GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2013

S                                                                                                                                                     1

SENATE BILL 614

 

 

Short Title:        WC/Omnibus Changes.

(Public)

Sponsors:

Senators Brown (Primary Sponsor); and Jackson.

Referred to:

Insurance.

April 4, 2013

A BILL TO BE ENTITLED

AN ACT to amend the insurance laws relating to the notice required for cancellation of workers' compensation insurance policies and to amend the workers' compensation act concerning the status of truck drivers as employees or independent contractors and relating to out-of-state accidents and state reciprocity of claims.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  G.S. 58-36-105(b) reads as rewritten:

"(b)      Any cancellation permitted by subsection (a) of this section is not effective unless written notice of cancellation has been given by registered or certified mail, return receipt requested, to the insured not less than 15 days before the proposed effective date of cancellation. The notice shall be given by registered or certified mail, return receipt requested, to the insured and any other person designated in the policy to receive notice of cancellation at their addresses shown in the policy or, if not indicated in the policy, at their last known addresses. The notice shall state the precise reason for cancellation. Whenever notice of intention to cancel is required to be given by registered or certified mail, no cancellation by the insurer shall be effective unless and until such method is employed and completed. employed. Failure to send this notice, as provided in this section, to any other person designated in the policy to receive notice of cancellation invalidates the cancellation only as to that other person's interest."

SECTION 1.(b)  This section is effective when it becomes law and applies to insurance policies in effect on or after that date.

SECTION 2.(a)  G.S. 97-19.1 reads as rewritten:

"§ 97-19.1.  Truck, tractor, or truck tractor trailer driver's status as employee or independent contractor.

(a)        An individual in the interstate or intrastate carrier industry who operates a truck, tractor, or truck tractor trailer licensed by a governmental motor vehicle regulatory agency for a motor carrier as defined by G.S. 20-4.01(21b) may be an employee or an independent contractor under this Article dependent upon the application of the common law test for determining employment status.

Any principal contractor, intermediate contractor, or subcontractor, irrespective of whether such contractor regularly employs three or more employees, who contracts with an individual in the interstate or intrastate carrier industry who operates a truck, tractor, or truck tractor trailer licensed by the United States Department of Transportation for a motor carrier as defined in G.S. 20-4.01(21b) and who has not secured the payment of compensation in the manner provided for employers set forth in G.S. 97-93 for himself personally and for his employees and subcontractors, if any, shall be liable as an employer under this Article for the payment of compensation and other benefits on account of the injury or death of the independent contractor and his employees or subcontractors due to an accident arising out of and in the course of the performance of the work covered by such contract.

(b)        Notwithstanding subsection (a) of this section, a principal contractor, intermediate contractor, or subcontractor shall not be liable as an employer under this Article for the payment of compensation on account of the injury or death of the independent contractor if the principal contractor, intermediate contractor, or subcontractor (i) contracts with an independent contractor who is an individual licensed by the United States Department of Transportation and owns or leases the vehicle providing service, (ii) the independent contractor personally operates or is responsible for hiring or engaging and paying personnel who operate the vehicle, and is operating the vehicle solely pursuant to that license. (iii) the independent contractor is covered under an occupational accident policy either issued to the independent contractor or motor carrier.

(c)        A motor carrier and an independent contractor meeting the criteria contained in subsection (b) of this section may, if mutually agreed to by the independent contractor and motor carrier in writing, provide that the independent contractor and any of the independent contractor's employees be covered by the motor carriers' workers' compensation insurance policy or self-insurance and that the independent contractor and any of the independent contractor's employees would be deemed employees of the motor carrier for purposes of workers' compensation only. The motor carrier may charge the independent contractor for any agreed upon premiums or, if self-insured, for any equitable assessment for such coverage. The agreement shall not affect the independent contractor status of the independent contractor for any purpose other than for workers' compensation.

(d)        For purposes of this section, the term "occupational accident insurance" means the type of insurance policy obtained by independent contractor owners-operators in the trucking industry that includes the following benefit categories: (i) temporary total disability-type wage replacement benefit, (ii) permanent disability or impairment benefit, (iii) a medical expense payment benefit, and (iv) a death benefit. The occupational accident insurance policy may be issued directly to the independent contractor owner-operator or issued as a master policy for which the motor carrier may charge the independent contractor owner-operator an equitable sum for the coverage. The principal contractor, intermediate contractor, or subcontractor may insure any and all of his independent contractors and their employees or subcontractors in a blanket policy, and when insured, the independent contractors, subcontractors, and employees will be entitled to compensation benefits under the blanket policy.

