AN ACT

 

1Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
2reenacted and amended, "An act defining the liability of an
3employer to pay damages for injuries received by an employe
4in the course of employment; establishing an elective
5schedule of compensation; providing procedure for the
6determination of liability and compensation thereunder; and
7prescribing penalties," in liability and compensation,
8further providing for injuries outside this Commonwealth; in
9the Uninsured Employers Guaranty Fund, further providing for
10definitions, for fund, for claims, for claim petition, for
11administration and for assessments and transfers; and
12providing for insolvency, for uninsured employer obligations
13and for administrative penalties and stop-work orders.

14The General Assembly of the Commonwealth of Pennsylvania
15hereby enacts as follows:

16Section 1. Section 305.2(c) of the act of June 2, 1915
17(P.L.736, No.338), known as the Workers' Compensation Act,
18reenacted and amended June 21, 1939 (P.L.520, No.281) and added
19December 5, 1974 (P.L.782, No.263), is amended and the section
20is amended by adding a subsection to read:

21Section 305.2. * * *

22(c) If an employe is entitled to the benefits of this act by
23reason of an injury sustained in this State in employment by an

1employer who is domiciled in another state and who has not
2secured the payment of compensation as required by this act, the
3[employer or his carrier may file with the director a
4certificate, issued by] department may verify with the
5commission or agency of such other state having jurisdiction
6over [workmen's] workers' compensation claims[, certifying] that
7such employer has secured the payment of compensation under the
8[workmen's] workers' compensation law of such other state and
9that with respect to said injury such employe is entitled to the
10benefits provided under such law.

11[In such event:

12(1) The filing of such certificate shall constitute an
13appointment by such employer or his carrier of the Secretary of
14Labor and Industry as his agent for acceptance of the service of
15process in any proceeding brought by such employe or his
16dependents to enforce his or their rights under this act on
17account of such injury;

18(2) The secretary shall send to such employer or carrier, by
19registered or certified mail to the address shown on such
20certificate, a true copy of any notice of claim or other process
21served on the secretary by the employe or his dependents in any
22proceeding brought to enforce his or their rights under this
23act;]

24(3) The following shall apply:

25(i) If such employer is a qualified self-insurer under the
26[workmen's] workers' compensation law of such other state, such
27employer shall[, upon submission of evidence, satisfactory to
28the director, of his ability to meet his liability to such
29employe under this act,] be deemed, for the purposes of such 
30employe, to be a qualified self-insurer under this act[;].

1(ii) If such employer's liability under the workmen's
2compensation law of such other state is insured, such employer's
3carrier, as to such employe or his dependents only, shall be
4deemed to be an insurer authorized to write insurance under and
5be subject to this act: Provided, however, That unless its
6contract with said employer requires it to pay an amount
7equivalent to the compensation benefits provided by this act,
8its liability for income benefits or medical and related
9benefits shall not exceed the amounts of such benefits for which
10such insurer would have been liable under the workmen's
11compensation law of such other state[;].

12(4) If the total amount for which such employer's insurance
13is liable under clause (3) above is less than the total of the
14compensation benefits to which such employe is entitled under
15this act, the [secretary] department may, if [he deems it]
16necessary, require the employer to file security[, satisfactory
17to the secretary, to secure] to guarantee the payment of
18benefits due such employe or his dependents under this act[;
19and].

20(5) Upon compliance with the preceding requirements of this
21subsection (c), such employer, as to such employe only, shall be
22deemed to have secured the payment of compensation under this
23act[.], and shall not be an uninsured employer for purposes of 
24Article XVI.

25(c.1) If an employe alleges an injury incurred with an
26employer that is domiciled in another state and that has not
27secured the payment of compensation as required by this act,
28such employe shall submit to the Uninsured Employers Guaranty
29Fund and to any workers' compensation judge hearing a petition
30against the fund, a decision, notice or ruling from such other

1state or its licensees that the employe has sought and is not
2entitled to benefits in such other state. No compensation shall
3be payable from the Uninsured Employers Guaranty Fund until the
4employe submits such decision, notice or ruling.

5* * *

6Section 2. Sections 1601, 1602, 1603, 1604 and 1605 of the
7act, added November 9, 2006 (P.L.1362, No.147), are amended to
8read:

9Section 1601. Definitions.

