2013 -- H 5773

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LC01805

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION--

GENERAL PROVISIONS

     Introduced By: Representatives Blazejewski, and Lally

     Date Introduced: February 28, 2013

     Referred To: House Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 28-29-2 of the General Laws in Chapter 28-29 entitled "Workers'

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Compensation - General Provisions" is 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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edition of the American Medical Association's Guide to the Evaluation of Permanent Impairment

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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 except for appeals from an

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order of the retirement board filed pursuant to the provisions of Rhode Island general law section

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45-21.2-9; provided, however, that it shall include the members of the police and aircraft rescue

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and firefighting (ARFF) units of the Rhode Island Airport Corporation. Whenever a contractor

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has contracted with the state, a city, town, or regional school district any person employed by that

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contractor in work under contract shall not be deemed an employee of the state, city, town, or

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regional school district as the case may be. Any person who on or after January 1, 1999, was an

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employee and became a corporate officer shall remain an employee, for purposes of these

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chapters, unless and until coverage under this act is waived pursuant to subsection 28-29-8(b) or

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section 28-29-17. Any person who is appointed a corporate officer between January 1, 1999 and

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December 31, 2001, and was not previously an employee of the corporation, will not be

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considered an employee, for purposes of these chapters, unless that corporate officer has filed a

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notice pursuant to subsection 28-29-19(b). In the case of a person whose services are voluntary or

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who performs charitable acts, any benefit received, in the form of monetary remuneration or

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otherwise, shall be reportable to the appropriate taxation authority but shall not be deemed to be

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wages earned under contract of hire for purposes of qualifying for benefits under chapters 29 --

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38 of this title. Any reference to an employee who had been injured shall, where the employee is

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dead, include a reference to his or her dependents as defined in this section, or to his or her legal

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representatives, or, where he or she is a minor or incompetent, to his or her conservator or

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guardian. A "seasonal occupation" means those occupations in which work is performed on a

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seasonal basis of not more than sixteen (16) 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 or is

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a party to an appeal from an order of the retirement board filed pursuant to the provisions of

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Rhode Island general law section 45-21.2-9.

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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, for injuries occurring on or after July 1, 2013, excepting injuries where the special

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employer is making payment of workers' compensation benefits directly to the injured temporary

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employee pursuant to paragraph 28-29-2(6)(iv) herein, if the special employer has acted or failed

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to act with reckless disregard for the safety of a temporary employee as defined in subdivision 28-

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29-2 (13) herein, and such reckless disregard for the safety of the temporary employee was a

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proximate cause of said temporary employee's injury, the special employer only in such eve3nt,

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shall not be deemed the employer for purposes of section 28-09-30.

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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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     (12) "Leased employee" is an employee leased to a special employer by a labor-leasing

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firm under an agreement between the special employer and the labor-leasing firm, to perform

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duties related to the conduct of the special employer's business. "Leased employee" does not

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include a "Temporary employee."

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     (13) "Temporary employee" means an employee who is furnished to a special employer

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to substitute for a "permanent employee" or for a "leased employee" as defined in this section, or

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to meet seasonal or short-term workload conditions of the special employer.

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     SECTION 2. Section 28-29-6.1 of the General Laws in Chapter 28-29 entitled "Workers'

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Compensation - General Provisions" is hereby amended to read as follows:

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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 an insurer-generated insurance coverage certification, on a form prescribed by the

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

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written documentation evidencing that the subcontractor carries workers' compensation insurance

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with no indebtedness for its employees for the term of the contract or is an independent contractor

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pursuant to the provisions of section 28-29-17.1. In the event that the general contractor or

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construction manager fails to obtain the and maintain at policy renewal this insurer-generated

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coverage certification demonstrating Rhode Island workers' compensation, and employer's

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liability coverage written documentation from the subcontractor, the general contractor or

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construction manager shall be deemed to be the employer pursuant to provisions of section 28-29-

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2. Upon the cancellation or failure to renew, the insurer having written the workers' compensation

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and employer's liability policy shall notify the certificate holders and the division of workers'

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compensation of the cancellation or failure to renew, and thereafter the certificate holders shall be

