Chapter
509
2007 -- S 1103 AS AMENDED
Enacted 10/30/07
A N A C T
RELATING TO LABOR AND
LABOR RELATIONS
Introduced By: Senator Roger R. Badeau
Date
Introduced: June 13, 2007
It is
enacted by the General Assembly as follows:
SECTION
1. Title 28 of the General Laws entitled "LABOR AND LABOR
RELATIONS"
is hereby amended by adding thereto the following chapter:
CHAPTER 53
RHODE ISLAND UNINSURED EMPLOYERS FUND
28-53-1.
Preamble and legislative findings. – WHEREAS, The system of workers'
compensation
in the state of Rhode Island was once in a state of acute crisis until
legislative
intervention
and oversight produced what is now a nationally recognized model of a well-
managed
economical program that provides injured workers with appropriate compensation,
health
care and rehabilitative services without unduly burdening employers, insurers
and the
citizens
of Rhode Island; and
WHEREAS,
Legislative and policy changes have corrected the abuses and misuse of the
workers'
compensation system while assisting injured workers, restoring fiscal
stability, and
eliminating
waste and unnecessary costs; and
WHEREAS,
Professionals providing services covered under the provisions of the
Workers'
Compensation Act have taken into account, in the performance of their service,
the
important
public policy benefit of a sound and properly functioning workers' compensation
system
in this state, and have tirelessly committed themselves to protect and
maintained the
integrity
of this system; and
WHEREAS,
Abuse and misuse of the workers' compensation system by non-complying
employers
has been reduced through the state's mandatory requirement that employers
subject to
the
law either self-insure or maintain a policy of workers' compensation insurance
to ensure that
legitimately
injured workers receive all the rights and benefits provided in the Workers'
Compensation
Act; and
WHEREAS,
Substantive efforts have already been undertaken by the general assembly,
the
workers' compensation court and the department of labor and training to
eliminate the illegal,
irresponsible
and unscrupulous behavior of employers who openly and deliberately operate
businesses
in Rhode Island without workers' compensation insurance for their employees;
and
WHEREAS,
The actions of non-complying employers are illegal and deprive not only
injured
employees of the workers' compensation benefits to which they are entitled but
also cause
greater
social and financial costs to all citizens of Rhode Island including employers
and health
care
providers who incur uncompensated expenses in treating the victims of the
uninsured
employer;
and
WHEREAS,
Additional reform is required to provide appropriate compensation, health
care
and rehabilitative services to employees who are injured while in the service
of uninsured
employers
and to eliminate the flagrant abuse of the system by illegally uninsured
employers by
requiring
them to accept their legal responsibility to pay the appropriate benefits to
their insured
employees;
now, therefore be it
RESOLVED,
That it is declared to be the intent of the legislature that an uninsured
employers
fund be created to ensure that injured workers who are employed by illegally
uninsured
employers are not deprived of workers' compensation benefits. The fund shall
have
enforcement
mechanisms as are necessary to induce illegally uninsured employers to
acknowledge
their malfeasance, provide legally mandated benefits for injured; and to assure
that
all
participants in the system recognize their obligation to conduct themselves in
a manner
consistent
with the overall integrity of the compensation system. All amounts owed to the
uninsured
employers fund from illegally uninsured employers are intended to be excise
taxes and
as
such, all ambiguities and uncertainties are to be resolved in favor of a
determination that such
assessments
are excise taxes.
28-53-2.
Establishment – Sources -- Administration. – (a) There shall be
established
within
the department of labor and training a special restricted receipt account to be
known as the
Rhode
Island uninsured employers fund. The fund shall be capitalized from excise
taxes assessed
against
uninsured employers pursuant to the provisions of section 28-53-9 of this
chapter and
from
general revenues appropriated by the legislature. Beginning in state fiscal
year ending June
30,
2009, the legislature may appropriate up to two million dollars ($2,000,000) in
general
revenue
funds annually for deposit into the Rhode Island uninsured employers fund.
(b)
All moneys in the fund shall be mingled and undivided. The fund shall be
administered
by the director of the department of labor and training or his or her designee,
but in
no
case shall the director incur any liability beyond the amounts paid into and
earned by the fund.
