Legislature(2017 - 2018)BARNES 124
02/24/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB38 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 38 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 2 | TELECONFERENCED | |
HB 38-WORKERS' COMPENSATION: DEATH BENEFITS
3:18:42 PM
CHAIR KITO announced that the only order of business would be
HOUSE BILL NO. 38, "An Act relating to the calculation and
payment of workers' compensation benefits in the case of
permanent partial impairment; relating to the calculation and
payment of workers' compensation death benefits payable to a
child of an employee where there is no surviving spouse;
relating to the calculation and payment of workers' compensation
death benefits for an employee without a surviving spouse or
child; relating to notice of workers' compensation death
benefits; and providing for an effective date."
3:19:20 PM
REPRESENTATIVE JOSEPHSON, as prime sponsor of HB 38, stated that
as a legislator he hears many legislative ideas and culls them
based on merit. He noted that he found merit in the issue
proposed in HB 38 and brought it forward in the Twenty-Ninth
Alaska State Legislature. He explained that bill addresses two
concerns: First, that the estate of someone single and
childless who dies in a workplace currently has no remedy under
the law; and second, that the value in Alaska's Permanent
Partial Impairment (PPI) rating is declining.
REPRESENTATIVE JOSEPHSON explained that under current law, the
estate of a single person who dies at work can receive up to
$10,000 for funeral expenses. After such a death, work safety
investigators would ascertain whether negligence or unsafe
practices were involved. Other than the funeral expenses, there
is no remedy for the death of a single, childless individual.
He mentioned that a recent finding showed that substantial
penalties can create an incentive to have a safer workplace.
3:23:00 PM
REPRESENTATIVE JOSEPHSON noted that workers' compensation
provides the only remedy employees can receive if they are
injured or die while working; the estate cannot sue for wrongful
death. He concluded that such restrictions create a situation
where individuals who haven't married and or had children don't
get the same respect and treatment under the law that a person
who has dependents would receive.
REPRESENTATIVE JOSEPHSON asked whether, in the event of a death,
workers' compensation is about helping the injured worker and
his/her dependents or just the dependents. He demonstrated that
some states award payment to the estate of a single, childless,
deceased worker. He characterized that a progressive workplace
would be sympathetic to a person who mourns the loss of a loved
one. He offered an example that under current law, parents of a
single, childless, deceased worker would only receive funeral
expenses in the event of an object falling and killing their
child; he explained that if the same injury happened to a non-
worker, such as a customer in a restaurant, then many remedies
to recover and claim negligence would be available to the
estate. He noted that many states have expanded payments to the
estates of single, childless workers. He stated that the
National Conference of State Legislatures (NCSL) and the Council
of State Governments (CSG) corroborate the supporting documents
[included in the committee packet].
3:26:36 PM
REPRESENTATIVE JOSEPHSON explained that when an [employee] is
injured, he/she receives a percent of what his/her wage would
have been: Payments received by [the estate of a deceased]
worker with children and/or a spouse can accumulate to over half
a million dollars. He remarked, "The system is generous if
there are significant injuries." He expressed that HB 38 would
require a payment of damages reflective of the harm caused in a
circumstance where a worker dies. He drew attention to Section
4 of HB 38, which makes no change to the first subsections and
paragraphs of AS 23.20.215 but outlines what death benefits get
paid to dependents; the benefit can exceed half a million
dollars. He explained that [paragraph] 4 of AS 23.20.215
outlines that the benefit is only $20,000 for workers without
dependents; HB 38 would increase that benefit to $255,854.
REPRESENTATIVE JOSEPHSON expressed that in order to cover a
single, childless person, there must be a formula that relates
to situations listed in [paragraph] 4. He explained that the
formula in HB 38 would grant half of the PPI value described in
Section 2 as payment to the estate of a single person who dies
and has no direct family dependents. He remarked, "If you think
that that expands workers' compensation beyond its bounds,
recall that other states say, 'No, we're going to do that.' So
we would not be an outlier in that respect."
REPRESENTATIVE JOSEPHSON offered his opinion that a wrongful
death suit should be allowed under AS 23.30.055 as an
alternative to the benefit payment. The proposed bill would no
longer preclude the estate of a single, childless person from
filing a wrongful death lawsuit; although the estate would still
bear the burden of demonstrating evidence. He added, "You'd
still have to show that it was the boss's fault, not the
decedent's."
