Workers Compensation Coverage Overview Robert Swisher Commissioner Department

Workers Compensation Coverage Overview Robert Swisher, Commissioner Department of Workers’ Claims Interim Joint Committee on Tourism, Small Business and Information Technology September 24, 2020

Statutory Requirement KRS 342. 340: (1) Every employer under this chapter shall: (a) Insure and keep insured its liability for compensation is some corporation, association, or organization authorized to transact the business of workers’ compensation insurance in this state; or (b)Furnish to the commissioner satisfactory proof of its financial ability to pay directly the compensation in the amount and manner and when due as provided in this chapter.

Coverage of Employers KRS 342. 630: The following shall constitute employers mandatorily subject to, and required to comply with, the provisions of this chapter: (1) Any person, other than one engaged solely in agriculture, that has in this state one (1) or more employees subject to this chapter; (2) The state, any agency thereof…or political entity of the state that has one (1) or more employees subject to this chapter.

Coverage of Employees KRS 342. 640: The following shall constitute employees subject to the provisions of this chapter, except as exempted under KRS 342. 650: (1) Every person, including a minor, whether lawfully or unlawfully employed, in the service of an employer under any contract of hire, express or implied… (2) Every executive officer of a corporation; (3) Public employees; (4) Every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of injury.

Exemptions of Particular Classes of Employees KRS 342. 650: The following employees are exempt from the coverage under this chapter: (1)Any person employed as a domestic servant in a private home by an employer who has less than two (2) employees each regularly employed forty (40) or more hours a week in domestic servant employment; (2) Any person employed, for not exceeding twenty (20) consecutive work days, to do maintenance, repair, remodeling, or similar work nor about the private residence of the employer, or if the employer has no other employees subject to this chapter, in or about the premises where the employer carries on his or her trade, business, or

Exemption of Employees (3)Any person performing services in return for aid or sustenance only, received from any religious or charitable organization; (4) Any person for whom a rule of liability for injury or death is provided by the laws of the United States, except those covered under the federal Black Lung law. (5) Any person employed in agriculture; (6) Any person who elects not to be covered; (7) Any person participating as a driver or passenger in a voluntary carpool or their way to or from the place of employment;

Exemption of Employees (8) Members of a religious sect that adheres to established tenets or teachings by reason of which members are conscientiously opposed to acceptance of the benefits of any public or private insurance which makes payments towards the cost of medical bills…and it has been the practice for ten or more years for the members of the sect to make reasonable provision for their dependent members; (9) A minister who has no set agreement with a church or religious organization to receive a fixed regular payment for services or who works no more than ten hours per week; (10) A church caretaker who works no more than ten

Business Owners KRS 342. 012: (1) For the purposes of this chapter, an owner or owners of a business…. shall be included within the meaning of term employee if the owner or owners…elect to come under the provisions of this chapter and provide the insurance required thereunder… (2) When an owner or owners have elected to be included as employees, this inclusion shall be accompanied by the issuance of an appropriate endorsement to a workers’ compensation insurance policy.

Independent Contractors Ratliff v. Redmon (1965) Nine-factor test for determining whether an employer-employee or an independent contractor relationship existed. (1) Extent and control alleged employer may exercise over the detail of the work; (2) Whether the alleged employee is engaged in a distinct occupation or business; (3) The kind of occupation with reference to whether it is usually done under the direct supervision of an employer or by a specialist without supervision; (4)The skill required in the particular occupation;

Ratliff test (5) Whether the employer or workman supplies the instrumentalities, tools and place of work; (6) The length of time for which the person is employed; (7) Method of payment; (8) Whether the work is part of the regular business of the employer; (9) Do the parties believe they are creating an employment relationship or one of independent contractor?

Refinement of Ratliff test Chamber’s v. Wooten’s IGA Foodliner (1969) Focus of the analysis is on four factors: (1) The nature of the work as related to the business generally carried out by the alleged employer; (2)The extent of control exercised by the alleged employer; (3) The professional skill of the alleged employee; (4) The true intention of the parties.

“Up the Ladder” Liability KRS 342. 700: … (2) A principal contractor, intermediate, or subcontractor shall be liable for compensation to any employee injured while in the employ of any one (1) of his intermediate or subcontractors and engaged upon the subject matter of the contract, to the same extent as the immediate employer.

Questions?