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PRINTER'S NO. 1022
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
876
Session of
2015
INTRODUCED BY GORDNER, BAKER, EICHELBERGER, RAFFERTY, FOLMER,
VULAKOVICH AND MENSCH, JUNE 8, 2015
REFERRED TO LABOR AND INDUSTRY, JUNE 8, 2015
AN ACT
Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
reenacted and amended, "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
the Uninsured Employers Guaranty Fund, further providing for
definitions, for fund, for claims, for claim petition, for
administration 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,
reenacted and amended June 21, 1939 (P.L.520, No.281) and added
December 5, 1974 (P.L.782, No.263), 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 1601, 1602, 1603, 1604 and 1605 of the
act, added November 9, 2006 (P.L.1362, No.147), are amended to
read:
Section 1601. Definitions.
The following words and phrases when used in this article
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
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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.
(4) Administrative penalties provided for under section
1611.
(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[,
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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
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
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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 set forth 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
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 set forth 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.
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(b) Amount of wages.--In a proceeding under this article,
the fund shall not be liable for wage loss benefits 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.
(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).
Section 1605. Department.
(a) Insurance inquiry.--Within ten days of notice of a
claim, the fund shall demand from the employer proof of
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
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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 any 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 any 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
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 2.1. Section 1607 of the act is amended by adding a
subsection to read:
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Section 1607. Assessments and transfers.
* * *
(c) For the purposes of further maintaining the fund, the
sum of $4,000,000 is transferred to the fund from the
Administration Fund established under section 446.
Section 3. The act is amended by adding sections to read:
Section 1609. (Reserved).
Section 1610. Uninsured employer obligations.
Nothing in this article shall alter the uninsured employer's
obligations under this act.
Section 1611. 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.
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(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:
(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
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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
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 any 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 set forth 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).
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Venue for an action under this subparagraph lies in
either:
(A) the Twelfth Judicial District; or
(B) the judicial district where the violation
occurred.
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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