HB 307: "An Act relating to workers' compensation; and providing for an effective date."
00 HOUSE BILL NO. 307 01 "An Act relating to workers' compensation; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 23.30.070(a) is amended to read: 04 (a) Within 10 days from the date the employer has knowledge of an injury or 05 death or from the date the employer has knowledge of a disease or infection, alleged 06 by the employee or on behalf of the employee to have arisen out of and in the course 07 of the employment, the employer shall file with [SEND TO] the division a report 08 setting out 09 (1) the name, address, and business of the employer; 10 (2) the name, address, and occupation of the employee; 11 (3) the cause and nature of the alleged injury or death; 12 (4) the year, month, day, and hour when and the particular locality 13 where the alleged injury or death occurred; and 14 (5) the other information that the division may require. 15 * Sec. 2. AS 23.30.070(b) is amended to read:
01 (b) Additional reports with respect to the injury and to the condition of the 02 employee shall be filed [SENT] by the employer with [TO] the division at the times 03 and in the manner that the director prescribes. 04 * Sec. 3. AS 23.30.070(d) is amended to read: 05 (d) Filing of the report in a manner prescribed by the director with 06 [MAILING OF THE REPORT AND A COPY TO] the division [IN A STAMPED 07 ENVELOPE], within the time prescribed in (a) or (b) of this section, is in compliance 08 with this section. 09 * Sec. 4. AS 23.30.070(f) is amended to read: 10 (f) An employer who fails or refuses to file [SEND] a report required of the 11 employer by this section or who fails or refuses to file [SEND] the report required by 12 (a) of this section within the time required shall, if so required by the board, pay the 13 employee or the legal representative of the employee or other person entitled to 14 compensation by reason of the employee's injury or death an additional award equal to 15 20 percent of the amounts that were unpaid when due. The award shall be against 16 either the employer or the insurance carrier, or both. 17 * Sec. 5. AS 23.30.075(b) is amended to read: 18 (b) If an employer fails to insure and keep insured employees subject to this 19 chapter or fails to obtain a certificate of self-insurance from the division, upon 20 conviction, the court shall impose a fine of $10,000 and may impose a sentence of 21 imprisonment for not more than one year. If an employer is a corporation, limited 22 liability company, or limited liability partnership, all persons who, at the time of 23 the injury or death, had authority to insure the business entity [CORPORATION] or 24 apply for a certificate of self-insurance, and the persons [PERSON] actively in charge 25 of the business entity [OF THE CORPORATION] shall be subject to the penalties 26 prescribed in this subsection and shall be personally, jointly, and severally liable 27 together with the business entity [CORPORATION] for the payment of all 28 compensation or other benefits, including civil penalties and benefit guaranty fund 29 payments, for which the business entity [CORPORATION] is liable under this 30 chapter if the business entity [CORPORATION] at that time is not insured or 31 qualified as a self-insurer.
01 * Sec. 6. AS 23.30.080(e) is amended to read: 02 (e) If a representative of the department investigates an employer's failure to 03 file the evidence of compliance required by AS 23.30.085 and, after investigation, 04 there is substantial evidence that the employer failed to insure or provide security as 05 required by AS 23.30.075, the representative shall inform the employer. The 06 representative may request the director to issue a stop order prohibiting the use of 07 employee labor by the employer until the employer insures or provides security as 08 required by AS 23.30.075. The director may issue a stop order, without a hearing, 09 based on the representative's investigation. The director shall dissolve a stop order 10 issued under this subsection upon receipt of substantial evidence that the employer is 11 insured or has provided security as required by AS 23.30.075(a). If an employer fails 12 to comply with a stop order issued under this subsection, the division may [PETITION 13 THE BOARD TO] assess a civil penalty [. THE BOARD MAY ASSESS A CIVIL 14 PENALTY] of $1,000 a day. An employer who is assessed a penalty under this 15 subsection may not obtain a public contract with the state or a political subdivision of 16 the state for the three years following violation of the stop order. 