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deemed to be the employer for the duration of the contract or arrangement unless or until a new

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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 3. Section 28-33-19 of the General Laws in Chapter 28-33 entitled "Workers'

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Compensation - Benefits" is hereby amended to read as follows:

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     28-33-19. Additional compensation for specific injuries. -- (a) (1) In case of the

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following specified injuries that occur on or after January 1, 2015, there shall be paid in addition

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to all other compensation provided for in chapters 29 to 38 of this title a weekly payment equal to

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one-half (1/2) of the average weekly earnings of the injured employee, but in no case more than

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ninety dollars ($90.00) nor less than forty-five dollars ($45.00) one hundred eighty dollars ($180)

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nor less than ninety dollars ($90.00) per week. In case of the following specified injuries that

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occur on or after January 1, 2012, there shall be paid in addition to all other compensation

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provided for in chapters 29 to 38 of this title a weekly payment equal to one-half (1/2) of the

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average weekly earnings of the injured employee, but in no case more than one hundred eighty

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dollars ($180) nor less than ninety dollars ($90.00) per week. Payment made under this section

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shall be made in a one time payment unless the parties otherwise agree. Payment shall be mailed

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within fourteen (14) days of the entry of a decree, order, or agreement of the parties:

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      (i) For the loss by severance of both hands at or above the wrist, or for the loss of the

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arm at or above the elbow or for the loss of the leg at or above the knee, or both feet at or above

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the ankle, or of one hand and one foot, or the entire and irrecoverable loss of the sight of both

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eyes, or the reduction to one-tenth ( 1/10) or less of normal vision with glasses, for a period of

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three hundred twelve (312) weeks; provided, that for the purpose of this chapter the Snellen chart

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reading 20/200 shall equal one-tenth ( 1/10) of normal vision or a reduction of ninety percent

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(90%) of the vision. Additionally, any loss of visual performance including, but not limited to,

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loss of binocular vision, other than direct visual acuity may be considered in evaluating eye loss;

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      (ii) For the loss by severance of either arm at or above the elbow, or of either leg at or

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above the knee, for a period of three hundred twelve (312) weeks;

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      (iii) For the loss by severance of either hand at or above the wrist for a period of two

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hundred forty-four (244) weeks;

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      (iv) For the entire and irrecoverable loss of sight of either eye, or the reduction to one-

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tenth ( 1/10) or less of normal vision with glasses, or for loss of binocular vision for a period of

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one hundred sixty (160) weeks;

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      (v) For the loss by severance of either foot at or above the ankle, for a period of two

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hundred five (205) weeks;

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      (vi) For the loss by severance of the entire distal phalange of either thumb for a period of

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thirty-five (35) weeks; and for the loss by severance at or above the second joint of either thumb,

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for a period of seventy-five (75) weeks;

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      (vii) For the loss by severance of one phalange of either index finger, for a period of

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twenty-five (25) weeks; for the loss by severance of at least two (2) phalanges of either index

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finger, for a period of thirty-two (32) weeks; for the loss by severance of at least three (3)

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phalanges of either index finger, for a period of forty-six (46) weeks;

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      (viii) For the loss by severance of one phalange of the second finger of either hand, for a

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period of sixteen (16) weeks; for the loss by severance of two (2) phalanges of the second finger

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of either hand, for a period of twenty-two (22) weeks; for the loss by severance of three (3)

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phalanges of the second finger on either hand, for a period of thirty (30) weeks;

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      (ix) For the loss by severance of one phalange of the third finger of either hand, for a

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period of twelve (12) weeks; for the loss by severance of two (2) phalanges of the third finger of

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either hand, for a period of eighteen (18) weeks; for the loss by severance of three (3) phalanges

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of a third finger of either hand, for a period of twenty-five (25) weeks;

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      (x) For the loss by severance of one phalange of the fourth finger of either hand, for a

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period of ten (10) weeks; for the loss by severance of two (2) phalanges of the fourth finger of

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either hand, for a period of fourteen (14) weeks; for the loss by severance of three (3) phalanges

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of a fourth finger of either hand, for a period of twenty (20) weeks;

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      (xi) For the loss by severance of one phalange of the big toe on either foot, for a period

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of twenty (20) weeks; for the loss by severance of two (2) phalanges of the big toe of either foot,

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for a period of thirty-eight (38) weeks; for the loss by severance at or above the distal joint of any

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other toe than the big toe, for a period of ten (10) weeks for each such toe;

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      (xii) For partial loss by severance for any of the injuries specified in paragraphs (1)(i) --

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(1)(xi) of this subsection, proportionate benefits shall be paid for the period of time that the

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partial loss by severance bears to the total loss by severance.

