2012 -- S 2297

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LC00173

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO LABOR AND LABOR RELATIONS - WORKERS' COMPENSATION

     Introduced By: Senators Doyle, Tassoni, Miller, and Lanzi

     Date Introduced: February 01, 2012

     Referred To: Senate Labor

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 28-29-2 and 28-29-6.1 of the General Laws in Chapter 28-29

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entitled "Workers' Compensation - General Provisions" are hereby amended to read as follows:

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     28-29-2. Definitions. -- In chapters 29 -- 38 of this title, unless the context otherwise

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requires:

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      (1) "Department" means the department of labor and training.

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      (2) "Director" means the director of labor and training or his or her designee unless

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specifically stated otherwise.

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      (3) (i) "Earnings capacity" means the weekly straight time earnings which an employee

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could receive if the employee accepted an actual offer of suitable alternative employment.

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Earnings capacity can also be established by the court based on evidence of ability to earn,

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including, but not limited to, a determination of the degree of functional impairment and/or

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disability, that an employee is capable of employment. The court may, in its discretion, take into

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consideration the performance of the employee's duty to actively seek employment in scheduling

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the implementation of the reduction. The employer need not identify particular employment

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before the court can direct an earnings capacity adjustment. In the event that an employee returns

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to light duty employment while partially disabled, an earnings capacity shall not be set based

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upon actual wages earned until the employee has successfully worked at light duty for a period of

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at least thirteen (13) weeks.

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      (ii) As used under the provisions of this title, "functional impairment" means an

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anatomical or functional abnormality existing after the date of maximum medical improvement as

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determined by a medically or scientifically demonstrable finding and based upon the Sixth (6th)

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most recent edition of the American Medical Association's Guide to the Evaluation of Permanent

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Impairment or comparable publications of the American Medical Association.

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      (iii) In the event that an employee returns to employment at an average weekly wage

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equal to the employee's pre-injury earnings exclusive of overtime, the employee will be presumed

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to have regained his/her earning capacity.

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      (4) "Employee" means any person who has entered into the employment of or works

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under contract of service or apprenticeship with any employer, except that in the case of a city or

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town other than the city of Providence it shall only mean that class or those classes of employees

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as may be designated by a city, town, or regional school district in a manner provided in this

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chapter to receive compensation under chapters 29 -- 38 of this title. Any person employed by the

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state of Rhode Island, except for sworn employees of the Rhode Island State Police, or by the

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Rhode Island Airport Corporation who is otherwise entitled to the benefits of chapter 19 of title

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45 shall be subject to the provisions of chapters 29 -- 38 of this title for all case management

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procedures and dispute resolution for all benefits. The term "employee" does not include any

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individual who is a shareholder or director in a corporation, general or limited partners in a

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general partnership, a registered limited liability partnership, a limited partnership, or partners in

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a registered limited liability limited partnership, or any individual who is a member in a limited

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liability company. These exclusions do not apply to shareholders, directors and members who

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have entered into the employment of or who work under a contract of service or apprenticeship

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within a corporation or a limited liability company. The term "employee" also does not include a

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sole proprietor, independent contractor, or a person whose employment is of a casual nature, and

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who is employed other than for the purpose of the employer's trade or business, or a person

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whose services are voluntary or who performs charitable acts, nor shall it include the members of

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the regularly organized fire and police departments of any town or city; provided, however, that it

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shall include the members of the police and aircraft rescue and firefighting (ARFF) units of the

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Rhode Island Airport Corporation. Whenever a contractor has contracted with the state, a city,

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town, or regional school district any person employed by that contractor in work under contract

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shall not be deemed an employee of the state, city, town, or regional school district as the case

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may be. Any person who on or after January 1, 1999, was an employee and became a corporate

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officer shall remain an employee, for purposes of these chapters, unless and until coverage under

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this act is waived pursuant to subsection 28-29-8(b) or section 28-29-17. Any person who is

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appointed a corporate officer between January 1, 1999 and December 31, 2001, and was not

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previously an employee of the corporation, will not be considered an employee, for purposes of

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these chapters, unless that corporate officer has filed a notice pursuant to subsection 28-29-19(b).

