Changes in the Rhode Island Workers’ Compensation Act based on recommendations by the Workers Compensation Advisory Council were passed unanimously in the recently concluded session of the General Assembly. The revisions relate to jurisdiction, benefits, procedure and the distinction between an employee and an independent contractor. The council continues to work on other issues we can expect to see in next year’s package. The following is a summary of this year’s changes. The first change is jurisdictional. Any dispute between an insurance carrier and an employer, except for disputes concerning insurers’ classification rates which are heard by the Workers’ Compensation Appeals Board, shall be considered by the Workers’ Compensation Court. Jurisdiction over these issues previously rested with the Superior or District Courts. The Workers’ Compensation Court will also now hear all issues regarding the right to reinstatement and all disputes concerning proposed rehabilitation plans submitted for approval to the Donley Center. Any requests for reinstatement or approval of a rehabilitation plan pending before the Director of the Department of Labor and Training prior to September 1, 2000 will remain there for determination. All requests after that date will be heard by the court.
On the benefit side, indemnity benefits in death cases have been increased from $20 to $40 per week. Further, the cost-of-living adjustment (COLA) on death benefits is now computed from death, not date of first payment. Additionally, the maximum compensation rate has been changed from one hundred percent (100%) of the State average weekly wage to one hundred ten percent (I 10%) of the State average weekly wage. The purpose of this is to bring those employees who are high wage earners into the mainstream of benefit entitlement. This goes into effect for injuries on and after September 1, 2000. The last benefit change concerns the statute entitled, “Employees not entitled to compensation.” This provision was amended to provide that where an employee is imprisoned as a result of a criminal conviction and credit is given in sentencing for pre-conviction time served, the employer/insurer shall be entitled to a credit for such payments against future entitlements.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
The 312-week “gate” was also addressed. In 1990, the General Assembly enacted a ceiling or “gate” of entitlement to 312 weeks of indemnity benefits for partial incapacity. To get through this “gate,” the partially incapacitated employee would have to prove that his or her injury posed a “material hindrance” to regaining employment. In 1992, the wide-reaching reforms included a definition of “material hindrance” as “65 percent of whole person functional impairment and/or disability.” The implementation of the 1992 definition has been delayed pending the Supreme Court’s construction of the 1990 definition.
The next change is procedural and concerns the mailing of memorandum of agreements to injured workers. More specifically, at present the Workers’ Compensation Act obligates the employer, through its insurance carrier or third-party administrator, to send a memorandum of agreement by certified mail. In lieu of sending the memorandum in this manner, the employer may now include the memorandum with the indemnity check. The endorsement of the indemnity check serves the same purpose as the return receipt. Other procedural changes, made at the request of the Department of Labor and Training, provide that first reports of injury under Section 28-32-1 do not have to be submitted in writing. The statute was amended to provide that it may be submitted “in writing or in any other manner specified to by the director.” The first report of injury will now be accessible by the Fraud Unit for investigation into workers’ compensation fraud.
The final component is a substantive fine-tuning of the 1998 reforms. More specifically, in 1998 the General Assembly enacted what is referred to as the “universal coverage” provisions, which required that all employers of one or more employees have workers’ compensation insurance. Many employers of three or fewer employees thereafter characterized these employees as independent contractors instead of employees to avoid these requirements. Of course, an employer does not have to include an independent contractor in its workers’ compensation insurance program, regardless of the number of employees. This has left many employees outside the protection of the Workers’ Compensation Act.
To close this loophole, the General Assembly, for the first time, has defined “independent contractor.” More specifically, the statute provides that an employee shall not be considered an independent contractor unless the person has filed a “notice of designation as independent contractor” form with the Director of Labor and Training. A group consisting of representatives of the Department of Labor and Training, its Fraud Unit, a plaintiff s attorney and this author is presently designing this new form. Both The Beacon Mutual Insurance Co. and the Department of Labor and Training will be offering training sessions on this new bill throughout the autumn months. Although the Workers’ Compensation Court will continue to have the power to find that a worker is an independent contractor as opposed to an employee, or vice versa, the filing of this form with the Department of Labor and Training shall create a presumption of independent contractor status. This reform goes into effect on January 1, 2001.
In addition, the “coverage under” provisions of Section 28-29-6.1 have also been amended to preclude coverage to independent contractors under the new scheme. Finally, the fraud provisions have been amended to provide specific provisions against the miscategorization of employees as independent contractors or, alternatively, as corporate officers.
The end result of this year’s legislative changes will, it is hoped, produce a mandate for a smoothly operating workers’ compensation system, to the benefit of both employers and employees.
Michael D. Lynch, Esq., is vice president, legal services, for The Beacon Mutual Insurance Co. A graduate of Providence College, he earned his juris doctorate degree at Gonzaga University in Spokane, Washington, and is a member of the Associate Member Advisory Council of the International Association of Industrial Accident Boards and Commissions, the American and Rhode Island Bar Associations and the Defense Research Institute.
