SP0608, LD 1553, item 2, Document Text

Amend the bill by striking out all of sections 1 and 2.

Amend the bill in section 3 in paragraph A in the 5th line (page 3, line 1 in L.D.) by striking out the following: " 2016-17" and inserting the following: ' 2017-18'

Amend the bill by inserting after section 4 the following:

‘Sec. 5. 39-A MRSA §324, sub-§3, as amended by PL 2011, c. 113, Pt. B, §20, is further amended to read:

3. Failure to secure payment. If any employer who is required to secure the payment to that employer's employees of the compensation provided for by this Act fails to do so, the employer is subject to the penalties set out in paragraphs A, B and C. The failure of any employer to procure insurance coverage for the payment of compensation and other benefits to the employer's employees in compliance with sections 401 and 403 constitutes a failure to secure payment of compensation within the meaning of this subsection.

A. The employer is guilty of a Class D crime. This paragraph applies only to cases in which the employer has committed a knowing violation.

B. The employer is liable to pay a civil penalty of up to $10,000 or up to an amount equal to 108% of the premium, calculated using Maine Employers' Mutual Insurance Company's standard discounted standard premium, that should have been paid during the period the employer failed to secure coverage, whichever is larger, payable to the Employment Rehabilitation Fund. In determining the amount of the penalty to be assessed under this paragraph, the board shall take into consideration the employer's effort to comply with sections 401 and 403.

C. The employer, if organized as a corporation, is subject to administrative dissolution as provided in Title 13-C, section 1421 or revocation of its authority to do business in this State as provided in Title 13-C, section 1532. The employer, if organized as a limited liability company, is subject to administrative dissolution as provided in Title 31, section 1592. The employer, if licensed, certified, registered or regulated by any board authorized by Title 5, section 12004-A or whose license may be revoked or suspended by proceedings in the District Court or by the Secretary of State, is subject to revocation or suspension of the license, certification or registration. This paragraph applies only to cases in which the employer has committed a knowing violation, has failed to pay a penalty assessed pursuant to this subsection or continues to operate without required coverage after a penalty has been assessed pursuant to this subsection.

For purposes of this subsection, a violation is considered a knowing violation if the employer has previously obtained workers' compensation insurance and that insurance has been cancelled or that insurance has not been continued or renewed, unless the cancellation, failure to continue or nonrenewal is due to a substantial change in the employer's operations that is unrelated to the classification of individuals as employees or independent contractors; the employer has been notified in writing by the board of the need for workers' compensation insurance; the employer has had one or more previous violations of the requirement to secure the payment of the compensation provided for by this Act; or the employer misclassifies an employee as an independent contractor despite a contrary determination by the board.

Prosecution under paragraph A does not preclude action under paragraph B or C.

If the employer is a corporation, partnership, limited liability company, professional corporation or any other legal business entity recognized under the laws of the State, any agent of the corporation or legal business entity having primary responsibility for obtaining insurance coverage is liable for punishment under this section. Criminal liability must be determined in conformity with Title 17-A, sections 60 and 61.’

Amend the bill in section 5 in subsection 1 in the first paragraph in the first and 2nd lines (page 3, lines 19 and 20 in L.D.) by striking out the following: " , including an independent contractor who hires and pays employees," and inserting the following: ', including an independent contractor who hires and pays employees,'

Amend the bill by striking out all of section 8.

Amend the bill in section 9 in §407 in the first paragraph in the 5th line (page 6, line 14 in L.D.) by striking out the following: " intentionally"

Amend the bill in section 9 in §407 in the first paragraph in the last 4 lines (page 6, lines 16 to 19 in L.D.) by striking out the following: " Notwithstanding this section, all workers' compensation policies and self-insured workers' compensation policies must include a provision requiring payment of benefits under this Act to an employee even if the employee was misclassified on the date of injury or death."

Amend the bill by inserting after section 9 the following:

‘Sec. 10. Report. By January 15, 2017, the Workers' Compensation Board shall study the independent contractor predetermination provisions of the Maine Revised Statutes, Title 39-A and report to the joint standing committee of the Legislature having jurisdiction over labor matters any recommended legislation related to those provisions. The committee may report out a bill relating to the report to the First Regular Session of the 128th Legislature.’

Amend the bill by relettering or renumbering any nonconsecutive Part letter or section number to read consecutively.

summary

This amendment changes the bill by eliminating the sections affecting independent contractor predeterminations. The amendment instead requires the Workers' Compensation Board to study the current system for independent contractor predeterminations and report any recommended legislation to the joint standing committee of the Legislature having jurisdiction over labor matters.

It also requires the Workers' Compensation Board to consider an employer's efforts to comply with the coverage requirements of the Maine Workers' Compensation Act of 1992 when imposing a monetary penalty, establishes that criminal prosecution may be pursued only if the employer has committed a knowing violation and establishes that revocation of authority to operate pursuant to the Maine Revised Statutes, Title 39-A, section 324, subsection 3, paragraph C may be pursued only if the employer has committed a knowing violation, has failed to pay a penalty assessed pursuant to that subsection or continues to operate without required workers' compensation insurance coverage after a penalty has been assessed pursuant to that subsection. Additionally, the amendment delays the increase to the Workers' Compensation Board assessment cap from fiscal year 2016-17 to fiscal year 2017-18.

FISCAL NOTE REQUIRED

(See attached)

SP0608 LD 1553	Session - 127th Maine Legislature C "A", Filing Number S-399, Sponsored by		LR 2581 Item 2
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