10The following words and phrases when used in this article
11shall have the meanings given to them in this section unless the
12context clearly indicates otherwise:

13"Compensation." Benefits paid pursuant to sections 306 and
14307.

15"Employer." Any employer as defined in section 103. The term
16does not include a person that qualifies as a self-insured
17employer under section 305.

18"Fund." The Uninsured Employers Guaranty Fund established in
19section 1602. The fund shall not be considered an insurer and
20shall not be subject to penalties, unreasonable contest fees, 
21interest or any reporting and liability requirements under
22section 440.

23"Policyholder." A holder of a workers' compensation policy
24issued by the State Workers' Insurance Fund, or an insurer that
25is a domestic, foreign or alien mutual association or stock
26company writing workers' compensation insurance on risks which
27would be covered by this act.

28"Secretary." The Secretary of Labor and Industry of the
29Commonwealth.

30Section 1602. Fund.

1(a) Establishment.--

2(1) There is established a special fund to be known as
3the Uninsured Employers Guaranty Fund.

4(2) The fund shall be maintained as a separate fund in
5the State Treasury subject to the procedures and provisions
6set forth in this article.

7(b) Source.--The sources of the fund are:

8(1) Assessments provided for under section 1607.

9(2) Reimbursements or restitution.

10(3) Interest on money in the fund.

11(4) Administrative penalties provided for under section
121611.

13(c) Use.--The administrator shall establish and maintain the
14fund for the exclusive purpose of paying to any claimant or his
15dependents workers' compensation benefits due and payable under
16this act and the act of June 21, 1939 (P.L.566, No.284), known
17as The Pennsylvania Occupational Disease Act, and any costs
18specifically associated therewith where the employer liable for
19the payments failed to insure or self-insure its workers'
20compensation liability under section 305 at the time the
21injuries took place.

22(d) Administration.--The secretary shall be the
23administrator of the fund and shall have the power to collect
24money for and disburse money from the fund.

25(e) Status.--The fund shall have all of the same rights[,
26duties, responsibilities and obligations] as an insurer.

27Section 1603. Claims.

28(a) Scope.--This section shall apply to claims for an injury
29or a death which occurs on or after the effective date of this
30article.

1(b) Time.--An injured worker shall notify the fund within 45
2days after the worker [knew] has been advised by the employer or 
3another source that the employer was uninsured. The department
4shall have adequate time to monitor the claim and shall
5determine the obligations of the employer. No employee shall 
6receive compensation [shall be paid] from the fund [until notice
7is given] unless:

8(1) the employee notifies the fund within the time 
9period specified in this subsection; and

10(2) the department determines that the employer failed
11to voluntarily accept and pay the claim or subsequently
12defaulted on payments of compensation. [No compensation shall
13be due until notice is given.]

14(c) Process.--After notice, the fund shall process the claim
15in accordance with the provisions of this act.

16(d) Petitions.--

17(1) No claim petition may be filed against the fund
18until at least 21 days after notice of the claim is made to
19the fund.

20(2) A claim petition shall be filed within 120 days
21after notice of the claim is made to the fund. If the time
22requirement under this paragraph is not met, a claim petition
23shall not be allowed.

24(e) List of providers.--

25(1) The fund may establish lists of at least six
26designated health care providers that are accessible in each
27county in specialties relevant to the treatment of work
28injuries in this Commonwealth, as referenced in section
29306(f.1)(1).

30(2) If the fund establishes a list under paragraph (1),

1the fund shall be responsible only to reimburse expenses of
2medical treatments, services and accommodations rendered by
3the physicians or other health care providers that are
4designated on the list for the period set forth in section
5306(f.1)(1) from the date of the employee's notice to the
6fund under subsection (b).

7(3) On the notice under subsection (b), the fund shall:

8(i) provide access to the list of designated
9providers to the employee; and

10(ii) notify the employee of the requirements of this
11subsection.

12(4) If the employee receives medical treatments,
13services or accommodations from a health care provider that
14is not designated on the list, the fund shall be relieved of
15liability for the payment of medical treatments, services or
16accommodations rendered during the period set forth in
17section 306(f.1)(1) from the date of the employee's notice to
18the fund under subsection (b).

19Section 1604. Claim petition.

