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An Act To Improve the Workers' Compensation System
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 39-A MRSA §105, as amended by PL 2015, c. 297, §2, is further amended to read:
§ 105.Predetermination of independent contractor and construction subcontractor status
 
1. Predetermination permitted.   A worker, an employer or a workers' compensation insurance carrier, or any together, may apply to the boardBureau of Insurance for a predetermination of whether the status of an individual worker, group of workers or a job classification associated with the employer is that of an employee or an independent contractor.
 
A. The predetermination by the boardBureau of Insurance creates a rebuttable presumption that the determination is correct in any later claim for benefits under this Actproceeding under Title 24-A.
 
B. Nothing in this subsection requires a worker, an employer or a workers' compensation insurance carrier to request predetermination.
 
1-A. Predetermination permitted for construction subcontractors.   A person, as defined in section 105-A, subsection 1, paragraph E, may apply to the boardBureau of Insurance for a predetermination that the person performs construction work in a manner that would not make the person an employee of a hiring agent, as defined in section 105-A, subsection 1, paragraph D.
 
A. The predetermination issued by the boardBureau of Insurance pursuant to this subsection is valid for one year and creates a rebuttable presumption that the determination is correct in any later claim for benefits under this Actproceeding under Title 24-A.
 
B. Nothing in this subsection requires a person, as defined in section 105-A, subsection 1, paragraph E, a worker, an employer or a workers’ compensation insurance carrier to request predetermination.
 
1-B.  Predetermination permitted for a person engaged in harvesting forest products.     Pursuant to section 401, subsection 4, a landowner and a wood harvester together may apply to the Bureau of Insurance for a predetermination of whether the status of the wood harvester is that of an independent contractor.
 
A.  A predetermination under this subsection related only to a person engaged in harvesting forest products is a conclusive presumption that the determination is correct.
 
B.  Each party involved in or affected by the predetermination must be provided information on the workers' compensation laws and the effect of independent contractor status in relation to those laws.
 
C.  A predetermination under this subsection related to a person engaged in harvesting forest products is effective for one calendar year or the duration of the contract, whichever is shorter.
 
2. Premium adjustment.   If it is determined that a predetermination does not withstand board or judicial scrutiny when raised in a subsequent workers' compensation claimproceeding under Title 24-A, then, depending on the final outcome of that subsequent proceeding, either the workers' compensation insurance carrier shall return excess premium collected or the employer shall remit premium subsequently due in order to put the parties in the same position as if the final outcome under the contested claimproceeding were predetermined correctly.
 
3. Predetermination submission.   A party may submit, on forms approved by the boardBureau of Insurance, a request for predetermination regarding the status of a person or job description as an employee, construction subcontractor, as defined in section 105-A, subsection 1, paragraph B, or independent contractor. The request is deemed to have been approved if the boardBureau of Insurance does not deny or take other appropriate action on the submission within 30 days.
 
4. Hearing.   A hearing, if requested by a party within 10 days of the board'sBureau of Insurance's decision on a petition, must be conducted under the Maine Administrative Procedure Act. A ruling by the board or administrative law judgeBureau of Insurance under this section is final and not subject to review by the Superior Court.
 
5. Certificate.   The boardBureau of Insurance shall provide the petitioning party a certified copy of the decision regarding predetermination that is to be used as evidence atin a later hearing on benefitsproceeding under Title 24-A.
 
6. Rulemaking.   The board is authorized toBureau of Insurance may adopt reasonable rules pursuant to the Maine Administrative Procedure Act to implement the intent of this section, which is to afford speedy and equitable predetermination of employee, construction subcontractor, as defined in section 105-A, subsection 1, paragraph B, and independent contractor status.
Sec. 2. 39-A MRSA §105-A, sub-§3, as enacted by PL 2009, c. 452, §5, is amended to read:
 
3. Penalties.   A person who is required to buthiring agent that fails to secure the payment of compensation with respect to persons deemed to be that person'sby purchasing a workers' compensation policy or self-insuring as set forth in section 403 for the hiring agent's employees under this sectionas required by this Act is subject to the penalties under section 324, subsection 3all applicable sections of this Act. This subsection may not be construed as limiting in any way the board's authority to impose penalties when a hiring agent fails to secure the payment of compensation for the hiring agent's employees as required by this Act.
Sec. 3. 39-A MRSA §154, sub-§6, ¶A, as amended by PL 2009, c. 109, §1 and affected by §2, is further amended to read:
 
A. The assessments levied under this section may not be designed to produce more than $10,000,000 beginning in the 2008-09 fiscal year, more than $10,400,000 beginning in the 2009-10 fiscal year, more than $10,800,000 beginning in the 2010-11 fiscal year or, more than $11,200,000 beginning in the 2011-12 fiscal year or more than $13,000,000 beginning in the 2016-17 fiscal year. Assessments collected that exceed the applicable limit by a margin of more than 10% must be used to reduce the assessment that is paid by insured employers pursuant to subsection 3. Any amount collected above the board's allocated budget and within the 10% margin must be used to create a reserve of up to 1/4 of the board's annual budget.
Sec. 4. 39-A MRSA §322, sub-§1, as amended by PL 2015, c. 297, §17, is further amended to read:
 
