Legislature(2007 - 2008)BELTZ 211
01/25/2008 03:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB101 | |
| SB147 | |
| SB107 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 101 | TELECONFERENCED | |
| = | SB 147 | ||
| = | SB 107 | ||
SB 147-WORKERS' COMP EMPLOYER LIABILITY
CHAIR ELLIS announced SB 147 to be up for consideration.
SENATOR HOLLIS FRENCH, sponsor of SB 147, said this bill tries
to fix a severe inequity that the addition of three words "or
potentially liable" for securing payment or compensation to the
workers' compensation statutes created when it last went through
the legislature. This means that employers who are merely
"potentially liable" for buying a workers' compensation policy,
but who do not actually purchase a policy, can still get the
benefit of the exclusiveness of remedy provisions in workers'
compensation statutes.
3:24:37 PM
LINDA HALL, Director, Division of Insurance, Department of
Community, Commerce and Economic Development, said she has
talked with four attorneys and she is not quite sure she
understands it.
3:25:58 PM
SENATOR BUNDE asked if Tesoro didn't have workers' compensation
and hired a sub who did have workers' compensation and the sub's
employee got hurt, was his compensation limited to workers
compensation. But if Tesoro purchased workers' compensation and
the person gets hurt, is Tesoro immune from tort suits.
3:27:46 PM
MS. HALL said she couldn't answer the question.
PAUL LISANKIE, Director, Division of Worker's Compensation,
Alaska Department of Labor and Workforce Development, said he is
not an expert in tort legislation either, but he attempted to
explain:
Under the 2004 law the project owner would be
potentially liable for everybody below for their
workers' compensation only if the people that had the
primary responsibility failed to cover that
responsibility. So they would only be responsible for
that injured subcontractor if both the subcontractor
employer and the intermediary general contractor, both
of them, failed to cover the workers' compensation
coverage. Then the project owner would be responsible
for paying those workers' compensation benefits and in
exchange, in a sense, they would not be liable for
being sued for the damages. That was under '04. They
weren't very likely to have to pay workers'
compensation. I would certainly agree with that
characterization, that the primary responsibility is
with the subcontractor employer. And presumably most
of them follow the law. If they fail, then it would
move up one step to the general contractor for whom
they are working and most of them follow the law and
have workers' compensation liability coverage.
But in the event that both of those fail, then it
would flow up to the project owner and under the laws
that were changed in 2004, they would now have
responsibility for workers' compensation payments that
they didn't use to have.
But the change in '04 was they were added to the mix
of people that had this very somewhat attenuated
liability for the workers' compensation benefits to
the lower employees. They didn't use to have that. It
used to stop at the general contractor. They were the
only intermediary other than the actual employer that
was required to pay workers' compensation benefits. In
'04 the project owners were added to be kind of
suspenders on top of the belt on top of the belt. So
it was like primary responsibility with the employer,
secondary responsibility with the general contractor,
and tertiary responsibility with the project owner.
In exchange, for that, if you think it's worth
anything, you know, then they were exempt from being
sued for that same injury - even if they were
negligent.
So now what this bill before you is talking about is
taking it back in the other direction and saying that
that is a too attenuated liability. It's extremely
unlikely....that they will end up paying workers'
compensation even if they have coverage.
So, as I understand it, it will be changed so that if
for some reason they actually pay the benefits, that
they will not be sued or they cannot be sued. But the
mere fact that they might under some set of
circumstances be liable will not longer shield them
from a tort suit for their own negligence.
3:32:03 PM
SENATOR BUNDE asked if under current law the owner that doesn't
have to buy workers' comp, and if it went to trial the most they
would be liable for would be the workers' compensation benefits.
MR. LISANKIE replied with what he understood from discussions
with Ms. Hall and others that a project owner is typically a
company, and it has the responsibility to cover workers'
compensation benefits for its employees; this would be an add on
to that. The question is how much credit should be extended
potentially to an employee - not their own - but of this other
company that is working for them.
3:33:38 PM
SUSAN ORLANSKY, Attorney, Feldman Orlansky & Sanders, Anchorage,
said Mr. Lisankie's understanding of the law comports with her
understanding both of how it is working currently and how it
would be changed under this bill.
SENATOR BUNDE asked if this bill passes, then the owner would
not be forced to buy workers' compensation, but even if he
bought it, an employee of a subcontractor who got hurt could sue
the owner.
MS. ORLANSKY said she understands the way the bill would work is
if an employee of a subcontractor were hurt and the
subcontractor didn't carry workers' compensation insurance and
the general contractor didn't either, if the project owner had
workers' compensation or stepped up to the plate and provided
the equivalent of workers' compensation benefits, then he would
be exempt from a tort suit. If the cause of the accident was due
to the project owner's negligence and he didn't have workers'
compensation coverage, he could be subject to a tort lawsuit.
3:36:03 PM
SENATOR BUNDE said he agreed with Senator French about fairness.
If this passes it would be unfair for owners of companies that
would buy the insurance but still be subject to a personal
injury suit. However, it may not be any fairer to leave it in
place.
3:38:41 PM
SENATOR HOFFMAN said he still doesn't feel comfortable with the
issue.
CHAIR ELLIS said he would like to expand the discussion to allow
more members of the Senate to express themselves.
3:39:28 PM
SENATOR FRENCH added that there is a policy decision to be made
here and he agreed with expanding the discussion. There is no
perfect solution to every legal issue. However, he thought this
bill restores a fundamental balance in the workers' compensation
law.
CHAIR ELLIS said he would hold the bill for further
consideration.
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