Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 355 First Substitute (2021GS)

Sponsor

Rep. Hawkes, T.

Final action

Governor Signed 3/17/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• amends provisions related to an eligible employer;
• amends third parties against whom an action may be brought for the injury or death of an employee; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

WORKERS' COMPENSATION REVISIONS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Timothy D. Hawkes
Senate Sponsor: 
Kirk A. Cullimore
LONG TITLE
General Description:
This bill amends provisions of the Workers' Compensation Act.
Highlighted Provisions:
This bill:
▸ amends provisions related to an eligible employer;
▸ amends third parties against whom an action may be brought for the injury or death
of an employee; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
34A-2-103
, as last amended by Laws of Utah 2017, Chapter 363
34A-2-106
, as last amended by Laws of Utah 2008, Chapter 3
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
34A-2-103
 is amended to read:
34A-2-103.
Employers enumerated and defined -- Regularly employed --
Statutory employers -- Exceptions.
(1) (a) The state, and each county, city, town, and school district in the state are
considered employers under this chapter and Chapter 3, Utah Occupational Disease Act.
(b) For the purposes of the exclusive remedy in this chapter and Chapter 3, Utah
Occupational Disease Act, prescribed in Sections 
34A-2-105
 and 
34A-3-102
, the state is
considered to be a single employer and includes any office, department, agency, authority,
commission, board, institution, hospital, college, university, or other instrumentality of the
state.
(2) (a) Subject to the other provisions of this section, each person, including each
public utility and each independent contractor, who regularly employs one or more workers or
operatives in the same business, or in or about the same establishment, under any contract of
hire, express or implied, oral or written, is considered an employer under this chapter and
Chapter 3, Utah Occupational Disease Act.
(b) As used in this Subsection (2):
(i) "Independent contractor" means any person engaged in the performance of any work
for another who, while so engaged, is:
(A) independent of the employer in all that pertains to the execution of the work;
(B) not subject to the routine rule or control of the employer;
(C) engaged only in the performance of a definite job or piece of work; and
(D) subordinate to the employer only in effecting a result in accordance with the
employer's design.
(ii) "Regularly" includes all employments in the usual course of the trade, business,
profession, or occupation of the employer, whether continuous throughout the year or for only a
portion of the year.
(3) (a) The client under a professional employer organization agreement regulated
under Title 31A, Chapter 40, Professional Employer Organization Licensing Act:
(i) is considered the employer of a covered employee; and
(ii) subject to Section 
31A-40-209
, shall secure workers' compensation benefits for a
covered employee by complying with Subsection 
34A-2-201
(1) and commission rules.
(b) The division shall promptly inform the Insurance Department if the division has
reason to believe that a professional employer organization is not in compliance with
Subsection 
34A-2-201
(1) and commission rules.
(4) A domestic employer who does not employ one employee or more than one
employee at least 40 hours per week is not considered an employer under this chapter and
Chapter 3, Utah Occupational Disease Act.
(5) (a) As used in this Subsection (5):
(i) (A) "Agricultural employer" means a person who employs agricultural labor as
defined in Subsections 
35A-4-206
(1) and (2) and does not include employment as provided in
Subsection 
35A-4-206
(3).
(B) Notwithstanding Subsection (5)(a)(i)(A), only for purposes of determining who is a
member of the employer's immediate family under Subsection (5)(a)(ii), if the agricultural
employer is a corporation, partnership, or other business entity, "agricultural employer" means
an officer, director, or partner of the business entity.
(ii) "Employer's immediate family" means:
(A) an agricultural employer's:
(I) spouse;
(II) grandparent;
(III) parent;
(IV) sibling;
(V) child;
(VI) grandchild;
(VII) nephew; or
(VIII) niece;
(B) a spouse of any person provided in Subsections (5)(a)(ii)(A)(II) through (VIII); or
(C) an individual who is similar to those listed in Subsection (5)(a)(ii)(A) or (B) as
defined by rules of the commission.
(iii) "Nonimmediate family" means a person who is not a member of the employer's
immediate family.
(b) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
agricultural employer is not considered an employer of a member of the employer's immediate
family.
