Legislature(2017 - 2018)BARNES 124
04/10/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB9 | |
| HB38 | |
| HB124 | |
| 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 9 | TELECONFERENCED | |
| += | HB 124 | TELECONFERENCED | |
HB 38-WORKERS' COMPENSATION: DEATH BENEFITS
4:07:19 PM
CHAIR KITO announced that the second 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."
4:07:26 PM
REPRESENTATIVE WOOL moved to adopt the proposed committee
substitute (CS) for HB 38, Version 30-LS0160\J, Wallace,
3/23/17, as the working document. There being no objection,
Version J was before the committee.
4:07:59 PM
REPRESENTATIVE JOSEPHSON, prime sponsor of HB 38, reviewed the
two changes in Version J. He said the first change is that the
amount of money that would be received by the estate of a person
who died without a spouse or children is reduced from about
$125,000 in the original version to $70,000 in Version J. The
reason for that reduction, he continued, is that it is a more
modest number, but is also pegged at the highest number afforded
by a state in the U.S., which is Louisiana which is also at
approximately $70,000. He pointed out that New York is at
$50,000.
REPRESENTATIVE JOSEPHSON said the second change is that there is
a category of dependents, as noted on page 3, lines 12-16, where
a person may be living alone but have people who are
recognizable as legal dependents. For example, a man might have
an 80-year-old mother living in an independent living facility
that is reliant him for $1,000 a month and it could be that the
man's estate could prove that. In that group, he explained, the
bill would reduce that number to $100,000, which had been based
on the whole-body number of $255,000.
REPRESENTATIVE JOSEPHSON discussed the two things that the bill
would do. First, he said, for the first time in Alaska history,
the life of a person who never married and didn't have children
but who dies at work would have legally recognizable value. The
bill says it's recognizable as $70,000, whereas currently it's
only recognizable in a funeral benefit of $10,000. This is
paying homage and respect to single childless people who die at
work. Second, he stated, the bill would increase the permanent
partial impairment (PPI) whole body number from $177,000 to
$255,000 to reflect an increase in inflation.
4:11:41 PM
REPRESENTATIVE JOSEPHSON brought attention to his PowerPoint
presentation entitled, "HB 38, Abigail Caudle Act". Displaying
the fourth slide entitled, "What is the current law?" he said
the current law for PPI is $177,000 and HB 38 would increase
that to $255,000. He referenced a document in the committee
packet from Legislative Research Services that says the amount
would be $255,000 had the consumer price index been in effect
the last 17 years. A way to think about this, he suggested, is
that it's as if minimum wage is being paid at whatever it was in
the year 2000. The bill would raise the PPI rating from
$177,000 for the whole body to $255,000 and would link it to the
consumer price index.
REPRESENTATIVE JOSEPHSON continued discussing the fourth slide
and explained that, under current law, for deceased workers
there is no provision for compensating the estate if there are
no surviving widow, widower, or dependents. Two different
concepts are included in the same bill, he explained, because
they both are in workers' compensation statutes and it is like a
mini-omnibus workers' compensation bill.
REPRESENTATIVE JOSEPHSON moved to the fifth slide entitled, "How
do we fix it?" and discussed the first bullet point. He stated
that if the PPI were properly set at $177,000 in the year 2000,
then it would be proper that it's set at $255,000 now. If it's
not that now, he continued, then one is really saying that it
never should have been $177,000 in the year 2000. He addressed
the next set of bullet points and noted that if the deceased did
not have dependents that lived at home but there were dependents
that relied on the deceased, then the bill would increase the
amount from $20,000 to $100,000. He pointed out that the figure
of $20,000 hasn't changed since 1968, so the amount of money the
state gives to those dependents hasn't changed in about 50
years. The real reform, along with reforming the PPI, he
stated, is the creation of a workers' compensation award for the
estate of the person who died unmarried and without children.
4:14:44 PM
REPRESENTATIVE KNOPP brought attention to page 3, line 19, which
states, "if there is no widow or widower or child or children,
and the father, mother, grandchildren, brothers, and sisters
were not dependent on the deceased at the time of injury, then
$70,000 is payable in a lump sum to the estate of the decedent."
He asked why the state would in this case pay $70,000 to the
estate.
REPRESENTATIVE JOSEPHSON replied that there are three things the
state can do with single people who could be of any age. One is
nothing - leave the law the way it is. But, he continued,
imagine talking to the parent of a 22-year-old child who died at
the work place, like Abigail Caudle did, but hadn't yet met a
spouse or borne a child. Raven Electric, Inc. did have some
OSHA fines, and, in effect, it is being said that all Raven
Electric had to do was cut a check for Abigail's funeral
expenses. He asked, How would you have that conversation with
Marianne Burke, her mother? It is being said that the value of
a single person's life is less to the legal system than everyone
else. Other states provide this benefit, he pointed out.
