ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
January 22, 2008
1:32 p.m.
MEMBERS PRESENT
Senator Johnny Ellis, Chair
Senator Gary Stevens, Vice Chair
Senator Bettye Davis
Senator Lyman Hoffman
Senator Con Bunde
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Thomas Wagoner
COMMITTEE CALENDAR
SENATE BILL NO. 120
"An Act relating to the calculation and payment of unemployment
compensation benefits; and providing for an effective date."
SCHEDULED BUT NOT HEARD
SENATE BILL NO. 28
"An Act relating to limitations on mandatory overtime for
registered nurses and licensed practical nurses in health care
facilities; and providing for an effective date."
MOVED CSSB 28(L&C) OUT OF COMMITTEE
SENATE BILL NO. 107
"An Act relating to naturopaths and to naturopathic practice;
establishing a Naturopathic Advisory Committee and an Alaska
Naturopathic Formulary Council; amending the duties of the State
Medical Board and the Board of Pharmacy relating to naturopathic
practice; and providing for an effective date."
HEARD AND HELD
SENATE BILL NO. 147
"An Act clarifying when a project owner or general contractor is
considered an employer for purposes of workers' compensation
exclusive liability."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 28
SHORT TITLE: LIMIT OVERTIME FOR REGISTERED NURSES
SPONSOR(s): SENATOR(s) DAVIS
01/16/07 (S) PREFILE RELEASED 1/5/07
01/16/07 (S) READ THE FIRST TIME - REFERRALS
01/16/07 (S) HES, L&C, FIN
04/04/07 (S) HES AT 2:45 PM BUTROVICH 205
04/04/07 (S) Heard & Held
04/04/07 (S) MINUTE(HES)
04/16/07 (S) HES AT 1:30 PM BELTZ 211
04/16/07 (S) Moved CSSB 28(HES) Out of Committee
04/16/07 (S) MINUTE(HES)
04/18/07 (S) HES RPT CS 2DP 1NR 2AM SAME TITLE
04/18/07 (S) DP: DAVIS, ELTON
04/18/07 (S) NR: THOMAS
04/18/07 (S) AM: DYSON, COWDERY
04/24/07 (S) L&C AT 1:30 PM BELTZ 211
04/24/07 (S) <Bill Hearing Postponed until Thursday>
04/26/07 (S) L&C AT 1:30 PM BELTZ 211
04/26/07 (S) Heard & Held
04/26/07 (S) MINUTE(L&C)
01/15/08 (S) L&C AT 1:30 PM BELTZ 211
01/15/08 (S) -- MEETING CANCELED --
01/17/08 (S) L&C AT 1:30 PM BELTZ 211
01/17/08 (S) -- MEETING CANCELED --
01/22/08 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 107
SHORT TITLE: NATUROPATHS
SPONSOR(s): SENATOR(s) DAVIS BY REQUEST
03/07/07 (S) READ THE FIRST TIME - REFERRALS
03/07/07 (S) L&C, HES, FIN
04/19/07 (S) L&C AT 1:30 PM BELTZ 211
04/19/07 (S) Heard & Held
04/19/07 (S) MINUTE(L&C)
01/15/08 (S) L&C AT 1:30 PM BELTZ 211
01/15/08 (S) -- MEETING CANCELED --
01/17/08 (S) L&C AT 1:30 PM BELTZ 211
01/17/08 (S) -- MEETING CANCELED --
01/22/08 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 147
SHORT TITLE: WORKERS' COMP EMPLOYER LIABILITY
SPONSOR(s): SENATOR(s) FRENCH
03/28/07 (S) READ THE FIRST TIME - REFERRALS
03/28/07 (S) L&C, FIN
01/17/08 (S) L&C AT 1:30 PM BELTZ 211
01/17/08 (S) -- MEETING CANCELED --
01/22/08 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
DANA OWEN
Staff to Senator Ellis
Alaska State Capitol
Juneau, AK
POSITION STATEMENT: Explained the changes in CSSB 28(L&C) [25-
LS0212\V] and SB 107.
