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HOUSE AMENDED
PRIOR PRINTER'S NOS. 795, 1022, 1289
PRINTER'S NO. 2051
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
676
Session of
2017
INTRODUCED BY GORDNER, MENSCH, FOLMER, RAFFERTY AND REGAN,
MAY 4, 2017
AS REPORTED FROM COMMITTEE ON LABOR AND INDUSTRY, HOUSE OF
REPRESENTATIVES, AS AMENDED, OCTOBER 1, 2018
AN ACT
Amending the act of June 2, 1915 (P.L.736, No.338), entitled "An
act defining the liability of an employer to pay damages for
injuries received by an employe in the course of employment;
establishing an elective schedule of compensation; providing
procedure for the determination of liability and compensation
thereunder; and prescribing penalties," in liability and
compensation, further providing for injuries outside this
Commonwealth; in procedure, further providing for the
Workmen's Compensation Administration Fund; and, in the
Uninsured Employers Guaranty Fund, further providing for
definitions, for fund, for claims, for claim petition, for
department and for assessments and transfers and providing
for uninsured employer obligations and for administrative
penalties and stop-work orders.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 305.2(c) of the act of June 2, 1915
(P.L.736, No.338), known as the Workers' Compensation Act, is
amended and the section is amended by adding a subsection to
read:
Section 305.2. * * *
(c) If an employe is entitled to the benefits of this act by
reason of an injury sustained in this State in employment by an
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employer who is domiciled in another state and who has not
secured the payment of compensation as required by this act, the
[employer or his carrier may file with the director a
certificate, issued by] department may verify with the
commission or agency of such other state having jurisdiction
over [workmen's] workers' compensation claims[, certifying] that
such employer has secured the payment of compensation under the
[workmen's] workers' compensation law of such other state and
that with respect to said injury such employe is entitled to the
benefits provided under such law.
In such event:
[(1) The filing of such certificate shall constitute an
appointment by such employer or his carrier of the Secretary of
Labor and Industry as his agent for acceptance of the service of
process in any proceeding brought by such employe or his
dependents to enforce his or their rights under this act on
account of such injury;
(2) The secretary shall send to such employer or carrier, by
registered or certified mail to the address shown on such
certificate, a true copy of any notice of claim or other process
served on the secretary by the employe or his dependents in any
proceeding brought to enforce his or their rights under this
act;]
(3) The following shall apply:
(i) If such employer is a qualified self-insurer under the
[workmen's] workers' compensation law of such other state, such
employer shall[, upon submission of evidence, satisfactory to
the director, of his ability to meet his liability to such
employe under this act,] be deemed, for the purposes of such
employe, to be a qualified self-insurer under this act[;].
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(ii) If such employer's liability under the workmen's
compensation law of such other state is insured, such employer's
carrier, as to such employe or his dependents only, shall be
deemed to be an insurer authorized to write insurance under and
be subject to this act: Provided, however, That unless its
contract with said employer requires it to pay an amount
equivalent to the compensation benefits provided by this act,
its liability for income benefits or medical and related
benefits shall not exceed the amounts of such benefits for which
such insurer would have been liable under the workmen's
compensation law of such other state[;].
(4) If the total amount for which such employer's insurance
is liable under clause (3) above is less than the total of the
compensation benefits to which such employe is entitled under
this act, the [secretary] department may, if [he deems it]
necessary, require the employer to file security[, satisfactory
to the secretary, to secure] to guarantee the payment of
benefits due such employe or his dependents under this act[;
and].
(5) Upon compliance with the preceding requirements of this
subsection (c), such employer, as to such employe only, shall be
deemed to have secured the payment of compensation under this
act[.], and shall not be an uninsured employer for purposes of
Article XVI.
(c.1) If an employe alleges an injury that is incurred with
an employer which is domiciled in another state and which has
not secured the payment of compensation as required by this act,
such employe shall provide to the Uninsured Employers Guaranty
Fund and to any worker's compensation judge hearing a petition
against the fund, a written notice, denial, citation of law or
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court or administrative ruling from such other state or an
insurer licensed to write insurance in that state as to that
employer, indicating that the employe is not entitled to
workers' compensation benefits in that state. No compensation
shall be payable from the Uninsured Employers Guaranty Fund
until the employe submits the notice, denial, citation or
ruling, however, the employe may file a notice or petition
against the fund under Article XVI of this act prior to the
submission.