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In the case of a person whose services are voluntary or who performs charitable acts, any benefit

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received, in the form of monetary remuneration or otherwise, shall be reportable to the

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appropriate taxation authority but shall not be deemed to be wages earned under contract of hire

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for purposes of qualifying for benefits under chapters 29 -- 38 of this title. Any reference to an

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employee who had been injured shall, where the employee is dead, include a reference to his or

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her dependents as defined in this section, or to his or her legal representatives, or, where he or she

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is a minor or incompetent, to his or her conservator or guardian. A "seasonal occupation" means

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those occupations in which work is performed on a seasonal basis of not more than sixteen (16)

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weeks.

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      (5) "Employer" includes any person, partnership, corporation, or voluntary association,

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and the legal representative of a deceased employer; it includes the state, and the city of

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Providence. It also includes each city, town, and regional school district in the state that votes or

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accepts the provisions of chapters 29 -- 38 of this title in the manner provided in this chapter.

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      (6) "General or special employer":

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      (i) "General employer" includes but is not limited to temporary help companies and

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employee leasing companies and means a person who for consideration and as the regular course

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of its business supplies an employee with or without vehicle to another person.

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      (ii) "Special employer" means a person who contracts for services with a general

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employer for the use of an employee, a vehicle, or both.

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      (iii) Whenever there is a general employer and special employer wherein the general

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employer supplies to the special employer an employee and the general employer pays or is

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obligated to pay the wages or salaries of the supplied employee, then, notwithstanding the fact

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that direction and control is in the special employer and not the general employer, the general

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employer, if it is subject to the provisions of the Workers' Compensation Act or has accepted that

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Act, shall be deemed to be the employer as set forth in subdivision (5) of this section and both the

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general and special employer shall be the employer for purposes of sections 28-29-17 and 28-29-

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18. However, the special employer shall not be deemed to be the employer for purposes of section

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28-29-20.

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      (iv) Effective January 1, 2003, whenever a general employer enters into a contract or

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arrangement with a special employer to supply an employee or employees for work, the special

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employer shall require an insurer generated insurance coverage certification, on a form prescribed

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by the department, demonstrating Rhode Island workers' compensation and employer's liability

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coverage evidencing that the general employer carries workers' compensation insurance with that

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insurer with no indebtedness for its employees for the term of the contract or arrangement. In the

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event that the special employer fails to obtain and maintain at policy renewal and thereafter this

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insurer generated insurance coverage certification demonstrating Rhode Island workers'

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compensation and employer's liability coverage from the general employer, the special employer

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is deemed to be the employer pursuant to the provisions of this section. Upon the cancellation or

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failure to renew, the insurer having written the workers' compensation and employer's liability

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policy shall notify the certificate holders and the department of the cancellation or failure to

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renew and upon notice, the certificate holders shall be deemed to be the employer for the term of

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the contract or arrangement unless or until a new certification is obtained.

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      (7) (i) "Injury" means and refers to personal injury to an employee arising out of and in

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the course of his or her employment, connected and referable to the employment.

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      (ii) An injury to an employee while voluntarily participating in a private, group, or

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employer-sponsored carpool, vanpool, commuter bus service, or other rideshare program, having

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as its sole purpose the mass transportation of employees to and from work shall not be deemed to

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have arisen out of and in the course of employment. Nothing in the foregoing provision shall be

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held to deny benefits under chapters 29 -- 38 and chapter 47 of this title to employees such as

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drivers, mechanics, and others who receive remuneration for their participation in the rideshare

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program. Provided, that the foregoing provision shall not bar the right of an employee to recover

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against an employer and/or driver for tortious misconduct.

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      (8) "Maximum medical improvement" means a point in time when any medically

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determinable physical or mental impairment as a result of injury has become stable and when no

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further treatment is reasonably expected to materially improve the condition. Neither the need for

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future medical maintenance nor the possibility of improvement or deterioration resulting from the

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passage of time and not from the ordinary course of the disabling condition, nor the continuation

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of a pre-existing condition precludes a finding of maximum medical improvement. A finding of

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maximum medical improvement by the workers' compensation court may be reviewed only

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where it is established that an employee's condition has substantially deteriorated or improved.

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      (9) "Physician" means medical doctor, surgeon, dentist, licensed psychologist,

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chiropractor, osteopath, podiatrist, or optometrist, as the case may be.

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      (10) "Suitable alternative employment" means employment or an actual offer of

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employment which the employee is physically able to perform and will not exacerbate the

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employee's health condition and which bears a reasonable relationship to the employee's

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qualifications, background, education, and training. The employee's age alone shall not be

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considered in determining the suitableness of the alternative employment.