NANCY DAVIS, Vice President
Alaska Nurses Association
Anchorage, AK
POSITION STATEMENT: Supported CSSB 28(L&C).
MR. TOM RENKES, Executive Director
Alaska Nurses Association
Anchorage, AK
POSITION STATEMENT: Supported CSSB 28(L&C).
ROD BETIT
Alaska State Hospital and Nursing Home Association (ASHNHA)
Juneau, AK
POSITION STATEMENT: Did not support SB 28 or CSSB 28(L&C).
TOM OBERMEYER
Staff to Senator Davis
Alaska State Capitol
Juneau, AK
POSITION STATEMENT: Commented on SB 107 for the sponsor.
SENATOR FRENCH
Alaska State Capitol
Juneau, AK
POSITION STATEMENT: Sponsor of SB 147.
PAUL LISANKIE, Director
Division of Workers' Compensation
Department of Labor and Workforce Development (DOLWD)
Juneau, AK
POSITION STATEMENT: Answered questions on SB 147.
SUSAN ORLANSKY
Feldman & Orlansky & Sanders
Juneau, AK
POSITION STATEMENT: Supported SB 147.
KIP KNUDSON, Government Relations Manager
Tesoro Alaska
Anchorage, AK
POSITION STATEMENT: Opposed SB 147.
ACTION NARRATIVE
CHAIR JOHNNY ELLIS called the Senate Labor and Commerce Standing
Committee meeting to order at 1:32:34 PM. All members were
present at the call to order.
SB 28-LIMIT OVERTIME FOR REGISTERED NURSES
1:34:18 PM
CHAIR ELLIS announced SB 28 to be up for consideration and that
the committee had been working from the CSSB 28(HES) version
[25-LS0212\L]. The committee now had a Labor and Commerce CS
before it, which he asked his staff to explain.
DANA OWEN, Staff to Senator Ellis, explained the changes in CSSB
28(L&C) [25-LS0212\V]. The first change was on page 2, line 24,
that added to the exceptions a new paragraph (1) to include
nurses at an occasional school event. It was suggested by nurses
who pointed out that they often accompany field trips that last
longer than the normal work day.
1:35:32 PM
The second change was on page 4, line 25, where a new section AS
18.20.440 spells out an enforcement mechanism for the
prohibition against retaliation set out in AS 18.24.30. Under
this section the commissioner has 90 days to determine whether a
facility has violated this statute. If the determination is yes,
the commissioner must request that the Office of the Attorney
General represent the department in the complaint and seek all
appropriate relief. The Department of Labor and Workforce
Development (DOLWD) suggested this amendment. The idea is to
provide clear authority to the department to investigate and act
on allegations of violations. This provision is similar to that
for violations of occupational safety and health.
1:36:22 PM
The third change, he said, was on page 5, line 4, where new
language specifies that the report required by Section 18.20.445
is to be submitted to the division responsible for enforcement.
Earlier drafts sent the report to the research and analysis
section of the department, which also requested this amendment.
The effective dates had all been moved a year forward to
recognize the current year.
1:36:56 PM
CHAIR ELLIS asked if it was fair to say the changes in the CS
improve the legislation.
MR. Owen replied yes.
CHAIR ELLIS stated he would hold consideration of the CS to have
the benefit of public testimony.
NANCY DAVIS, Vice President, Alaska Nurses Association, said she
has been a registered nurse for the past 39 years and supported
the proposed CS to SB 28. This bill is a great step forward for
a number of reasons, she said, to protect the health and safety
of patients and nurses alike. The CS recognizes the impacts of
fatigue on nurses who are the mainstay of round-the-clock
patient care.
