PA 10-12—sHB 5204

Labor and Public Employees Committee

Judiciary Committee

AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE JOINT ENFORCEMENT COMMISSION ON EMPLOYEE MISCLASSIFICATION

SUMMARY: By law, any employer who misrepresents either the number of its employees or casts them as independent contractors to defraud or deceive an insurance company in order to pay lower workers' compensation insurance is (1) guilty of a class D felony (see Table on Penalties), (2) subject to a stop work order, and (3) liable to the Labor Department for a $300 civil penalty. This act applies the same penalty to an employer who defrauds or deceives the state in the same way. The act also increases the civil penalty for this violation by specifying that each day of the violation constitutes a separate offense.

The act specifies that any employer who is fully insured for workers' compensation and fails to pay the required state assessments for (1) administration of the Workers' Compensation Commission and (2) administration and funding of the Second Injury Fund (SIF), is guilty of a class D felony and subject to a stop work order. By law, a self-insured employer who fails to make the same assessments is already subject to these penalties.

The SIF, which the state treasurer administers, is an employer-funded program that provides workers' compensation to employees whose employers did not provide it. By law and with few exceptions, employers must provide workers' compensation insurance for their employees.

EFFECTIVE DATE: October 1, 2010

OLR Tracking: JM: VR: CR: DF