* * *
Section 2. Sections 446(a) and (b), 1601, 1602, 1603, 1604,
1605 and 1607(a) of the act are amended to read:
Section 446. (a) There is hereby created a special fund in
the State Treasury, separate and apart from all other public
moneys or funds of this Commonwealth, to be known as the
Workmen's Compensation Administration Fund.
(a.1) The purpose of [this fund] the Workmen's Compensation
Administration Fund shall be to finance:
(1) the Prefund Account established in section 909(a); and
(2) the operating and administrative expenses of the
Department of Labor and Industry, including the Workmen's
Compensation Appeal Board and staff, but not the State Workmen's
Insurance Fund, in the direct administration of The Pennsylvania
Workmen's Compensation Act and The Pennsylvania Occupational
Disease Act [including].
(a.2) The operating and administrative expenses in
subsection (a.1)(2) shall include only the following:
(1) wages and salaries of employes for services performed in
the administration of these acts;
(2) reasonable travel expenses for employes while engaged in
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official business; and
(3) moneys expended for office rental, equipment rental,
supplies, equipment, repairs, services, postage, books, and
periodicals.
(b) The [fund] Workmen's Compensation Administration Fund
shall be maintained by no more than one (1) annual assessment
payable in any calendar year on insurers and self-insurers under
this act, including the State Workers' Insurance Fund[. After
the initial term, budgeted expenses shall be approved by the
General Assembly on a fiscal year basis. Thereafter, the] as
follows:
(1) The department shall [make assessments and] submit for
approval to the General Assembly on a fiscal year basis a
proposed budget sufficient to cover the Prefund Account and
other operating and administrative expenses under subsection
(a.1). The total amount approved by the General Assembly shall
be the approved budget. The department shall collect moneys
based on the ratio that such insurer's or self-insurer's
payments of compensation bear to the total compensation paid in
the preceding calendar year in which the annual assessment is
made. [The total amount assessed shall be the approved budget.]
(2) If on January 31, there exists in the [administration
fund] Workmen's Compensation Administration Fund any money in
excess of one hundred [thirty-three] twenty per centum of the
[current] approved budget, the following fiscal year's
assessment shall be reduced by an amount equal to that excess
amount.
* * *
Section 1601. Definitions.
The following words and phrases when used in this article
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shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Compensation." Benefits paid pursuant to sections 306 and
307.
"Employer." Any employer as defined in section 103. The term
does not include a person that qualifies as a self-insured
employer under section 305.
"Fund." The Uninsured Employers Guaranty Fund established in
section 1602. The fund shall not be considered an insurer and
shall not be subject to penalties, unreasonable contest fees,
interest or any reporting and liability requirements under
section 440.
"Policyholder." A holder of a workers' compensation policy
issued by the State Workers' Insurance Fund, or an insurer that
is a domestic, foreign or alien mutual association or stock
company writing workers' compensation insurance on risks which
would be covered by this act.
"Secretary." The Secretary of Labor and Industry of the
Commonwealth.
Section 1602. Fund.
(a) Establishment.--
(1) There is established a special fund to be known as
the Uninsured Employers Guaranty Fund.
(2) The fund shall be maintained as a separate fund in
the State Treasury subject to the procedures and provisions
set forth in this article.
(b) Source.--The sources of the fund are:
(1) Assessments provided for under section 1607.
(2) Reimbursements or restitution.
(3) Interest on money in the fund.
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(4) Administrative penalties provided for under section
1610.
(c) Use.--The administrator shall establish and maintain the
fund for the exclusive purpose of paying to any claimant or his
dependents workers' compensation benefits due and payable under
this act and the act of June 21, 1939 (P.L.566, No.284), known
as The Pennsylvania Occupational Disease Act, and any costs
specifically associated therewith where the employer liable for
the payments failed to insure or self-insure its workers'
compensation liability under section 305 at the time the
injuries took place.
(d) Administration.--The secretary shall be the
administrator of the fund and shall have the power to collect
money for and disburse money from the fund.
(e) Status.--The fund shall have all of the same rights[,
duties, responsibilities and obligations] as an insurer.
Section 1603. Claims.
(a) Scope.--This section shall apply to claims for an injury
or a death which occurs on or after the effective date of this
article.