3:32:31 PM
REPRESENTATIVE JOSEPHSON moved onto the second concern addressed
in HB 38. He stated that in 2000, Alaska set the PPI whole-body
rating at $177,000; it has not been adjusted since then. He
expressed that the proposed bill would, along with offering a
remedy for workers, tie the PPI whole-body rating to a consumer
price index and set it to "where it should have been." He noted
that the Department of Commerce, Community & Economic
Development (DCCED) has voiced its concern about the effect of
HB 38 on state workers.
REPRESENTATIVE JOSEPHSON asked, "What is the alternative to
increasing the PPI?" He proposed that if the legislature set
the PPI at an appropriate level in 2000 at $177,000, then
$255,000 would be appropriate today. He mentioned a document
[included in the committee packet] that shows Alaska ranked 33rd
in the country on the PPI "care index": For the same type of
injury, Pennsylvania would pay $389,000 while Alaska would pay
$71,000.
REPRESENTATIVE JOSEPHSON concluded that there are two issues
addressed by HB 38: First, current law treats people who aren't
married as second class citizens and values their lives
economically different; and second, the PPI rating hasn't been
changed for 17 years.
3:36:50 PM
REPRESENTATIVE BIRCH asked if Representative Josephson works in
this area.
REPRESENTATIVE JOSEPHSON answered no.
REPRESENTATIVE BIRCH noted that people are concerned about the
rising costs of delivering workers' compensation. He reported
that workers' compensation is intended to be a mechanism to
restore a worker back to health and into the workforce; however,
he expressed that HB 38 seems like a life insurance issue. He
asked, "When does this migrate over into a life insurance policy
..., as opposed to if somebody wants life insurance they go buy
it, as opposed to restoring a worker back to health and putting
them back on the job and putting them back in the workforce?"
3:38:36 PM
REPRESENTATIVE JOSEPHSON responded that other states do what HB
38 proposes. He drew attention to language on page 3 of HB 38,
lines 12-17, which provides a benefit of $20,000 for deceased
workers with dependents who "aren't even their own children."
He presumed that in a trial, the estate would have to prove an
individual's dependence on the deceased. He argued that if the
committee doesn't feel it is appropriate to expand workers'
compensation as provided in HB 38, then such individuals should
be offered an opportunity to sue the employer. He observed,
"People shouldn't have to go to work and die." He acknowledged
that accidents happen, but current law treats people
differently. He characterized that not having a spouse or child
is penalized in current law. He expressed that current law is
an economic insult to those without familial dependents.
REPRESENTATIVE JOSEPHSON explained that HB 38 would not cost
much; of all the deaths in 2015, only two would have been
impacted by HB 38. He noted that the estates of the two
deceased workers only had funeral expenses covered and the
employers had no retribution. He mentioned that workers'
compensation is being reformed currently through other
legislation.
3:41:59 PM
REPRESENTATIVE JOSEPHSON, in response to a question, clarified
that HB 38 would apply to more than just state employees.
REPRESENTATIVE BIRCH asked how the half million cost figure
would be paid.
REPRESENTATIVE JOSEPHSON offered his interpretation that the
estimation of costs in the fiscal note provided by the Division
of Risk Management showed what could happen to the state's
bottom line in the event of a worker's death. He stated, "You
have to have some number to pay for the death benefit." He
presumed that the division multiplied the whole-body rate of
$255,000 by the average number of deaths annually to reach
$515,000. He acknowledged that HB 38 could have a financial
impact on the state. He offered his view that the committee
should give people like Marianne [Burke] a chance to prove
wrongful death in court if the committee determines that
financial impact of HB 38 is too extreme given the state's
financial situation.
3:43:31 PM
REPRESENTATIVE BIRCH asked how HB 38 would impact the workers'
compensation rate. He mentioned that there has been
unconstrained growth in workers' compensation. He asked how HB
38 would affect the state and the rest of the economy.
REPRESENTATIVE JOSEPHSON directed attention to a report of
similar legislation [included in the committee packet], which
read as follows:
In a report to the Oregon Legislature in 2009, the
Workers' Compensation Management-Labor Advisory
Committee estimated such a change in benefits would
not "materially affect" workers' compensation premium
rates, due to the small number of compensable deaths
each year.
REPRESENTATIVE JOSEPHSON added that the change mentioned was to
the extension of coverage to single, deceased workers. He
commented that HB 38 might impact rates "on the margins";
however, Alaska has averaged 15-17 workplace deaths over the
years and is already insuring 12-15 of those deaths each year:
HB 38 would cover the 2-3 workers who die each year who do not
get the same treatment.
