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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, 1171.1,2
and 1291(C)(5) and to enact R.S. 23:1170(C), and to repeal R.S. 23:1168(A)(5),3
relative to workers' compensation; to require for compliance; to provide for reporting4
of compliant coverage; to provide for penalties; to provide for matters to be5
determined by workers' compensation judges; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 23:1168(A)(1) and (4) and (B), 1170(A) and (B), 1171, 1171.1, and8
1291(C)(5) are hereby amended and reenacted and R.S. 23:1170(C) is hereby enacted to read9
as follows:10
§1168. Ways of securing compensation to employees11
A. An employer shall secure compensation to his employees in one of the12
following ways:13
(1) By insuring and keeping insured the payment of such compensation with14
any stock corporation, mutual association, or other concern authorized to transact the15
business of workers' compensation insurance in this state. When an insurer issues a16
policy to provide workers' compensation benefits pursuant to the provisions of the17 SB NO. 198
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Workers' Compensation Act, the insurer shall file, or cause to be filed, with the1
director a notice in such form and detail as the director may prescribe by rule and2
regulation. The notice shall contain the name, address, and principal occupation of3
the employer, the number, effective date, and expiration date of the policy, and such4
other information as may be required by the director. The notice shall be filed by the5
insurer within thirty days after the effective date of the policy report to the National6
Council on Compensation Insurance all policy information in accordance with7
the reporting guidelines established by the National Council on Compensation8
Insurance. Proof of coverage must be filed no later than thirty days after the9
effective date of coverage and include the name of each business entity10
operating in the state of Louisiana for which coverage is provided.11
* * *12
(4) By using any combination of life, accident, health, property, casualty or13
other insurance policies offered:14
(a) By any stock corporation, mutual association or other concern authorized15
to transact the business of insurance in this state;16
(b) By any group of individual, unincorporated alien insurers with assets held17
in trust for the benefit of its United States policyholders in a sum not less than one18
hundred million dollars and which is authorized to transact insurance in at least one19
state; or20
(c) By any other insurer which has been approved by the commissioner of21
insurance, and has capital and surplus, or the equivalent thereof, of at least ten22
million dollars and its financial condition, as evidenced by its most recent annual23
statement, conforms substantially to the same standards of solvency which would be24
required if such insurer were licensed in this state.25
(5)(4) By furnishing satisfactory proof to the director of the employer's26
financial ability to pay such compensation. The director, pursuant to rules adopted27
by the office for an individual self-insured or own risk carrier, including but not28
limited to rules relative to security and excess coverage, shall require that an29 SB NO. 198
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employer:1
(a) Deposit with the director securities or a surety bond in an amount2
determined by the director which would be at least an average of the yearly claims3
for the last three years.4
(b) Provide proof of excess coverage with such terms and conditions as is5
commensurate with their ability to pay the benefits required by the provisions of the6
Workers' Compensation Act.7
B.(1) The director may waive the requirements of Paragraph A(5)(4) of this8
Section if he finds any company able to pay benefits, and that the requirements of9
these provisions are unnecessary. He shall establish rules which set standards for10
such waiver.11
(2) The director shall waive the requirements of Paragraph A(5)(4) of this12
Section if any employer that is a municipality or other political subdivision of the13
state is able to demonstrate financial responsibility and ability to pay benefits by the14
filing of annual reports including statements of financial condition and summary loss15
data detailing past claims experience.16
* * *17
§1170. Penalty for failure to secure workers' compensation insurance; assessment18
and collection19
A. In addition to any other penalty prescribed by law, any employer who fails20
to secure compensation required by R.S. 23:1168 shall be liable for a civil penalty,21
to be assessed by the executive director or his designee workers' compensation22
judge, of not more than two hundred fifty dollars per employee for a first offense,23
and liable for a civil penalty of not more than five hundred dollars per employee for24
a second or subsequent offense; however, the maximum civil penalty for a first25
offense shall not exceed ten thousand dollars for all related series of violations. All26
civil penalties collected shall be deposited in the Office of Workers' Compensation27
