JOSEPHSON commented that HB 79 only addresses one
sliver of the problem of misclassification. He told that a
legislator cut her hand and needed stitches. He asked that the
data requested from the Division of Risk Management has clear
definitions. He offered his understanding that the legislator
didn't have a loss of time. He commented that state workers'
are not clumsier, but they may take comfort in being more
organized and knowing that a report of injury would not cause
any tension in the workplace.
4:19:20 PM
MS. MARX stated that she doesn't know how to address
Representative Josephson's comments, but she offered that the
bill would aim to make the process more efficient for injured
workers' and employers. She noted that HB 79 would fix
longstanding problems and gaps which would benefit injured
workers' and employers.
4:19:49 PM
MS. DRYGAS added her opinion that [state employees have] less
fear of retaliation. She acknowledged that retaliation does
happen, although it is unlawful under the Workers' Compensation
Act. She offered her belief that when a profession is organized
there is less fear of losing jobs because of protections within
the profession's collective bargaining agreement. She stated
that she does not have statistics to show that.
4:20:16 PM
CHAIR KITO announced that HB 79 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB079 Fiscal Note DOLWD-SIF 1.30.2017.pdf |
HL&C 2/20/2017 3:15:00 PM |
HB 79 |
| HB079 Sectional Analysis 2.17.2017.pdf |
HL&C 2/20/2017 3:15:00 PM |
HB 79 |
| HB079 Fiscal Note DOLWD-WC 1.30.2017.pdf |
HL&C 2/20/2017 3:15:00 PM |
HB 79 |
| HB079 Supporting Documents-Presentation DOLWD 2.17.17.pdf |
HL&C 2/20/2017 3:15:00 PM |
HB 79 |
| HB079 Transmittal Letter 1.24.17.pdf |
HL&C 2/20/2017 3:15:00 PM |
HB 79 |