SENATE BILL REPORT

SB 5607

BYSenators Rasmussen, Vognild and Niemi

Establishing duties of an employer for industrial insurance purposes.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 16, 1989

Senate Staff:David Cheal (786-7576)

AS OF FEBRUARY 17, 1989

BACKGROUND:

The industrial insurance law imposes certain responsibilities and rights on both employees and employers in the management of workplace injuries.  These obligations include such matters as reporting workplace injuries and paying benefits within specified time lines.  Failure to comply with these requirements may subject the employer to penalties.  The law does not, however, address whether certain actions of an employer could be determined to be in bad faith.

SUMMARY:

The failure of an employer or employer's representative to act in good faith is an unfair practice.  Bad faith conduct includes: material misrepresentation to employees who inquire about or file industrial insurance claims; inducing an employee to choose a nonindustrial option for medical coverage of a known workplace injury; having direct contact with an injured worker unless by the employer or employee of the employer; disapproving or closing a claim without substantial good cause; requesting the denial of a reopening application without objective medical evidence; failing to administer an injured worker's claim in good faith; and inappropriately terminating an injured worker or returning an injured worker to work to avoid paying benefits.

Any order or action by the Department of Labor and Industries in response to a request from a self-insured employer is not admissible in any action alleging bad faith conduct.

Employers and employers' representatives who have engaged in bad faith conduct are subject to treble damages and attorneys' fees. Damages paid in excess of the employee's actual damages are paid into the medical aid fund.

If an employee does not file an industrial insurance claim or take action to enforce a claim as a result of a bad faith action by an employer, then the statute of limitations for filing industrial insurance claims will not apply.

Appropriation:    none

Revenue:    none

Fiscal Note:      available