1. Appeals.   Any party in interest may present a copy of the decision of the division or of the board, if the board has reviewed a decision pursuant to section 320, to the clerk of the Law Court within 20 days after receipt of notice of the filing of the decision by the division or the board. Within 20 days after the copy is filed with the Law Court, the party seeking review by the Law Court shall file a petition seeking appellate review with the Law Court that sets forth a brief statement of the facts, the error or errors of law that are alleged to exist and the legal authority supporting the position of the appellant. For purposes of an appeal from a decision issued pursuant to section 321-B, subsection 3, only a decision of the division may be reviewed on appeal.
Sec. 5. 39-A MRSA §401, sub-§1, as amended by PL 2013, c. 87, §1, is further amended to read:
 
1. Private employers.   Every private employer, including an independent contractor who hires and pays employees, is subject to this Act and shall secure the payment of compensation in conformity with this section and sections 402 to 407 with respect to all employees, subject to the provisions of this sectionby purchasing a workers' compensation policy or self-insuring as set forth in section 403. Unless employed by a private employer, a person engaged in harvesting forest products is subject to this Act and shall secure the payment of compensation in conformity with this section and sections 402 to 407by purchasing a workers' compensation policy or self-insuring as set forth in section 403 with respect to that person individually if that person is an employee as defined in section 102, subsection 11, paragraph B-1.
 
A private employer who has not secured the payment of compensation under this section and sections 402 to 407by purchasing a workers' compensation policy or self-insuring as set forth in section 403 is not entitled, in a civil action brought by an employee or the employee's representative for personal injuries or death arising out of and in the course of employment, to the defense set forth in section 103. The employee of any such employer may, instead of bringing a civil action, claim compensation from the employer under this Act.
 
The following employers are not liable under this section for securing the payment of compensation in conformity with this section and sections 402 to 407by purchasing a workers' compensation policy or self-insuring as set forth in section 403 with respect to the employees listed, nor deprived of the defenses listed in section 103:
 
A. Employers of employees engaged in domestic service;
 
B. Employers of employees engaged in agriculture or aquaculture as seasonal or casual laborers, if the employer maintains coverage by an employer's liability insurance policy with total limits of not less than $25,000 and medical payment coverage of not less than $5,000.
 
(1) As used in this subsection, "casual" means occasional or incidental. "Seasonal" refers to laborers engaged in agricultural or aquacultural employment beginning at or after the commencement of the planting or seeding season and ending at or before the completion of the harvest season; and
 
C. Employers of agricultural or aquacultural laborers, if the employer maintains an employer's liability insurance policy with total limits of not less than $100,000 multiplied by the number of full-time equivalent agricultural or aquacultural laborers employed by that employer and medical payment coverage of not less than $5,000, and either:
 
(1) The employer has 6 or fewer concurrently employed agricultural or aquacultural laborers; or
 
(2) The employer has more than 6 agricultural or aquacultural laborers but the total number of hours worked by all such laborers in a week does not exceed 240 and has not exceeded 240 at any time during the 52 weeks immediately preceding an injury.
 
For purposes of this paragraph, seasonal and casual workers, immediate family members of unincorporated employers and immediate family members of bona fide owners of at least 20% of the voting stock of an incorporated employer are not considered agricultural or aquacultural laborers. "Immediate family members" means parents, spouses, brothers, sisters and children and the spouses of parents, brothers, sisters and children.
 
The burden of proof to establish an exempt status under this subsection is on the employer claiming the exemption.
Sec. 6. 39-A MRSA §401, sub-§2, as enacted by PL 1991, c. 885, Pt. A, §8 and affected by §§9 to 11, is amended to read:
 
2. Governmental bodies.   The State and every county, city and town is subject to this Act and shall secure the payment of compensation in conformity with sections 402 to 407by purchasing a workers' compensation policy or self-insuring as set forth in section 403.
Sec. 7. 39-A MRSA §401, sub-§3, as amended by PL 1999, c. 364, §5, is further amended to read:
 
3. Failure to conform.   The failure of any private employer or of any person engaged in harvesting forest products not exempt under subsection 1 or of any governmental body, as defined in subsection 2, to procure insurance coverage forsecure the payment of compensation pursuant to sections 402 to 407with respect to all employees by purchasing a workers' compensation policy or self-insuring as set forth in section 403 constitutes failure to secure payment of compensation provided for by this Act within the meaning of section 324, subsection 3, and subjects the employer or a person engaged in harvesting forest products to the penalties prescribed by that section. For purposes of this subsection, the term "insurance coverage" includes authorization by the Superintendent of Insurance to self-insure.An employer that purchases a workers' compensation policy or self-insures as set forth in section 403 and misclassifies one or more employees as independent contractors has not complied with the coverage provisions of this Act and is subject to all applicable penalties for failure to secure payment of compensation with respect to all misclassified employees.
Sec. 8. 39-A MRSA §401, sub-§4, as amended by PL 2011, c. 643, §12 and affected by §14, is further amended to read:
 