(c) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
agricultural employer is not considered an employer of a nonimmediate family employee if:
(i) for the previous calendar year the agricultural employer's total annual payroll for all
nonimmediate family employees was less than $8,000; or
(ii) (A) for the previous calendar year the agricultural employer's total annual payroll
for all nonimmediate family employees was equal to or greater than $8,000 but less than
$50,000; and
(B) the agricultural employer maintains insurance that covers job-related injuries of the
employer's nonimmediate family employees in at least the following amounts:
(I) $300,000 liability insurance, as defined in Section 
31A-1-301
; and
(II) $5,000 for health care benefits similar to benefits under health care insurance as
defined in Section 
31A-1-301
.
(d) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
agricultural employer is considered an employer of a nonimmediate family employee if:
(i) for the previous calendar year the agricultural employer's total annual payroll for all
nonimmediate family employees is equal to or greater than $50,000; or
(ii) (A) for the previous year the agricultural employer's total payroll for nonimmediate
family employees was equal to or exceeds $8,000 but is less than $50,000; and
(B) the agricultural employer fails to maintain the insurance required under Subsection
(5)(c)(ii)(B).
(6) An employer of agricultural laborers or domestic servants who is not considered an
employer under this chapter and Chapter 3, Utah Occupational Disease Act, may come under
this chapter and Chapter 3, Utah Occupational Disease Act, by complying with:
(a) this chapter and Chapter 3, Utah Occupational Disease Act; and
(b) the rules of the commission.
(7) (a) (i) As used in this Subsection (7)(a), "employer" includes any of the following
persons that procures work to be done by a contractor notwithstanding whether or not the
person directly employs a person:
(A) a sole proprietorship;
(B) a corporation;
(C) a partnership;
(D) a limited liability company; or
(E) a person similar to one described in Subsections (7)(a)(i)(A) through (D).
(ii) If an employer procures any work to be done wholly or in part for the employer by
a contractor over whose work the employer retains supervision or control, and this work is a
part or process in the trade or business of the employer, the contractor, all persons employed by
the contractor, all subcontractors under the contractor, and all persons employed by any of
these subcontractors, are considered employees of the original employer for the purposes of
this chapter and Chapter 3, Utah Occupational Disease Act.
(b) Any person who is engaged in constructing, improving, repairing, or remodeling a
residence that the person owns or is in the process of acquiring as the person's personal
residence may not be considered an employee or employer solely by operation of Subsection
(7)(a).
(c) A partner in a partnership or an owner of a sole proprietorship is not considered an
employee under Subsection (7)(a) if the employer who procures work to be done by the
partnership or sole proprietorship obtains and relies on either:
(i) a valid certification of the partnership's or sole proprietorship's compliance with
Section 
34A-2-201
 indicating that the partnership or sole proprietorship secured the payment of
workers' compensation benefits pursuant to Section 
34A-2-201
; or
(ii) if a partnership or sole proprietorship with no employees other than a partner of the
partnership or owner of the sole proprietorship, a workers' compensation coverage waiver
issued pursuant to Part 10, Workers' Compensation Coverage Waivers Act, stating that:
(A) the partnership or sole proprietorship is customarily engaged in an independently
established trade, occupation, profession, or business; and
(B) the partner or owner personally waives the partner's or owner's entitlement to the
benefits of this chapter and Chapter 3, Utah Occupational Disease Act, in the operation of the
partnership or sole proprietorship.
(d) A director or officer of a corporation is not considered an employee under
Subsection (7)(a) if the director or officer is excluded from coverage under Subsection
34A-2-104
(4).
(e) A contractor or subcontractor is not an employee of the employer under Subsection
(7)(a), if the employer who procures work to be done by the contractor or subcontractor obtains
and relies on either:
(i) a valid certification of the contractor's or subcontractor's compliance with Section
34A-2-201
; or
(ii) if a partnership, corporation, or sole proprietorship with no employees other than a
partner of the partnership, officer of the corporation, or owner of the sole proprietorship, a
workers' compensation coverage waiver issued pursuant to Part 10, Workers' Compensation
Coverage Waivers Act, stating that:
(A) the partnership, corporation, or sole proprietorship is customarily engaged in an
independently established trade, occupation, profession, or business; and
(B) the partner, corporate officer, or owner personally waives the partner's, corporate
officer's, or owner's entitlement to the benefits of this chapter and Chapter 3, Utah
Occupational Disease Act, in the operation of the partnership's, corporation's, or sole
proprietorship's enterprise under a contract of hire for services.