She said, "It's well known that excessive work hours for some
occupations become a critical issue for safety. Excessive work
hours for nurses is a very risky response to the staffing
crisis." Errors may be made due to fatigue, which is bad in
terms of patient care, but it is also a liability for workers'
compensation issues. Nurses are more prone to be injured and
this is exacerbated by the fact that this professional group is
already facing a shortage, which could get worse. Many other
opportunities exist in the workforce for nurses and it is
getting more difficult to encourage people into the profession.
MS. DAVIS said that a number of states have passed legislation
similar to CSSB 28(L&C).
1:43:14 PM
SENATOR BUNDE said he didn't want people to work overtime if it
harms patients. However there is a nursing shortage and he asked
if this would create more of a nursing shortage.
MS. DAVIS replied that there are different management approaches
to the nursing shortage. It will continue, but it won't get
better if people keep leaving the profession.
1:44:55 PM
SENATOR STEVENS followed up by asking for statistics on why
people are leaving the profession.
MS. DAVIS replied that this is the hard part; nurses say they
can't do 12-hour shifts or double shifts; so they pick other
employment like home care and out-of-institution places.
"Clearly the 24/7 patient situations are the most critical ones
for which this makes a difference." She said this is considered
a problem nationally, especially as the nursing workforce ages.
1:46:23 PM
MR. TOM RENKES, Executive Director, Alaska Nurses Association,
added that the record on mandatory overtime is mostly anecdotal
at this point. They know the shortage of nurses will encompass
millions of nurses in the future. Fourteen states have already
passed the mandatory overtime legislation and it has been shown
that the hospitals that work toward garnering better workforce
working conditions have a virtually 0 to 3 percent rate on the
RN positions. The hospitals that continue to use the practice of
mandatory overtime and mandatory call can have open positions up
to the 10 - 20 percent around the country.
1:48:03 PM
ROD BETIT, Alaska State Hospital and Nursing Home Association
(ASHNHA), said he still could not support CSSB 28(L&C). He has
been monitoring mandatory overtime use in the Alaska. Hard data
from member facilities indicate that mandatory overtime is not
one of the tools they use to close the nursing shortage gap, but
they rather use temporary nursing staff. In addition, facilities
have been working hard to try to produce an adequate number of
nurses for health care in Alaska by working with the University
of Alaska Anchorage to increase the nursing student graduation
rate from about 100 students a year (four years ago) to 200 a
year. Data shows that 93 percent of those nurses are staying in
Alaska to practice.
1:50:11 PM
He also said that going down this road will not really improve
health care or help support facilities attempting to strike
reasonable working conditions for nurses, which is locally
managed now mostly through collective bargaining. He didn't see
any evidence presented to the committee that would suggest this
is an area that requires legislative attention at this time.
CHAIR ELLIS asked if he wanted to comment on the CS
specifically.
MR. BETIT replied no; most of those changes impact the
department that is responsible for managing the reporting. That
reporting requirement would be onerous to facilities to comply
with without having any concrete evidence that a problem exists.
1:52:34 PM
SENATOR BUNDE asked if this bill would leave wards or beds
uncovered.
MR. BETIT replied he thought so. His members say the shortage is
improving and not worsening.
1:54:06 PM
SENATOR BUNDE said one nursing organization suggested doubling
nursing wages, but he wondered if that would just elevate the
cost of health care.
MR. BETIT replied that was an astute observation.
1:55:26 PM
SENATOR STEVENS asked if complaint investigations were still an
issue for him and what did it mean.
MR. BETIT replied that the whole complaint investigation area is
of concern if it's to be done any time someone wants to file a
complaint. This particular bill requires the kind of reporting
that goes down to the individual nurse using overtime rather
than the aggregate kind of facility reporting that is applicable
in other states that have adopted this kind of approach.
1:56:30 PM
SENATOR DAVIS moved to adopt CSSB 28(L&C) version V. There were
no objections and it was so ordered.
