MINUTES OF THE

      ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT

 

      Sixty-seventh Session

      May 11, 1993

 

 

 

The Assembly Committee on Labor and Management was called to order by Chairman Christina R. Giunchigliani, at 3:45 p.m., on May 11, 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. Christina R. Giunchigliani, Chairman

      Mr. Bernie Anderson, Vice Chairman

      Mr. Douglas A. Bache

      Mr. John C. Bonaventura

      Mr. John C. Carpenter

      Mr. Tom Collins, Jr.

      Ms. Lynn Hettrick

      Ms. Erin Kenny

      Mr. John B. Regan

      Mr. Michael A. Schneider

 

 

COMMITTEE MEMBERS ABSENT:

 

      Mr. Peter G. Ernaut, excused

 

GUEST LEGISLATORS PRESENT:

 

      None

 

STAFF MEMBERS PRESENT:

 

      Mr. Donald Williams, Principal Research Analysts

      Mr. Frank Krajewski, Senior Research Analysts

 

OTHERS PRESENT:

 

      Mr. Jim Endres, State Manager of AT&T

      Mr. Larry Zimmerman, CDS of Nevada

      Scott Young, General Counsel, State Industrial Insurance

        System (SIIS)

      Mr. Donald Jayne, General Manager, the State Industrial

        Insurance System (SIIS)

      Mr. Jim Jeppson, Acting Administrator, Department of

        Industrial Relations (DIR)

 

Chairman Giunchigliani opened the hearing on SB-344.

 

SENATE BILL 344 -Permits certain employers to pay wages to certain employees monthly. (BDR 53-1472)

 

Mr. Jim Endres, State Manager of AT&T, testified from prepared testimony (Exhibit C).  Mr. Endres declared his support of the amendments provided in SB-344.

 

Mr. Anderson questioned if SB-344 was not passed, would this make Nevada unique.  Mr. Endres responded in the western region Alaska and Hawaii also did not have this statute.  AT&T has taken charge to correct the inaccuracy of the state's statutes.

 

Mr. Hettrick asked if there was any prohibition against employers in this state paying monthly at present.  Mr. Endres noted according to the present statute there was prohibition, but an employee could be paid monthly pursuant to consent.  Chairman Giunchigliani noted up until about eight years ago teachers were required to be paid monthly, and the statute was changed so they could be paid twice a month.

 

Mr. Regan pointed out the University of Nevada, non-faculty members were paid monthly.

 

      ASSEMBLYMAN REGAN MOVED DO PASS ON SB-344.

     

      ASSEMBLYMAN ANDERSON SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.

      ASSEMBLYMAN ERNAUT WAS ABSENT AT THE TIME OF THE VOTE.

 

Chairman Giunchigliani opened the hearing on AB-466.  She explained AB-466 was submitted for the committee's review.  AB-466 dealt with the issue of small and medium size businesses being unable to put together light duty positions.  She noted the committee should take a look at the Oregon plan, to allow for injured workers not to go into rehabilitation but be placed in a light duty position.  

 

ASSEMBLY BILL 466 -     Establishes preferred employee program for rehabilitation of injured employees.  (BDR 53-1873)

 

Mr. Larry Zimmerman, CDS of Nevada, testified.  Mr. Zimmerman stated what AB-466 appeared to accomplish was to give employers an incentive to take injured workers back to work.  It established certain parts of a claim would be funded through the subsequent injury fund, and the employer would be relieved of premiums for taking the injured worker back to work.  Presently there was nothing in the statute prohibiting the State Industrial Insurance System (SIIS) or a self-insured employer to do exactly what AB-466 allowed.  SIIS had on-the-job training programs where they would pay the injured workers rehabilitation maintenance while he was going through an on-the-job training program.  If the injured worker was injured while in the training program SIIS would continue to cover the new injury.  A self-insured employer could establish any incentive program they choose to encourage another employer to take an injured worker back to work, if there was no position available at their pre-injury facility. 

 

He noted the subsequent injury fund presently was only used by some employers and some insurers, although everyone was paying into it.  AB-466 acted as a impediment for some of the employers who presently took injured workers back to work to light duty positions, and it would act as a big incentive for employers to no longer take them back.  Mr. Zimmerman explained if Washoe County had an injured worker and took him back in a rehabilitation program, the cost of taking back its own employee would be funded by the subsequent injury fund which was funded by other employers.  He emphasized the basic rule in workers' compensation was for each employer to pay for its own claims.  AB-466 relieved employers of the responsibility to take back their own employees.  Mr. Zimmerman noted he had never heard a businessman say, "Let's do something like the state does it."  Mr. Zimmerman concluded it did not seem to be cost effective to get the state involved in another area of qualifying employees and how they should be taken back to work.

 

Chairman Giunchigliani questioned if his objection was the subsequent injury fund.  Mr. Zimmerman explained all claims expenses SIIS accumulated, based upon a certain injury, would be charged back one way or another to the pre-injury employer by way of premiums, modification factors, retrospective rating adjustments, etc.  After some discussion Chairman Giunchigliani noted information which had been gathered, demonstrated the subsequent injury fund was necessary, although it should be kept separate, allowing the State Industrial Insurance System (SIIS) to handle their own and Department of Industrial Relations (DIR) to handle the self-insureds.

