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WC Legislation Targets Contractors & Uninsured Workers

Date: March 19, 2014


Legislation was printed this week to improve workers’ compensation coverage for injured workers and go after employers that have failed to obtain legally required insurance (LD 1833).

As stated in the summary for LD 1833:

* “The bill creates liability for situations when an employee is injured while working for an uninsured subcontractor. In such situations, the general contractor will be responsible for payment of workers' compensation benefits as if it were the direct employer of the injured employee, unless there is an intermediate subcontractor with workers' compensation insurance coverage, in which case, the intermediate subcontractor is responsible for payment of all benefits due under the Act. These provisions would be effective January 1, 2015 and would be repealed July 1, 2017.

* “The bill also amends the laws governing the Employment Rehabilitation Fund. Until July 1, 2017, the fund will be used to pay workers' compensation benefits to injured employees working for illegally uninsured employers when there is no other general contractor or subcontractor liable for payment of benefits.

The bill results from a 2013 study by the Maine Workers’ Compensation Board.  Some 44 states have provisions that make contractors liable for an injured worker of an uninsured subcontractor.  The actual mechanics of this provision are not spelled out in the legislation but it is presumed a notification system will be developed for insurers to report on dropped or cancelled policies.

No new or higher fee will be created to supplement the Employment Rehabilitation Fund.

A public hearing may be held later this March.

The status and information relating to LD 1833 may be found at this website:
www.mainelegislature.org/legis/bills/display_ps.asp?LD=1833&snum=126


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