(c)
All amounts owed to the uninsured employers fund from illegally uninsured
employers
are intended to be excise taxes and as such, all ambiguities and uncertainties
are to be
resolved
in favor of a determination that such assessments are excise taxes.
28-53-3.
Powers and duties of the fund. – The fund shall:
(a)
Be obligated to pay covered claims as determined by the director or the
workers'
compensation
court pursuant to the provisions of this section;
(b)
Investigate claims brought against the fund and adjust, compromise, settle and
pay
covered
claims to the extent of the fund's allocation;
(c)
Establish procedures for managing the assets of the fund;
(d)
Sue or be sued; and
(e)
Perform any and all acts necessary to effectuate the humanitarian purposes of
this
chapter.
28-53-4.
Payor of last resort. – The fund shall not distribute funds of any
kind to any
insured,
insurer, or self-insured employer and shall not be deemed an insurer for any
purpose
noted
in this act.
28-53-5.
Establishment of reserves – Disbursement of excess funds. – When the
balance
of the fund, following the deduction of operating expenses, reserves, claims,
administration
costs and all other reasonable and necessary costs and expenses, exceeds the
sum
of
five million dollars ($5,000,000) the director is authorized to determine by
experience or other
appropriate
accounting and actuarial method what percentage of the payment collected by the
fund
pursuant to the provisions of Rhode Island general laws subsection 28-53-2(a)
is needed to
maintain
the fund at the five million dollar ($5,000,000) level for the following twelve
(12)
months
and shall certify the same and shall make such calculations on or before May 10
of each
year
thereafter.
28-53-6.
Custodian – Orders for payment. – The general treasurer of the State
of
Rhode
Island and Providence Plantations shall be the custodian of such fund and the
state
controller
is hereby authorized and empowered to draw orders upon the general treasurer
upon
receipt
of duly authenticated vouchers.
28-53-7.
Payments to employees of uninsured employers. – (a) Where it is
determined
that
the employee was injured in the course of employment while working for an
employer who
fails
to maintain a policy of workers' compensation insurance as required by Rhode
Island general
laws
section 28-36-1, et seq., the uninsured employers fund shall pay the benefits
to which the
injured
employee would be entitled pursuant to chapters 29 to 38 of this title subject
to the
limitations
set forth herein.
(b)
The workers' compensation court shall hear all petitions for payment from the
fund
pursuant
to Rhode Island general laws section 28-30-1, et seq., provided, however, that
the
uninsured
employers fund and the employer shall be named as parties to any petition
seeking
payment
of benefits from the fund.
(c)
Where an employee is deemed to be entitled to benefits from the uninsured
employers
fund,
the fund shall pay benefits for disability and medical expenses as provided
pursuant to
chapters
29 to 38 of this title except that the employee shall not be entitled to
receive benefits for
loss
of function and disfigurement pursuant to the provisions of Rhode Island
general laws
section
28-33-19.
(d)
The fund shall pay cost, counsel and witness fees as provided in Rhode Island
general
laws
section 28-35-32 to any employee who successfully prosecutes any petitions for
compensation,
petitions for medical expenses, petitions to amend a pretrial order or
memorandum
of
agreement and all other employee petitions and to employees who successfully
defend, in
whole
or in part, proceedings seeking to reduce or terminate any and all workers'
compensation
benefits;
provided, however, that the attorney's fees awarded to counsel who represent
the
employee
in petitions for lump sum commutation filed pursuant to Rhode Island general
laws
section
28-33-25 or in the settlement of disputed cases pursuant to Rhode Island
general laws
section
28-33-25.1 shall be limited to the maximum amount paid to counsel who serve as
court
appointed
attorneys in workers' compensation proceedings as established by rule or order
of the
Rhode
Island supreme court.
(e)
In the event that the uninsured employer makes payment of any monies to the
employee
to compensate the employee for lost wages or medical expenses, the fund shall
be
entitled
to a credit for all such monies received by or on behalf of the employee
against any future
benefits
payable directly to the employee.
28-53-8.