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      (11) "Independent contractor" means a person who has filed a notice of designation as

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independent contractor with the director pursuant to section 28-29-17.1 or as otherwise found by

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the workers' compensation court.

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     28-29-6.1. Secondary provision of workers' compensation insurance. -- (a) Whenever

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a general contractor or a construction manager enters into a contract with a subcontractor for

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work to be performed in Rhode Island, the general contractor or construction manager shall at all

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times require written documentation evidencing that the subcontractor carries workers'

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compensation insurance with no indebtedness for its employees for the term of the contract or is

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an independent contractor pursuant to the provisions of section 28-29-17.1. In the event that the

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general contractor or construction manager fails to obtain the written documentation and maintain

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at policy renewal this insurer generated insurance coverage certification demonstrating Rhode

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Island workers’ compensation and employers’ liability coverage from the subcontractor, the

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general contractor or construction manager shall be deemed to be the employer pursuant to

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provisions of section 28-29-2. Upon the cancellation or failure to renew, the insurer having

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written the workers' compensation and employers’ liability policy shall notify the certificate

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holders and the division of workers’ compensation of the cancellation or failure to renew, and

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thereafter the certificate holders shall be deemed to be the employer for the duration of the

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contract or arrangement unless or until a new certificate has been obtained.

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      (b) For the purposes of this section, "construction manager" means an individual

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corporation, partnership, or joint venture or other legal entity responsible for supervising and

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controlling all aspects of construction work to be performed on the construction project, as

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designated in the project documents, in addition to the possibility of performing some of the

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construction services itself. For the purposes of this section, the construction manager need have

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no contractual involvement with any of the parties to the construction project other than the

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owner, or may contract directly with the trade contractors pursuant to its agreement with the

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owner.

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      (c) This section only applies to a general contractor, subcontractor, or construction

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manager deemed an employer subject to the provisions of Chapters 29 -- 38 of this title, as

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provided in section 28-29-6.

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      (d) Whenever the workers' compensation insurance carrier is obligated to pay workers'

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compensation benefits to the employee of an uninsured subcontractor, the workers' compensation

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insurance carrier shall have a complete right of indemnification to the extent benefits are paid

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against either the uninsured subcontractor, uninsured general contractor or uninsured construction

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manager.

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     SECTION 2. Sections 28-35-6, 28-35-8, 28-35-32 and 28-35-57 of the General Laws in

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Chapter 28-35 entitled "Workers' Compensation - Procedure" are hereby amended to read as

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follows:

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     28-35-6. Notice of amendments to memorandum of agreement. -- (a) If the workers'

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compensation court makes any amendment or addition to the memorandum of agreement, the

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administrator of the workers' compensation court shall immediately notify the department of the

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changes in the agreement.

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      (b) If an employer or insurer and an employee and his or her attorney, if represented,

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reach an agreement, subsequent to the filing of a memorandum of agreement, order, or decree, as

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to any issue, the parties shall file a written agreement and receipt with the department, signed by

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the parties, and on a form prescribed by the department. A copy of any agreement and receipt

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shall be delivered to each of the parties. Upon the filing of the agreement and receipt with the

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department, it shall be as binding upon both parties as a preliminary determination order or

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decree.

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     (c) The attorney for an injured worker shall be entitled to a counsel fee reasonably

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compensating him or her for the services he or she rendered on behalf of the injured worker in

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securing the relief sought.

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     28-35-8. Filing of non-prejudicial memorandum of agreement. -- (a) Notwithstanding

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section 28-35-1, if the employer files a memorandum of agreement but specifically designates

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that agreement as a "non-prejudicial" or "without prejudice", the employer may pay weekly

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compensation benefits not exceeding thirteen (13) weeks. In these cases, the employer shall send

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a copy of the non-prejudicial memorandum and any amendments to it to the employee and his or

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her attorney or the representative of the decedent and his or her attorney by certified mail, return

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receipt requested, at the same time as it is filed with the department in the same manner as if it

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were a memorandum of agreement. The non-prejudicial memorandum of agreement shall contain

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all information as directed by section 28-35-1. Having done so, the non-prejudicial memorandum

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of agreement and any action taken pursuant to it shall be without prejudice to any party

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subsequently maintaining any position as to employer liability for payments under chapters 29 --