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      (2) Where any bodily member or portion of it has been rendered permanently stiff or

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useless, compensation in accordance with the above schedule shall be paid as if the member or

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portion of it had been completely severed; provided, that if the stiffness or uselessness is less than

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total, then compensation shall be paid for that period of weeks in proportion to the applicable

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period where the member or portion of it has been completely severed as the instant percentage of

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stiffness or uselessness bears to the total stiffness or total uselessness of the bodily members or

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portion of them.

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      (3) In case of the following specified injuries there shall be paid in addition to all other

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compensation provided for in chapters 29 -- 38 under this title a weekly payment equal to one-

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half ( 1/2) of the average weekly earnings of the injured employee, but in no case more than

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ninety dollars ($90.00) nor less than forty-five dollars ($45.00) per week. Payment under this

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subsection shall be made in a one time payment unless the parties otherwise agree. Payment shall

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be mailed within fourteen (14) days of the entry of a decree, order, or agreement of the parties:

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      (i) For permanent disfigurement of the body the number of weeks may not exceed five

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hundred (500) weeks, which sum shall be payable in a one time payment within fourteen (14)

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days of the entry of a decree, order, or agreement of the parties in addition to all other sums under

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this section wherever it is applicable.

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      (4) (i) Loss of hearing due to industrial noise is recognized as an occupational disease for

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purposes of chapters 29 -- 38 of this title and occupational deafness is defined to be a loss of

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hearing in one or both ears due to prolonged exposure to harmful noise in employment. Harmful

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noise means sound capable of producing occupational deafness.

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      (ii) Hearing loss shall be evaluated pursuant to protocols established by the workers'

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compensation medical advisory board. All treatment consistent with this subsection shall be

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consistent with the protocols established by the workers' compensation medical advisory board

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subject to section 28-33-5.

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      (iii) If the employer has conducted baseline screenings within one (1) year of exposure to

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harmful noise to evaluate the extent of an employee's pre-existing hearing loss, the causative

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factor shall be apportioned based on the employee's pre-existing hearing loss and subsequent

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occupational hearing loss, and the compensation payable to the employee shall only be that

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portion of the compensation related to the present work-related exposure.

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      (iv) There shall be payable as permanent partial disability for total occupational deafness

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of one ear, seventy-five (75) weeks of compensation; for total occupational deafness of both ears,

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two hundred forty-four (244) weeks of compensation; for partial occupational deafness in one or

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both ears, compensation shall be paid for any periods that are proportionate to the relation which

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the hearing loss bears to the amount provided in this subdivision for total loss of hearing in one or

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both ears, as the case may be. For the complete loss of hearing for either ear due to external

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trauma or by other mechanism, acuity loss shall be paid pursuant to this subsection.

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      (v) No benefits shall be granted for tinnitus, psychogenic hearing loss, congenital

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hearing loss, recruitment or hearing loss above three thousand (3,000) hertz.

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      (vi) The provisions of this subsection and the amendments insofar as applicable to

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hearing loss shall be operative as to any occupational hearing loss that occurs on or after

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September 1, 2003, except for acuity hearing loss related to a single event which shall become

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effective upon passage.

