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Regular Session, 2014
SENATE BILL NO. 198
BY SENATOR RISER
WORKERS' COMPENSATION. Ensures compliance with requirements for mandatory
workers' compensation coverage. (8/1/14)
AN ACT1
To amend and reenact R.S. 23:1168(A)(1) and (4) and (B), 1170(A) and (B), 1171,2
1171.1(A), (B), (C), (D)(1), and (E)(1), and 1291(C)(5) and to enact R.S. 23:1170(C)3
and 1171.1(F), and to repeal R.S. 23:1168(A)(5), relative to workers' compensation;4
to require for compliance; to provide for reporting of compliant coverage; to provide5
for penalties; to provide for matters to be determined by workers' compensation6
judges; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 23:1168(A)(1) and (4) and (B), 1170(A) and (B), 1171, 1171.1(A),9
(B), (C), (D)(1), and (E)(1), and 1291(C)(5) are hereby amended and reenacted and R.S.10
23:1170(C) and 1171.1(F) are hereby enacted to read as follows:11
§1168. Ways of securing compensation to employees12
A. An employer shall secure compensation to his employees in one of the13
following ways:14
(1) By insuring and keeping insured the payment of such compensation with15
any stock corporation, mutual association, or other concern authorized to transact the16
business of workers' compensation insurance in this state. When an insurer issues a17 SB NO. 198
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policy to provide workers' compensation benefits pursuant to the provisions of the1
Workers' Compensation Act, the insurer shall report to the National Council on2
Compensation Insurance all policy information in accordance with the3
reporting guidelines established by the National Council on Compensation4
Insurance. Proof of coverage must be filed no later than thirty days after the5
effective date of coverage and include the name of each business entity6
operating in the state of Louisiana for which coverage is provided file, or cause7
to be filed, with the director a notice in such form and detail as the director may8
prescribe by rule and regulation. The notice shall contain the name, address, and9
principal occupation of the employer, the number, effective date, and expiration date10
of the policy, and such other information as may be required by the director. The11
notice shall be filed by the insurer within thirty days after the effective date of the12
policy.13
* * *14
(4) By using any combination of life, accident, health, property, casualty or15
other insurance policies offered:16
(a) By any stock corporation, mutual association or other concern authorized17
to transact the business of insurance in this state;18
(b) By any group of individual, unincorporated alien insurers with assets held19
in trust for the benefit of its United States policyholders in a sum not less than one20
hundred million dollars and which is authorized to transact insurance in at least one21
state; or22
(c) By any other insurer which has been approved by the commissioner of23
insurance, and has capital and surplus, or the equivalent thereof, of at least ten24
million dollars and its financial condition, as evidenced by its most recent annual25
statement, conforms substantially to the same standards of solvency which would be26
required if such insurer were licensed in this state.27
(5)(4) By furnishing satisfactory proof to the director of the employer's28
financial ability to pay such compensation. The director, pursuant to rules adopted29 SB NO. 198
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by the office for an individual self-insured or own risk carrier, including but not1
limited to rules relative to security and excess coverage, shall require that an2
employer:3
* * *4
B.(1) The director may waive the requirements of Paragraph A(5)(4) of this5
Section if he finds any company able to pay benefits, and that the requirements of6
these provisions are unnecessary. He shall establish rules which set standards for7
such waiver.8
(2) The director shall waive the requirements of Paragraph A(5)(4) of this9
Section if any employer that is a municipality or other political subdivision of the10
state is able to demonstrate financial responsibility and ability to pay benefits by the11
filing of annual reports including statements of financial condition and summary loss12
data detailing past claims experience.13
* * *14
§1170. Penalty for failure to secure workers' compensation insurance; assessment15
and collection16
A. In addition to any other penalty prescribed by law, any employer who fails17
to secure compensation required by R.S. 23:1168 shall be liable for a civil penalty,18
to be assessed by the executive director or his designee workers' compensation19
judge, of not more than two hundred fifty dollars per employee for a first offense,20
and liable for a civil penalty of not more than five hundred dollars per employee for21
a second or subsequent offense; however, the maximum civil penalty for a first22
offense shall not exceed ten thousand dollars for all related series of violations. All23
civil penalties collected shall be deposited in the Office of Workers' Compensation24
Administrative Fund established in R.S. 23:1291.1(E).25
B. The financial and compliance officer of the office of worker's26
compensation workers' compensation judge shall assess and collect any civil27
penalty incurred under R.S. 23:1170(A) against any employer who fails to provide28
proof of compliance within fifteen days of any notice. Any penalty assessed and29 SB NO. 198
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collected pursuant to this Section shall be forwarded to the fraud administrator1
for collection. In his discretion, the financial and compliance officer fraud2
administrator may remit, mitigate, or negotiate said penalty if proof of the3
mitigating circumstances is provided within fifteen days of notice of the assessment.4
In determining the amount of the penalty to be assessed, or the amount agreed upon5
in any negotiation, consideration shall be given to the appropriateness of such6
penalty in light of the life of the business of the employer charged, the gravity of the7
violation, and the extent to which the employer charged has complied with the8
provisions of R.S. 23:1168, or has otherwise attempted to remedy the consequences9
of the said violation. Individual proceedings shall be conducted pursuant to the10
provisions of R.S. 23:1171.11
C. In addition to any penalties assessed in accordance with the provisions12
of this Chapter, the workers' compensation judge shall order the employer to13
