MINUTES OF THE

      ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT

 

      Sixty-seventh Session

      June 3, 1993

 

 

 

The Assembly Committee on Labor and Management was called to order by Vice Chairman Bernie Anderson, at 3:40 p.m., on Thursday, June 3, 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    Absent/Excused

      Mr. Bernie Anderson, Vice Chairman

      Mr. Douglas A. Bache

      Mr. John C. Bonaventura

      Mr. John C. Carpenter  

      Mr. Tom Collins, Jr.

      Mr. Peter G. Ernaut

      Mr. Lynn Hettrick

      Ms. Erin Kenny

      Mr. John B. Regan

      Mr. Michael A. Schneider                              Absent/Excused

 

 

STAFF MEMBERS PRESENT:

 

      Don Williams, Legislative Counsel Bureau Research

      Frank Krajewski, Senior Research Analyst

 

OTHERS PRESENT:

 

      Larry Zimmerman, Consensus Group

      Ray Bacon, Nevada Manufacturers' Association

      Bonnie James, Las Vegas Chamber of Commerce

      Jim Shelly, Sr. Research Analyst, Employment

        Security Department

      Harry Bradley, Chief of Benefits, Employment

        Security Department

     

 

 

Following roll call, Vice Chairman Anderson brought attention to a report and recommendations made by the subcommittee on occupational safety and health (Exhibit C).  He also submitted Exhibit D, a memo from Carol Jackson, Director of the Department of Industrial Relations, regarding the Amusement Ride Ordinance.

 

The summary outlined on Exhibit C, Vice Chairman Anderson noted, had requested two BDRs and an indefinite postponement of AB 385.

 

      ASSEMBLYMAN HETTRICK MOVED TO REQUEST BILL DRAFTS TO:

 

      1.    ESTABLISH A PROGRAM TO CERTIFY WELDERS; AND

 

      2.    TO ESTABLISH A STATE PROGRAM TO REGULATE THE SAFETY OF AMUSEMENT BUILDINGS AND RIDES.

 

      ASSEMBLYMAN REGAN SECONDED THE MOTION.

 

Mr. Carpenter questioned the certification of welders and whether this would affect welders on every ranch, at every mine, etc.  Vice Chairman Anderson answered it would not.  Mr. Regan noted there were different levels of certification for welders and which was taken into account in the hiring process.  The bill would serve to create a training program to establish the qualifications for the different levels of certification. 

 

      THE MOTION CARRIED UNANIMOUSLY.

 

ASSEMBLY BILL 385 -     Creates cause of action for death of or substantial bodily injury to employee caused by employer's willful violation or gross negligence related to occupational safety.

 

Referring to the request to indefinitely postpone AB 385, Vice Chairman Anderson pointed out there was not enough time left in the Session to debate the bill and identify the businesses causing an inordinate number of accidents.

 

      ASSEMBLYMAN HETTRICK MOVED TO INDEFINITELY POSTPONE AB 385.

 

      ASSEMBLYMAN ERNAUT SECONDED THE MOTION.

 

      THE MOTION CARRIED.  (ASSEMBLYMAN ANDERSON VOTED NO, ALL OTHERS VOTED YES.)

 

Vice Chairman Anderson opened the hearing on AB 662.

 

ASSEMBLY BILL 662 -     Requires issuance of identification cards to persons covered by industrial insurance.

 

Reviewing, Vice Chairman Anderson recalled AB 662 had been requested by the committee to establish an employee identification system. 

 

Mr. Hettrick said although he had proposed there should be some kind of system to identify workers, he believed AB 662 was too cumbersome.  Therefore, he told the committee he had obtained material from the Employment Security Department (ESD) which delineated the Department's system of reporting by social security number.  This was language contained in NAC 612.050.  He suggested the committee incorporate the first two paragraphs of the language which read as follows:

 

1.    Each employer shall obtain the social security account number of each worker employed by him in employment subject to Chapter 612 of NRS.

 

2.    Each employer shall report the worker's social security account number making any report required by the Employment Security Department (Mr. Hettrick pointed out the "Employment Security Department" would be changed, of course, to "insurer" or "insured") with respect to that worker.

 

The remaining language indicated if the number was not readily available, the worker would be required to obtain the number pursuant to federal law, etc.

 

As written, Mr. Hettrick said, AB 662 would prove so cumbersome it would be extremely difficult to fulfill.  Alternatively, he believed every employer required an employee to fill out a W-4 form at the time of hire.  If so, he thought it was reasonable to require a copy of the W-4 form for an injured worker to take with him to the treating doctor.  The W-4 form would be proof of employment as well as providing social security number, hire date and the employer's account number.  If it was long-term employment, Mr. Hettrick believed the card would probably be workable, but once a quarter had been worked, the employee would be listed on the quarterly report for ESD for that particular employer and there was no further need for tracking. 

