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Department Proposals for February 3, 1999





Deputy Administrator

Repeal the following: "(b) 'Examiner' includes the deputy administrator of the worker's compensation division of the department."

Comment: s. 102.18(2) requires examiners to be attorneys. The current deputy is not an attorney and has recommended the change.


No-employe contractors

Clarify that:
? a person who is an employer under s. 102.07(8m) cannot be someone else's employe--even if that person is an independent contractor under s. 102.07(8)(a), and;
? a person who buys a policy is an employer subject to the statute--even if the person has no employes and does not elect to cover himself or herself under the policy.

Comment: These clarifications should help insurers collect the correct premium amounts (without overcharging) from each of two policyholders. The problem arises when a general contractor hires a no-employe subcontractor who has purchased a policy and the general contractor's insurance carrier attempts to collect a premium from the general contractor for payments made by the general contractor to the no-employe subcontractor. Because the no-employe subcontractor has a policy, the Department has consistently said this person is an employer (not an employe) and the insurer should not collect a premium from the general contractor.

One of the basic principles in Chapter 102 is that a person is either an employer or an employe, but not both at the same time. In a situation where s. 102.07(8m) and (8)(a) might both apply, this change will create a cross-reference between the two provisions to make it clear that s. 102.07(8m) is controlling.

Section 102.04(1)(e) defines an "employer" as a person who has employes and who buys a policy. Section 102.05(2) says an "employer" may elect coverage by buying a policy. However, Ch. 102 is silent on the status of a person who buys a policy, but who has no employes and/or who does not elect to cover himself or herself under the policy. This codifies the Department's position that a person buys a policy--with or without employes--is an "employer" subject to the Act and cannot be someone else's employe.


Withdrawal from coverage

Currently, an employer may withdraw from coverage if the employer does not pay $500 in "any calendar quarter in a calendar year." Does the word, "any" mean "one" calendar quarter or "every" (that is, all four) calendar quarters? The proposed change would clarify that it means every calendar quarter, by substituting the word, "every" for the word "any" in the phrase "any calendar quarter in a calendar year."

Comment: The courts have held that the statutory meaning of the word "any" depends upon the context in which it is used. "Any" can mean "all" or "only one" depending on the context. In this statute the context is not clear from the statute alone. However, the legislative history shows that the current language was part of a department proposal adopted in 1969 after 10 years of discussion. The documents at that time clearly show the agency's intention was that the word "any" meant " every" calendar quarter, not "one" calendar quarter.


LIRC petitions

Amend 102.18(3) as follows: "A party in interest may petition the commission for review of an examiner's decision awarding or denying compensation if the department or commission receives the petition within 21 days after the department mailed a copy of the examiner's findings and order to the party's last-known address. The commission shall dismiss a petition which is not timely filed unless the petition petitioner shows probable good cause that the reason for failure to timely file was beyond the petitioner's control...."

Comment: The petition itself cannot establish good cause for a person filing a petition late. LIRC currently gives the petitioner an opportunity to explain the delay after the petition is filed. This change would codify LIRC's current practice.



Amend 102.28(2)(a) to read:

"102.28(2) required insurance; exemptions. (a) Duty to insure payment for compensation. Unless exempted by the department, every employer, as described in the s. 102.04(1), shall insure payment for that compensation in through an insurance policy in its name alone issued by an insurer authorized to do business in this state. Two or more entities with common majority ownership that are combinable under a rating plan authorized by Ch. 626 may be insured through an insurance policy issued in the names of the combinable entities.

Comment: The Assistant Attorney General representing the Department in the Koch case recommended we clarify the statute even though he won the case. In that case, an uninsured Wisconsin trucker attempted to argue that he was covered under the policy of an Indiana trucker. However, by the terms of the policy, the Indiana trucker's policy only covered the Wisconsin trucker when the Wisconsin trucker was working for the Indiana trucker. It did not cover the Wisconsin trucker when he was doing local work on his own. Also, the policy did not cover the Wisconsin trucker's clerical staff. However, the specific problem relating to the proposed statutory change is that the trucking companies were not eligible to insure under the same policy as combinable entities because they lacked the necessary degree of common ownership required by the Rating Bureau's rating plan manual.


TPD calculations

Codify the department's method for calculating TPD benefits where the employe has lost wages during the 3-day waiting period. Only for the purposes of calculating TPD benefits, impute earnings to the employe (as though wages had been paid) for days lost during the waiting period, prior to calculating the proportional wage loss for TPD purposes.

Comment: There are disputes with insurers and some department staff about what the statute intends. Some have argued that the wage loss during the waiting period should be counted (increasing the numerator in the calculation--i.e., the wage loss--increases the TPD benefits). Others agree, but shorten the work week by deducting from the denominator the number of waiting period days for which a wage loss was included.


Work injury supplemental benefit fund

Insurers pay into the work injury supplemental benefit fund as follows:
1. Death benefits when there are no dependents;
2. $5,000 if the injury is the proximate cause of death;
3. $7,000 for loss of hand, arm, foot, leg or eye.

The fund pays benefits to:
1. Children to age 18 (10% of wholly dependent spouse's amount);
2. Carriers for $150 minimum payments for pre-1976 injuries;
3. Claims with at least 200 weeks of pre-existing disability;
4. Barred occupational disease claims.

Rather than suspend insurers' payments into the fund when the fund balance exceeds 3 times the amount of paid out of the fund in the prior year, use the "excess" to offset insurers' assessments for department administrative costs under 102.75(1).

Comment: Payments into the fund and interest earnings continue to provide significant "excess" balances. The balance at the end of fiscal 1998 was about $7.2 million, with an excess of about $0.9 million. On roughly a 3 to 4-year cycle, the Division periodically suspends, and then re-instates, payments. This proposal would:
1. Retain some safety incentive to prevent serious bodily harm;
2. Prevent unjust enrichment of insurers if death benefits are due;
3. Ease administrative hassles for the department and insurers related to stopping and re-instating payments at odd intervals;
4. Eliminate the temptation to allocate the "excess" for less defensible public purposes.
5. Reduce overall administrative costs for "safe" employers/insurers who do not pay into the fund by reducing their assessments.


UEF penalties

Double the minimum penalty from $750 to $1500 for any lapse in insurance that occurs within 3 years of a prior lapse in coverage. Unlike a $750 dollar penalty, a $1500 penalty would not be pro-rated for the first 7 days of lapsed coverage.

Comment: Multiple offenders within a short time period deserve tougher sanctions. It is fair to assume that multiple offenders know their responsibilities, but have chosen to neglect them.


UEF citation procedures

Change the word "insured" to "uninsured."

Comment: This is an inadvertent typo. The citation procedure in this section is limited to actions for recovering a forfeiture under s. 102.85(1) or (2) which relate only to uninsured employers.

15.227(4) and (11)

Appointing council members

Designate the department secretary rather than LIRC as the appointing authority for the Council on Worker's Compensation and the Self-Insurance Council.

Comment: The statute carries over from the time that the Commission administered the Department. This change is recommended by LIRC and the Secretary. As a matter of practice, LIRC has always deferred to the Secretary on all appointments to these councils. LIRC is recommending a similar change in the UI bill for that council.

Updated February 06, 2012
Division of Worker's Compensation
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