provide proof of compliance with R.S. 23:1168 within forty-five days of the14
order.15
§1171. Civil fine; hearing; appeal16
A. The financial and compliance officer shall determine from all of the17
evidence submitted by the employer a fair and equitable resolution of the violation,18
taking into consideration any mitigating circumstances timely submitted as required19
by R.S. 23:1170. The financial and compliance officer shall assess, upon20
examination of the information submitted, a penalty commensurate with the violation21
so adjudged. However, the employer may provide additional mitigating22
circumstances or evidence to the financial and compliance officer within ten days of23
the assessment, and a reevaluation of the penalty shall be conducted. Unless a formal24
hearing is requested pursuant to the provisions of R.S. 23:1171(B), the penalty shall25
become final within thirty days of assessment. Upon becoming final, the penalty26
shall be regarded as any other money judgment and may be pursued for collection27
as prescribed by law for any other such remedy.28
B. An employer may appeal the decision of the financial and compliance29 SB NO. 198
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officer to the workers' compensation judge in the manner described in R.S.1
23:1310.5(B) for appealing decisions regarding disputed claims in the district in2
which the business of the employer is located or East Baton Rouge Parish by filing,3
within thirty days of the date of assessment, a written request for a formal hearing,4
which request should be filed on a disputed claim form. All appeals to the workers'5
compensation judge shall be de novo. A final order from a hearing may be appealed6
to the appropriate court of appeal.7
§1171.1. Discontinuance of business; injunction; procedure8
A. The director, or his designee, shall investigate an employer if he receives9
information from any person or entity that such employer has failed to provide10
security for compensation as required by R.S. 23:1168. If such allegations can be11
reasonably substantiated, and the employer has previously been subject to a civil12
penalty pursuant to R.S. 23:1170 or criminal penalties pursuant to R.S. 23:1172,13
the director, or his designee, and the employer has previously been fined under14
R.S. 23:1170 or been penalized under R.S. 23:1172, the director shall notify the15
employer that, unless he can show proof of compliance with R.S. 23:1168 within16
fifteen days, he may shall be subject to further fines and penalties including but not17
limited to an injunction against further business operations a civil penalty pursuant18
to the provisions of R.S. 23:1170.19
B. If within fifteen days of the employer's receipt of such notice, he has not20
submitted to the director satisfactory proof of such compliance, the director shall set21
the matter for hearing in accordance with the procedures set forth by law for claims22
for workers' compensation benefits If such allegations can be reasonably23
substantiated and the employer has been fined under R.S. 23:1170 or penalized24
under R.S. 23:1172, the director shall notify the employer that unless he can25
show proof of compliance with R.S. 23:1168 within fifteen days, he shall be26
subject to further fines and penalties, including but not limited to an injunction27
against further business operations.28
C. If within fifteen days of the employer's receipt of such notice he has29 SB NO. 198
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not submitted to the director satisfactory proof of such compliance, the director1
or his designee shall request the workers' compensation judge of any district2
where the employer does business to set the matter for hearing in accordance3
with the procedures set forth by law for claims for workers' compensation4
benefits. Upon the request of the director or his designee, the workers'5
compensation judge shall issue a rule to show cause to the employer why he6
should not be fined or penalized for failure to show proof of compliance with7
R.S. 23:1168 when requested.8
D. (1) If at such hearing, it is determined that the employer is in violation of9
his obligation under R.S. 23:1168, the workers' compensation judge may shall fine10
the employer in the manner provided pursuant to R.S. 23:1170(A) and shall order the11
employer to secure workers' compensation insurance and file evidence of coverage12
within ninety days of the order provide proof of compliance with R.S. 23:116813
within forty-five days of the order by securing the appropriate coverage. Should14
the employer fail to file such evidence, the workers' compensation judge shall assess15
a fine for a second offense and issue a cease and desist order prohibiting the16
employer from continuing its business operations until such time as the employer17
complies with R.S. 23:1168, and all fines issued are paid in full.18
* * *19
D. E. (1) After the issuance of a cease and desist order and upon the request20
of the director or the director's designee, the attorney general shall immediately21
institute proceedings for injunctive relief against the employer in the district court22
of any judicial district in this state where the employer does business. In such district23
court proceedings, a certified copy of any cease and desist order entered by the24
workers' compensation judge in accordance with this Section based upon evidence25
in the record shall be prima facie evidence of the facts found in such record.26
* * *27
E. F. The issuance of an order to cease and desist or the issuance of a28
temporary restraining order or an injunction against an employer for failure to insure29 SB NO. 198
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or keep insurance in force as required by R.S. 23:1168 shall be in addition to any1
civil or criminal penalties imposed by any other provision of law or Paragraph C(1)2
of this Section.3
PART IV. ADMINISTRATION OF CLAIMS4
SUBPART A. OFFICE OF WORKERS' COMPENSATI ON ADMINISTRATION5
§1291. Creation, powers, and duties of the office of workers' compensation6
administration7
* * *8
C. There shall be established within the office the following sections:9
* * *10
(5) A workers' compensation fraud section, which shall administer the11
provisions of R.S. 23:1170, 1171, 1171.1, 23:1172, 1172.1, 1172.2, 1208, and 129512
by investigating allegations of workers' compensation fraud and non-compliance13
by employers.14
* * *15
Section 2. R.S. 23:1168(A)(5) is hereby repealed.16
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Carla S. Roberts.
