HB848: relative to a private right of action to recover workers' compensation coverage payments.

HB 848 – AS INTRODUCED

2007 SESSION

07-1101

01/03

HOUSE BILL 848

AN ACT relative to a private right of action to recover workers’ compensation coverage payments.

SPONSORS: Rep. Long, Hills 10

COMMITTEE: Labor, Industrial and Rehabilitative Services

ANALYSIS

This bill establishes procedures for a private right of action to recover workers’ compensation coverage payments.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-1101

01/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT relative to a private right of action to recover workers’ compensation coverage payments.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Section; Private Right of Action to Recover Workers’ Compensation Coverage Payments. Amend RSA 281-A by inserting after section 5-f the following new section:

281-A:5-g Private Right of Action to Recover Workers’ Compensation Coverage Payments.

I.(a) Where upon written petition pursuant to this section either the commissioner or a superior court finds that probable cause exists to show that an employer has not fully complied with this chapter, then any 3 persons may bring on behalf, and in the name, of the state of New Hampshire a civil action to recover amounts which by law should have been paid by the employer pursuant to this chapter to cover the employer’s employees who engaged in employment in New Hampshire. Persons who petition either the commissioner or a superior court to hold a probable cause hearing to determine whether probable cause exists shall serve a copy of the petition to the employer named within 5 days of filing the petition. The commissioner or the superior court in which such a petition was filed shall hold a hearing within 30 days, and after the conclusion of such hearing, shall render a decision within an additional 30 days allowing or denying the petition based on a finding or failure to find, respectively, that probable cause exists under this section. The decision may be appealed when a claim filed under this section has been finally adjudicated after suit where the petition is allowed. If the petition is denied, the denial may be immediately appealed. At the probable cause hearing, it shall be prima facie evidence that such probable cause exists if it is shown that:

(1) The employer paid an employee any portion of wages in cash currency with no deductions or applicable taxes withheld for that cash portion of wages;

(2) The employer misclassified an individual as an independent contractor where the individual was in fact an employee;

(3) The employer failed to withhold from its payment of the employee’s wages all related payroll taxes or the employer failed to forward to the appropriate entity all related payroll contributions or taxes;

(4) The employer employed an individual who is not lawfully allowed to perform labor as an employee in this state; or

(5) The commissioner has no record of compliance with RSA 281-A:5.

(b) Nothing contained in paragraph I shall be construed as limiting or prohibiting in any way other information that might be used to establish the requisite probable cause that this chapter was not fully complied with, and any information produced need not be admissible at a trial. At the probable cause hearing, it shall not be grounds for objecting that the information produced will be inadmissible in a trial if the information appears reasonably sufficient that it might lead to the discovery of other information that could be admissible at a trial.

II. After the finding that such probable cause exists has been made, the persons who brought the petition shall serve a copy of the decision on the insurer, if any, that was or is at the time of suit entitled to collect amounts not paid and the persons shall simultaneously state to such insurer their intention to file suit under this section. At least 90 days after such service to the insurer, if any, the persons may file a civil action in accordance with this section. Where no insurer exists, then suit may proceed immediately. Any persons who prevail in an action filed pursuant to this section shall be entitled to recover, in the aggregate, 10 percent of the amounts unlawfully not paid or $10,000, whichever is less, plus costs and reasonable attorney’s fees, as well as an additional amount from the defendant as liquidated damages equal to 10 percent of the amount not paid or $10,000, whichever is less. Such liquidated damages are not intended to be penal or punitive, but compensatory. After an action under this section is filed in a court, any insurer that failed to file a complaint or seek arbitration to recover or collect any amounts sought in the action and which would have been due to the insurer from a defendant in such action shall be prohibited from attempting to recover or collect such amounts sought in the action which the insurer failed to seek to recover or collect, unless the insurer obtains the written and voluntary consent of the persons who have initiated the suit under this section. When the persons provide such written and voluntary consent, a court may substitute the insurer as the plaintiff. When the insurer is substituted as the plaintiff, then the case shall proceed without further regard to this section and any award in favor of the insurer, if any, shall be the property of such insurer.

III. No settlement made between any insured and any insurer shall be deemed to prohibit or limit an action under this section to recover other amounts that should have been paid to cover employees under this chapter and which the insurer did not recover by such settlement or otherwise.

IV. Except as provided in this section and unless the insurer has been substituted in the action, any amounts recovered by the persons who filed the civil action under this section shall be forwarded to the state treasurer for deposit into the administration fund, established under RSA 281-A:59, except those amounts payable to such persons in accordance with this section. Any insurer, however, who pays any injured employee any claim may recover from the amounts that are deposited into the administration fund any premium that should have been paid to that insurer and which would have provided coverage for that specific claimant and claim.

V. Nothing contained in this section shall be deemed as limiting or prohibiting any political subdivision, public entity, or office, for example, any division, commission, commissioner, director, attorney general, and law enforcement entity or office, presently entitled to bring any action, criminal or civil, against a defendant to an action under this section from proceeding against such defendant in any appropriate forum. The forum, court, or agency, however, may consider and offset the amounts recovered, or likely recoverable, by an action pursuant to this section in imposing a verdict or judgment, or deciding against imposing a fine or other penalty.

VI. The section shall not affect, or apply to, insurance contracts that were made before the effective date of this section. In addition, any action filed under this section may be filed only after 90 days following the expiration of the then-present term of the workers’ compensation policy affected by the action, if one existed. In paragraphs I, II, and IV “person” includes, but is not limited to, any corporation, enterprise, partnership, association, or organization operating primarily in the state of New Hampshire.

2 Effective Date. This act shall take effect January 1, 2008.