(b) Time.--An injured worker shall notify the fund within 45
days after the worker [knew] has been advised by the employer or
another source that the employer was uninsured. The department
shall have adequate time to monitor the claim and shall
determine the obligations of the employer. No employee shall
receive compensation [shall be paid] from the fund [until notice
is given] unless:
(1) the employee notifies the fund within the time
period specified in this subsection; and
(2) the department determines that the employer failed
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to voluntarily accept and pay the claim or subsequently
defaulted on payments of compensation. [No compensation shall
be due until notice is given.]
(c) Process.--After notice, the fund shall process the claim
in accordance with the provisions of this act.
(d) Petitions.--
(1) No claim petition may be filed against the fund
until at least 21 days after notice of the claim is made to
the fund.
(2) A claim petition shall be filed within 180 days
after notice of the claim is made to the fund. If the time
requirement under this paragraph is not met, a claim petition
shall not be allowed.
(e) List of providers.--
(1) The fund may establish lists of at least six
designated health care providers that are accessible in each
county in specialties relevant to the treatment of work
injuries in this Commonwealth, as referenced in section
306(f.1)(1).
(2) If the fund establishes a list under paragraph (1),
the fund shall be responsible only to reimburse expenses of
medical treatments, services and accommodations rendered by
the physicians or other health care providers that are
designated on the list for the period provided in section
306(f.1)(1) from the date of the employee's notice to the
fund under subsection (b).
(3) On the notice under subsection (b), the fund shall:
(i) provide access to the list of designated
providers to the employee; and
(ii) notify the employee of the requirements of this
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subsection.
(4) If the employee receives medical treatments,
services or accommodations from a health care provider that
is not designated on the list, the fund shall be relieved of
liability for the payment of medical treatments, services or
accommodations rendered during the period provided in section
306(f.1)(1) from the date of the employee's notice to the
fund under subsection (b).
Section 1604. Claim petition.
(a) Authorization.--If a claim for compensation is filed
under this article and the claim is not voluntarily accepted as
compensable, the employee may file a claim petition naming both
the employer and the fund as defendants. Failure of the
uninsured employer to answer a claim petition shall not serve as
an admission or otherwise bind the fund under section 416.
(b) Amount of wages.--In a proceeding under this article,
the fund shall not be liable for wage loss payments unless the
amount of wages the employee earned at the time of injury is
established by one of the following:
(1) A check, check stub or payroll record.
(2) A tax return. This paragraph includes IRS form W-2
and form 1099, and successors to those forms.
(3) Unemployment compensation records, including form
UC-2A.
(4) Bank statements or records showing regular and
recurring deposits.
(5) Written documentation created contemporaneously with
the payment of wages.
(6) Testimony of the uninsured employer presented under
oath at a hearing or deposition.
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(7) Testimony of the claimant, if found credible by the
judge . , WHICH IS PROVIDED IN ADDITION TO ONE OR MORE OF THE
ITEMS LISTED IN PARAGRAPHS (1), (2), (3), (4), (5) AND (6).
(c) Limitation on wage loss payments.--If a judge accepts
testimony and finds it to be credible under subsection (b)(7) as
the sole basis for determining wage loss payments, without
supporting evidence established in subsection (b)(1), (2), (3),
(4), (5) or (6), the wage loss payment rate shall be sixty-six
and two-thirds per centum of the average weekly wage for the
claimant's occupation. The judge may reduce the average weekly
wage loss payment upon the submission of evidence indicating a
lesser wage amount or based on the claimant's length of
employment with the employer. For the purposes of this
subsection, the term "average weekly wage" is the average weekly
wage for the claimant's occupation by metropolitan statistical
area, as determined by the United States Department of Labor for
the calendar year prior to the year in which the claimant's
injury occurred, and shall be based on the metropolitan
statistical area in which the claimant's injury occurred.
(C) REPORTS.--IF THE DEPARTMENT HAS REASONABLE CAUSE TO
SUSPECT THAT A CLAIMANT OR UNINSURED EMPLOYER HAS NOT REPORTED,
HAS UNDERREPORTED OR IS DELINQUENT IN THE PAYMENT OF ANY FEDERAL
OR STATE TAX, THE DEPARTMENT SHALL MAKE A REPORT WITHIN 30 DAYS
TO THE DEPARTMENT OF REVENUE, THE UNITED STATES INTERNAL REVENUE
SERVICE OR ANY OTHER APPLICABLE FEDERAL OR STATE AGENCY. THE
DEPARTMENT SHALL COOPERATE WITH AN INVESTIGATION INITIATED AS
THE RESULT OF A REPORT MADE UNDER THIS SUBSECTION.