Limitations on payments to injured employees. – Where the director
determines
by experience or other appropriate accounting and actuarial methods that the
reserves
in
the fund are insufficient to pay all claims presented or pending, the director
shall petition the
workers'
compensation court for an order to make appropriate, proportionate reductions
in the
payments
being made to injured employees by the fund or to suspend all payments to
injured
employees
until such time as the reserves maintained by the fund are sufficient to resume
the
payment
of benefits. The matter shall be heard by the chief judge. If the court
determines that
the
monies held by the fund are insufficient to fully pay all claims as they fall
due, the court shall
issue
an order directing that a proportionate reduction be made in the payments made
to those
employees
receiving benefits from the fund. In considering the fund's request for relief,
the court
shall
give due weight to the policy of the workers' compensation act that benefits
are to be paid
weekly
and that the unwarranted reduction or interruption in the employee's weekly
compensation
benefit will impose financial hardship upon the injured worker.
The
chief judge shall hear the director's petition within twenty-one (21) days of
the date
the
matter is filed with the court. The petition shall set forth the names and
addresses of each
employee
who may be affected by the reduction in benefits and the court shall provide
notice to
each
employee. The attorney general shall appear on behalf of the employees
receiving benefits
from
the fund and shall take such action as he or she feels is necessary to protect
the rights of the
injured
employees.
In
the event that the court determines that a reduction or suspension of payments
is
necessary
to maintain the fiscal integrity of the fund, the court shall schedule a
mandatory review
date
to determine whether the financial status of the fund warrants a continuation
of the order
reducing
such payments and shall reinstitute payments only upon finding that the
reserves
maintained
by the fund are sufficient to pay all future claims as they fall due.
28-53-9.
Penalties, taxes and assessments against non-complying employers. – (a)
Where
it is determined that an employer has failed to maintain a policy of workers'
compensation
insurance
as required by Rhode Island general laws section 28-36-1 et seq. and that while
the
employer
was uninsured in violation of the statute, an employee suffered a compensable
injury,
the
uninsured employers fund shall commence the payment of weekly benefits and
medical
expenses
necessary to cure, relieve or rehabilitate the employee from the effects of the
work
related
injury to the employee as set forth herein, subject to fund availability. The
fund shall
acquire
a lien against the goods and chattels of the uninsured employer to the extent
of any
payments
made by it to the injured employee. The lien(s) shall arise and attach as of
the date on
which
the fund makes payment to the injured employee without further action by the
fund or the
court.
The lien shall have priority over all subsequently perfected liens and security
interests.
(b)
Prior to the lien being filed with the office of the secretary of state, the
employer shall
be
notified by certified mail, return receipt requested that a lien will be filed
against all goods
situated
in the state if the outstanding tax is not paid within seven (7) business days
of receipt of
the
notice.
(c)
The liens shall become perfected at the time when a notice of lien is filed
pursuant to
the
filing provisions of Rhode Island general laws section 6A-9-501. The notice of
lien shall
include
the following:
(1)
The name of the debtor, as governed by Rhode Island general laws section
6A-9-503;
(2)
The name of the director of the department of labor and training as the party
claiming
the
lien; and
(3)
A description of the property so encumbered as governed by the Rhode Island
general
laws
section 6A-9-504.
(d)
The director shall be entitled to effectively file the lien and to amend the
lien quarterly
as
additional payments are made or terminate it as necessary.
(e)
No filing fee shall be charged for the filing of a lien authorized by this
section.
(f)
Where the employer is a corporation, the president, vice president, secretary
and
treasurer
of the corporation shall be severally personally liable, jointly with a corporation
for any
payments
made to the injured employee by the fund, and the fund shall acquire a lien
against the
goods
and chattels of said president, vice president, secretary and treasurer to the
extent of any
payments
so made.
(g)
Where the employer is a limited liability company, the managers and managing
members
shall be severally personally liable, jointly with the limited liability
company for any
payments
made to the injured employee by the fund and the fund shall acquire a lien
against the
goods
and chattels of said manager and managing member to the extent of any payments
so
made.
(h)
The liens and excise taxes levied against the non-complying party pursuant to
this
section
shall be in addition to any and all other fines, penalties and assessments, to
which the
party
would otherwise be liable in particular the penalties mandated by Rhode Island
general laws
section
28-36-15.
SECTION
2. Section 28-29-26 of the General Laws in Chapter 28-29 entitled
"Workers'
Compensation
- General Provisions" is hereby amended to read as follows:
28-29-26.