 

Vice Chairman Anderson observed the classification of employment and the gross monthly wage were two important things they would lose if Mr. Hettrick's suggestion was adopted.  Also, in paragraph 3 on page 1, lines 16-20, there was a requirement for identification cards for short-term employees and specific instructions regarding the responsibility of third-party administrators and self-insured employers.  Gross monthly wage was needed to determine the relationship of gross monthly wage to PPD and TPD awards; and job classification would be used to determine incidence of job-related injuries.

 

Mr. Hettrick suggested the form the employer had to fill out quarterly would include the information Vice Chairman Anderson described.  For "day" employees he believed a one-day card could be issued showing the name of the worker and the date of expiration.  Also, Mr. Hettrick pointed out if they were to adopt a method of handing out cards, they would have to address the possibility of fraudulent issuance of cards and penalties attached thereto. 

 

Mr. Collins opined it would be simple matter to adopt a system of cards.

 

Mr. Carpenter believed there should be a requirement to report to SIIS in the same manner as employees were reported to the Employment Security Department.

 

Larry Zimmerman, representing the Consensus Group, questioned the reasoning behind an employee being supplied a card.  Currently, he believed the only benefit would be to notify the medical provider with information that the injured worker was insured under the Nevada Workers' Compensation law, but there was no need for a card to prove this.  However, having thousands of workers possessing a card opened the process up for fraud.  The questions which would arise would be:  1) how long would the card be valid; 2) would it be returned when the injured worker was no longer employed; and 3) to what would it entitle the worker?  Going to a doctor with a card in your hand entitled you to nothing until the claim was accepted.  Mr. Zimmerman believed the issuance of cards would create a bureaucratic nightmare. 

 

As for the information Mr. Anderson thought was needed, Mr. Zimmerman believed the Employment Security Department already gathered this information; and SIIS was statutorily allowed to obtain information from the Employment Security Department.

 

Mr. Collins and Mr. Zimmerman discussed the benefits and drawbacks of the proposal.

 

Mr. Carpenter asked Mr. Zimmerman's opinion regarding whether employers could submit the same employment information to SIIS as they now submitted to ESD.  Basically, Mr. Carpenter thought the committee was trying to see that each employer was paying his fair share in SIIS contributions.  Mr. Zimmerman said he was unable to comment with any true experience.  As a third-party administrator he did not have a problem as all their self-insured employers were insured at all times.  If anything, he wished to see the self-insured employers separated from the intent of the bill.  If SIIS was not collecting all the premiums it was entitled to, he believed the question should be answered by the SIIS counsel, Scott Young.

 

Ray Bacon, Executive Director of the Nevada Manufacturers' Association, remarked the committee was on the edge of the issue of fee consolidation and fee collection.  He said he basically agreed with Mr. Hettrick's suggestions.  However, it was important to:  1) make sure the two agencies did not somehow duplicate information in the computer; and 2) make certain the information was the same information -- one form, one set of information going to one location.  If this could be done, Mr. Bacon believed a large step had been taken toward improving reporting, reducing paperwork, reducing bureaucracy and actually improving the cash flow issues for both agencies. 

 

Mr. Bacon also believed there should be a centralized payment instead of two separate checks, i.e., one to SIIS and one to the Employment Security Department.  Distribution could then be made by computer.  Mr. Bacon indicated some states were doing this.  In the past the process had been opposed in Nevada because SIIS was a state agency and the ESD program was federal.  Nevertheless, Mr. Bacon believed it was possible.

 

Bonnie James from the Las Vegas Chamber of Commerce, was confused about the intent of the bill.  If they went to a card system, several thousands of cards would have to be issued if each Nevada worker was to receive this proof of employment.  Ms. James saw this as being unbearably burdensome.  She believed there were other bills which attempted to simplify the reporting procedure for SIIS, ESD, FICA, etc.  If the same information was provided for each agency this would simplify the reporting for each agency.

 

Mr. Carpenter remarked if SIIS required the same information as the other agencies and at the same time, there should not be a problem for the employers.  Ms. James acknowledged Mr. Carpenter's point, but pointed out different agencies often needed different information.  Therefore, she said they were trying to develop some simplified form(s), but there were difficulties involved with including everything on one form. 

 

Mr. Hettrick insisted it would be simple if SIIS was just allowed to take a photocopy of the report submitted for the Employment Security Department.  One computer check could compare ESD's report to the forms submitted.  If the worker was not shown on both reports with the same hire date, it would be obvious there was a problem.

 

The Senior Research Analyst for the Employment Security Department, Jim Shelly, explained the ESD collected information on gross wage of employees on a quarterly basis.  However, there was no identification of class of employment -- only social security numbers.  In response to Vice Chairman Anderson's question, Mr. Shelly said it would be difficult for ESD to go from the required gross quarterly wage to a gross monthly wage.  He was unable to answer whether the classification of each employee could be incorporated into their forms. 