Version J cuts this benefit almost in half, down to $70,000 from
the original [proposed] benefit of $125,000. This benefit, he
argued, would create a little further incentive for a company to
say it better have a safe work place. This is an exclusive
remedy, he further noted, as these single, childless people
cannot sue, and their estates cannot sue.
REPRESENTATIVE JOSEPHSON continued his answer by posing a
scenario in which two people are in an elevator at a business
when the elevator suddenly crashes downward, killing both
people. One of the people was an unmarried, childless worker at
the business and the other a customer of the business. He
explained that the customer could collect potentially millions
of dollars in damages, but under Alaska law the worker would
receive nothing. Two lives experienced the same thing, he
continued, and this is an injustice that [the legislature] can
correct. He referred to the [Division of Legal and Research
Services'] research paper provided to committee members and
pointed out that it states there would not be an appreciable
amount of workers' compensation impact. For example, he
continued, the State of Oregon said a change in these benefits
would not materially affect workers' compensation premium rates
due to the small number of compensable deaths each year.
4:18:36 PM
REPRESENTATIVE KNOPP maintained that the aforementioned elevator
scenario is not an apples-to-apples comparison because the
customer would collect under civil or criminal litigation and
the employee's family would have the same option. It isn't an
apples-to-apples comparison, he continued, because the customer
would not collect under workers' compensation litigation. He
asked why an employee's family would not be eligible under the
same rules that applied to the customer as far as civil or
criminal litigation.
REPRESENTATIVE JOSEPHSON responded that Title 9 is Alaska's
personal injury or torts statute and is the rules of the road
for personal injury damages, and Title 23 is Alaska's rules of
the road for workers' compensation. In the elevator scenario,
he explained, the worker's benefits would fall entirely under
[Title 23], and that statute says the worker would get $10,000
funeral expenses, period. If the family goes to the supreme
court like Abigail Caudle's mother did, he said, he thinks that
ultimately the court will say it can't help because the people
in Juneau won't help. Abigail's mother went to the [Alaska
Workers' Compensation Appeals Commission], he continued, which
told her that policy arguments must be directed to legislature,
which will be in connection with currently pending legislation.
He added, "That is the bill before us."
REPRESENTATIVE JOSEPHSON continued and stated that the ultimate
answer to Representative Knopp's question is, "It's not like you
could really, really try to file a wrongful death and maybe
they'll let you do it - it is 1,000 percent prohibited." If it
is not in the workers' compensation statute, he continued, "and
you're a worker, you don't get a benefit." In the elevator
scenario, he added, the customer's family at least gets a
feeling that the issue of not checking the elevator shaft or
doing maintenance will get recognized and the family can come
after the business for damages as appropriate. The customer's
family would get that, but the worker's family would not.
4:21:14 PM
REPRESENTATIVE BIRCH stated that this must be hugely frustrating
to attorneys. He said he looks at workers' compensation as a
form of insurance providing for wage replacement and medical
benefits to employees injured in the course of employment. But,
he posited, what is being talked about [in the bill] is life
insurance. While workers' compensation pays to bury someone, he
said, he struggles to understand how workers' compensation
migrates over into a life insurance policy, which is effectively
what the bill does. Every employer must pay for workers'
compensation and it is for medical benefits and to replace wages
lost due to injury. He asked what prohibits any employee from
buying a large [life] insurance policy like he has done for
himself. He requested the sponsor to address how workers'
compensation is being migrated into a life insurance deal.
REPRESENTATIVE JOSEPHSON answered that it presumes that an
unsophisticated person in their early twenties would think that
they could die at this job and need to provide a remedy to the
people who care about him or her. It's not a fix for unsafe
workplaces, so it doesn't solve that problem, he said. The bill
adds [paragraph] (6) to a death benefit section where there are
already death benefits being paid out. He noted that other
states do this and that the [proposed] award is fairly modest
and would not materially change the workers' compensation rates.
There really are only three options, he said: do nothing; do
something like this bill; or offer these single, childless
people the chance to sue [the employer's] pants off. Under
wrongful death, he continued, they would then carry the burden
by a preponderance of the evidence that they themselves weren't
negligent. He added that if he were an employer, he would not
be sure he'd want the third option because the damages total in
workers' compensation could be far greater. Given that other
states are doing this, if he were the employer, he would say he
could work with this. Otherwise, it seems highly unjust.
REPRESENTATIVE BIRCH noted that the Department of Labor and
Workforce Development can fine an employer for unsafe work
conditions, so he surmised the department would also be able to
sue the pants off of" an employer for an unsafe work condition.
He said all he hears about workers' compensation is how
expensive it is, especially for jobs that are more dangerous
than others. Workers' compensation rates are high and getting
higher, he opined, and HB 38 doesn't seem like it is going to
mitigate the cost of workers' compensation and therefore he
would like to see the additional cost component.
4:26:30 PM
REPRESENTATIVE WOOL recalled Representative Josephson's
statement about how to have the conversation with the family.