17 * Sec. 7. AS 23.30.080(f) is amended to read: 18 (f) If an employer fails to insure or provide security as required by 19 AS 23.30.075, the division may [PETITION THE BOARD TO] assess a civil penalty 20 of up to a maximum of three times the workers' compensation premium the 21 employer would have paid if the employer had insured [$1,000 FOR EACH 22 EMPLOYEE FOR EACH DAY AN EMPLOYEE IS EMPLOYED WHILE THE 23 EMPLOYER FAILED TO INSURE] or provided [PROVIDE] the security required 24 by AS 23.30.075. Notwithstanding AS 23.30.250(a), if an employer misclassifies 25 employees as provided in (j) of this section, the division may assess a civil penalty 26 of up to a maximum of three times the workers' compensation premium the 27 employer would have paid if the employer had properly classified the employees. 28 The division shall base the amount of the civil penalty on the employer's payroll 29 and the assigned risk rates approved and published by the division of insurance 30 in effect at the time the employer was uninsured or underinsured because of 31 misclassification of employees. When calculating the civil penalty for failure to
01 insure or for underinsuring, the division shall apply aggravating and mitigating 02 factors prescribed by regulation. An employer that willfully fails, under 03 AS 23.05.090, to furnish to the department records required to be kept under 04 AS 23.05.080 and by the Internal Revenue Service is subject to a penalty of 05 $1,000 for each seven-day period of noncompliance. The division may (1) enter a 06 place of employment during regular hours of employment and, in cooperation 07 with the employer, or someone designated by the employer, collect facts and 08 statistics pertinent to the employment and classification of workers; and (2) for 09 the purpose of examination, have access to and copy from any book, account, 10 record, payroll, paper, or document relating to the employment of workers. The 11 failure of an employer to file evidence of compliance as required by AS 23.30.085 12 creates a rebuttable presumption that the employer failed to insure or provide security 13 as required by AS 23.30.075. 14 * Sec. 8. AS 23.30.080(g) is amended to read: 15 (g) If an employer fails to pay a civil penalty [ORDER ISSUED] under [(d),] 16 (e) [,] or (f) of this section within 30 [SEVEN] days after the date of service of notice 17 on [THE ORDER UPON] the employer, the director may declare the employer in 18 default. The director shall file a certified copy of the penalty order and declaration of 19 default with the clerk of the superior court. The court shall, upon the filing of the copy 20 of the order and declaration, enter judgment for the amount declared in default if it is 21 in accordance with law. Anytime after a declaration of default, the attorney general 22 shall, when requested to do so by the director, take appropriate action to ensure 23 collection of the defaulted payment. Review of the judgment may be had as provided 24 under the Alaska Rules of Civil Procedure. Final proceedings to execute the judgment 25 may be had by writ of execution. 26 * Sec. 9. AS 23.30.080 is amended by adding new subsections to read: 27 (h) An employer may appeal a civil penalty assessed by the division under (e) 28 or (f) of this section by requesting a hearing under AS 23.30.110 within 30 days after 29 the date of service of notice of the civil penalty on the employer. If an employer who 30 is issued a civil penalty fails to request a hearing within the prescribed time, the right 31 to hearing is waived and the civil penalty is not subject to judicial review.
01 (i) The division or board may not suspend payment of civil penalties assessed 02 under this section. The division or board may accept a payment plan for payment of 03 civil penalties assessed under this section. Under the terms of the payment plan, 04 interest shall accrue at the rate specified in AS 09.30.070(a). 05 (j) An employer misclassifies an employee under this chapter if the employer 06 (1) falsifies or misrepresents employee job duties; 07 (2) misrepresents oneself or an employee as an independent contractor, 08 as provided in (k) of this section; 09 (3) conceals some or all compensation paid in currency, negotiable 10 instruments, or in kind for work performed; 11 (4) fails to report workers' compensation insurance policy information 12 as required under AS 23.30.085 by listing the individual name of each business leasing 13 employees under an employee leasing contract; 14 (5) adds individuals as partners in partnerships, limited liability 15 members in limited liability companies, or directors or officers of corporations without 16 a minimum of 10 percent ownership interest documented with the Department of 17 Commerce, Community, and Economic Development, without sharing in profits or 18 losses, and without decision-making authority. 19 (k) An employer may only classify an employee as an independent contractor 20 under this chapter if the independent contractor 21 (1) maintains a properly licensed business, the success or profitability 22 of which does not depend exclusively or primarily on the individual or entity for 23 whom or for which the services are being performed; 24 (2) has a federal employer identification number issued by the Internal 25 Revenue Service or who filed business or self-employment income tax returns with 26 the Internal Revenue Service the previous tax year; 27 (3) has a contract to perform the services; 28 (4) maintains liability insurance or other insurance policies necessary 29 to protect the employees, financial interests, and customers of the business; 30 (5) controls the methods, means, and progress of work; 31 (6) incurs most of the expenses for materials, tools, equipment, labor,