Administrative Fund established in R.S. 23:1291.1(E).28
B. The financial and compliance officer of the office of worker's29 SB NO. 198
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compensation workers' compensation judge shall assess and collect any civil1
penalty incurred under R.S. 23:1170(A) against any employer who fails to provide2
proof of compliance within fifteen days of any notice. Any penalty assessed and3
collected pursuant to this Section shall be forwarded to the fraud administrator4
for collection. In his discretion, the financial and compliance officer fraud5
administrator may remit, mitigate, or negotiate said the penalty if proof of the6
mitigating circumstances is provided within fifteen days of notice of the assessment.7
In determining the amount of the penalty to be assessed, or the amount agreed upon8
in any negotiation, consideration shall be given to the appropriateness of such9
penalty in light of the life of the business of the employer charged, the gravity of the10
violation, and the extent to which the employer charged has complied with the11
provisions of R.S. 23:1168, or has otherwise attempted to remedy the consequences12
of the said violation. Individual proceedings shall be conducted pursuant to the13
provisions of R.S. 23:1171.14
C. In addition to any penalties assessed in accordance with the provisions15
of this Chapter, the workers' compensation judge shall order the employer to16
provide proof of compliance with R.S. 23:1168 within forty-five days of the17
order.18
§1171. Civil fine; hearing; appeal19
A. The financial and compliance officer shall determine from all of the20
evidence submitted by the employer a fair and equitable resolution of the violation,21
taking into consideration any mitigating circumstances timely submitted as required22
by R.S. 23:1170. The financial and compliance officer shall assess, upon23
examination of the information submitted, a penalty commensurate with the violation24
so adjudged. However, the employer may provide additional mitigating25
circumstances or evidence to the financial and compliance officer within ten days of26
the assessment, and a reevaluation of the penalty shall be conducted. Unless a formal27
hearing is requested pursuant to the provisions of R.S. 23:1171(B), the penalty shall28
become final within thirty days of assessment. Upon becoming final, the penalty29 SB NO. 198
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shall be regarded as any other money judgment and may be pursued for collection1
as prescribed by law for any other such remedy.2
B. An employer may appeal the decision of the financial and compliance3
officer to the workers' compensation judge in the district in which the business of the4
employer is located or East Baton Rouge Parish by filing, within thirty days of the5
date of assessment, a written request for a formal hearing, which request should be6
filed on a disputed claim form. All appeals to the workers' compensation judge shall7
be de novo. A final order from a hearing may be appealed to the appropriate court8
of appeal in the manner provided in R.S. 23:1310.5(B) for appealing decisions9
regarding disputed claims.10
§1171.1. Discontinuance of business; injunction; procedure11
A. The director, or his designee, shall investigate an employer if he receives12
information from any person or entity that such employer has failed to provide13
security for compensation as required by R.S. 23:1168. If such allegations can be14
reasonably substantiated, and the employer has previously been subject to a civil15
penalty pursuant to R.S. 23:1170 or criminal penalties pursuant to R.S. 23:1172,16
the director, or his designee, and the employer has previously been fined under17
R.S. 23:1170 or been penalized under R.S. 23:1172, the director shall notify the18
employer that, unless he can show proof of compliance with R.S. 23:1168 within19
fifteen days, he may shall be subject to further fines and penalties including but not20
limited to an injunction against further business operations a civil penalty pursuant21
to the provisions of R.S. 23:1170.22
B. If within fifteen days of the employer's receipt of such notice, he has not23
submitted to the director satisfactory proof of such compliance, the director shall set24
the matter for hearing in accordance with the procedures set forth by law for claims25
for workers' compensation benefits If such allegations can be reasonably26
substantiated and the employer has been fined under R.S. 23:1170 or penalized27
under R.S. 23:1172, the director shall notify the employer that unless he can28
show proof of compliance with R.S. 23:1168 within fifteen days, he shall be29 SB NO. 198
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subject to further fines and penalties, including but not limited to an injunction1
against further business operations.2
C. If within fifteen days of the employer's receipt of such notice he has3
not submitted to the director satisfactory proof of such compliance, the director4
or his designee shall request the workers' compensation judge of any district5
where the employer does business to set the matter for hearing in accordance6
