HB 491 -- WORKERS' COMPENSATION

SPONSOR:  Barnes

COMMITTEE ACTION:  Voted "do pass" by the Committee on Workers'
Compensation and Employment Security by a vote of 11 to 2.

This bill requires business owners deemed subject to chapter 287
(because they have work performed under contract on their
business premises which is in the normal operation of the
business) to secure a valid certificate of workers' compensation
insurance or self-insurance from each contractor, subcontractor,
and their employees, if those workers are otherwise required to
cover their liability under chapter 287.

Such business owners will be liable for injuries to the
qualified employees of such contractors and subcontractors.
Qualified employees are defined as employees other than the
owners of the contracting or subcontracting entities.

The bill also removes liability from contractors for the
injuries to the employees of their subcontractors if the
contractors maintain on file a copy of a current certificate of
insurance documenting that each of the subcontractors had
coverage at the time of the accident.  Fraud by the contractor
in such certification renders such protection void, and is a
class A misdemeanor.  Any contractor potentially liable for a
subcontractor must receive from the subcontractor's insurer a
certificate of insurance which states that the insurer must
provide 10 days written notice before cancelling the insurance
of the subcontractor.  In the case of self-insurance, the
Division of Workers' Compensation is required to give 10 days
notice of revocation of such status.

The bill also changes the provision that requires cities or
counties which issue occupational or business licenses to secure
from those license applicants a certificate of insurance for
workers' compensation coverage.  Currently, anyone requesting
such a license must supply a certificate of insurance.  This
bill limits that provision so as to apply only to contractors in
the construction industry.

FISCAL NOTE:  Estimated Net Cost to Workers' Compensation of
$26,727 in FY 96, $12,078 in FY 97, & $12,398 in FY 98.

PROPONENTS:  Supporters say that the good contractors already
require proof of workers' compensation insurance.  This bill
mandates this upon all the rest.  The intent is merely to ensure
that those who are supposed to have coverage do, indeed, have
it.  Because fraud will void an exemption, the bill will prevent
employers from skirting workers' compensation requirements
through sham arrangements, where employees are called
independent sub-contractors.  Also, requiring cities to secure
workers' compensation insurance certificates from everyone
applying for a business license has proven to be unnecessary.
Making that provision apply only to contractors will save the
cities and business a lot of paperwork.

Testifying for the bill were Representative Barnes; Missouri
Home Builders Association; Kansas City Home Builders
Association; Missouri Municipal League; AFL-CIO; Associated
General Contractors; and Russell Still, attorney.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Research Analyst

HB 491 -- Workers' Compensation Contractor Liability

Sponsor:  Barnes

This bill requires business owners deemed subject to chapter 287
(because they have work performed under contract on their
business premises which is in the normal operation of the
business) to secure a valid certificate of workers' compensation
insurance or self-insurance from each contractor, subcontractor,
and their employees, if those workers are otherwise required to
cover their liability under chapter 287.

Such business owners will be liable for injuries to the
qualified employees of such contractors and subcontractors.
Qualified employees are defined as employees other than the
owners of the contracting or subcontracting entities.

The bill also removes liability from contractors for the
injuries to the employees of their subcontractors if the
contractors maintain on file a copy of a current certificate of
insurance documenting that each of the subcontractors had
coverage at the time of the accident.  Fraud by the contractor
in such certification renders such protection void, and is a
class A misdemeanor.  Any contractor potentially liable for a
subcontractor must receive from the subcontractor's insurer a
certificate of insurance which states that the insurer must
provide 10 days written notice before cancelling the insurance
of the subcontractor.  In the case of self-insurance, the
Division of Workers' Compensation is required to give 10 days
notice of revocation of such status.

The bill also changes the provision that requires cities or
counties which issue occupational or business licenses to secure
from those license applicants a certificate of insurance for
workers' compensation coverage.  Currently, anyone requesting
such a license must supply a certificate of insurance.  This
bill limits that provision so as to apply only to contractors in
the construction industry.