01 and other operational costs necessary for the business; 02 (7) is engaged in a trade, occupation, profession, or business to provide 03 services that are not an integral part of the day-to-day operations of the business to 04 which services are provided; 05 (8) has the opportunity for profit or loss based on the management of 06 revenue and expenses associated with the services performed for the other individual 07 or entity; 08 (9) does not work as a part of a team of individuals or entities on a 09 singular task, such as painting a building or installing a roof, where the work 10 performed by the individual cannot be clearly isolated from the work performed by 11 other individuals or entities; 12 (10) hires, pays, and controls any employees or other workers required 13 to perform the task for which the individual was hired; and 14 (11) maintains a business location separate from the location of the 15 individual or entity for whom or for which the services are being performed. 16 * Sec. 10. AS 23.30.082(a) is amended to read: 17 (a) The workers' compensation benefits guaranty fund is established in the 18 general fund to carry out the purposes of this section. The fund is composed of civil 19 penalty and interest payments made by employers under AS 23.30.080, civil penalty 20 payments made under AS 23.30.085, income earned on investment of the money in 21 the fund, money deposited in the fund by the department, and appropriations to the 22 fund, if any. However, money appropriated to the fund does not lapse. Amounts in the 23 fund may be appropriated for claims against the fund, for expenses directly related to 24 fund operations and claims, and for legal expenses. 25 * Sec. 11. AS 23.30.085 is amended to read: 26 Sec. 23.30.085. Duty of employer, insurer, or adjuster to file evidence of 27 compliance. (a) An employer, insurer, or adjuster that provides workers' 28 compensation insurance to an [AN] employer subject to this chapter [, UNLESS 29 EXEMPTED,] shall initially file evidence of compliance with the insurance provisions 30 of this chapter with the division, within 30 days, in the form prescribed by the 31 director. The employer, insurer, or adjuster shall also give evidence of compliance
01 within 30 [10] days after the termination of the employer's insurance by expiration or 02 cancellation. These requirements do not apply to an employer who has certification 03 from the board of the employer's financial ability to pay compensation directly without 04 insurance. 05 (b) If an employer, insurer, or adjuster fails, refuses, or neglects to comply 06 with the provision of this section, the employer, insurer, or adjuster shall be subject 07 to a civil penalty of $100 a day for each day the employer, insurer, or adjuster is 08 late. Total penalties under this subsection may not exceed $1,000 for each late 09 filing, and $10,000 for each insurer or adjuster a year for late filings under this 10 section. If, during the preceding year, the insurer or adjuster filed at least 90 11 percent of the reports required under AS 23.30.155(c) and (m) on time, the 12 penalties for the insurer or adjuster shall be waived [THE PENALTIES 13 PROVIDED IN AS 23.30.070 FOR FAILURE TO REPORT ACCIDENTS; BUT 14 NOTHING IN THIS SECTION MAY BE CONSTRUED TO AFFECT THE RIGHTS 15 CONFERRED UPON AN INJURED EMPLOYEE OR THE EMPLOYEE'S 16 BENEFICIARIES UNDER THIS CHAPTER]. 17 * Sec. 12. AS 23.30.165(a) is amended to read: 18 (a) If an [EACH] employee, a [AND] beneficiary, or the benefits guaranty 19 fund established under AS 23.30.082 is entitled to compensation or penalty 20 payments under the provisions of this chapter, the person or the fund has a lien for 21 the full amount of the compensation or penalty payments the person or the fund is 22 entitled to, including costs and disbursements of suit and attorney fees allowed, on 23 [UPON] all of the property in connection with the construction, preservation, 24 maintenance, or operation of which the work of the employee was being performed at 25 the time of the injury or death. For example: in the case of an employee injured or 26 killed while engaged in mining or in work connected with mining, the lien extends to 27 the entire mine and all property used in connection with it; and in the case of an 28 employee injured or killed while engaged in fishing or in the packing, canning, or 29 salting of fish, or other branch of the fish industry, the lien extends to the entire 30 packing, fishing, salting, or canning plant or establishment and all property used in 31 connection with it; and this is the case with other businesses, industries, works,