3:45:12 PM
REPRESENTATIVE SULLIVAN-LEONARD asked if there is a delineation
between someone who dies as a result of an injury at a job site
and someone who dies as the result of a heart attack at his/her
desk.
REPRESENTATIVE JOSEPHSON offered his understanding that there
would be no death benefit in the second circumstance. He
remarked, "I think that there's got to be some showing of
causality .... If you're sitting at a desk, and you die, and
nothing fell on you, I think there's no remedy there." He
offered his understanding that if someone died at worksite as a
result of a faulty ladder, then the estate might be able to sue
the ladder manufacturer: The estate could not sue the employer
unless the employer failed to pay the appropriate benefit.
3:47:39 PM
REPRESENTATIVE WOOL asked whether HB 38 would raise the whole-
body compensation rate from $177,000 to $255,000. He said that
the rate is not necessarily a death benefit; it is more along
the lines of assisting a worker who is impaired beyond being
able to work.
REPRESENTATIVE JOSEPHSON agreed. He explained that the whole-
body compensation rate is the economic value the system places
on a human being and is the base rate from which other
impairments are divided.
REPRESENTATIVE WOOL offered his understanding that the
compensation rate is offered to support an injured worker and
his/her dependents. He expressed that if an employee with no
dependents dies, then HB 38 would cut the compensation rate in
half; however, there would be no survivability or medical costs,
et cetera, because the compensation is to the estate.
REPRESENTATIVE JOSEPHSON responded, "Precisely right." He noted
that under the proposed bill, the estate would get about
$122,000.
3:50:14 PM
REPRESENTATIVE WOOL suggested that the reason [the benefit] is
currently only $10,000 is that there are no costs for a deceased
person without a spouse or child. He asked whether HB 38 would
allow the [parents] of an employee with no dependents to receive
money for purpose of compensation for the death of their child.
REPRESENTATIVE JOSEPHSON answered yes.
REPRESENTATIVE WOOL commented that in order to receive the
workers' compensation death reimbursement, a death in the
workplace would have to be the result of someone's negligence.
He assessed that anyone who receives the award agrees not to
sue; he asked if HB 38 seeks to change that.
REPRESENTATIVE JOSEPHSON answered no. He expressed that if the
committee doesn't want to expand workers' compensation to cover
single, childless people, then the committee could allow for
wrongful death action. He noted that HB 38 aims to offer an
award, but there could be other options of remedies, such as:
allowing the estate to sue for wrongful death or setting up a
trust fund. He noted that separate from the expansion of
workers' compensation, another aspect of the bill would increase
the PPI.
REPRESENTATIVE WOOL asked how many other states offer such a
benefit. He asked whether it is currently possible to sue after
a death in the workplace.
3:54:25 PM
REPRESENTATIVE JOSEPHSON stated his understanding that although
workers' compensation litigation does occur, the program was
designed to provide a remedy for employees while limiting
litigation. He said, "What you hear about is people, generally,
who aren't working and die ... [in] car accidents, plane
crashes. They're not working, they're a customer." He
mentioned that circumstances that would be affected by HB 38 are
not heard about as frequently; although there was coverage of
the death of Abigail Caudle. He explained that Abigail's
mother, Marianne Burke, has taken a claim to the Workers'
Compensation Board and will be taking the case to the Alaska
Supreme Court. He read from page 6 of the Alaska Workers'
Compensation Appeals Commission Decision No. 215, which read as
follows [original punctuation provided]:
There are three primary reasons why an award of
benefits should be made, according to Ms. Burke.
First, she asserts, the absence of a financial award
devalues the life of a loved one, depriving their
family of a sense of justice. Second, she argues, the
absence of a financial consequence to the employer
removes an incentive to keep the workplace and work
practices safe. Third, Ms. Burke argues, to deny any
compensation to the family is counter to the
fundamental constitutional promises of equal
protection under the law and due process of law, in
that it treats a person without financial dependents
unfairly as compared with others, and denies their
estate the right to sue the employer for damages
resulting from the employer's negligence.
These policy arguments must be directed to the
legislature, as they no doubt will in connection with
currently pending legislation introduced following Ms.
Caudle's death.
3:57:46 PM
CHAIR KITO opened public testimony on HB 38.