CHAIR ELLIS said he is personally persuaded that this is
reasonable public policy, because he has been concerned about
the nursing shortage. He thought this bill would help with it.
Other states have moved in this direction and have reported a
positive effect.
1:57:27 PM
SENATOR BUNDE commented if mandatory overtime isn't being used
in Alaska, this won't help much. He didn't think the problems in
the nursing field were over.
CHAIR ELLIS responded that it may be an incremental change.
1:59:08 PM
SENATOR DAVIS moved to pass CSSB 28(L&C) from committee with
individual recommendations and accompanying fiscal notes. There
were no objections and it was so ordered.
SB 107-NATUROPATHS
CHAIR ELLIS announced SB 107 to be up for consideration. He said
the committee had proposed CSSB 107(L&C) 25-LS0702\E before it.
2:02:18 PM
DANA OWEN, staff to Senator Ellis, explained that SB 107
proposes to establish a structure that would regulate an
expanded scope of practice for naturopaths in the State of
Alaska.
MR. OWEN noted that the title of the CS had been changed to
reflect some of the changes. The first major change was on page
3, line 12. He explained that structure of the previous bill had
two bodies that would regulate the practice of naturopathy; one
would be a formulary commission and the other an advisory
committee.
This CS proposes to combine those two bodies into one called the
Alaska Naturopathic Council - a concern of the Division of
Occupational Licensing. The membership would consist of three
naturopaths - one from outside the third judicial district, one
would be a pharmacist and one would be a public member who may
be a physician. This council retains all the powers and duties
ascribed to each of the bodies in the previous bill.
He noted that regarding the public member, physicians did not
want to be forced into participating in this process over a
concern for liability.
CHAIR ELLIS clarified that it was part of the CS, but it needed
to be fully discussed.
MR. OWEN said Section 8 of the original bill was deleted in the
CS; it amended the duties of the State Medical Board to include
appointing a member of the Formulary Council, which was dropped
in the CS. Section 10 has transitional provisions that reflect
the blending of the two bodies.
2:04:15 PM
SENATOR BUNDE asked if the makeup of the council had changed
other than the medical doctor.
MR. OWEN replied the numbers are the same as had been proposed
for the Formulary Council before; the advisory committee had
three members, but that was expanded with the combining.
SENATOR BUNDE observed that most other councils have more public
participation. In this case there is only one public member.
TOM OBERMEYER, Staff to Senator Davis, sponsor of SB 107 stepped
in to explain that the CS follows the general direction of the
original bill, but it has changed substantially. He said the
Alaska State Medical Association rejected this bill because it
includes minor surgery and pharmaceutical use. The current
version essentially waters down the controls that had been
implemented in the initial bill by creating just one board that
is supposed to be supervising everything - discipline,
continuing education, pharmacy and the selection of all legend
drugs by a pharmacist that is presumably appointed who also
responsible for the drugs to be used along with IVs. The concern
is that this practice is being changed into what the Medical
Association would call primary care physicians. Naturopaths are
not allowed to use the title "physician," but the four
institutions that license them give them certificates of
naturopathic physicians.
Their main concern is that the public cannot be adequately
protected - since physicians don't want to have any part of it
and there will not be enough oversight to control everything.
He said the State Medical Association pointed out in a letter to
rd
this committee last year that the 23 legislature had appointed
a task force that did not fulfill its obligation of reporting
the comparison of the training of medical doctors - their
continuing internships and extensive hospital practice while
they are in medical school - to that of naturopaths.
CHAIR ELLIS asked if he had any comments about Senator Bunde's
concern regarding the amount of public participation on the new
board.
MR. OBERMEYER replied that Massachusetts had a task force in
2002 that recommended a nine-member board. It was to include
only three or four naturopaths and the remainder would be from
the other medical professions and maybe a public member or two.
So, it was an expanded board compared to this one. He said this
is essentially a self-regulated board and it was determined by
Massachusetts that naturopaths could not and should not
supervise themselves. He said that naturopathy is growing in
this country and he thought the state could work with the
version they have.
