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Employer Representatives Send Letter on Workers’ Compensation/Second Injury Fund

LETTER TO HOUSE LEADERS:

The organizations listed below represent many Missouri employers.  On behalf of these employers, we respectfully request that HCS SS#2 SCS Senate Bill 1 be returned to the committee of origin for further amendment.

Because of the haste with which the House Committee on Workforce Development and Workplace Safety acted upon this House Committee Substitute, there was no opportunity to offer constructive amendments that could have resulted in a workable bill.  As written, there are so many changes necessary to this bill there is no practical way to craft the bill in an acceptable form through the amendment process during House floor debate on the bill.  The Substitute in its current form is unacceptable for many reasons, some of which are as follows:

The bill as currently drafted levies a tax increase on Missouri employers in the form of a surcharge to pay large amounts to workers that contract diseases from exposure to toxic substances, even if the employer has never exposed employees to toxic substances. These enhanced remedies and this tax increase must be removed from the bill;

While creating a second fund is a bad idea, the exemption of employers with fewer than 15 employees from this new tax creates several concerns.  The term, “employees” is not defined.  Ironically, employers with fewer than 15 employees that have exposed employees to toxic substances may be excused from all liability, while employers with more than 15 employees that have never exposed employees to a toxic substance would be liable for the additional tax;

The limitation on the surcharge to support the “Toxic Disease Fund” is likely to prove insufficient to meet obligations of the Fund in future years after plaintiff’s attorneys advertise and fully exploit the enhanced remedy provided for the listed toxic exposure diseases.  We do not believe it is responsible to create another fund that is likely to require additional employer tax increases in the future;

The language of subsection 6 of section 287.715 must be modified.  As currently drafted, the language implies the legislature intends to fully fund the Second Injury Fund.  The language may lead to misinterpretation by the judicial branch that may view the language as a commitment by the legislature to ensure adequate funding of the Second Injury Fund irregardless of the surcharge cap contained in that subsection;

Section 287.220, subsection 3 must be redrafted, particularly subdivision (1) (a) c of that subsection, as the current language would allow many cases that are currently accessing the Second Injury Fund to continue to be paid from the Fund.  Previous conditions that have nothing to do with work, such as obesity and diabetes, could meet the criteria provided in this subdivision, allowing those claims to continue to be paid from the Second Injury Fund.  Employers are willing to increase the amount they pay for this Fund, but only if the Fund is appropriately reformed and this provision defeats that purpose;

Subrogation language in section 287.150, subsection 7, is verbose and ambiguous and includes provisions of comparative fault that are not necessary.  We have substitute language that should be considered by the Committee;

Sections 287.955 and 287.957 are new to the bill and have nothing to do with Second Injury Fund or occupational disease coverage, which was the original subject of the bill.  This new language involves rating methodologies used to set workers’ compensation rates.  The language needs to be fully explained and reviewed as this was not considered in a public forum by the Committee and there has been no opportunity for the Committee to hear testimony in support or opposition to these provisions.

Thank you for your consideration and please let us know if you have any questions.

Sincerely,

Jack Atterberry, Associated General Contractors of Missouri, Inc.

Ray McCarty, Associated Industries of Missouri

Dan Shaul, Missouri Grocers Association

Tim Phelps, Missouri Merchants & Manufacturers Association

David Overfelt, Missouri Retailers Association

Mike Winter, Missouri Self Insurers Association

Brad Jones, National Federation of Independent Business

John Bryan, The Poultry Federation

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