The legislature is back in town so it is no surprise that a number of bills have been introduced directly or indirectly affecting workers’ compensation in NC. Since the General Assembly’s “crossover deadline” was last week this is a good time to take a look at some of this legislation.
First, a word about “crossover.” Under the House and Senate rules bills that did not pass one house and “crossover” to the other by last Thursday are dead for the session. Crossover does not apply to bills that impose a tax or appropriate money. Also, it is not uncommon for legislation that did not pass crossover to appear later in the session in a budget bill or as an amendment to a bill that did make crossover.
A number of bills were introduced to address the employee misclassification problem in North Carolina. Misclassification occurs when an employer classifies an employee as an independent contractor in order to avoid paying payroll taxes and providing workers’ compensation in NC. The victims of employee misclassification include the government, which is denied revenue it is owed, businesses that are placed at a competitive disadvantage by following the rules, employees who are denied workers’ comp benefits, and the public which must pick up the costs of these workplace injuries. Mandy Locke with the News and Observer brought attention to this issue with her series Contract to Cheat and subsequent articles.
Senate Bill 694, sponsored by Senator Buck Newton and Senator Warren Daniel, is the only bill which made crossover, passing from the Senate to the House just before the crossover deadline. House Bill 482, sponsored by Representative Gary Pendleton, includes an appropriation and is not subject to crossover. This bill has received recent attention in the House. Other misclassification bills include Senate Bill 576 and House Bill 674. All of these of these bills would a create new misclassification department in state government to identify and punish misclassification. House Bill 482 also includes a provision that would allow officials to issue a stop work order when misclassification is evident on a jobsite.
NC Industrial Commission to Adopt Drug Formulary and Prescription Fee Schedule
Senate Bill 656 and Senate Bill 697 were introduced to require the North Carolina Industrial Commission to adopt a drug formulary as well as a fee schedule for prescriptions in workers’ compensation cases. A drug formulary is a list of preferred medications for particular ailments. A prescription drug fee schedule would set the price paid by employers and their workers’ compensation insurance companies in NC workers’ compensation cases. While neither of these bill made crossover it is certainly possibly they will receive attention, possibly in the budget.
Independent Contractor and Occupational Accident Policies in the Trucking Industry
Senate Bill 205 would change the responsibility for ensuring that truck drivers are insured for workers’ compensation injuries in North Carolina and allow trucking companies to replace workers’ compensation with occupational accident policies.
Exempt Non-Profit Volunteer Officers from Definition of Employee
House Bill 760 would, among many other things, exempt volunteer nonprofit officers from the definition of “employee” under the NC Workers’ Compensation Act. This bill passed the House and is headed to the Senate.
The House is hard at work on its budget and Speaker Tim Moore says he plans to roll out the budget bill the week of May 18, with votes possible later that week. This deadline could slip. Any number of issues affecting workers’ compensation in NC could pop up in the budget, including increased efforts to identify and punish employers who fail to obtain workers’ comp insurance or misclassify employees as independent contractors such as contained in Senate Bill 560 and Senate Bill 656.
The Governor has made it clear that he intends to overhaul the state’s handling of its workers’ comp claims. The Governor’s has submitted his own budget, introduced in the Senate as Senate Bill 713, which gives a blueprint of some of the things he is looking to do, including centralizing claims management.
House Bill 854 – Would reduce the number of employees required to trigger workers’ compensation in North Carolina from three to one for most businesses.
Senate Bill 693 — Would eliminate the presumption that newspaper deliverers are independent contractors.