Supervision of enforcement. -- (a) Department of labor and training. -
The
director,
as provided for in chapters 29 -- 38 of this title, and chapter 53 of this
title and chapter
16.1 of
title 42, shall have supervision over the enforcement of the provisions of
those chapters,
and the
director shall have the power and authority to adopt and enforce all reasonable
rules,
regulations,
and orders necessary and suitable to the administration of the department's
responsibilities
as described in those chapters.
(b) (1) Workers' compensation court. - The workers' compensation court, as
provided for
in
chapters 29 -- 38 of this title, shall have supervision over the enforcement of
the provisions of
the
chapters, and shall have the power and authority to adopt and enforce all
reasonable rules,
regulations,
and orders necessary and suitable to the administration of its responsibilities
described
in the chapters. The court shall remain judicially and administratively
independent. The
Workers'
compensation court shall have original jurisdiction over all civil actions
filed pursuant
to
sections 28-36-15 and 28-37-28 and pursuant to the provisions of chapter 53
of this title.
(2) Any petition arising from any dispute regardless of date of injury, unless
specifically
excepted,
shall be filed with the administrator of the workers' compensation court in
accordance
with
chapter 35 of this title and any rules and regulations promulgated by the
workers'
compensation
court.
(3) The enactment of this subsection shall not affect the rights of the parties
established
by any
existing memorandum of agreement, suspension agreement and receipt, preliminary
determination
of the department of workers' compensation, order or decree, or any existing
right
to the
payment of compensation acquired pursuant to section 28-29-6 or 28-35-9.
SECTION
3. Section 28-30-13 of the General Laws in Chapter 28-30 entitled
"Workers'
Compensation
Court" is hereby amended to read as follows:
28-30-13.
Controversies submitted to court. -- (a) Any controversy over which the
workers'
compensation court has jurisdiction in accordance with chapters 29 – 38 and
chapter 53
of this
title, including compensation, reasonableness of medical and hospital bills,
degree of
functional
impairment and/or disability, a dispute between an insurance carrier and an
employer
under a
workers' compensation insurance contract, except disputes under the
jurisdiction of the
workers'
compensation appeals board established pursuant to section 27-9-29, failure of
an
employer
to secure the payment of compensation under chapters 29 – 38 and chapter 53
of this
title
and any controversy in which the state or any of its political subdivisions is
a party, shall be
submitted
to the court in the manner provided in chapters 33 and 35 of this title.
(b) Disputes between an insurance carrier and an employer under a workers'
compensation
insurance contract shall not be subject to a pretrial conference in accordance
with
section
28-35-20, but shall be assigned consistent with the rules and regulations of
the workers'
compensation
court.
SECTION
4. Section 28-35-32 of the General Laws in Chapter 28-35 entitled
"Workers'
Compensation
- Procedure" is hereby amended to read as follows:
28-35-32.
Costs -- Counsel and witness fees. -- No fee shall be charged by the
clerk of
any
court or by the administrator of the workers' compensation court for the performance
of any
service
required by this chapter, except for certified copies of decrees and copies of
transcripts.
Notwithstanding
any provisions of law to the contrary, the workers' compensation court shall be
allowed
a filing fee of twenty dollars ($20.00) for the filing of a petition under
chapters 29 -- 38
of this
title, and a filing fee of twenty-five dollars ($25.00) for the filing of an
appeal under
section
28-35-28, which sums shall be deposited into "the court improvement
project fund"
established
pursuant to chapter 29.1 of title 9. These sums shall be used exclusively for
the
automated
civil information system (ACIS), pursuant to chapter 108 of title 42 to provide
additional
funding to the uninsured employers fund as established by chapter 28-53. In
proceedings
under this chapter, and in proceeding under chapter 37 of this title, costs
shall be
awarded,
including counsel fees and fees for medical and other expert witnesses including
interpreters,
to employees who successfully prosecute petitions for compensation, petitions
for
medical
expenses, petitions to amend a preliminary order or memorandum of agreement,
and all
other
employee petitions, except petitions for lump sum commutation, and to employees
who
successfully
defend, in whole or in part, proceedings seeking to reduce or terminate any and
all
workers'
compensation benefits, and to medical services providers who successfully
prosecute
petitions
for the payment of medical expenses except that medical services providers
shall not be
paid
expert witness fees for testimony in support of petitions filed in their
behalf. These costs
shall be
assessed against the employer by a single judge, by an appellate panel and by
the
supreme
court on appeal consistent with the services rendered before each tribunal and
shall be
made a
part of the decree. No employee's attorney shall accept any other or additional
fees for his
services
for the particular petition for which the fees are awarded in each tribunal.