 

Vice Chairman Anderson also asked Mr. Shelly if there were any prohibitions against ESD sharing information with SIIS or any other state department.  Mr. Shelly replied NRS 612.265 was the disclosure provision, but it did allow ESD to provide information for workers' compensation.  This was tied to the individual's social security number.  To have to provide such information on either a monthly or quarterly basis would increase the cost to ESD.

 

Mr. Hettrick believed they could work with a quarterly report simply by dividing gross monthly wage by three, and there would not be a great margin of error.  The quarterly information, Mr. Shelly acknowledged, was entered into a computer, but in response to Mr. Hettrick's request, he was not willing to say whether the information could be shared through a computer network.  Mr. Hettrick insisted with a small amount of effort they could devise a way to share the information between ESD and SIIS which would preclude some employers from avoiding SIIS premiums.  Mr. Shelly said he believed ESD was already matching tapes for those individuals who appeared to be filing for SIIS and unemployment claims at the same time. 

 

Since both Chairman Giunchigliani and Mr. Schneider were absent, Vice Chairman Anderson indicated the committee would not vote on the bills to be discussed during the meeting.

 

Vice Chairman Anderson asked Mr. Shelly to provide the committee with a copy of the forms they used under NRS 612.050, in order to see if SIIS could use them to address the problems prompting the bill.

 

Mr. Regan asked what the penalty was for not reporting to ESD.  In response, Mr. Shelly said the penalties were not severe, however, one of the ways ESD was able to detect the employer who did not report occurred when someone named an employer when filing for unemployment compensation and the employer had not reported wages.  When this occurred, the ESD auditors investigated the business. 

 

Mr. Regan also asked if the federal information routinely gathered on an individual would be available more often than annually and whether it would be available to SIIS.  Mr. Shelly did not believe IRS information would be available to ESD.  However, he said, it was conceivable to share information between ESD and SIIS.  Vice Chairman Anderson asked Mr. Shelly to confer with the Legislative Counsel Bureau research staff and provide the information. 

 

ASSEMBLY BILL 636 -     Expands category of employers allowed to appeal charging of unemployment benefits to their accounts.

 

Harry Bradley, Chief of Benefits with the Nevada Employment Security Department, said they were opposed to AB 636, because the process of non-charging of benefits to employers was not funded by the Department of Labor.  Therefore, the work they currently performed cost ESD approximately $120,000/year in administrative costs -- costs not reimbursed by the Department of Labor.  He said they realized the bind the base-period employer was in with an employee who quit, went to work somewhere else and was later laid off because that job was completed.  If the first employer fell within the claimant's base period, that employer was charged for whatever benefits the individual might draw -- and in some circumstances, the employer had no right to protest those charges.

 

Mr. Bradley added the current statute stated any base-period employer who contributed 75 percent or more of the individual's earnings on which his claim was based, did have the right to protest the charges.  It was not an eligibility issue, had no effect on the claimant and was simply a matter of who paid the cost.  If there was a non-charge provided to an employer, this cost was socialized and shared by all employers in the state.

 

Continuing, Mr. Bradley concluded AB 636 would lower the 75 percent base-period employer to any base-period employer who contributed 45 percent or more.  Currently, he said, there was approximately $14 million non-charged benefits a year and with AB 636 this would double.  Administrative costs would also increase to approximately $350,000, with $50,000 in one-time start-up costs to conform to the amendment.

 

Mr. Hettrick asked what it would cost employers if they went from 75 percent to 45 percent.  Mr. Bradley said if it was not a 75 percent employer, the cost was directed to everyone proportionate to each contribution.  The bill would provide those persons the right to protest those charges.  Presently, those employers had no say unless they happened to be the worker's last employer. 

 

Mr. Bacon said he had had two employers who had experienced the identical situation cited by Mr. Bradley.  While he believed Mr. Bradley's fiscal estimates might be high, it was a serious problem to the employer victimized.  Vice Chairman Anderson asked Mr. Bacon if he could suggest any way to address the problem.  In response, Mr. Bacon said he believed much of the problem was due to lack of communication and notification.  Oftentimes, employers were not notified when they were charged for an individual who had quit, had gone to another job, was laid off from that job and subsequently filed for unemployment compensation.  Although it was a serious issue, Mr. Bacon said he did not know how the problem could be solved.

 

Mr. Bradley explained if an individual quit a job and was denied benefits, there was a "work and earnings" test to meet before they could become eligible again.  In Nevada this was 10 weeks.  Thus, if a person was eligible for $200/week unemployment, they would have to return to work in covered employment for 10 weeks and in each of those 10 weeks earn $200 or more before the qualification would be lifted. 

 

Vice Chairman Anderson reiterated there would be no action taken on either bill.  There being no further business, the meeting was adjourned at 4:51 p.m.

 

 

                                          RESPECTFULLY SUBMITTED:

 

 

 

                                                                 

                                          Iris Bellinger

                                          Committee Secretary

 

 

 

 

 

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Assembly Committee on Labor and Management

Date:  June 3, 1993

Page:  1