2008 Legislative Update

This year’s Omnibus Bill was one of two bills passed by the General Assembly relating to workers’ compensation. (S3111). The other bill was entitled: “Joint Resolution Creating a Special Joint Commission to Study the Underground Economy and Employee Misclassification”. Here is a thumbnail sketch of the critical components of each:

OMNIBUS BILL S3111

The only legislation of interest as it relates to workers’ compensation was the creation of an uninsured employer’s fund. (S1103 aa). There was no omnibus bill. The following is a thumbnail sketch of its important elements:

1. AMA Guides. Many benefit awards rely upon “the most recent edition of the AMA (American Medical Association) Guides to the evaluation of permanent impairment”. On December 22, 2007, the Sixth Edition was released. Rhode Island joins many other states in delaying implementation of the Sixth Edition and continuing to rely on the Fifth Edition pending further review by the Medical Advisory Board and the Advisory Council. There is a statement that the effective date of this change is December 22, 2007 but it shall not impact existing orders, decrees or agreements.
2. Rhode Island Airport Corporation. The definition of an “employee” will be amended to include police and crash rescue and firefighting personnel at the airport. This change is effective upon passage.
3. Farm Laborers. Removes the exception for “arborists” from the Workers’ Compensation Act. This change goes into effect on January 1, 2009.
4. The “Gate”. The 1990 definition of the “Gate” will be extended for another three years. The 1990 definition has continued to work; the 1992 definition includes the use of the AMA Guides (which are being placed on hold) and maintains stability in the system. This goes into effect upon passage.
5. Notice to the Department of Labor. An insurance company will now have five days to notify the DLT of a change in coverage.
6. Penalties for failure to have insurance. This provision will allow a judge to suspend or reduce a civil penalty for failure to have insurance based on consideration of the gravity of the offense, resources of the employer, effect on the employees of the company, the reason for the lapse of coverage and the recommendation of the DLT.
7. Uninsured Employers Fund. This provision delays capitalization of the Fund until 2010 and its application to those who only suffer injuries after January 1, 2011. All of the other financing components of the Fund, i.e. filing fees from the Court, remain intact.

STUDY COMMISSION S3099

The Joint Commission was created to study the “Underground Economy and Employee Misclassification”. Its purpose is to study both concepts as it relates to workers’ compensation, taxation and unemployment, and to propose possible solutions to a developing problem thereby lessening the impact on government and law abiding business and workers. In layman’s terms, the “underground economy” is the “cash” economy and the growing use of the “independent contractor” to avoid responsibility for workers’ compensation premium, payroll and unemployment taxes and other sources of government revenue.