3:58:10 PM
KEVIN DOUGHERTY, General Counsel, Alaska Laborers, testified in
support of HB 38. He stated that he had read about Abigail
Caudle's case and he expressed the case "should prompt us to
take the bill seriously and move it forward." He asked the
committee for support for the families of those killed on the
job in Alaska. He noted that he is glad not many people are
killed on the job in Alaska and the number of such deaths is
declining; currently it is between 20-30 deaths each year. He
acknowledged that public policy requires balancing different
interests and economic considerations. He said:
Representative Birch asked a question that can be
precisely answered in terms of what is the cost of
this bill in relation to ... having a fair-minded ...
civil respect for families of people that get killed
on the job. Thankfully the answer is: we're talking
less than one percent.
MR. DOUGHERTY commented that the Alaska Division of Insurance
communicates with the National Counsel of Compensation Insurance
(NCCI) and determines a precise financial analysis of every
proposed bill. He remarked, "I can bet my life on it, it will
be a lot less than one percent." He stated that the death
benefit is a minimal piece of the equation: there are only a
few deaths and 30,000 injuries each year.
MR. DOUGHERTY mentioned that he submitted documents [included in
the committee packet] about some workplace deaths in Alaska
where the deceased workers' families received zero or $20,000.
He asked, "Is that ... an indignant position for the state to
take?" He offered his opinion that in 1915, when workers'
compensation laws went into effect, Alaska [territorial law]
appropriately balanced the relationship between money and human
life. He remarked, "If we take that really direct, practical,
respectful perspective, I think we can say this bill is worth
it." He added that economics are important and fortunately
workers' compensation [costs] have decreased in the last 12
years. He expressed that he would appreciate having "the
legislature do it right, 'cause we did not do it rightly for the
people the last session the bill was up."
4:03:06 PM
MARIANNE BURKE testified in support of HB 38. She described
that her daughter, Abigail Caudle, was killed June 20, 2011,
while working overtime. She recounted:
She was put on lighting, she used her tester twice,
which showed green. She had gotten down because the
journeyman told her to go turn the light switch off -
they didn't even turn the circuit breaker off. She
turned the light switch off, came back, tried the
tester for at least the second or third time - it was
green, and that's when she inadvertently hit live
wire. She got locked up, twisted as she fell down the
ladder. ... The paramedics came; she was alive at
first; ... they used the defibrillator; ... she
eventually faded. ... To hear in the police report
she was in seizure during that time. Details have
been really, really difficult for me as you can
imagine. I heard from the owner that night that when
the accident happened that the people were actually in
the other room - the journeymen - they weren't even
right there with her. I've heard from journeymen that
a journeyman is always responsible for an apprentice,
and she was a new apprentice.
MS. BURKE remarked that accidents similar to Abigail's -
involving taking down and putting up lighting - are common and
represent most of the deaths of [working] electricians. She
explained that Abigail likely hit 440 voltage because of a "live
neutral." She asked the committee to imagine how traumatic
Abigail's death has been for their family. She expressed that
Abigail's sister just had a baby two weeks ago, and she now
doesn't have a sister. Abigail's brothers no longer have an
older sister to look up to. She commented, "I don't have my
daughter to talk to, and to come over and visit me, and to be
there at holidays." She asked the committee members to imagine
going into a hospital, lifting the white sheet off of their son
or daughter, and finding that he/she has died.
MS. BURKE noted that the state has awarded nothing to the
family. She stated that the insurance company, not the
employer, paid $10,000 to the funeral home and a "measly"
$11,000 fine from Occupational Safety and Health Administration
(OSHA). She offered her understanding that after three years,
OSHA's "books are wiped clean" and in the event of a future,
identical accident, the employer would be treated as though it
were the first incident. She stated that OSHA gave five
citations, of which, four contributed to Abigail's death; she
described the conditions as "gross negligence." She said no
lawyers were willing to represent the family's case. She
remarked, "They said to me we've gone through this up to the ...
Supreme Court, and we cannot get justice."
4:07:12 PM
MS. BURKE aired that she cannot sue through civil court. She
declared:
Where do I get justice? Where would you go to get
justice? If this was you, and you were trying to get
justice for your daughter or son killed in the
workplace, single with no dependents, and nothing was
given for their life, and the employer had no
consequence whatsoever, what would you do? Well, I'm
giving my life to get justice for her.
MS. BURKE added that the employer's attorneys argue that
workers' compensation gives an exclusive remedy for death in the
workplace. She related that there has been no remedy. She
stated that the attorneys say, "We're providing provision for
you." She related that there is no provision. She stated that
she has submitted her arguments to the committee in response to
the attorneys' claims. She offered her belief that there is a
scheme hidden behind the legal terms that doesn't make sense.
She expressed that she must try to get justice. She asked the
committee to listen to their hearts and to value human life.