(f) (i) For purposes of this Subsection (7)(f), "eligible employer" means a person who:
(A) is an employer; and
(B) procures work to be done wholly or in part for the employer by a contractor,
including:
(I) all persons employed by the contractor;
(II) all subcontractors under the contractor; and
(III) all persons employed by any of these subcontractors.
(ii) Notwithstanding the other provisions in this Subsection (7), if the conditions of
Subsection (7)(f)(iii) are met, an eligible employer is considered an employer for purposes of
Section 
34A-2-105
 of the contractor, subcontractor, and all persons employed by the contractor
or subcontractor described in Subsection (7)(f)(i)(B).
(iii) Subsection (7)(f)(ii) applies if the eligible employer:
(A) under Subsection (7)(a) is liable for and pays workers' compensation benefits as an
original employer under Subsection (7)(a) because the contractor or subcontractor fails to
comply with Section 
34A-2-201
;
(B) (I) secures
, in accordance with Section 
34A-2-201
,
 the payment of workers'
compensation [
benefits
] 
coverage
 for the contractor or subcontractor [
pursuant to Section
34A-2-201
];
(II) procures work to be done that is part or process of the trade or business of the
eligible employer; and
(III) does the following with regard to a written workplace accident and injury
reduction program that meets the requirements of Subsection 
34A-2-111
(3)(d):
(Aa) adopts the workplace accident and injury reduction program;
(Bb) posts the workplace accident and injury reduction program at the work site at
which the eligible employer procures work; and
(Cc) enforces the workplace accident and injury reduction program according to the
terms of the workplace accident and injury reduction program; or
(C) (I) obtains and relies on:
(Aa) a valid certification described in Subsection (7)(c)(i) or (7)(e)(i);
(Bb) a workers' compensation coverage waiver described in Subsection (7)(c)(ii) or
(7)(e)(ii); or
(Cc) proof that a director or officer is excluded from coverage under Subsection
34A-2-104
(4);
(II) is liable under Subsection (7)(a) for the payment of workers' compensation benefits
if the contractor or subcontractor fails to comply with Section 
34A-2-201
;
(III) procures work to be done that is part or process in the trade or business of the
eligible employer; and
(IV) does the following with regard to a written workplace accident and injury
reduction program that meets the requirements of Subsection 
34A-2-111
(3)(d):
(Aa) adopts the workplace accident and injury reduction program;
(Bb) posts the workplace accident and injury reduction program at the work site at
which the eligible employer procures work; and
(Cc) enforces the workplace accident and injury reduction program according to the
terms of the workplace accident and injury reduction program.
(8) (a) For purposes of this Subsection (8), "unincorporated entity" means an entity
organized or doing business in the state that is not:
(i) an individual;
(ii) a corporation; or
(iii) publicly traded.
(b) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
unincorporated entity that is required to be licensed under Title 58, Chapter 55, Utah
Construction Trades Licensing Act, is presumed to be the employer of each individual who
holds, directly or indirectly, an ownership interest in the unincorporated entity. 
Notwithstanding Subsection (7)(c) and Subsection 
34A-2-104
(3), the unincorporated entity
shall provide the individual who holds the ownership interest workers' compensation coverage
under this chapter and Chapter 3, Utah Occupational Disease Act, unless the presumption is
rebutted under Subsection (8)(c).
(c) Pursuant to rules made by the commission in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, an unincorporated entity may rebut the presumption
under Subsection (8)(b) for an individual by establishing by clear and convincing evidence that
the individual:
(i) is an active manager of the unincorporated entity;
(ii) directly or indirectly holds at least an 8% ownership interest in the unincorporated
entity; or
(iii) is not subject to supervision or control in the performance of work by:
(A) the unincorporated entity; or
(B) a person with whom the unincorporated entity contracts.
