03/17/2004 08:02 AM Senate JUD

                                                                                                                                
          SB 323-WORKERS COMPENSATION AND CONTRACTORS                                                                       
                                                                                                                                
MR. BRIAN HOVE, staff to  Senator Seekins, sponsor, presented the                                                               
following description of SB 323.                                                                                                
                                                                                                                                
     SB  323 revises  the  Workers' Compensation  Act as  it                                                                    
     applies  to  contractors  and subcontractors.  The  two                                                                    
     principal   modifications   are  as   follows.   First,                                                                    
     responsibility for payment  of workers' compensation is                                                                    
     extended up  the chain of contracts  to include project                                                                    
     owners.  Secondly,   injured  parties  in   receipt  of                                                                    
     benefits under  the Workers' Compensation Act  would be                                                                    
     barred  from  'double  dipping' via  a  tort  liability                                                                    
     claim.                                                                                                                     
                                                                                                                                
     Under  AS 23.30.045(a),  an injured  employee only  has                                                                    
     recourse  for  workers' compensation  benefits  against                                                                    
     his  immediate  employer  and  if  the  employer  is  a                                                                    
     subcontractor against  the contractor who  retained the                                                                    
     subcontractor.   The    proposed   legislation   allows                                                                    
     recourse  for  the  payment  of  compensation  benefits                                                                    
     against  project owners,  as  well  as contractors  and                                                                    
     subcontractors.                                                                                                            
                                                                                                                                
     This extension  of the rights  of injured  employees is                                                                    
     sensible  inasmuch   as  the   project  owner   is  the                                                                    
     beneficial user  of the work  performed by  the injured                                                                    
     employee. It should be noted  that a project owner does                                                                    
     not include  individuals who have engaged  the services                                                                    
     of  contractors  to  build or  renovate  a  residential                                                                    
     home.                                                                                                                      
                                                                                                                                
     Finally,   the   proposed   legislation   extends   the                                                                    
     exclusivity  protection set  forth in  AS 23.30.055  to                                                                    
     all  parties in  the  contracting chain  relating to  a                                                                    
     project.  This includes  the  employer  of the  injured                                                                    
     employee, and those parties, which  are upstream in the                                                                    
     chain  of contracts  from the  employer of  the injured                                                                    
     employee.                                                                                                                  
                                                                                                                                
     In  other words,  if an  injured employee  works for  a                                                                    
     subcontractor, then  the subcontractor,  the contractor                                                                    
     and the project  owner would be free  of tort liability                                                                    
     so long as the injured employee...[END OF SIDE A]                                                                          
                                                                                                                                
TAPE 04-21, SIDE B                                                                                                            
                                                                                                                                
     ...receives  the  benefits  set  forth  in  the  Alaska                                                                    
     Workers' Compensation Act.                                                                                                 
                                                                                                                                
     SB 323  will encourage  all parties participating  in a                                                                    
     project   to  identify   and   enforce  strict   safety                                                                    
     standards for  the benefit of  all workers  rather than                                                                    
     deflecting responsibility through  the use of indemnity                                                                    
     agreements,  as is  common practice  currently. At  the                                                                    
     same  time,  it  ensures   that  injured  workers  will                                                                    
       receive all benefits available under the Workers'                                                                        
     Compensation Act.                                                                                                          
                                                                                                                                
CHAIR SEEKINS announced that he would hold SB 323 for a further                                                                 
hearing and adjourned the meeting at 8:57 p.m.