01 occupations, and employments. The division has a lien for the benefit of the 02 benefits guaranty fund for the full amount of civil penalties assessed against an 03 uninsured employer under AS 23.30.080 on all of the property in connection with 04 the construction, preservation, maintenance, or operation of the employer at the 05 time the employer was uninsured. 06 * Sec. 13. AS 23.30.165(d) is amended to read: 07 (d) A person claiming a lien under this chapter shall, within one year after the 08 date of the injury from which the claim of compensation arises, record in the office of 09 the recorder of the recording district in which the property affected by the lien is 10 located a notice of lien signed and verified by the claimant, [OR] someone on behalf 11 of the claimant, and stating, in substance, the name of the person injured or killed out 12 of which injury or death the claim of compensation arises, the name of the employer 13 of the injured or deceased person at the time of the injury or death, a description of the 14 property affected or covered by the lien, and the name of the owner or reputed owner 15 of the property. The division claiming a lien under this chapter shall, within one 16 year after the date of a declaration of default under AS 23.30.080, record in the 17 office of the recorder of the recording district in which the property affected by 18 the lien is located a notice of lien signed and verified by the division, and stating, 19 in substance, the name of the employer that failed to pay a civil penalty or the 20 penalties under AS 23.30.080, a description of the property affected or covered 21 by the lien, and the name of the owner or reputed owner of the property. 22 * Sec. 14. AS 23.30.165 is amended by adding a new subsection to read: 23 (f) In this section, "fund" means the benefits guaranty fund established under 24 AS 23.30.082. 25 * Sec. 15. AS 23.30.240 is amended to read: 26 Sec. 23.30.240. Officers of corporations, municipal corporations, and 27 nonprofit corporations and members of limited liability companies as employees. 28 (a) Except as provided in (b) of this section, an executive officer 29 (1) [AN EXECUTIVE OFFICER] elected or appointed and 30 empowered in accordance with the charter and bylaws of a corporation or a member 31 of a limited liability company organized under AS 10.50 [, OTHER THAN AN
01 OFFICIAL OF A MUNICIPAL CORPORATION OR A CHARITABLE, 02 RELIGIOUS, EDUCATIONAL, OR OTHER NONPROFIT CORPORATION,] is not 03 an employee of the corporation or limited liability company under this chapter if the 04 executive officer or member owns at least 10 percent of the corporation or limited 05 liability company; 06 (2) [. HOWEVER, AN EXECUTIVE OFFICER OF A 07 CORPORATION MAY WAIVE COVERAGE UNDER THIS CHAPTER, SUBJECT 08 TO THE APPROVAL OF THE DIRECTOR, NOTWITHSTANDING 09 AS 23.30.245(b). NOTWITHSTANDING ANY OTHER PROVISION OF THIS 10 CHAPTER, AN EXECUTIVE OFFICER] of a municipal corporation or of a 11 charitable, religious, educational, or other nonprofit corporation is not an employee of 12 the corporation [MAY BE BROUGHT WITHIN THE COVERAGE OF ITS 13 INSURANCE CONTRACT BY THE CORPORATION BY SPECIFICALLY 14 INCLUDING THE OFFICER IN THE CONTRACT OF INSURANCE. THE 15 ELECTION TO BRING AN EXECUTIVE OFFICER WITHIN THE COVERAGE 16 CONTINUES IN FORCE FOR THE PERIOD THE CONTRACT OF INSURANCE 17 IS IN EFFECT. DURING THAT PERIOD, AN EXECUTIVE OFFICER BROUGHT 18 WITHIN THE COVERAGE OF THE INSURANCE CONTRACT IS AN 19 EMPLOYEE OF THE CORPORATION] under this chapter. 20 (b) A corporation or [EXCEPT AS PROVIDED IN THIS SUBSECTION, A 21 MEMBER OF A LIMITED LIABILITY COMPANY ORGANIZED UNDER 22 AS 10.50 IS NOT AN EMPLOYEE OF THE COMPANY UNDER THIS CHAPTER. 23 NOTWITHSTANDING ANY OTHER PROVISION OF THIS CHAPTER, A] 24 limited liability company may bring an executive officer or [A] member [OF THE 25 COMPANY] within the coverage of the business entity's [COMPANY'S] insurance 26 contract by specifically including the executive officer or member in the contract of 27 insurance. The election to bring the executive officer or member within the business 28 entity's [COMPANY'S] coverage continues in force for the period the contract of 29 insurance is in effect. During that period, an executive officer or [A] member brought 30 within the coverage of the insurance contract is an employee of the business entity 31 [COMPANY] under this chapter.