20(a) Authorization.--If a claim for compensation is filed
21under this article and the claim is not voluntarily accepted as
22compensable, the employee may file a claim petition naming both
23the employer and the fund as defendants. Failure of the
24uninsured employer to answer a claim petition shall not serve as
25an admission or otherwise bind the fund under section 416.

26(b) Amount of wages.--In a proceeding under this article,
27the fund shall not be liable for wage loss benefits unless the
28amount of wages the employee earned at the time of injury is
29established by one of the following:

30(1) A check, check stub or payroll record.

1(2) A tax return. This paragraph includes IRS form W-2
2and form 1099, and successors to those forms.

3(3) Unemployment compensation records, including form
4UC-2A.

5(4) Bank statements or records showing regular and
6recurring deposits.

7(5) Written documentation created contemporaneously with
8the payment of wages.

9(6) Testimony of the uninsured employer presented under
10oath at a hearing or deposition.

11Section 1605. Department.

12(a) Insurance inquiry.--Within ten days of notice of a
13claim, the fund shall demand from the employer proof of
14applicable insurance coverage. Within 14 days from the date of
15the fund's request, the employer must provide proof of
16insurance. If the employer does not provide proof, there shall
17be rebuttable presumption of uninsurance.

18(b) Reimbursement.--The department shall, on behalf of the
19fund, exhaust all remedies at law against the uninsured employer
20in order to collect the amount of a voluntary payment or award,
21including voluntary payment or award itself and reimbursement of
22costs, interest, penalties, fees under section 440 and costs of
23the fund's attorney, which have been paid by the fund. The fund
24shall also be reimbursed for costs or attorney fees which are
25incurred in seeking reimbursement under this subsection. The
26department is authorized to investigate violations of section
27305 for prosecution of the uninsured employer pursuant to
28section 305(b) and shall pursue such prosecutions through
29coordination with the appropriate prosecuting authority. [Any
30restitution obtained shall be paid to the fund.] The fund shall
 

1be entitled to restitution of all payments made under this 
2article as the result of any injury to an employee of an 
3uninsured employer. Restitution to the fund under section 305 
4shall not be limited to the amount specified in the award of 
5compensation and shall include the amount of any voluntary 
6payment or award and reimbursement of the fund's costs and the 
7fees of the fund's attorney.

8(c) Bankruptcy.--The department has the right to appear and
9represent the fund as a creditor in a bankruptcy proceeding
10involving the uninsured employer.

11(d) Liens.--If payments of any nature have been made by the
12fund on behalf of an uninsured employer, the fund shall file a
13certified proof of payment with the prothonotary of a court of
14common pleas, and the prothonotary shall enter the entire
15balance as a judgment against the employer. The judgment shall
16be a statutory lien against property of the employer in the
17manner set forth in section 308.1 of the act of December 5, 1936
18(2nd Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
19Compensation Law, and execution may issue on it. The fund has
20the right to update the amount of the lien as payments are made.

21Section 2.1. Section 1607 of the act is amended by adding a
22subsection to read:

23Section 1607. Assessments and transfers.

24* * *

25(c) For the purposes of further maintaining the fund, the
26sum of $4,000,000 is hereby transferred to the fund from the
27Administration Fund established under section 446.

28Section 3. The act is amended by adding sections to read:

29Section 1609. Insolvency.

30(a) Limitation of liability.--The liability of the fund is

1limited to the assets in the fund. Neither the fund nor the
2Commonwealth may be required to incur any debt under this
3article.

4(b) Limited payments.--

5(1) If the department projects that the aggregate
6payments to or on behalf of employees under this article
7during a fiscal year may exceed the projected assets of the
8fund for that year, the secretary shall order the payment of
9compensation under this article at a percentage of the full
10amounts payable under this act. The secretary shall adjust
11that percentage as necessary, based on updated projections.

12(2) The department shall make payments it considers
13appropriate as funds become available.

14(3) To take action under paragraph (1), the department
15shall provide a minimum of 60 days' notice to the General
16Assembly of the impending action. The notice shall be in the
17form of a written report of the pending funding shortfall to
18the chairman and minority chairman of the Appropriations
19Committee of the Senate and the chairman and minority
20chairman of the Labor and Industry Committee of the Senate
21and the chairman and minority chairman of the Appropriations
22Committee of the House of Representatives and the chairman
23and minority chairman of the Labor and Industry Committee of
24the House of Representatives.

