MINUTES OF THE

      ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT

 

      Sixty-seventh Session

      June 9, 1993

 

The Assembly Committee on Labor and Management was called to order by Chairman Christina R. Giunchigliani, at 5:35 p.m., on Wednesday, June 9, 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.

      Mr. Peter G. Ernaut

      Mr. Lynn Hettrick

      Ms. Erin Kenny                      Absent/Excused

      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:

 

      Jim Shelly, Sr. Research Analyst, Employment Security Dept.

      Mike Griffin, Deputy Insurance Commissioner

      Holly Jensen, Administrator, Div. of Preventative Safety

 

Following roll call, Mr. Bache submitted a proposed amendment and language for AB 562.  (See Exhibit C.)

 

ASSEMBLY BILL 562 -     Prohibits Commission on Economic Development from referring or recommending person for employment with Motion Picture Company.

 

      ASSEMBLYMAN BACHE MOVED TO AMEND AND DO PASS AB 562.

 

      ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

 

Mr. Anderson asked if the Commission on Economic Development would still be allowed to update and/or keep a file of new people in Nevada who were in the motion picture industry.  In response, Mr. Bache explained the language in Exhibit C, paragraph B. explained the Motion Picture Division prohibited solicitation of resumes from anyone, but allowed the Division to receive resumes and place them in a supplement until they could be entered into the next edition of the Nevada Production Directory.  However, he added, the Motion Picture Division had been cautioned any supplements issued by the Division had to be in the exact format as the original directory.  Mr. Hettrick indicated the representatives from the Motion Picture Division had opposed this provision, however, finally agreed to abide by the subcommittee's proposal.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

SENATE BILL 380 -Clarifies that employee leasing company is employing unit of employees it leases to client company for purposes of unemployment compensation.

 

Jim Shelly, Senior Research Analyst for the Nevada Employment Security Department (ESD), explained SB 380 had been requested by ESD.  He told the committee the employee leasing business was expanding throughout the country as well as in Nevada.  Current law concerning unemployment insurance made it difficult to determine who the employer was, i.e., the leasing company or the client company.  SB 380 defined "employee leasing company" and specifically identified the leasing company as the employer of the individuals leased to client companies.  At the same time, it imposed certain requirements on the leasing companies for the protection of the unemployment trust fund.  This required the employee leasing company to identify each client company and report them separately on the quarterly report submitted to ESD.  Additionally, the leasing company and client company could be held jointly and severally liable for any delinquent taxes attributable to a particular client.

 

Continuing, Mr. Shelly said the bill included a saving clause to distinguish between leasing activities and those of temporary employment agencies.  The purpose of this provision was to avoid confusion between those two activities. 

 

Mr. Shelly testified the bill had been patterned after other states with similar legislation.  Since the employee leasing industry appeared to be here to stay, Mr. Shelly thought it served a legitimate purpose in the current business climate.  However, all the states contacted had recommended legislation be drafted before problems arose.

 

Chairman Giunchigliani, Mr. Shelly and Mr. Collins discussed whether SB 380 was in conflict with AB 474.  Mr. Shelly commented ESD also supported AB 474.  Although there were some differences, AB 474 contained two essential elements, i.e., to recognize the employee leasing company as the statutory employer, and to have joint and several liability.  He stated AB 474 would adequately serve the needs of ESD, but if AB 474 was not enacted, they would have SB 380 to fall back on.  Ultimately, Mr. Shelly said ESD would be happy if either bill passed.

 

In response to Mr. Anderson's question, Mr. Shelly said AB 474 would address SIIS and ESD, however, SB 380 was specifically directed to unemployment insurance.

 

When Mr. Anderson asked Mr. Shelly how much revenue had been lost due to a lack of specific legislation, Mr. Shelly said generally, there had not yet been a problem and ESD had not lost a great deal of revenue.  However, two companies were currently causing ESD some concern, which prompted the desire to see such legislation enacted.

 

On page 2, lines 4 and 5, Mr. Hettrick wondered if the language, "the leasing company is responsible for the administration of claims for benefits" was too broad.  In answer, Mr. Shelly said SB 380 was under NRS 612, which was specifically directed to unemployment compensation.

 

      ASSEMBLYMAN COLLINS MOVED TO DO PASS SB 380.

 

      ASSEMBLYMAN BACHE SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

ASSEMBLY BILL 702 -     Makes various changes relating to industrial insurance and safety.

 

The Chairman noted she had requested this bill to require the licensing of claims examiners, and went on to describe the various provisions of the bill. 

 

Deputy Insurance Commissioner, Mike Griffin, came forward to testify on the bill.  He indicated the Department of Insurance opposed AB 702 in its current form.  Attention was drawn to page 2, lines 19-22, which defined the "self-insured employer" as someone who possessed certification from the "department" (Department of Industrial Relations) rather than the Commissioner of Insurance, where certification was currently made.  If the intent of the bill was to move the certification for self-insured employers to the Department of Industrial Relations, Mr. Griffin suggested the language in Section 8, subparagraph 2, should not make the Commissioner of Insurance responsible for investigating the solvency of insurers and certifying third-party administrators.