CHAIR ELLIS summarized that the committee should consider having
more than one public member.
MR. OBERMEYER agreed.
2:12:28 PM
CHAIR ELLIS asked for any other requests from the committee.
SENATOR BUNDE said he wanted to hear from the Division of
Occupational Licensing and that he was disappointed the report
on training comparison didn't get back to them because he
thought he heard some inaccuracies in the report last year and
had asked for them to report back.
2:13:47 PM
SENATOR STEVENS said he didn't remember discussions on
prescriptions and he wanted to know more about the ability
naturopaths were being given for prescribing drugs.
CHAIR ELLIS announced that SB 107 and the CS would be held over
for further hearings.
SB 147-WORKERS' COMP EMPLOYER LIABILITY
2:15:40 PM
CHAIR ELLIS announced SB 147 to be up for consideration.
SENATOR FRENCH, sponsor of SB 147, stated this bill makes a tiny
change to the workers' compensation statutes and said that
workers' compensation is basically a no-fault insurance policy
that says if you're hurt at work, you get payment for your
injuries. He read the sponsor statement:
Workers' compensation laws represent a simple bargain
between employers and employees. By purchasing a
worker's comp policy, an employer gains immunity from
lawsuits that arise out of workplace injuries. This
part of the workers' comp bargain is referred to as
'exclusiveness of remedy,' meaning that the employer
who buys the policy knows that there won't be
expensive and time consuming court cases arising out
of workplace accidents. Injured workers get worker's
comp benefits and nothing more.
By entering into the bargain the employee gives up the
right to sue for damages. In exchange for giving up
the possibility of a large court award, the employee
gets a relatively swift and fair, though smaller,
compensation benefit for his or her injuries. Both
sides also agree to a 'no fault' provision, meaning
that there is no inquiry into who was at fault in the
events giving rise to the accident.
Revisions to the workers' comp statutes in 2004 added
a clause to the workers' comp laws that undermine this
bargain, and works to the detriment of workers injured
by third parties who do not purchase workers' comp
policies. Under the 2004 changes, employers who are
merely 'potentially liable' for buying a workers' comp
policy, but who do not actually purchase a policy, can
still get the benefit of the 'exclusiveness of remedy'
provisions in workers' comp.
This legal imbalance is having real world
consequences, most notably at large worksites where a
project owner is supervising many subcontractors.
Because the project owner is 'potentially liable' for
purchasing workers' comp policies to cover all the
work that takes place at the work site, the project
owner enjoys immunity from lawsuits that result from
its own negligence. Severe injuries take place at some
of these large construction projects. When these
injuries are caused by the negligence of the owner,
the injured worker is left with only workers' comp
benefits, which, as the attached letter shows, do not
fully cover the damages inflicted by the injury.
Removing the phrase 'or potentially liable' from the
statute restores the bargain to its proper form. If an
employer wants immunity, he or she must buy a policy.
An employer who gets immunity without buying a policy
is getting something for nothing. Basic fairness
should not allow such a situation to continue. Please
join me in supporting a small change to the law that
will result in big changes to the lives of working
people.
2:21:38 PM
SENATOR STEVENS said he thought he was missing something and
asked what the employee loses if he is already covered under
workers' compensation.
SENATOR FRENCH replied that he loses the ability to sue for more
damages than a lawsuit allows - like future loss of income or
pain and suffering for instance. Workers' compensation has
fairly strict remedies that while being certain are smaller.
2:22:22 PM
SENATOR BUNDE asked if this law will benefit the people who sell
workers' compensation more than the injured worker.
SENATOR FRENCH answered that is right. He added, "In those
instances where the general does the responsible thing and pays
money for a policy, yes, he or she will enjoy that coverage."
SENATOR BUNDE asked how often a general contractor is
potentially liable for not purchasing workers' compensation.
