MINUTES OF MEETING

      ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT

 

      Sixty-seventh Session

      April 23, 1993

 

 

 

The Assembly Committee on Labor and Management was called to order by Chairman Chris Giunchigliani at 11:58 a.m., Friday, April 23, 1993, in Room 321 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

      Ms. Chris Giunchigliani, Chairman

      Mr. Bernie Anderson, Vice Chairman

      Mr. Douglas A. Bache

      Mr. John C. Bonaventura

      Mr. John Carpenter

      Mr. Tom Collins, Jr.

      Mr. Peter G. Ernaut

      Mr. Lynn Hettrick

      Mrs. Erin Kenny

      Mr. John B. Regan

      Mr. Michael A. Schneider

 

 

COMMITTEE MEMBERS ABSENT:

 

      None

 

STAFF MEMBERS PRESENT:

 

      Donald Williams, Principal Research Analyst (LCB)

      Frank Krajewski, Senior Research Analyst (LCB)

 

OTHERS PRESENT:

 

      Ross Whitacre, Employment Security Department; George

      McNally, Nevada Trial Lawyers Association; Ray Badger,      Nevada Trial Lawyers Association; Pam Miller, Associated General Contractors, Mark Brown, Associated General       Contractors; John McGlamery, Department of Industrial

      Relations.

 

 

Assembly Bill 436 -     Precludes persons receiving certain benefits for industrial injuries from receiving unemployment compensation at same time.

 

Chairman Giunchigliani commented it was her understanding AB 436 was written to clarify AB 375 which was passed last session.  She asked someone from Nevada Employment Security to come forward.

 

Mr. Ross Whitacre, Assistant Chief of Benefits for Nevada Employment Security, read Exhibit C into the record. 

 

Ms. Giunchigliani remarked the rehabilitation portion was apparently omitted last session when they dealt with the fraud issue.  She asked Mr. Whitacre if a monthly check was performed to ensure a person was not dual collecting.  Mr. Whitacre replied affirmatively and stated they also checked when someone came in to file a claim.  Mr. Whitacre explained their database contained employers, quarterly report of employees for each employer and amount of salary paid. 

 

Mr. Hettrick asked if employees listed on the quarterly payroll by employee were identified by social security number.  Mr. Whitacre responded they were. 

 

      ASSEMBLYMAN ERNAUT MOVED TO DO PASS ON AB 436.

 

      ASSEMBLYMAN ANDERSON SECONDED.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

Assembly Bill 479 -     Limits circumstances under which certain benefits for injured employees are exclusive remedy for subcontractors, independent contractors, their employees and employees of principal contractors.

 

Mr. George McNally, Nevada Trial Lawyers Association, and Mr. Ray Badger, Vice President Nevada Trial Lawyers Association, came forward to testify.  Mr. Badger proceeded to give the committee a background of AB 479.  He explained the bill began with exclusive remedy.  Before workers' compensation was enacted employers did not have any requirement to provide medical or lost wage benefits for injuries.  In return for workers' compensation, the employer or another employee who caused injuries could not be sued for negligence even if there was negligence or gross negligence involved, as long as premiums were paid.  In

 

the construction industry, a subcontractor was supposed to purchase workers compensation insurance if he had employees working for him.  If a subcontractor worked for a general contractor and it was discovered the subcontractor had not paid SIIS, the general contractor had to pay the premiums for the subcontractor and his employees.  Because the general contractor was liable for the subcontractor's premiums, the Supreme Court developed in case law that Nevada exclusive remedy was different than most of the United States, and passed exclusive remedy on any other type work in Nevada.  What case law of Nevada said was on a construction site, if an employee was injured, he cannot sue anyone.  What this bill said was if the employer bought industrial insurance, the employee could not sue employer or fellow employees.

 

Mr. Badger cited the Supreme Court case of Aragonez (1985) wherein Mr. Aragonez was killed on-the-job by negligence of a subcontractor.  The Supreme Court ruled the heirs could not sue for negligence and could only receive SIIS benefits.  The rates went up for the general contractor even though the negligence was caused by the subcontractor.  This bill protected a situation where subcontractor or another contractor did not purchase industrial insurance.  The bill said if a general contractor became liable for premiums of a subcontractor who did not pay for SIIS and paid premiums, the employee could not sue.  He believed this followed the principle of why this rule of law started in the Supreme Court.