DIGEST
Riser (SB 198)
Present law provides that an employer doing business in the state of Louisiana must provide
workers' compensation coverage for the employees of the business.
Present law provides that an employer may provide statutorily required workers'
compensation coverage for employees by purchasing coverage from a stock corporation,
mutual association, or other concern authorized to transact the business of workers'
compensation insurance in this state. Present law provides that the workers' compensation
insurer shall file notice of coverage with the director of the office of workers' compensation
with the Workforce Commission.
Proposed law retains present law but changes the requirement that the notice of coverage be
sent to the National Council on Compensation Insurance instead of the director of the office
of workers' compensation.
Proposed law provides that proof of coverage must be filed no later than 30 days after the
effective date of coverage and include the name of each business entity operating in the state
of La. for which coverage has been obtained.
Present law provides that in addition to any other penalty prescribed by law, any employer SB NO. 198
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who fails to secure compensation required by present law shall be liable for a civil penalty,
to be assessed by the executive director or his designee, of not more than $250.00 per
employee for a first offense, and liable for a civil penalty of not more than $500.00 per
employee for a second or subsequent offense; however, the maximum civil penalty for a first
offense shall not exceed $10,000 for all related series of violations.
Proposed law retains present law but provides that a workers' compensation judge shall
assess any civil penalty against an employer who fails to provide proof of compliance within
15 days of any notice.
Proposed law provides that, in addition to any penalties assessed, the workers' compensation
judge shall order the employer to provide proof of workers' compensation coverage within
45 days of the order.
Present law provides that the financial and compliance officer shall determine, based upon
all of the evidence submitted by the employer, a fair and equitable resolution of the
violation, taking into consideration any mitigating circumstances. Present law provides that
the financial and compliance officer shall assess a penalty commensurate with the violation
so adjudged. Present law provides that any appeal regarding a disputed claim shall be
decided in the district court in which the business of the employer is located or East Baton
Rouge Parish.
Proposed law retains present law but provides that the workers' compensation judge shall
conduct the hearing on the matter and an appeal may be made in the appropriate circuit court
of appeal.
Present law provides that the director shall investigate an employer if he receives
information from any person or entity that such employer has failed to provide workers'
compensation coverage for his employees. Present law provides that if such allegations can
be reasonably substantiated, the director, shall notify the employer that, unless he can show
proof of coverage, he may be subject to further fines and penalties including but not limited
to an injunction against further business operations.
Proposed law retains present law but provides that if such allegations can be reasonably
substantiated and the employer has been fined or penalized under, the director, or his
designee, shall notify the employer that unless he can show proof of coverage within 15
days, the employer will be subject to further fines and penalties including but not limited to
an injunction against further business operations.
Proposed law provides that if within 15 days of the employer's receipt of such notice he has
not submitted to the director satisfactory proof of such compliance, the director or his
designee shall request the workers' compensation judge of any district where the employer
does business to set the matter for hearing and the workers' compensation judge shall issue
a rule to show cause to the employer why he should not be fined or penalized for failure to
show proof of workers' compensation coverage.
Effective August 1, 2014.
(Amends R.S. 23:1168(A)(1) and (4) and (B), 1170(A) and (B), 1171, 1171.1(A), (B), (C),
(D)(1), and (E)(1), and 1291(C)(5); adds R.S. 23:1170(C) and 1171.1(F); repeals R.S.
23:1168(A)(5))