01 * Sec. 16. AS 23.30.250(a) is amended to read: 02 (a) A person who (1) knowingly makes a false or misleading statement, 03 representation, or submission, or knowingly fails to report a material fact related to 04 a payment, coverage, or other benefit under this chapter; (2) knowingly assists, 05 abets, solicits, or conspires in making a false or misleading submission affecting the 06 payment, coverage, or other benefit under this chapter; (3) knowingly misclassifies 07 employees or engages in deceptive leasing practices for the purpose of evading full 08 payment of workers' compensation insurance premiums; or (4) employs or contracts 09 with a person or firm to coerce or encourage an individual to file a fraudulent 10 compensation claim is civilly liable to a person adversely affected by the conduct, is 11 guilty of theft by deception as defined in AS 11.46.180, and may be punished as 12 provided by AS 11.46.120 - 11.46.150. 13 * Sec. 17. AS 23.30.250(b) is amended to read: 14 (b) If the board, after a hearing, finds that a person has obtained compensation, 15 medical treatment, or another benefit provided under this chapter, or that a provider 16 has received a payment, by knowingly making a false or misleading statement or 17 representation or knowingly failing to report a material fact [FOR THE PURPOSE 18 OF OBTAINING THAT BENEFIT], the board shall order that person to make full 19 reimbursement of the cost of all benefits obtained. Upon entry of an order authorized 20 under this subsection, the board shall also order that person to pay all reasonable costs 21 and attorney fees incurred by the employer and the employer's carrier in obtaining an 22 order under this section and in defending any claim made for benefits under this 23 chapter. If a person fails to comply with an order of the board requiring reimbursement 24 of compensation and payment of costs and attorney fees, the employer may declare the 25 person in default and proceed to collect any sum due as provided under 26 AS 23.30.170(b) and (c). 27 * Sec. 18. AS 23.30.250 is amended by adding a new subsection to read: 28 (d) While receiving compensation provided under this chapter, an employee 29 shall inform the employer or insurer of any employment, other than the work being 30 performed for the employer, or receipt of other disability or unemployment benefits. If 31 an employee does not disclose other employment or receipt of other disability or
01 unemployment benefits under this section and the employee knowingly receives 02 compensation under this chapter that the employee is not entitled to because of the 03 employment or receipt of other disability or unemployment benefits, the employee has 04 failed to report a material fact related to a benefit under this chapter. In this subsection, 05 "employment" means any type of work, whether paid or unpaid. 06 * Sec. 19. AS 23.30.080(d) is repealed. 07 * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 TRANSITIONAL PROVISIONS. This Act applies to 10 (1) the failure of a person to insure or provide security under AS 23.30 on or 11 after the effective date of this Act; 12 (2) the failure of a person to furnish records relating to a 13 (A) violation under AS 23.30 occurring on or after the effective date of 14 this Act; or 15 (B) penalty under AS 23.30 imposed on or after the effective date of 16 this Act for a violation under AS 23.30 occurring on or after the effective date of this 17 Act; 18 (3) a penalty imposed under AS 23.30 on or after the effective date of this Act 19 for a violation under AS 23.30 occurring on or after the effective date of this Act; and 20 (4) a penalty payment due under AS 23.30 on or after the effective date of this 21 Act for a violation under AS 23.30 occurring before, on, or after the effective date of this Act. 22 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 23 read: 24 TRANSITION: REGULATIONS. The Department of Labor and Workforce 25 Development may adopt regulations to implement this Act. The regulations take effect under 26 AS 44.62 (Administrative Procedure Act), but not before the effective date of the law being 27 implemented. 28 * Sec. 22. Section 21 of this Act takes effect immediately under AS 01.10.070(c).