 

Chairman Giunchigliani explained the subsequent injury fund was not needed to fund the program.  However, something had to be done to codify and come up with a way to assist the small and medium sized employers who did not have light duty positions.

 

Mr. Zimmerman reiterated the State Industrial Insurance System (SIIS) and the self-insureds presently had the option to offer incentives to employers to take people back to on-the-job training programs.  Chairman Giunchigliani noted the problem SIIS had was subsidizing an injured worker for two to three years in some instances.  The whole issue for on-the-job training or rehabilitation was for the injured worker to gain proper employable skills. 

 

Mr. Carpenter questioned if the self-insured had the means to do this now, how did they handle a program like this.  Mr. Zimmerman said self-insured employers generally had the luxury of taking their injured workers back.  Very seldom did they have to go into a full-blown rehabilitation process.  With AB-466, the self-insured could take back an injured worker and also receive funding for taking them back, which would be paid for by other employers.  He further elaborated, currently if a self-insured employer had no position for the injured worker, the worker would be evaluated by a rehabilitation counselor.  After evaluation, if it was found the worker had some transferrable skill, the previous employer would search the job market and find an employer who might employ and retrain the injured worker.  The original employer would fund the worker's wages and workers' compensation for the first six months. 

Chairman Giunchigliani questioned what would happen after the six month period.  Mr. Zimmerman responded after the six month period the employee should be retrained.  Mr. Zimmerman noted his opposition to AB-466 was a program should not be funded by someone other than the pre-injury employer. 

 

Chairman Giunchigliani questioned what was wrong with trying to codify a program to focus on injured workers or quality employees as well, and to encourage incentive programs for the small and medium size businesses.  Mr. Zimmerman declared normally it was best left to the professionals involved, such as the rehabilitation counselor or insurance companies, to determine what was necessary to train someone and the time period necessary.

 

Chairman Giunchigliani queried in the self-insured what was the longest period an injured worker's wages has been subsidized for on-the-job training.  Mr. Zimmerman replied six months, and at times the pre-injury employer would have to purchase a new chair, computer or other type equipment the employee might need.  Chairman Giunchigliani remarked if AB-466 was constructed without the subsequent injury fund and had any expenses charged back to the pre-injury employer's premium, it would not be an incentive for the employer to take someone back to work.

 

Scott Young, General Counsel, the State Industrial Insurance System (SIIS), testified.  Mr. Young noted AB-466 provided a preferred employee would be covered for any injury.  He stated the language in AB-466 left the potential for the new employer to be less safety conscious because there was no way a new injury could affect the employer.  He stated, "I could envision some unscrupulous employer saying, give me as many of those as you can, cause no matter what happens to them on my job I will never have to pay any premium for them because I'm going to get reimbursed for any premium I do pay, and any injury that they have will never affect me."  He mentioned another concern was a situation where the employee returned to its pre-accident employment, either with the same employer or the same type of industry, he would still carry the pre-accident status.  Mr. Young explained if a carpenter was injured and was told to become something less physically demanding,and a year later he was working as a carpenter again, the State Industrial Insurance System (SIIS) should be granting an incentive to have him go back to something he was told he should not be doing in the first place.  The language stated the administrator would reimburse the employer for premiums paid and also reimburse the insurer for claims costs. 

 

Mr. Young remarked the notion of an incentive was an excellent one.  The whole idea was to get people off workers' compensation and back to gainful employment.  SIIS did have a type of incentive program where if a worker was injured and a new employer wanted to hire him, the employer was not responsible for any aggravation to the injury. 

 

After discussion it was decided Section 3, subsection 2(a) and Section 3, subsection (b) had to be reviewed.

 

Mr. Carpenter questioned where the funds came from to carry out the program SIIS was using at present. 

 

Mr. Donald Jayne, General Manager, the State Industrial Insurance System (SIIS), testified.  He explained funds for the subsequent injury were paid for by all the employers in the state.  The charge for on-the-job training was paid for out of the rehabilitation fund.  Mr. Jayne explained AB-466 established the preferred employee, and the reimbursement of expenses for the preferred employee would come from the subsequent injury fund, which would then spread the expense across all employers in the state.

 

Mr. Jayne further summarized if SIIS utilized the internal subsequent injury to access the incentive program which allowed hiring an injured worker, they had to have a written agreement and different criteria.  Mr. Jayne noted he could send a copy of the criteria which was slightly more liberal than the current subsequent injury with the six percent threshold, but was spread across all employers as well.  Mr. Jayne further stated whether it was more proper to charge expenses back to the specific employer at the time of injury was a policy level decision.

 

Mr. Carpenter further questioned Mr. Jayne regarding what he thought about AB-466 and the use of the subsequent injury funds to fund the preferred employee program.  Mr. Jayne responded any effort to encourage employers to hire injured workers was a good approach.  The quicker an injured worker went back to work the shorter the TTD payments and rehabilitation maintenance.  Mr. Jayne concurred with Mr. Young regarding the problems with some of the language in AB-466 and stated he would be willing to work with the committee to amend the language.  Mr. Jayne emphasized there should be more risk placed on the new hiring employer.  He also noted agreement with Mr. Zimmerman concerning many things could be accomplished with SIIS's current on-the-job training programs.   