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      (vii) If previous hearing loss, whether occupational or not, is established by an

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audiometric examination or other competent evidence, whether or not the employee was exposed

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to assessable noise exposure within one year preceding the test, the employer is not liable for the

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previous loss, nor is the employer liable for a loss for which compensation has previously been

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paid or awarded. The employer is liable only for the difference between the percent of

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occupational hearing loss determined as of the date of the audiometric examination conducted by

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a certified audiometric technician using an audiometer which meets the specifications established

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by the American National Standards Institute (ANSI 3.6-1969, ri973) used to determine

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occupational hearing loss and the percentage of loss established by the baseline audiometric

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examination. An amount paid to an employee for occupational hearing loss by any other

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employer shall be credited against compensation payable by the subject employer for the hearing

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loss. The employee shall not receive in the aggregate greater compensation from all employers

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for occupational hearing loss than that provided in this section for total occupational hearing loss.

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A payment shall not be paid to an employee unless the employee has worked in excessive noise

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exposure employment for a total period of at least one hundred eighty (180) days for the

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employer for whom compensation is claimed.

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      (viii) No claim for occupational deafness may be filed until six (6) months separation

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from the type of noisy work for the last employer in whose employment the employee was at any

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time during the employment exposed to harmful noise.

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      (ix) The total compensation due for hearing loss is recovered from the employer who last

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employed the employee in whose employment the employee was last exposed to harmful noise

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and the insurance carrier, if any, on the risk when the employee was last so exposed, and if the

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occupational hearing loss was contracted while the employee was in the employment of a prior

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employer, and there was no baseline testing by the last employer, the employer and insurance

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carrier which is made liable for the total compensation as provided by this section may petition

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the worker's compensation court for an apportionment of the compensation among the several

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employers which since the contraction of the hearing loss have employed the employee in a noisy

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environment.

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      (b) Where payments are required to be made under more than one clause of this section,

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payments shall be made in a one time payment unless the parties otherwise agree. Payment shall

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be mailed within fourteen (14) days of the entry of a decree, order, or agreement of the parties.

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      (c) Payments pursuant to this section, except paragraph (a)(3)(ii) of this section, shall be

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made only after an employee's condition as relates to loss of use has reached maximum medical

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improvement as defined in section 28-29-2(8) and as found pursuant to section 28-33-18(b).

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     SECTION 4. Section 5-75-9 of the General Laws in Chapter 5-75 entitled "Professional

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Employer Organizations Act of 2004" is hereby amended to read as follows:

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     5-75-9. Workers' compensation. -- (a) The responsibility to obtain workers'

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compensation coverage for covered employees, from a carrier licensed to do business in this state

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and otherwise in compliance with all applicable requirements, shall be specifically allocated in

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the professional employer agreement to either the client or the PEO. If such responsibility is

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allocated to the PEO under any such agreement, such agreement shall require that the PEO

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maintain and provide to client, at the termination of the agreement if requested by the client,

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records regarding the loss experience related to workers' compensation insurance provided to

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covered employees pursuant to such agreement. A certificate of insurance as proof of workers'

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compensation coverage shall be issued to the client if the PEO is to provide coverage or to the

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PEO if the client is to provide coverage with notification of cancellation to be issued immediately

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to either entity. In the case of cancellation, the other entity must immediately obtain coverage.

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      (b) Workers' compensation. - Except as is otherwise provided in chapters 29-38 of title

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28 for "temporary employees" provided to the client and as to the furnishing of "temporary help

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services" as defined in this chapter, both Both client and the PEO shall be considered the

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employer for the purpose of coverage under the workers' compensation act and both the PEO and

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its client shall be entitled to protection of the exclusive remedy provision of the workers'

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compensation act irrespective of which co-employer obtains such workers' compensation

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coverage.

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     SECTION 5. This act shall take effect upon passage with some provisions effective July

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1, 2013 and January 1, 2015.

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LC01805

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION--

GENERAL PROVISIONS

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     This act would: (1) Define "leased" and "temporary" employees; (2) Impose sole liability

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for certain injuries to a "temporary employee" on special employers; (3) Impose insurer-generated

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coverage certification maintenance and documentation requirements on the general contractor or

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construction manager; (4) Provide compensation for specific injuries ranging from ninety dollars

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($90.00) to one hundred eight dollars ($180) effective January 1, 2015; and (5) Create an

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exception for Professional Employer Organizations and their clients dealing with "temporary

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employees" and "temporary help services."

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     This act would take effect upon passage with some provisions effective July 1, 2013 and

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January 1, 2015.

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LC01805

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