with the procedures set forth by law for claims for workers' compensation7
benefits. Upon the request of the director or his designee, the workers'8
compensation judge shall issue a rule to show cause to the employer why he9
should not be fined or penalized for failure to show proof of compliance with10
R.S. 23:1168 when requested.11
D.(1) If at such hearing, it is determined that the employer is in violation of12
his obligation under R.S. 23:1168, the workers' compensation judge may shall fine13
the employer in the manner provided pursuant to R.S. 23:1170(A) and shall order the14
employer to secure workers' compensation insurance and file evidence of coverage15
within ninety days of the order provide proof of compliance with R.S. 23:116816
within forty-five days of the order by securing the appropriate coverage. Should17
the employer fail to file such evidence, the workers' compensation judge shall assess18
a fine for a second offense and issue a cease and desist order prohibiting the19
employer from continuing its business operations until such time as the employer20
complies with R.S. 23:1168, and all fines issued are paid in full.21
(2) Any cease and desist order issued by the workers' compensation judge22
under Paragraph (C)(1) of this Subsection shall include specific findings of fact23
based upon evidence of all of the following:24
(a) The employer received notice of the hearing.25
(b) The employer employs employees for whom it must secure workers'26
compensation insurance or be authorized to self-insure under the provisions of this27
Chapter.28
(c) The employer has willfully failed to provide security for compensation29 SB NO. 198
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as required by R.S. 23:1168 and there has been a final determination in a matter in1
which the employer has been fined under R.S. 23:1170 or penalized under R.S.2
23:1172.3
(d) The employer continues to operate its business in the absence of such4
security for compensation.5
(3) There shall be a presumption that an employer who has previously been6
civilly fined for a second offense, or has previously been criminally penalized, has7
willfully failed to secure his obligation under R.S. 23:1168.8
(4) A cease and desist order shall not issue prior to a hearing and there shall9
be no interruption of an employer's business operation if he submits satisfactory10
proof to the workers' compensation judge of his compliance with R.S. 23:1168,11
regardless of whether he may have been in violation thereof previously.12
D.E. (1) After the issuance of a cease and desist order and upon the request13
of the director or the director's designee, the attorney general shall immediately14
institute proceedings for injunctive relief against the employer in the district court15
of any judicial district in this state where the employer does business. In such district16
court proceedings, a certified copy of any cease and desist order entered by the17
workers' compensation judge in accordance with this Section based upon evidence18
in the record shall be prima facie evidence of the facts found in such record.19
(2) Such injunctive relief may include the issuance of a temporary restraining20
order under Louisiana Code of Civil Procedure Article 3601 et seq., which order21
shall enjoin the employer from continuing its business operations until it has22
procured the required insurance or authorization to self-insure or has posted adequate23
security with the court pending the procurement of such insurance or authorization.24
The court, in its discretion, shall determine the amount that shall constitute adequate25
security.26
E.F. The issuance of an order to cease and desist or the issuance of a27
temporary restraining order or an injunction against an employer for failure to insure28
or keep insurance in force as required by R.S. 23:1168 shall be in addition to any29 SB NO. 198
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civil or criminal penalties imposed by any other provision of law or Paragraph C(1)1
of this Section.2
PART IV. ADMINISTRATION OF CLAIMS3
SUBPART A. OFFICE OF WORKERS' COMPENSATI ON ADMINISTRATION4
§1291. Creation, powers, and duties of the office of workers' compensation5
administration6
* * *7
C. There shall be established within the office the following sections:8
* * *9
(5) A workers' compensation fraud section, which shall administer the10
provisions of R.S. 23:1170, 1171, 1171.1, 1172, 1172.1, 1172.2, 1208, and 1295 by11
investigating allegations of workers' compensation fraud and noncompliance by12
employers.13
* * *14
Section 2. R.S. 23:1168(A)(5) is hereby repealed.15
The original instrument was prepared by Carla S. Roberts. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Cathy R. Wells.
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
who fails to secure compensation required by present law shall be liable for a civil penalty, SB NO. 198
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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, and
1291(C)(5); adds R.S. 23:1170(C); repeals R.S. 23:1168(A)(5))
Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill
1. Makes technical corrections, including citation.