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38 of this title, maintainable in the absence of an agreement. If at any time within or at the close

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of the thirteen-week period after payments of compensation have commenced the employer or

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insurer terminates weekly payments to the employee or to those entitled to payments on account

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of death of an employee, the employer or insurer shall notify the employee and his or her attorney

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or the representative of the decedent employee and his or her attorney within ten (10) days on a

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form prescribed by the department by certified mail, return receipt requested that:

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      (1) Payments have terminated;

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      (2) The claim has not been formally accepted; and

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      (3) The employee has the right to file a petition, within the two (2) year limitation as set

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forth in section 28-35-57, to formally establish liability of the employer or insurer.

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      (b) If the employer or insurer makes payments of weekly benefits to the employee or to

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those entitled to payments on account of death of an employee for more than the thirteen (13)

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week period, the payments shall constitute a conclusive admission of liability and ongoing

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incapacity as to the injuries set forth in the non-prejudicial memorandum of agreement. The

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employer or insurer shall within ten (10) days of making additional payments file a memorandum

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of agreement pursuant to section 28-35-1.

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     28-35-32. Costs -- Counsel and witness fees. – (a) No fee shall be charged by the clerk

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of any court or by the administrator of the workers' compensation court for the performance of

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any service required by this chapter, except for certified copies of decrees and copies of

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transcripts. Notwithstanding any provisions of law to the contrary, the workers' compensation

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court shall be allowed a filing fee of twenty dollars ($20.00) for the filing of a petition under

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chapters 29 -- 38 of this title, and a filing fee of twenty-five dollars ($25.00) for the filing of an

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appeal under section 28-35-28, which sums shall be deposited to provide additional funding to the

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uninsured employers fund as established by chapter 28-53. In proceedings under this chapter, and

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in proceeding under chapter 37 of this title, costs shall be awarded, including counsel fees and

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fees for medical and other expert witnesses including interpreters, to employees who successfully

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prosecute petitions for compensation, petitions for medical expenses, petitions to amend a

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preliminary order or memorandum of agreement, and all other employee petitions, except

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petitions for lump sum commutation, and to employees who successfully defend, in whole or in

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part, proceedings seeking to reduce or terminate any and all workers' compensation benefits, and

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to medical services providers who successfully prosecute petitions for the payment of medical

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expenses except that medical services providers shall not be paid expert witness fees for

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testimony in support of petitions filed in their behalf. These costs shall be assessed against the

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employer by a single judge, by an appellate panel and by the supreme court on appeal consistent

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with the services rendered before each tribunal and shall be made a part of the decree. No

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employee's attorney shall accept any other or additional fees for his services for the particular

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petition for which the fees are awarded in each tribunal.

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     (b) Costs, including counsel fees, shall be awarded in the same manner as subsection (a)

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to reasonably compensate attorneys who successfully secure relief for injured workers pursuant to

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sections 28-35-1, 28-35-5, 28-35-6 and 28-35-7.1.

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     28-35-57. Limitation of claims for compensation. -- (a) An employee's claim for

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compensation under chapters 29 -- 38 of this title shall be barred unless payment of weekly

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compensation has commenced, or a petition, as provided for in this chapter, has been filed within

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two (2) years after the occurrence or manifestation of the injury or incapacity, or in case of the

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death of the employee, or in the event of his or her physical or mental incapacity, within two (2)

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years after the death of the employee or the removal of the physical or mental incapacity.

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      (b) The time for filing shall not begin to run in cases of latent or undiscovered physical

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or mental impairment due to injury including disease until:

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      (1) The person claiming benefits knew, or by exercise of reasonable diligence should

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have known, of the existence of the impairment and its causal relationship to his or her

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employment; or

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      (2) After disablement, whichever is later.

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      (c) In any case in which weekly compensation benefits have been paid, pursuant to

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section 28-35-8, in which the employer or insurer has failed to file the required notices, or has

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failed to comply with the requirements thereof regarding the mailing of documents required to be

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sent to the employee, the claimant's right to file a petition for compensation benefits shall be

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preserved without time limitation.

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     SECTION 3. This act shall take effect upon passage.

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LC00173

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO LABOR AND LABOR RELATIONS - WORKERS' COMPENSATION

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     This act would make various amendments to the statutes applicable to workers'

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compensation.

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     This act would take effect upon passage.

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LC00173

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