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2005 General Session
SF 82 explicitly prohibited any employer or their agent from intentionally attempting to avoid or minimize their premium rate for workers’ compensation, and provided civil and criminal penalties for anyone caught doing so. The bill closed some loopholes in present statutes to prevent employers from achieving a lower workers’ compensation premium rate by selling or transferring their business to new ownership.
SF 82 closely paralleled another bill of the 2005 session, SF 80, which addressed the same concerns for unemployment compensation rate manipulation.
Under the provisions of SF 82, if an employer is found guilty of attempting to manipulate any statutory requirements related to determining their workers’ compensation premium rate, their workers’ compensation rates will automatically be assigned the highest possible rate for the next three years. They also will be subject to prosecution as a felony punishable by a fine up to $50,000 and up to five years imprisonment. A person who was not an employer who is found guilty of the same offense will be subject to a civil penalty up to $50,000, and to the same felony prosecution.
SF 82 also clarified statutory language so that a business may not be sold or transferred primarily to achieve a reduced workers’ compensation premium rate.
Finally, SF 82 authorized the Workers’ Safety and Compensation Division to define “intoxicated or under the influence of a controlled substance” for purposes of exclusion from covered injuries. This turned out to be the only controversial part of the bill.
Proponents of SF 82 maintained that some employers do take unfair advantage of loopholes in current statutes to reduce their workers’ compensation rate. They pointed to the Legislative Service Office estimate that closing these loopholes would lead to $1,250,000 more in workers’ compensation premiums each year.
There was no notable opposition to most of SF 82. The bill passed the Senate Labor, Health and Social Services Committee unanimously, and passed the full Senate on third reading unanimously. The bill also passed the House unanimously, but only after it was amended to remove the authorization for the Workers’ Safety and Compensation Division to define intoxication/under the influence of a controlled substance.
The Senate then unanimously rejected the House amendment to the bill, which sent it to a conference committee. The conference committee removed the House amendment and sent the original bill back to both chambers. The conference committee bill again passed the Senate unanimously, and passed the House 44-12 (4 excused).
The votes listed below are the Senate and House votes on the conference committee bill. A YES vote means the legislator wanted to modify statutes to make it more difficult for businesses to intentionally attempt to avoid or minimize workers’ compensation rates, and to provide stiff penalties for anyone found guilty of doing so. A NO vote means the legislator did not want to change statutes in this way.