Section 1605. Department.
(a) Insurance inquiry.--Within ten days of notice of a
claim, the fund shall demand from the employer proof of
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applicable insurance coverage. Within 14 days from the date of
the fund's request, the employer must provide proof of
insurance. If the employer does not provide proof, there shall
be rebuttable presumption of uninsurance.
(b) Reimbursement.--The department shall, on behalf of the
fund, exhaust all remedies at law against the uninsured employer
in order to collect the amount of a voluntary payment or award,
including voluntary payment or award itself and reimbursement of
costs, interest, penalties, fees under section 440 and costs of
the fund's attorney, which have been paid by the fund. The fund
shall also be reimbursed for costs or attorney fees which are
incurred in seeking reimbursement under this subsection. The
department is authorized to investigate violations of section
305 for prosecution of the uninsured employer pursuant to
section 305(b) and shall pursue such prosecutions through
coordination with the appropriate prosecuting authority. [Any
restitution obtained shall be paid to the fund.] The fund shall
be entitled to restitution of all payments made under this
article as the result of an injury to an employee of an
uninsured employer. Restitution to the fund under section 305
shall not be limited to the amount specified in the award of
compensation and shall include the amount of a voluntary payment
or award and reimbursement of the fund's costs and the fees of
the fund's attorney.
(c) Bankruptcy.--The department has the right to appear and
represent the fund as a creditor in a bankruptcy proceeding
involving the uninsured employer.
(d) Liens.--If payments of any nature have been made by the
fund on behalf of an uninsured employer, the fund shall file a
certified proof of payment with the prothonotary of a court of
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common pleas, and the prothonotary shall enter the entire
balance as a judgment against the employer. The judgment shall
be a statutory lien against property of the employer in the
manner set forth in section 308.1 of the act of December 5, 1936
(2nd Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
Compensation Law, and execution may issue on it. The fund has
the right to update the amount of the lien as payments are made.
Section 1607. Assessments and transfers.
(a) [For the purpose of establishing and maintaining the
fund, the sum of $1,000,000 is hereby transferred from the
Administration Fund established under section 446 to the fund
for operation of the fund for the period commencing on the
effective date of this section through June 30, 2007.] (1) The
department shall calculate the amount necessary to maintain the
fund and shall assess insurers and self-insured employers as is
necessary to provide an amount sufficient to pay outstanding and
anticipated claims in the following year in a timely manner and
to meet the costs of the department to administer the fund. The
fund shall be maintained in the same manner as the Workmen's
Compensation Administration Fund under section 446 and the
regulations thereunder.
(2) In no event shall any annual assessment exceed
[0.1%] 0.25% of the total compensation paid by all insurers
or self-insured employers during the previous calendar year.
(3) Each fiscal year, the department shall determine the
expenses of the fund for the prior fiscal year. If the total
amount assessed for the prior fiscal year exceeds 130% of the
expenses for that prior fiscal year, the current fiscal year
assessment shall be reduced by an amount equal to that excess
amount.
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* * *
Section 3. The act is amended by adding sections to read:
Section 1609. Uninsured employer obligations.
Nothing in this article shall alter the uninsured employer's
obligations under this act.
Section 1610. Administrative penalties and stop-work orders.
(a) Certification.--
(1) If the department receives information indicating
that an employer has failed to insure the employer's
obligations as required by this act, the department may
require the employer to certify, on a form prescribed by the
department, that the employer meets one of the following:
(i) Possesses the requisite insurance. This
subparagraph shall require the identification of the
insurer, policy period and policy number.
(ii) No longer operates a business. This
subparagraph shall require a statement of the dates of
operation and cessation of operation.
(iii) Does not employ an individual entitled to
compensation under this act.
(iv) Is otherwise exempt from the requirements of
obtaining insurance under this act. This paragraph shall
require the identification of the applicable exemption.
(2) The employer shall return the form to the department
within 15 days of service of the form by the department. The
following shall apply:
(i) If an employer does not return the form within
15 days of service by the department, the department may
assess an administrative penalty of $200 per day until
the earlier of:
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(A) the date the employer complies; or
(B) 30 days from service under this paragraph.