4. Liability of landowner.   A landowner subject to this Act who contracts to have wood harvested from the landowner's property by a contractor who, as an employer, is subject to this Act and who has not complied with the provisions of this section and who does not comply with the provisions of this section prior to the date of an injury or death for which a claim is made is liable to pay to any person employed by the contractor in the execution of the work any compensation under this Act that the landowner would have been liable to pay if that person had been immediately employed by the landowner.
 
A landowner is not liable for compensation if at the time the landowner enters into the contract with the contractor, the landowner applies for and receives a predetermination of the independent status of the contractor as set forth in section 105, subsection 1-B, the landowner requests and receives a certificate of independent status, issued by the boardBureau of Insurance on an annual basis to a contractor, certifying that the contractor harvests forest products in a manner that would not make the contractor an employee of the landowner or the landowner requests and receives a certificate of insurance, issued by the contractor's insurance carrier, certifying that the contractor has obtained the required coverage and indicating the effective dates of the policy, and if the landowner requests and receives at least annually similar certificates indicating continuing coverage during the performance of the work. A landowner who receives a predetermination of the contractor's status as independent contractor or a certificate of independent status is only relieved of liability under this paragraph if the contract for wood harvesting expressly states that the independent contractor will not hire any employees to assist in the wood harvesting without first providing the required certificate of insurance to the landowner.
 
Notwithstanding section 105, subsection 1, paragraph A, a predetermination under section 105 related only to a person engaged in harvesting forest products is a conclusive presumption that the determination is correct and section 105, subsection 2 does not apply to that determination. Each party involved in or affected by the predetermination must be provided information on the workers' compensation laws and the effect of independent contractor status in relation to those laws. A predetermination under section 105 related to a person engaged in harvesting forest products is effective for one calendar year or the duration of the contract, whichever is shorter.
 
A landowner required to pay compensation under this section is entitled to be indemnified by the contractor and may recover the amount paid in an action against that contractor. A landowner may demand that the contractor enter into a written agreement to reimburse the landowner for any loss incurred under this section due to a claim filed for compensation and other benefits. The employee is not entitled to recover at common law against the landowner for any damages arising from such injury if the employee takes compensation from that landowner.
 
Landowners willfully acting to circumvent the provisions of this section by using coercion, intimidation, deceit or other means to encourage persons who would otherwise be considered employees within the meaning of this Act to pose as contractors for the purpose of evading this section are liable subject to the provisions of section 324, subsection 3. Nothing in this section may be construed to prohibit an employee from becoming a contractor subject to the provisions of section 102, subsection 13-A.
Sec. 9. 39-A MRSA §407, as enacted by PL 1991, c. 885, Pt. A, §8 and affected by §§9 to 11, is amended to read:
§ 407.Preservation of existing employer status
An employer with a currently approved workers' compensation policy or a currently accepted self-insurance workers' compensation policy under sections 401 to 407 is deemed to be in compliance with this Act until the expiration or cancellation date of the current assent based on the policy or planthat has misclassified one or more employees has intentionally failed to secure payment of compensation within the meaning of section 324, subsection 3 and is subject to the penalties prescribed by that section. Notwithstanding this section, all workers' compensation policies and self-insured workers' compensation policies must include a provision requiring payment of benefits under this Act to an employee even if the employee was misclassified on the date of injury or death.
 
SUMMARY
This bill makes the following changes to the Maine Workers' Compensation Act of 1992.
1. It transfers the predetermination of independent contractor status process to the Department of Professional and Financial Regulation, Bureau of Insurance.
2. It establishes that rebuttable presumptions granted as a result of a request for a predetermination are admissible only in proceedings arising under the Maine Revised Statutes, Title 24-A. Conclusive predeterminations received by landowners continue to be admissible in proceedings under the Maine Workers' Compensation Act of 1992.
3. It modifies the law after the Law Court's decision in Workers' Compensation Board Abuse Investigation Unit v. Nate Holyoke Builders, Inc., et al., 2015 ME 99 and ensures employers that misclassify employees as independent contractors are subject to penalties under the Maine Workers' Compensation Act of 1992.
4. It increases the Workers' Compensation Board's assessment cap starting in fiscal year 2016-17.
5. It establishes that appeals to the Law Court from the Workers' Compensation Board are from decisions of the Workers' Compensation Board's Appellate Division and not an individual administrative law judge.