 

Mr. Ernaut questioned whether exclusive remedy provisions prohibited the general contractor from suing the subcontractor.  Mr. Badger responded it did.  Mr. McNally interjected there had been areas excluded from exclusive remedy umbrella protection.

 

Mr. Bonaventura queried if what Mr. Badger requested was a blanket cover for employees, not just on a construction site.  Mr. Badger stated he believed construction employers should be treated like other employers.

 

Mr. McNally further explained the bill removed the immunity currently granted to all independent contractors and subcontractors on construction sites.  In any other working scenario the immunity did not apply.

 

Several committee members posed scenarios to clarify their understanding of the previous testimony and the requests of Mr. McNally and Mr. Badger.

 

 

Mr. Regan asked Mr. McNally, if after hearing the scenarios of subcontractors and general contractors having paid SIIS premiums, the bill appeared to be aimed at the subcontractor who did not have SIIS.  Mr. McNally responded if an employee of the subcontractor who had not complied with SIIS was injured on the job, it reverted to the general contractor. 

 

Chairman Giunchigliani explained construction was the only business in Nevada where a different standard was afforded.  She further stated the goal was to deal with the rates and what was impacting the rates.  She questioned the penalty for being found an uninsured employer.

 

Mr. McNally responded the worker had the right to pursue the immediate benefits available under the uninsured employer's fund.  Currently the law allowed Department of Industrial Relations (DIR) to take an assignment from the injured worker and go after the uninsured employer.  If it was established the worker was injured on the job and the employer was uninsured, commonly under a regular tort lawsuit, there were defenses which could be asserted.  Nevada statutes removed defenses available to an uninsured employer.

 

Ms. Pam Miller, Northern Nevada Associated General Contractors (AGC), and Mr. Mark Brown, Southern Nevada Associated General Contractors (AGC), were next to testify.  Ms. Miller explained the general contractor usually covered the insurance premium for all subcontractors on a job because it was the only way they were assured of an exclusive remedy.  Under this bill general contractors no longer had an exclusive remedy because every time there was an injury by a subcontractor, the subcontractor would sue the general contractor.  Ms. Miller read Exhibit D as a portion of her testimony.

 

Ms. Miller further explained while a general contractor requested a certificate from a subcontractor stating the subcontractor had SIIS, the general contractor was not aware if the subcontractor allowed coverage to lapse during the course of the job.  When audited, the general contractor paid the back payments to SIIS for the subcontractor.

 

Ms. Giunchigliani commented if a general contractor hired and paid subcontractors who were properly covered or covered them himself, then there was no erosion.  If the subcontractor said he had insurance but he did not and someone was injured, the subcontractor should be liable, not the general contractor.

 

Further discussion ensued between Ms. Giunchigliani and Ms. Miller regarding the liability issue.

 

Mr. Brown expressed a significant concern was occupational disease.  Long term liability possibilities and the costs involved were a major issue.

 

Mr. Collins again posed a scenario trying to clarify the issues surrounding the bill.  Discussion between Mr. Collins, Mr. Brown and Ms. Miller followed.

 

Ms. Giunchigliani asked Ms. Miller for further explanation regarding certificates issued pertaining to SIIS coverage to enable the committee to prepare a list of questions.

 

The discussion continued between the committee, Ms. Miller and Mr. Brown with the committee using examples to grasp the concept of the bill.

 

Chairman Giunchigliani stated she would put a subcommittee together at a later time to further investigate the bill.

 

Mr. John McGlamery, Department Counsel, DIR, expressed a

concern regarding AB 479.  He requested an amendment stating this did not apply to the calculation of employer/employee relationships under NRS 616.377 or NRS 617.275 for the purpose of the uninsured fund.  He believed the bill had an implied effect, and DIR wanted to make sure it was not imposed by the court.

 

There being no further business to come before committee, the meeting was adjourned at 1:12 p.m.

 

      RESPECTFULLY SUBMITTED:

 

 

                             

      LINDA BLEVINS

      Committee Secretary

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Assembly Committee on Labor and Management

April 23, 1993

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