(ii) If an employer does not comply with this
paragraph within 45 days of service under this paragraph,
the department may proceed with further enforcement under
subsection (d).
(b) Good cause.--If the department's investigation under
section 1605 reveals good cause to believe that the employer is
required and has failed to insure the employer's liabilities as
required by this act, the department may proceed with further
enforcement under subsection (d).
(c) Enforcement.--For the purposes of enforcing section 305
and this article, each department employee or agent charged with
enforcement may enter the premises or worksite of an employer
that is subject to subsection (a)(2)(ii) or (b).
(d) Stop-work order.--The department may issue an order
requiring the cessation of operations of an employer that has
failed to insure its liabilities as required by this act. The
following apply:
(1) The order may require compliance with conditions
necessary to ensure that the employer insures its liabilities
as required by this act.
(2) The order shall take effect when served upon the
employer by first class mail or posting at the employer's
worksite.
(3) The order shall remain in effect until released by
the department or a court of competent jurisdiction.
(4) The order shall be effective against a successor
entity that:
(i) has one or more of the same principals or
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officers as the employer against whom the order was
issued; and
(ii) is engaged in the same or equivalent trade or
activity.
(e) Nonexclusivity.--An order under subsection (d) is in
addition to a penalty which may be imposed pursuant to this act.
(f) Appeal.--
(1) An order under subsection (d) is subject to 2
Pa.C.S. Ch. 7 Subch. A (relating to judicial review of
Commonwealth agency action).
(2) Except as provided in paragraph (3), an appeal of a
penalty under subsection (a)(2)(i) or an order under
subsection (d) shall not act as a supersedeas.
(3) Upon application and for cause shown, the department
may issue a supersedeas.
(g) Noncompliance.--
(1) Upon failure to comply with an order under
subsection (d) and (f), the department may institute an
action to enforce the order.
(2) An action under this subsection may be initiated as
follows:
(i) In Commonwealth Court under 42 Pa.C.S. §
761(a) (2) (relating to original jurisdiction).
(ii) In a court of common pleas under 42 Pa.C.S. §
931(b) (relating to original jurisdiction and venue).
Venue for an action under this subparagraph lies in
either:
(A) the Twelfth Judicial District; or
(B) the judicial district where the violation
occurred.
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(H) SUSPENSION AND REINSTATEMENT OF LICENSES OR
CERTIFICATIONS.-- TO ENFORCE A STOP-WORK ORDER ISSUED UNDER
SUBSECTION (D), THE DEPARTMENT, AT ITS DISCRETION, MAY SUSPEND
ANY LICENSE OR CERTIFICATION ISSUED BY THE COMMONWEALTH FOR AN
EMPLOYER SUBJECT TO A STOP-WORK ORDER. THE DEPARTMENT MAY
PROVIDE ANY COMMONWEALTH AGENCY WITH A COPY OF A VALID STOP-WORK
ORDER AND REQUEST THAT THE AGENCY SUSPEND ANY LICENSE OR
CERTIFICATION WHICH THE AGENCY HAS ISSUED TO THE EMPLOYER. IF
THE STOP-WORK ORDER IS RELEASED BY THE DEPARTMENT OR A COURT OF
COMPETENT JURISDICTION, THE DEPARTMENT SHALL IMMEDIATELY REQUEST
THE REINSTATEMENT OF ANY LICENSE OR CERTIFICATION SUSPENDED
UNDER THIS SUBSECTION. A COMMONWEALTH AGENCY SHALL COMPLY WITH A
REQUEST FOR SUSPENSION OR REINSTATEMENT OF A LICENSE OR
CERTIFICATION UNDER THIS SUBSECTION WITHIN ONE BUSINESS DAY.
Section 4. Applicability is as follows:
(1) The amendment or addition of section 1603(d) and (e)
of the act shall apply to every claim in which notice under
section 1603 of the act is provided to the fund on or after
the effective date of this paragraph.
(2) The following provisions shall apply retroactively
to claims existing as of the effective date of this paragraph
for which compensation has not been paid or awarded:
(i) The amendment of section 305.2(c) of the act.
(ii) The amendment of section 1601 of the act.
(iii) The amendment of section 1603(b) of the act.
(iv) The amendment of section 1604 of the act.
Section 5. This act shall take effect immediately.
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