A principal contractor, intermediate contractor, or subcontractor may include in the governing contract with an independent contractor in the interstate or intrastate carrier industry who operates a truck, tractor, or truck tractor trailer licensed by a governmental motor vehicle regulatory agency an agreement for the independent contractor to reimburse the cost of covering that independent contractor under the principal contractor's, intermediate contractor's, or subcontractor's coverage of his business."

SECTION 2.(b)  This section is effective when it becomes law.

SECTION 3.(a)  G.S. 97-36 reads as rewritten:

"§ 97-36.  Accidents taking place outside State; employees receiving compensation from another state.state; reciprocity.

(a)        Where an accident happens while the employee is employed elsewhere than in this State and the accident is one which would entitle him or his the employee or the employee's dependents or next of kin to compensation if it had happened in this State, then the employee or his the employee's dependents or next of kin shall be entitled to compensation (i) if the contract of employment was made in this State, (ii) if the employer's principal place of business is in this State, or (iii) if the employee's principal place of employment is within this State; provided, however, that if an employee or his dependents or next of kin shall receive compensation or damages under the laws of any other state nothing herein contained shall be construed so as to permit a total compensation for the same injury greater than is provided for in this Article.

(b)        If an employee in this State temporarily leaves the State incidental to the employee's employment and receives an accidental injury arising out of and in the course of the employment, then the employee, or beneficiaries of the employee if the injury results in death, must file their claim for compensation in this State subject to the terms of any choice of forum clause contained in the employee's employment contract. If there is no choice of forum clause in the employment contract, then the other provisions in this section shall apply.

(c)        An employee from another state and the employer of the employee in the other state are exempt from the provisions of this Chapter while the employee is working temporarily in this State only if all of the following conditions are met:

(1)        The employer has furnished workers' compensation insurance coverage under the workers' compensation insurance or similar laws of the other state to cover the employee's employment while in this State.

(2)        The extraterritorial provisions of this Chapter are recognized in the other state.

(3)        Employees and employers who are covered in this State are likewise exempted from the application of the workers' compensation insurance or similar laws of the other state.

(d)        The benefits under the workers' compensation insurance or similar laws of the other state, or other remedies under similar law, are the exclusive remedies against the employer for any injury, whether resulting in death or not, received by the employee while working temporarily for that employer in this State.

(e)        A certificate from the governmental entity or duly authorized officer or person of another state certifying that the employer from the other state is insured in that state and has provided extraterritorial coverage insuring employees while working in this State is prima facie evidence that the employer carries that workers' compensation insurance.

(f)         Whenever in any appeal or other litigation the construction of the laws of another jurisdiction is required, the court shall take judicial notice of such construction of the laws of the other jurisdiction.

(g)        The Industrial Commission may enter into an agreement with the workers' compensation agency of any other state relating to conflicts of jurisdiction where the contract of employment is in one state and the injuries occur in the other state or where there is a dispute as to the boundaries or jurisdiction of the states. When such an agreement has been duly executed and made public by the respective state agencies, then (i) the rights of employees who are hired in the other state and injured while working temporarily in this State or hired in this State and injured while working temporarily in the other states and (ii) when claims arise where jurisdiction is otherwise uncertain, the rights of employees shall be determined pursuant to the agreement and confined to the jurisdiction provided in the agreement.

(h)        When an employee has a claim under the workers' compensation law of another jurisdiction for the same injury or occupational disease as the claim filed in this State, the total amount of compensation paid or awarded under the other workers' compensation law shall be credited against the compensation due under the North Carolina Workers' Compensation Act.

(i)         The following definitions apply in this section:

(1)        Jurisdiction or state. - Includes a territory, province, or foreign nation.

(2)        Working temporarily. - When an employee is working for his or her employer for no more than 10 consecutive days or for no more than 25 total days during a calendar year in a state other than the state where the employee is primarily employed."

SECTION 3.(b)  This section is effective when it becomes law and applies to claims for workers' compensation insurance benefits made on or after that date regardless of the date of the accident.

SECTION 4.  This act is effective when it becomes law.