Adopted amendment brings reasonable change for workers compensation self-insured employers

After weeks of debate and changes, the Senate adopted a striking amendment during the floor vote that increases fines but removed other provisions that increased employer liability.

HB 2409 updates penalties and processes for self-insurers across the state. The adopted striking amendment made the following changes:

• Increases the maximum penalty for self-insurers delaying or refusing the payment of benefits from $500 to $1,000. This penalty applies to each occurrence.
• Allows the Department of Labor & Industries (L&I) to consider the following when determining the penalty amount:
  • The amount of the delayed payment;
  • Employer communication; and
  • History or past practices of underpayments by the employer, as well as following department orders directing the payment and making any required adjustments.
• Directs that any collected penalty related to the delay or refusal of payment be paid to the claimant along with any benefits.
• Increases the maximum penalty for failing to keep and preserve records from $250 to $500.
• Declares that penalties for records violations may be waived for first-time or de minimis violations. However, if an additional violation occurs within a year of the waived penalty, the original penalty may be reinstated.
• Increases maximum penalties for refusing to submit books, records, and payrolls for inspection by L&I from $250 to $500.
• Provides for penalties under this section to be adjusted for inflation every three years beginning July 1, 2023.
• Beginning July 1, 2021, third-party administrators must be certified by L&I. Employer claims administrators must maintain certification through L&I.

Once fully implemented, penalty increases would go into effect September 1, 2020.

HB 2409 must now return to the House for concurrence vote on the Senate amendments before heading to the Governor’s desk for signature.