REPORT TITLE:
Workers' Compensation


DESCRIPTION:
Requires owner-builders to provide workers' compensation under
specified instances; requires DLIR to process complaints from
workers' compensation claimants about unlicensed contractors and
absence of excise tax license for contractors; requires workers'
compensation insurance contracts to cover excluded items in
construction contract.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           138
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO WORKERS' COMPENSATION.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 371, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§371-    Reports of contractor violations; investigations.
 
 5 (a)  If a claimant under chapter 386 reports to the department
 
 6 that an employer may be in violation of chapter 237 or 444, the
 
 7 department shall notify the department of commerce and consumer
 
 8 affairs or the department of taxation, as appropriate.
 
 9      (b)  Upon receipt of a notification under subsection (a),
 
10 the department of commerce and consumer affairs or the department
 
11 of taxation shall each conduct an investigation, as applicable,
 
12 into whether an employer may be in violation of chapter 237 or
 
13 444, respectively.
 
14      (c)  The department shall keep a record of reports and
 
15 notifications under subsection (a) for a period of    years from
 
16 the date of the report of the violation."
 
17      SECTION 2.  Chapter 386, Hawaii Revised Statutes, is amended
 
18 by adding a new section to be appropriately designated and to
 
19 read as follows:
 

 
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 1      "§386-    Owner-builders; obligation to provide security for
 
 2 compensation.  (a)  As used in this section, an owner-builder
 
 3 refers to a person who qualifies for an exemption under section
 
 4 444-2(7).
 
 5      (b)  An owner-builder shall be deemed the employer, with
 
 6 obligations under subsection (c), for purposes of section 386-121
 
 7 if the owner-builder hires or contracts, express or implied, oral
 
 8 or written, with an independent contractor to perform work for
 
 9 the owner-builder if the independent contractor:
 
10      (1)  Fails to provide security for compensation as an
 
11           employer under section 386-121(a); or
 
12      (2)  Is not an employer and is not covered by a policy under
 
13           section 386-121(a).
 
14      (c)  An owner-builder under subsection (b) shall be deemed
 
15 the employer of all employees performing work in the execution of
 
16 the contract, including employees of the independent contractor's
 
17 subcontractors and their subcontractors; provided that the
 
18 liabilities of the direct employer of an employee who suffers a
 
19 work injury shall be primary and that of the others secondary in
 
20 their order.  An employer secondarily liable who satisfies a
 
21 liability under this chapter shall be entitled to indemnity
 
22 against loss from the employer primarily liable.
 
23      (d)  This section shall not be construed to impose liability
 

 
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 1 upon an owner-builder under chapter 378, 383, 387, 388, 392, 393,
 
 2 396, or 398.
 
 3      (e)  Failure of an owner-builder to comply with subsection
 
 4 (a), shall:
 
 5      (1)  Not be construed to impose third party liability upon
 
 6           the owner-builder under section 386-8; and
 
 7      (2)  Not impose liability upon the special compensation fund
 
 8           under section 386-56."
 
 9      SECTION 3.  Section 386-1, Hawaii Revised Statutes, is
 
10 amended by amending the definition of "employer" to read as
 
11 follows:
 
12      ""Employer" means any person having one or more persons in
 
13 the person's employment.  [It] The term includes [the]:
 
14      (1)  The legal representative of a deceased employer and the
 
15           State, any county or political subdivision of the
 
16           State, and any other public entity within the State[.];
 
17           and
 
18      (2)  An owner-builder under section 444-2(7), as provided
 
19           under section 386-  .
 
20      The insurer of an employer is subject to the employer's
 
21 liabilities, shall pay the deductible as provided for under
 
22 section 386-100, shall collect the amount of the deductible from
 
23 the employer, and be entitled to rights and remedies under this
 

 
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 1 chapter as far as applicable.
 
 2      The workers' compensation self-insurance group of which an
 
 3 employer is a member is subject to that employer's liabilities
 
 4 and entitled to rights and remedies under this chapter as far as
 
 5 applicable."
 
 6      SECTION 4.  Section 386-56, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§386-56  Payment from the special compensation fund in case
 
 9 of default.  Where an injured employee or the employee's
 
10 dependents fail to receive prompt and proper compensation and
 
11 this default is caused through no fault of the employee, the
 
12 director shall pay the full amount of all compensation awards and
 
13 benefits from the special compensation fund to the employee or
 
14 dependent.
 
15      The employer, upon order of the director, shall reimburse
 
16 the special compensation fund for the sums paid therefrom under
 
17 this section, and the fund, represented by the director, shall be
 
18 subrogated to all the rights and remedies of the individual
 
19 receiving the payments.
 
20      In case a defaulting employer moves to another state without
 
21 reimbursing the special compensation fund, the director shall be
 
22 authorized to contract, on a contingent fee basis, with a private
 
23 collection agency in that state to effect collection from the
 

 
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                                     S.B. NO.           138
                                                        
                                                        

 
 1 employer.
 
 2      This section shall not apply to the default of an owner-
 
 3 builder under section 386-  ."
 
 4      SECTION 5.  Section 386-124, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "§386-124  The insurance contract.  (a)  Every policy of
 
 7 insurance issued by an insurer of an employer referred to in
 
 8 section 386-1 which covers the liability of the employer for
 
 9 compensation shall cover the entire liability of the employer to
 
10 the employer's employees covered by the policy or contract, and
 
11 provide for the deductible under section 386-100, at the option
 
12 of the insured.  The policy also shall contain a provision
 
13 setting forth the right of the employees to enforce in their own
 
14 names either by filing a separate claim or by making the
 
15 insurance carrier a party to the original claim, the liability of
 
16 the insurance carrier in whole or in part for the payment of the
 
17 compensation.  Payment in whole or in part of compensation by
 
18 either the employer or the insurance carrier shall, to the extent
 
19 thereof, be a bar to the recovery against the other of the amount
 
20 so paid.
 
21      (b)  With respect to a contract for the construction,
 
22 alteration, improvement, repair, or demolition of any building or
 
23 structure, or for work involving excavation, infrastructure, site
 

 
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 1 preparation, or for installation of utilities, roads, or
 
 2 sidewalks, the entire liability of the employer under subsection
 
 3 (a) shall include items expressly excluded from the contract;
 
 4 provided that the same employer performs work on the excluded
 
 5 items within the period of the contract.
 
 6      (c)  All insurance policies shall be of a standard form, the
 
 7 form to be designated and approved by the insurance commissioner.
 
 8 No policy of insurance different in form from the designated and
 
 9 approved form shall be approved by the director."
 
10      SECTION 6.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 7.  This Act shall take effect upon its approval.
 
13 
 
14                           INTRODUCED BY:  _______________________