H.B. 221 Enrolled

WORKERS' COMPENSATION -
NONCOMPLIANCE OF EMPLOYER
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: Gerry A. Adair
AN ACT RELATING TO WORKFORCE SERVICES; AMENDING PENALTY PROCESS;
MAKING TECHNICAL CORRECTIONS; AND PROVIDING AN EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
35A-3-204 (Effective 07/01/97), as renumbered and amended by Chapter 240, Laws of
Utah 1996
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 35A-3-204 (Effective 07/01/97) is amended to read:
35A-3-204 (Effective 07/01/97). Notice of noncompliance to employer -- Enforcement
power of department -- Penalty.
(1) (a) In addition to the remedies specified in Section 35A-3-201, if the department has
reason to believe that an employer of one or more employees is conducting business without
securing the payment of benefits in one of the three ways provided in Section 35A-3-201, the
department may give that employer written notice of the noncompliance by certified mail to the
last-known address of the employer.
(b) If the employer does not remedy the default within 15 days after delivery of the notice,
the department may issue an order requiring the employer to appear before the department and
show cause why the employer should not be ordered to comply with Section 35A-3-201.
(c) If it is found that the employer has failed to provide for the payment of benefits in one
of the three ways provided in Section 35A-3-201, the department may order any employer to
comply with Section 35A-3-201.
(2) (a) [In addition to the remedies specified in Subsection (1) and Section 35A-3-201,]
Notwithstanding Subsection (1), the department may impose a penalty against the employer [of]
under this Subsection (2):

(i) subject to the notice and other requirements of Title 63, Chapter 46b, Administrative
Procedures Act; and
(ii) if the department believes that an employer of one or more employees is conducting
business without securing the payment of benefits in one of the three ways provided in Section
35A-3-201.
(b) The penalty imposed under Subsection (2)(a) shall be the greater of:
(i) $1,000; or
(ii) three times the amount of the premium the employer would have paid for workers'
compensation insurance based on the rate filing of the Workers' Compensation Fund of Utah during
the period of noncompliance.
[(b)] (c) The premium is calculated by applying rates and rate multipliers to the payroll basis
under Subsection (2)(c), using the highest rated employee class code applicable to the employer's
operations.
[(c)] (d) The payroll basis for the purpose of calculating the premium penalty shall be 150%
of the state's average weekly wage multiplied by the highest number of workers employed by the
employer during the period of the employer's noncompliance multiplied by the number of weeks of
the employer's noncompliance up to a maximum of 156 weeks.
(3) The penalty imposed under Subsection (2) shall be deposited in the Uninsured
Employers' Fund created by Section 35A-3-704 and used for the purposes of that fund.
(4) (a) An employer who disputes the determination, imposition, or amount of a penalty
imposed under Subsection [(3)] (2) shall request a hearing before an administrative law judge within
[15] 30 days of the date of issuance of the order imposing the penalty or the order becomes final.
(b) The employer's request shall specify the facts and grounds that are the basis of the
employer's objection to the determination, imposition, or amount of the penalty.
(c) An administrative law judge's order under this Subsection (4) may be reviewed pursuant
to Part 8, Adjudication.
(5) After a penalty order has been issued and becomes final, the department may file an
abstract for any uncollected penalty in the district court. The abstract shall state the amount of the

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uncollected penalty, reasonable attorneys' fees, costs of collection, and court costs. The filed abstract
shall have the effect of a judgment of that court.
(6) Any order issued by the department under this section shall:
(a) be in writing;
(b) be sent by certified mail to the last-known address of the employer;
(c) state the findings and order of the department; and
(d) specify its effective date, which may be immediate or may be at a later date.
(7) The order of the department, upon application by the department made on or after the
effective date of the order to a court of general jurisdiction in any county in this state, may be
enforced by an order to comply entered ex parte and without notice by the court.
Section 2. Effective date.
This act takes effect on July 1, 1997.

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