25Section 1610. Uninsured employer obligations.

26Nothing in this article shall otherwise alter the uninsured
27employer's obligations under this act.

28Section 1611. Administrative penalties and stop-work orders.

29(a) Certification.--

30(1) If the department receives information indicating

1that an employer has failed to insure its obligations as
2required by this act, the department may require the employer
3to certify, on a form prescribed by the department, that the
4employer meets one of the following:

5(i) Possesses the requisite insurance. This
6subparagraph requires identification of the insurer,
7policy period and policy number.

8(ii) No longer operates a business. This
9subparagraph requires statement of the dates of operation
10and cessation of operation.

11(iii) Does not employ an individual entitled to
12compensation under this act.

13(iv) Is otherwise exempt from the requirements of
14obtaining insurance under this act. This paragraph
15requires identification of the applicable exemption.

16(2) The employer shall return the form to the department
17within 15 days of service of the form by the department.

18(i) If an employer does not return the form within
1915 days of service by the department, the department may
20assess an administrative penalty of $200 per day until
21the earlier of:

22(A) the date the employer complies; or

23(B) 30 days from service under this paragraph.

24(ii) If an employer does not comply with this
25paragraph within 45 days of service under this paragraph,
26the department may proceed with further enforcement under
27subsection (d).

28(b) Good cause.--If the department's investigation under
29section 1605 reveals good cause to believe that the employer is
30required and has failed to insure its liabilities as required by

1this act, the department may proceed with further enforcement
2under subsection (d).

3(c) Enforcement.--For the purposes of enforcing section 305
4and this article, all department employees or agents charged
5with enforcement may enter the premises or worksite of an
6employer that is subject to subsection (a)(2)(ii) or (b).

7(d) Stop-work order.--The department may issue an order
8requiring the cessation of operations of an employer that has
9failed to insure its liabilities as required by this act. The
10following apply:

11(1) The order may require compliance with conditions
12necessary to ensure that the employer insures its liabilities
13as required by this act.

14(2) The order shall take effect when served upon the
15employer by first class mail or posting at the employer's
16worksite.

17(3) The order shall remain in effect until released by
18the department or a court of competent jurisdiction.

19(4) The order shall be effective against a successor
20entity that:

21(i) has one or more of the same principals or
22officers as the employer against whom the order was
23issued; and

24(ii) is engaged in the same or equivalent trade or
25activity.

26(e) Nonexclusivity.--An order under subsection (d) is in
27addition to any penalty which may be imposed pursuant to this
28act.

29(f) Appeal.--

30(1) An order under subsection (d) is subject to 2

1Pa.C.S. Ch. 7 Subch. A (relating to judicial review of
2Commonwealth agency action).

3(2) Except as set forth in paragraph (3), an appeal of a
4penalty under subsection (a)(2)(i) or an order under
5subsection (d) shall not act as a supersedeas.

6(3) Upon application and for cause shown, the department
7may issue a supersedeas.

8(g) Noncompliance.--

9(1) Upon failure to comply with an order under
10subsection (d) and (f), the department may institute an
11action to enforce the order.

12(2) An action under this subsection may be initiated as
13follows:

14(i) In Commonwealth Court under 42 Pa.C.S. §
15761(a)(2) (relating to original jurisdiction).

16(ii) In a court of common pleas under 42 Pa.C.S. §
17931(b) (relating to original jurisdiction and venue).
18Venue for an action under this subparagraph lies in
19either:

20(A) the Twelfth Judicial District; or

21(B) the judicial district where the violation
22occurred.

23Section 4. Applicability is as follows:

24(1) The amendment or addition of section 1603(d) and (e)
25of the act shall apply to every claim in which notice under
26section 1603 of the act is provided to the fund on or after
27the effective date of this paragraph.

28(2) The following provisions shall apply retroactively
29to claims existing as of the effective date of this paragraph
30for which compensation has not been paid or awarded:

1(i) The amendment of section 305.2(c) of the act.

2(ii) The amendment of section 1601 of the act.

3(iii) The amendment of section 1603(b) of the act.

4(iv) The amendment of section 1604 of the act.

5Section 5. This act shall take effect immediately.