(d) As part of the rules made under Subsection (8)(c), the commission may define:
(i) "active manager";
(ii) "directly or indirectly holds at least an 8% ownership interest"; and
(iii) "subject to supervision or control in the performance of work."
(9) (a) As used in this Subsection (9), "home and community based services" means
one or more of the following services provided to an individual with a disability or to the
individual's family that helps prevent the individual with a disability from being placed in a
more restrictive setting:
(i) respite care;
(ii) skilled nursing;
(iii) nursing assistant services;
(iv) home health aide services;
(v) personal care and attendant services;
(vi) other in-home care, such as support for the daily activities of the individual with a
disability;
(vii) specialized in-home training for the individual with a disability or a family
member of the individual with a disability;
(viii) specialized in-home support, coordination, and other supported living services;
and
(ix) other home and community based services unique to the individual with a
disability or the family of the individual with a disability that help prevent the individual with a
disability from being placed in a more restrictive setting.
(b) Notwithstanding Subsection (4) and subject to Subsection (9)(c), an individual with
a disability or designated representative of the individual with a disability is considered an
employer under this chapter and Chapter 3, Utah Occupational Disease Act, of an individual
who provides home and community based services if the individual with a disability or
designated representative of the individual with a disability:
(i) employs the individual to provide home and community based services for seven
hours per week or more; and
(ii) pays the individual providing the home and community based services from state or
federal money received by the individual with a disability or designated representative of the
individual with a disability to fund home and community based services, including through a
person designated by the Secretary of the Treasury in accordance with Section 3504, Internal
Revenue Code, as a fiduciary, agent, or other person who has the control, receipt, custody, or
disposal of, or pays the wages of, the individual providing the home and community based
services.
(c) The state and federal money received by an individual with a disability or
designated representative of an individual with a disability shall include the cost of the workers'
compensation coverage required by this Subsection (9) in addition to the money necessary to
fund the home and community based services that the individual with a disability or family of
the individual with a disability is eligible to receive so that the home and community based
services are not reduced in order to pay for the workers' compensation coverage required by
this Subsection (9).
(10) (a) For purposes of this Subsection (10), "federal executive agency" means an
executive agency, as defined in 5 U.S.C. Sec. 105, of the federal government.
(b) For purposes of determining whether two or more persons are considered joint
employers under this chapter or Chapter 3, Utah Occupational Disease Act, an administrative
ruling of a federal executive agency may not be considered a generally applicable law unless
that administrative ruling is determined to be generally applicable by a court of law, or adopted
by statute or rule .
(11) (a) As used in this Subsection (11):
(i) "Franchise" means the same as that term is defined in 16 C.F.R. Sec. 436.1.
(ii) "Franchisee" means the same as that term is defined in 16 C.F.R. Sec. 436.1.
(iii) "Franchisor" means the same as that term is defined in 16 C.F.R. Sec. 436.1.
(b) For purposes of this chapter, a franchisor is not considered to be an employer of:
(i) a franchisee; or
(ii) a franchisee's employee.
(c) With respect to a specific claim for relief under this chapter made by a franchisee or
a franchisee's employee, this Subsection (11) does not apply to a franchisor under a franchise
that exercises a type or degree of control over the franchisee or the franchisee's employee not
customarily exercised by a franchisor for the purpose of protecting the franchisor's trademarks
and brand.
Section 2. Section 
34A-2-106
 is amended to read:
34A-2-106.
Injuries or death caused by wrongful acts of persons other than
employer, officer, agent, or employee of employer -- Rights of employer or insurance
carrier in cause of action -- Maintenance of action -- Notice of intention to proceed
against third party -- Right to maintain action not involving employee-employer
relationship -- Disbursement of proceeds of recovery -- Exclusive remedy.
(1) When any injury or death for which compensation is payable under this chapter or
Chapter 3, Utah Occupational Disease Act is caused by the wrongful act or neglect of a person
other than an employer, officer, agent, or employee of the employer:
(a) the injured employee, or in case of death, the employee's dependents, may claim
compensation; and
(b) the injured employee or the employee's heirs or personal representative may have
an action for damages against the third person.