2:23:55 PM
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development (DOLWD), answered
that he couldn't say. When the bill passed in 2004, he
understood the intention was that general contractors and
project owners would have some type of insurance policy that
would pick up this potential contingent liability. He didn't
know if that had started to happen or not.
SENATOR BUNDE asked if Linda Hall, Director, Division of
Insurance, would be a resource the committee would want to
contact on who is buying insurance.
CHAIR ELLIS replied they could do that for the next meeting.
2:25:37 PM
SENATOR HOFFMAN asked why the change was made in 2004.
MR. LISANKIE replied that his notes weren't complete on those
discussions.
2:26:30 PM
SUSAN ORLANSKY, Feldman & Orlansky & Sanders, said her firm
represents a wide variety of clients in litigation including
both injured employees and companies that are sued for
negligence at a job site. She underscored Senator French's
perspective that SB 147 is a simple fix for a couple of problems
that were created by the 2004 language that added the words "or
potentially liable" to AS 23.30.055. There are three good
reasons for this fix; first undoing those words will promote job
safety. She explained that right now general contractors and
project owners who are the entities with the greatest oversight
over the project have no incentive to be concerned about safety.
They are technically liable to pay workers' compensation
benefits to any worker on the job site; so the general
contractor and project owner are now totally exempt from any
risk of tort liability no matter how unsafe their own practices
may be. "In reality, what is unfair about it is they don't ever
have to pay workers' compensation benefits to the employees of
the subcontractors," she said. The law already requires and has
required for decades that each subcontractor carry its own
workers' compensation insurance for its own employees. General
contractors and owners can enforce this through they have master
subcontracts which require subs to show a certificate of having
purchased workers' compensation insurance for their employees
before they ever begin any work on the project. This means the
general contractor and project owner have assumed a potential
liability, but it's never a realistic one.
This leads to the second reason for SB 147. The 2004 law added a
protection from tort liability for employers who actually don't
secure worker's compensation insurance and don't pay workers'
compensation benefits by designing a system where employers and
employees each made a tradeoff. It introduced a new benefit for
large employers and project owners and a new disadvantage for
employees of subcontractors with no corresponding tradeoff. SB
147 would restore the basic workers' compensation principal so
that those who pay workers' compensation benefits are exempt
from tort suit and those that don't pay are not.
2:30:01 PM
Third, she said the 2004 changes resulted in some very illogical
and unfair situations where two employees injured in exactly the
same way get very different kinds of compensation and it has
nothing to do with who actually pays the workers' compensation
benefit. Right now little subcontracting companies may be liable
in tort to employees of larger general subcontractors but not
vice versa. "It's not fair and it's not logical."
She said SB 147 would remedy the unfairness. She has a client
who is employed by Tesoro; he was injured at a Tesoro refinery.
His own employer paid him workers' compensation benefits. Tesoro
didn't do anything for him, but under the 2004 law, it is exempt
from having to pay tort damages.
SENATOR BUNDE asked how two employees could receive different
amounts of money. In the Tesoro case the injured employee would
be compensated by workers' compensation, but if both
subcontractor and Tesoro have workers' compensation, the
employee is not going to get any additional money.
2:31:54 PM
MS. ORLANSKY answered if you have two different subcontractors
and one mid-level subcontractor and it's the employee of the
mid-level contractor who acts negligently, the employee of the
subcontractor directly under that person is only going to get
workers' compensation benefits under the law the way it's set
up, but the employee of the other subcontractor who is not a
subcontractor under a contractor is entitled to sue and recover
in court. Those damages could be many, many times different.
Court damages can be 10 times as high as workers' compensation
benefits, which are designed to be sort of minimal - some
guaranteed recovery paid relatively quickly. It's a good system
when nothing else is available, but the common law has also
developed a tort system which is more complicated for employees
to choose go that route, but it can also end up compensating
them much more generously.