She remarked:
If we don't value human life, look what happens in the
workplace. If there's no liability to the employer,
nothing is paid out for the people that are single,
without any dependents, and so little is paid for the
ones that are killed, even with dependents, then you
get the owners thinking to themselves, "Well, do I
need to pay that extra money for the safety equipment?
Well, no there's nothing that really happens to me,
so, I guess I don't.
MS. BURKE concluded that "it all comes down to money,
unfortunately." She asked the committee to give value to human
life in Alaska. She analyzed that penalties would force
employers to keep safety standards. She stated that a previous
safety commissioner told her that he was willing to testify
about the poor safety conditions in the state. She offered her
understanding that Alaska has more accidents than other states.
4:11:18 PM
REPRESENTATIVE BIRCH stated he is sorry for Ms. Burke's loss,
which he characterized as "a tragedy that should befall no
parent." He asked how health and insurance programs work under
the [International Brotherhood of Electrical Workers] (IBEW).
He stated that most employees sign up for health and life
insurance on the first day at a new job. He asked if insurance
is typically provided by the union or the employer. He asked
whether [insurance] was available to Abigail.
MS. BURKE stated that although Abigail had tried, she was not
with the union. She offered her understanding that the union
takes better care of their people than Raven Electric, Inc.,
Abigail's employer, does. She mentioned hearing from other
individuals who had claimed that Raven Electric, Inc. was
considered a poor employer and they had hoped that the accident
would bring [the poor working conditions] to light. She
analyzed that unsafe practices of a poor employer have no
consequences; consequences might prevent further accidents.
REPRESENTATIVE BIRCH asked whether Abigail had an opportunity to
have a benefit program. He stated that he is not interested in
disparaging any employer.
MS. BURKE responded that she does not know. She offered her
opinion that providing life insurance to workers in dangerous
jobs should be mandatory for [employers] or, alternatively, that
workers' compensation should cover death benefits. She stated
that she is sorry to disparage Raven Electric, Inc., but she is
upset at the lack of consequences and the poor supervision that
led to Abigail's death. She remarked, "I know there's good
people over there and they were very, very sorry about the
death, so I don't mean to bring the whole company down."
CHAIR KITO thanked Ms. Burke for her testimony and expressed
condolences on behalf of the committee.
4:14:45 PM
RONALD ROSS testified in support of HB 38. He informed the
committee that his granddaughter, Abigail Caudle, was killed.
He remarked:
I am appalled, really, ... that a company like [Raven
Electric, Inc.] - and I don't know all the answers ...
I've been an employer around and I know ... I never
had a death thing in my thing - but some young girl
going up the ladder and touch a live wire - and I'm a
contractor - I mean, I think they'd hang me by my feet
out in the courtyard. I mean, this is ridiculous.
... You guys get away with ten grand ... I think your
laws stink, I'm sorry. But this is just ...
outrageous that a person - a young employee - and the
journeyman's on the ground having tea with the boys
... and she's up there grabbing a live wire and lose
her life. She pays half the rent of Betty Caudle and
she supplies the food and the stuff there with Betty
at her apartment and she gets nothing. Nothing goes
to her. What's going on with this state? I just
can't believe it.
4:17:00 PM
DON ETHERIDGE, Lobbyist, Alaska American Federation of Labor and
Congress of Industrial Organizations (AFL-CIO), testified in
support of HB 38. He explained that if someone dies on the job
and the death was not job related, then the individual's estate
would get nothing. He mentioned that he saw such an example in
Juneau when a foreman had a heart attack, his family claimed it
was stress related, and the family was denied any worker's
compensation. He explained that some units of AFL-CIO provide
life insurance, but the majority do not. He commented that when
he first started he had young children and couldn't afford life
insurance in addition to daily living expenses. He remarked,
"Not everybody can afford it, sir." He mentioned that he got
life insurance when he could afford it. He urged, "We got to
have something for the families that are left behind."
4:18:43 PM
CHAIR KITO announced that HB 38 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB038 Sponsor Statement 2.9.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Sectional Analysis 2.9.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Fiscal Note DOLWD-WC 2.17.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Fiscal Note-DOA-DRM 2.23.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Supporting Document - Research Report 2015 2.9.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Supporting Document - Research Report-Similar Legislation 2.21.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Supporting Document - Letters of Opposition 2.24.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |
| HB038 Supporting Document - Letters of Support 2.24.17.pdf |
HL&C 2/24/2017 3:15:00 PM |
HB 38 |