 

Basically, Mr. Griffin believed the Department of Insurance simply needed the intent of the bill clarified.  Chairman Giunchigliani explained the committee had tried to determine whether it was appropriate to have a regulatory agency without authority but somewhat responsible for licensing self-insureds.  Thus, there was an intent to give the DIR responsibility and authority for licensing the self-insured.  She agreed with Mr. Griffin, however, his concern needed to be addressed.

 

Mr. Griffin was also concerned with a reference to workers' compensation representatives/administrators.  If, in fact, the responsibility was to be shifted, he believed the entire function should be moved.  The Chairman agreed.

 

Mr. Carpenter questioned language on page 13, Section 33, lines 9-13.  He wondered if it was realistic to expect an employer to comply with the requirement to administer a program of education and training to employees within two weeks of a person being hired.

 

Holly Jensen, the Administrator for the Division of Preventative Safety, addressed Section 33 regarding "10 or more employees."  Ms. Jensen said they had contacted the Research Division of ESD and found there were approximately 7,800 employers employing 10 or more employees; and there was a 3.6 percent growth rate per year.  Therefore, approximately 300 employers with more than 10 employees had entered Nevada in 1992.  Ms. Jensen told the committee a fiscal impact statement had been submitted and four additional positions had been requested to handle the anticipated extra demand plus reducing the present backlog. 

 

In addition, Ms. Jensen remarked, NRS 616.33055 required all new business to prove they had industrial insurance when obtaining a business license.  This was a Division of Industrial Insurance Regulation form.  This form, she suggested, could be changed to include a box to check the number of employees a new employer would be employing; and the information would be gathered when the new employer obtained a business license and showed proof of industrial insurance.  This form could then be forwarded to the Division of Preventative Safety which would, in turn, contact the employers having 10 or more employees. 

 

Ms. Jensen was somewhat troubled by the requirement to administer the program to the employees of the employer within two weeks.  She believed a monthly period would be more feasible as this would conform to the monthly listing received by the Administrator of the DIIR of all new employers obtaining a business license. 

 

After this suggestion was discussed, the Chairman indicated the committee was open to a 90-day time period.

 

The Chairman pointed out the bill would also force the state government to abide by the same regulations governing the private sector; and further stated governmental agencies were the most inconsistent in their training procedures.

 

Questioning Section 31, Mr. Regan noted the language of Section 31, page 12, lines 17, 19, 23, 24, 27, 31, 40 and 44, "Each state agency and local government shall establish and maintain a program which authorizes and encourages. . ." was an unfunded mandate.  Chairman Giunchigliani acknowledged his point and agreed to delete the "local government" language.  The intent of the language was to require the state to begin to create light-duty jobs.

 

Mr. Anderson believed local governments were already being asked to meet or develop the standards set by AB 702.  Ms. Jensen told Mr. Anderson the standards had been on the books for years and technically every state agency and local government should have a safety program.  However, it did not require a "written" program.

 

In response to Mr. Hettrick's question, it was agreed the bill would have to go to the Ways and Means Committee for a fiscal note.  Also, Mr. Hettrick asked if any positions would be lost in taking duties away from the Commissioner's office, since they would have to increase positions in Preventative Safety.  Mr. Griffin said currently the self-insured/workers' compensation section was funded by the Department of Industrial Relations, but the Insurance Commissioner's Office administered the three employees who performed the certification and auditing functions.  Therefore, he said, the Department of Insurance interpreted the bill to mean the three employees would transfer to the Department of Industrial and Insurance Regulations (DIIR).

 

Mr. Hettrick also wondered what the effective date would be.  He said he had only seen an effective date of July 1, 1993; but he was not certain there would be certified technicians available by that time.  Following a suggestion from Mr. Bache, and after some discussion, the committee agreed upon an effective date for certification of July 1, 1995, to coincide with the effective date for vocational rehabilitation licensing.

 

Ms. Jensen recommended the current employees be grandfathered in; however, the Chairman said this had not been done for other categories as it was not considered the present personnel had the expertise needed.  Mr. Anderson wanted to assure a strong safety program from the beginning rather than trying to address the problems further along in the process.  Ms. Jensen said it was her understanding the certification was for claims examiners. 

 

Chairman Giunchigliani suggested the committee move to amend and rerefere the bill to committee so the members could read it with the amendments before passing it out of committee.

 

      ASSEMBLYMAN BACHE MOVED TO AMEND AND REREFER AB 702.

 

      ASSEMBLYMAN CARPENTER SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

There being no further business, the meeting was adjourned at 6:15 p.m.

 

 

                                          RESPECTFULLY SUBMITTED:

 

 

 

                                                                 

                                          Iris Bellinger

                                          Committee Secretary

 

 

 

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Assembly Committee on Labor and Management

Date:  June 9, 1993

Page:  1