2:33:06 PM
KIP KNUDSON, Government Relations Manager, Tesoro Alaska, said
the current law is good for labor and commerce and the proposed
changes are probably a step backwards for both. He said Tesoro
has a core value of safety for its workers; but he said it is a
constant battle to keep employees safe. He remarked, "Some
people have said that employers have no motivation to keep their
employees safe; I gotta tell you, these guys aren't grown on
trees; we want to keep them as safe as possible. And we want
them to come and go every day in the same condition."
He said that workers' safety is a duty that requires significant
resource and effort on everyone's part. He said that all Alaskan
workers should be covered by a workers' compensation policy and
that all businesses benefit from safe employees and reduced
legal expenses.
MR. KNUDSON said the 2004 change freed up resources and efforts
on projects to allow better coordination of safety programs
between employers and contractors with the resulting benefit of
safer workers. He opined that exclusive liability motivates
project owners to make sure that everybody that is on a project
site has a workers' compensation policy in place.
2:38:14 PM
He illustrated his point with a picture of five different people
that might be on a worksite - the project owner, an employee, a
project contractor employee, a project subcontractor employee,
someone that is a contract employee, but not working on the
project and a visitor who just happens to be there - all being
injured simultaneous in the same event. In the first scenario
the project owner is at fault. Pre-2004 the picture showed the
remedy for the employee of the project owner would be workers'
compensation and everyone else had both (workers' compensation
and tort claim) available. If the same thing happened today,
workers' compensation was available to all of them. However, if
the project subcontractor for some reason allows a sub on site
without a workers' compensation policy in place, that employee
is still allowed to sue the project owner. (If the policy is not
in place one does not get the benefit of the exclusive remedy.)
He also did scenario 3 that showed the situation Senator French
was discussing. If the project contractor is in place, his
employees can only make use of workers' compensation and
everyone else can sue the project contractor. Today, the
imbalance is where the project contractor and all his subs can
avail themselves of workers' compensation, but the project owner
employee could potentially sue down. His only response was that
it is the project owner's responsibility to make sure that
everyone has workers' compensation on the project site - the
reason the remedy flows back to him.
SENATOR BUNDE said he appreciated fairness and asked if before
the 2004 change one could have a workers' compensation claim and
a tort claim in three of his situations where people are working
on site.
MR. KNUTSON replied that Senator French talked about a bargain
between an employer and an employee, but whenever he took a job
he didn't understand it that way. This is public policy that has
been set. The goal of the 2004 law change (on slide 2) is to
have all contractors working on a project treated equally during
an injury. There is a no fault provision.
SENATOR BUNDE said he would like to invite Linda Hall to explain
if there is double coverage if the contractor and the sub both
have workers' compensation coverage. It doesn't necessarily get
the worker any more money.
2:43:14 PM
SENATOR FRENCH wrapped up that the basic unfairness on slide 2,
situation 2, is that the project owner is getting a workers'
compensation remedy without actually having bought a policy. So,
essentially he has less desire to have a safe workplace.
2:44:17 PM
SENATOR STEVENS asked what he thought about Senator Bunde's
question about multiple carriers.
SENATOR FRENCH replied that Linda Hall would be the best person
to answer that; he guessed that a project owner would pay less
for a workers' compensation policy where every single
subcontractor was also carrying a policy because he is then only
covering those instances where he is at fault - the time when a
drunken truck driver employed by a Collins Construction worker
drives over an Alasco employee. That contractor is protected
from tort liability because of a workers' compensation policy
that the subcontractor has paid for. He said:
That's the imbalance. If the situation were reversed,
if the drunken subcontractor runs over a project
employee, the project employee is going to sue the
pants off of those folks, because of the
outrageousness of the conduct and the fact that the
liability only and the protection only runs downhill.
CHAIR ELLIS thanked him and said SB 147 would be held for
further work. There being no further business to come before the
committee, he adjourned the meeting at 2:47:36 PM.