(2) (a) If compensation is claimed and the employer or insurance carrier becomes
obligated to pay compensation, the employer or insurance carrier:
(i) shall become trustee of the cause of action against the third party; and
(ii) may bring and maintain the action either in [
its
] 
the employer or insurance carrier's
own name or in the name of the injured employee, or the employee's heirs or the personal
representative of the deceased.
(b) Notwithstanding Subsection (2)(a), an employer or insurance carrier may not settle
and release a cause of action of which [
it
] 
the employer or insurance carrier
 is a trustee under
Subsection (2)(a) without the consent of the commission.
(3) (a) Before proceeding against a third party, to give a person described in
Subsections (3)(a)(i) and (ii) a reasonable opportunity to enter an appearance in the proceeding,
the injured employee or, in case of death, the employee's heirs, shall give written notice of the
intention to bring an action against the third party to:
(i) the carrier; and
(ii) any other person obligated for the compensation payments.
(b) The injured employee, or, in case of death, the employee's heirs, shall give written
notice to the carrier and other person obligated for the compensation payments of any known
attempt to attribute fault to the employer, officer, agent, or employee of the employer:
(i) by way of settlement; or
(ii) in a proceeding brought by the injured employee, or, in case of death, the
employee's heirs.
(4) For the purposes of this section and [
notwithstanding
] 
subject to
 Section
34A-2-103
, the injured employee or the employee's heirs or personal representative may also
maintain an action for damages against any of the following persons who do not occupy an
employee-employer relationship with the injured or deceased employee at the time of the
employee's injury or death 
and who are not considered eligible employers under Section
34A-2-103
:
(a) a subcontractor;
(b) a general contractor;
(c) an independent contractor;
(d) a property owner; or
(e) a lessee or assignee of a property owner.
(5) If any recovery is obtained against a third person, it shall be disbursed in
accordance with Subsections (5)(a) through (c).
(a) 
(i)
 The reasonable expense of the action, including attorney fees, shall be paid and
charged proportionately against the parties as their interests may appear.
(ii)
 Any fee chargeable to the employer or carrier is to be a credit upon any fee payable
by the injured employee or, in the case of death, by the dependents, for any recovery had
against the third party.
(b) The person liable for compensation payments shall be reimbursed, less the
proportionate share of costs and attorney fees provided for in Subsection (5)(a), for the
payments made as follows:
(i) without reduction based on fault attributed to the employer, officer, agent, or
employee of the employer in the action against the third party if the combined percentage of
fault attributed to persons immune from suit is determined to be less than 40% prior to any
reallocation of fault under Subsection 
78B-5-819
(2); or
(ii) less the amount of payments made multiplied by the percentage of fault attributed
to the employer, officer, agent, or employee of the employer in the action against the third party
if the combined percentage of fault attributed to persons immune from suit is determined to be
40% or more prior to any reallocation of fault under Subsection 
78B-5-819
(2).
(c) The balance shall be paid to the injured employee, or the employee's heirs in case of
death, to be applied to reduce or satisfy in full any obligation thereafter accruing against the
person liable for compensation.
(6) 
(a)
 The apportionment of fault to the employer in a civil action against a third party
is not an action at law and does not impose any liability on the employer.
(b)
 The apportionment of fault does not alter or diminish the exclusiveness of the
remedy provided to [
employees, their
] 
an employee, the employee's
 heirs, or 
the employee's
personal representatives, or the immunity provided [
employers
] 
an employer
 pursuant to
Section 
34A-2-105
 or 
34A-3-102
 for injuries sustained by an employee, whether resulting in
death or not.
(c)
 Any court in which a civil action is pending shall issue a partial summary judgment
to an employer with respect to the employer's immunity as provided in Section 
34A-2-105
 or
34A-3-102
, even though the conduct of the employer may be considered in allocating fault to
the employer in a [
third party
] 
third-party
 action in the manner provided in Sections 
78B-5-817
through 
78B-5-823
.