SECTION
5. Sections 28-37-1 and 28-37-28 of the General Laws in Chapter 28-37
entitled
"Workers' Compensation Administrative Fund" are hereby amended to
read as follows:
28-37-1.
Establishment -- Sources -- Administration. -- (a) There is established
in the
department
of labor and training a special account to be known as the workers'
compensation
administrative
account, an account within the general fund. This account, referred to as the
"workers'
compensation administrative account", shall consist of payments made to it
as provided
in this
chapter, or penalties paid pursuant to this chapter, and of all other moneys
paid into and
received
by the fund, of property and securities acquired by and through the use of
moneys
belonging
to the fund, and of interest earned upon the moneys belonging to the fund. All
moneys
in the
fund shall be mingled and undivided. The fund shall be administered by the
director of
labor
and training or his or her designee.
(b) The purposes for which this fund shall be used are as follows:
(1) To provide funds to the Dr. John E. Donley rehabilitation center for
suitable
structures,
personnel, and equipment necessary for the rendering of rehabilitative
services,
including,
but not limited to, physical therapy, psychotherapy, and occupational therapy
to injured
workers
coming within the purview of chapters 29 -- 38 of this title;
(2) To provide funds for all expenditures of the education unit created
pursuant to
section
42-16-4 and all expenditures of the workers' compensation fraud prevention unit
created
pursuant
to section 42-16.1-12;
(3) To provide funds for all expenditures of the workers' compensation court.
The
administrator
of the fund shall on July 1st of each fiscal year transfer those funds that are
reasonable
and necessary to fund all expenditures of the workers' compensation court for
the
fiscal
year from the administrative account, to a restricted receipt account to be
established in the
judicial
department. The administrator of the workers' compensation court is authorized
to draw
funds
from the restricted receipt account for all court expenditures;
(4) To provide funds to the department of labor and training for all
expenditures incurred
in
administering its responsibilities under chapters 29 -- 38 of this title;
(5) To provide funds to the department of labor and training for all
expenditures incurred
in
investigating and processing or otherwise administering its responsibilities
regarding claims for
benefits
or payments under sections 28-35-20, 28-37-4, and 28-37-8;
(6) To provide funds to the department of labor and training for the
maintenance and
operation
of a system of data collection as provided for in section 28-37-31. The
director shall be
authorized
to purchase and/or lease equipment necessary to effectuate the purposes of
section 28-
37-31;
(7) To provide funds for loans to the state compensation insurance fund as
provided in
sections
27-7.2-19 and 27-7.2-20.1; and
(8) To provide funds for the payment or reimbursement of actual incremental
costs of
COLA
increases mandated by section 28-33-17 respecting injuries occurring prior to
September
1, 1990,
in such amounts as the director, in his or her sole discretion, deems
appropriate. These
amounts
may be paid out of the fund by order of the director and shall be made by order
drawn on
the
general treasury to be charged against the fund.
(9) To provide funds to the workers' compensation advisory council created
pursuant to
the
provisions of section 28-29-30 for expenditures to carry out its
responsibilities.
(10) To provide funds to the department of business regulation relating to the
evaluation
of rate
filings, reviews, and pricing procedures pursuant to the provisions of section
27-9-52.
28-37-28.
Prosecution of actions. -- All actions for any violations of this
chapter or of
any of
the rules or regulations promulgated by the director, or for the collection of
payments in
accordance
with section 28-37-13 or section 28-53-9 or other penalties under this
chapter, shall
be
prosecuted by any qualified member of the Rhode Island bar whom the director
may designate,
in the
name of the director, and the director shall be exempt from giving surety for
costs in any
proceedings.
The workers' compensation court shall have jurisdiction over all civil actions
filed
pursuant
to this section.
SECTION
6. This act shall take effect on July 1, 2007 and shall apply to injuries that
occur
on or after January 1, 2009.
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LC03333
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