BILL REQ. #:  H-0795.1 

Read first time 01/31/2003.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to the duty of good faith and fair dealing to injured workers; amending RCW 51.48.080, 51.28.050, and 51.28.055; adding a new section to chapter 51.48 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 51.48 RCW to read as follows:
     (1) The department, employer, employer representative, and other persons have a duty to injured workers of good faith and fair dealing relating to all aspects of this title. This duty is violated if:
     (a)(i) The department, employer, or employer representative denies or delays payment of benefits, including medical benefits, without a reasonable basis; and
     (ii) The department, employer, or employer representative knew, or should have known, there was not a reasonable basis for denying or delaying payment of benefits. A reasonable basis is an objective standard based on the information available at the time.
     (b) An employer, employer representative, or any person:
     (i) Induces or coerces a worker not to report an industrial accident or file an application for benefits;
     (ii) Induces or coerces a worker to treat an industrial accident as an off-the-job injury;
     (iii) Persuades a worker to accept less than the compensation due under this title;
     (iv) Induces or coerces a worker who is entitled to temporary total disability under this title to return to work in contravention of RCW 51.32.090(4); or
     (v) Fails to comply with the rules of the department regarding reports or other requirements necessary for adjudicating claims under this title.
     (2) The department may adopt by rule additional applications of the duty of good faith and fair dealing. In adopting a rule under this subsection, the department shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the department's own experience, and the industrial insurance and insurance laws and rules of the state.
     (3) The department shall investigate each alleged violation of this section upon the filing of a written complaint or on its own motion. Violations shall be determined in the sole discretion of the director or designee. An order conforming with RCW 51.52.050 determining whether a violation has occurred shall be issued within thirty days of a request for an investigation.
     (4) If the department, employer, employer representative, or other person violates any provision of this section, the violator shall pay a civil penalty of one thousand dollars for each offense upon order of the director. The penalty shall accrue for the benefit of:
     (a) The affected worker if the violation pertains to a specific claim; or
     (b) To the department to be used specifically for worker safety programs if the penalty is based on a history or pattern of violations.

Sec. 2   RCW 51.48.080 and 1985 c 347 s 7 are each amended to read as follows:
     Except as provided in section 1(1)(b)(v) of this act, every person, firm or corporation who violates or fails to obey, observe or comply with any rule of the department ((promulgated)) adopted under ((authority of)) this title, shall be subject to a penalty of not ((to exceed)) more than five hundred dollars.

Sec. 3   RCW 51.28.050 and 1984 c 159 s 1 are each amended to read as follows:
     No application shall be valid or claim thereunder enforceable unless filed within one year after the day upon which the injury occurred or the rights of dependents or beneficiaries accrued, except as provided in RCW 51.28.055. An application is exempt from the limitation imposed by this section if the failure to file the application or take action to enforce a claim thereunder resulted from an act prohibited by section 1 of this act.

Sec. 4   RCW 51.28.055 and 1984 c 159 s 2 are each amended to read as follows:
     Claims for occupational disease or infection to be valid and compensable must be filed within two years following the date the worker had written notice from a physician: (1) Of the existence of his or her occupational disease, and (2) that a claim for disability benefits may be filed. The notice shall also contain a statement that the worker has two years from the date of the notice to file a claim. The physician shall file the notice with the department. The department shall send a copy to the worker and to the self-insurer if the worker's employer is self-insured. However, a claim is valid if it is filed within two years from the date of death of the worker suffering from an occupational disease. An application is exempt from the limitation imposed by this section if the failure to file the application or take action to enforce a claim thereunder resulted from an act prohibited by section 1 of this act.