 

Mr. Anderson questioned currently, if an injured worker went back to work at a reduced position, did this generally occur more in large business than small.  Mr. Jayne replied generally there was more opportunity for the larger employer.

 

Mr. Anderson asked if AB-466 would prohibit the small businessman who might have a job vacancy to take advantage of the same kind of a position the large businesses currently enjoy.  Mr. Jayne responded AB-466 would make it much more viable for the smaller employers in the state who had an injured worker to become a preferred employee. 

 

Mr. Anderson queried if a business owner took back an injured worker for a short period of time at a reduced capacity position and he did not work out and was fired, what was the consequence to the employee.  Mr. Young replied if the reason the individual could not perform the new light duty job was because of his industrial injury, then he would be eligible for continued rehabilitation.  However, if the injured worker was in a light duty position he could handle, and for some reason such as insubordination was fired, then he would not be eligible for further rehabilitation.

 

Chairman Giunchigliani noted the whole on-the-job training program needed to be reviewed as to what employers were used and the length of duration someone was in an on-the-job training program.

 

Mr. Regan stated he understood AB-466 to read light employment, not rehabilitation or on-the-job training.  Mr. Young noted AB-466 really only applied to light duty employment.  However, because for the first six months the administrator would subsidize the rate of salary of the injured worker, the employer could decide to train him. 

 

Mr. Collins questioned if an incentive could be established for the employers to bring the injured worker back and offset their higher premium for a higher modification factor rate, and make it work into AB-466.  Mr. Jayne noted AB-466 did not prevent an injured worker from becoming a preferred employee after rehabilitation instead of before.  The gain to the insured would come if he was large enough to be experienced rated.  The reduction of claims payments made to this particular claim file would have a direct impact on what the modification factor would be in the future.

 

Mr. Collins questioned if an injured worker could go to work part-time while he was being rehabilitated or would he be in violation of benefits and could this be put into AB-466.  Mr. Jayne noted the Temporary Partial Disability (TPD) was another form of disability payment, and an individual who was capable of going back to light duty would be eligible for the TPD.  Chairman Giunchigliani noted this was a good point, and TPD was not used very often.

 

Mr. Hettrick noted he was an employer with 20 employees and it was impossible to bring in an extra person to just answer the phone.  This would only apply to larger employers.  Mr. Hettrick also noted he did see some problems with AB-466, where the larger employers would abuse the subsequent injury fund and the smaller employers would not even know it was available to them.

 

Mr. Hettrick called attention to Section 4, subsection 2 and noted the word "once" on line 21 could be construed as one pay check.  He noted this section needed to be reworded.  He further noted Section 3, subsection (b) should be removed from AB-466. 

 

After committee discussion Mr. Jayne noted AB-466 indicated the injured worker who could not return to his prior occupation, but if he had other residual skills which could be utilized, he could immediately go into the preferred employee pool.

 

Chairman Giunchigliani reiterated what the committee was trying to accomplish in AB-466 was more of a light duty approach because the small and medium sized businesses required assistance to compete as the large businesses did.  Mr. Jayne stated what SIIS was already doing needed to be enhance and to obtain a way to return the injured worker back into some temporary duty while he was recouping.

 

Chairman Giunchigliani commented the light duty opportunities must be worked on first, and the vocational rehabilitation area must be broadened.

 

The Chair explained the subsequent injury fund was now rated six percent.  If an employer hired an injured worker, and he was reinjured, the employer would not be held liable for up to six percent of the cost of the Permanent Partial Disability (PPD). 

 

Mr. Zimmerman noted this was not particularly a self-insured employer's problem.  Self-insureds did not have a problem bringing employees back to work and getting people rehabilitated.  He suggested amending "preferred employee" to "preferred employer" concept.

 

Chairman Giunchigliani agreed and noted one of her suggestions was to establish job banks, job development and working with employers so SIIS would have direct contacts on where to place the injured workers.

 

Following committee discussion, Chairman Giunchigliani concluded AB-466 was tied to light duty, assistance to small employers and vocational rehabilitation and possibly could be modified to accomplish this.

 

Mr. Jim Jeppson, Acting Administrator, Department of Industrial Relations (DIR), testified.  Mr. Jeppson referred to Section 3, subsection (a) and suggested this language was too restrictive.  He noted the audits DIR did on self-insurers employers were resulting in notices of violation.  He mentioned over the last several months DIR would have eliminated several large self-insurers from participating in this program because of the violations discovered.  Mr. Jeppson noted over the past 18 months, slightly over $200,000 had been collected in fines.

 

Chairman Giunchigliani closed the hearing on AB-466.  No action was taken at this time.

 

There being no further business to come before committee, the meeting was adjourned at 5:00 p.m..

 

      RESPECTFULLY SUBMITTED:

 

 

                             

      JEANNE PEYTON

      Committee Secretary

 

  

 

 

 

           

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Assembly Committee on Labor and Management

May 11, 1993

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