Obviously, he continued, it would be a very difficult
conversation, whether or not the individual has dependents. He
said he agrees in some ways with Representative Birch that
workers' compensation insurance covers certain things and life
insurance covers other things. He offered his agreement that
the current $10,000 for funeral expense is a paltry amount. He
inquired whether the sponsor is saying that by adding more it
would make a bad situation a little better.
REPRESENTATIVE JOSEPHSON replied yes. He related that last year
in Anchorage a hole was dug in the ground and the man in the
hole died when it caved in. The man was young and therefore
could have been single and childless. He said the difference is
that it is one thing to go to the other family and say that the
state has a remedy for the widow or children that will offer
them a modicum of solace. It's another thing, he continued, to
go to the other person and say your child didn't have any kids
and never married and while the parent can sue it will likely be
thrown out immediately, no damages can be filed, and there is no
award from workers' compensation.
4:28:41 PM
REPRESENTATIVE WOOL posed a scenario in which he works for a
company and is driving the company car one day when suddenly the
brakes don't work, and he drives off the road and is killed. He
said he would think he has some legal recourse for negligence
and that people could sue, so he therefore finds it hard to
believe that that would not be the case. He further stated that
it is hard to believe that if it were blatant negligence then a
customer could sue to the full extent of the law, but an
employee could not, which is shocking, he added. He surmised
that more people die in the fishing industry than in the
restaurant industry and asked whether the fishing industry would
therefore be more affected.
REPRESENTATIVE JOSEPHSON offered his belief that the Jones Act
or other maritime acts would answer that. He said he thinks
fishermen are covered differently. He added that for fishermen
there is a huge carve-out under federal law often in terms of
Jones Act damages. In terms of Representative Wool's scenario,
he agreed it would be negligent of the company. He gave his
assurance to the committee that it truly is the exclusive
remedy. He said it might be that if the brake manufacturer
could be sued independent of the company that owned the car for
which the brakes gave out there could be possibility of
litigation. Workers' compensation is the grand compact that was
designed to end litigation, he continued, although it never
really did do that.
REPRESENTATIVE STUTES pointed out that fishermen are independent
contractors and therefore not covered by workers' compensation,
so the bill's provisions would not apply. She commented that it
seems odd to have any kind of law that would make a carve-out
where it had to be said to someone that his or her child has no
value. She said it is inconceivable to her to think along those
lines and therefore it is very difficult for her when it is an
easy remedy to fix.
4:32:00 PM
REPRESENTATIVE KNOPP stated that instead of putting a death
benefit into the workers' compensation bill he would rather see
legislation that would allow surviving members, dependent or
not, to have a course of legal action against the employer for
something unjust. He said he has issues with there being a
death benefit of $10,000 in funeral expense on page 2, line 27,
and $70,000 in addition to be given to the estate of someone who
has died and has no dependents, and this figure being tied to
the rate of inflation. More important, he continued, is the
provision for partial impairment. He drew attention to language
on page 1, line 12, through page 2, line 2, which states: "In
case of impairment partial in character but permanent in
quality, and not resulting in permanent total disability, the
compensation is $255,506 [$177,000] multiplied by the employee's
percentage of permanent impairment of the whole person." He
opined that this is complicated and complex.
REPRESENTATIVE JOSEPHSON responded that the $70,000 provision is
not tied to inflation and is a fixed amount. Twenty years from
now, he continued, $70,000 may not seem like what it is now, and
someone may ask to increase it. Regarding partial impairment,
he pointed out that the cited language is existing law, not the
bill, and that what HB 38 does is grow the number from $177,000
to $250,000. He further pointed out that that is not the amount
the person gets, it is the base amount from which a permanently
damaged appendage or bodily organ would be multiplied. He noted
that about a dozen other states do this; for example, Minnesota
provides $60,000; New York provides $50,000; and Louisiana
provides $75,000 to each surviving parent.
4:36:01 PM
REPRESENTATIVE WOOL moved to report CSHB 38, Version 30-
LS0160\J, Wallace, 3/23/17, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 38(L&C) was reported from House Labor and
Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB38 Supporting Document - 2017 Research Report 3.24.17.pdf |
HL&C 4/10/2017 3:15:00 PM |
HB 38 |
| HB0038 ver J 3.24.17.pdf |
HL&C 4/10/2017 3:15:00 PM |
HB 38 |
| HB038 Explanation of Changes version A to version J 4.10.17.pdf |
HL&C 4/10/2017 3:15:00 PM |
HB 38 |
| HB038 PowerPoint Presentation 4.10.2017.pdf |
HL&C 4/10/2017 3:15:00 PM |
HB 38 |
| HB038 ver J Sectional Analysis 4.10.2017.pdf |
HL&C 4/10/2017 3:15:00 PM |
HB 38 |
| HB038 ver J Side-by-side 4.10.2017.pdf |
HL&C 4/10/2017 3:15:00 PM |
HB 38 |