1     
LABOR CODE AMENDMENTS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Daniel Hemmert

5     
House Sponsor: Jefferson Moss

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions of the Utah Labor Code.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines "certified mail";
13          ▸     modifies the mailing requirements under Title 34A, Utah Labor Code;
14          ▸     provides the circumstances under which the Division of Industrial Accidents may
15     waive or reduce a penalty against an employer for conducting business without
16     securing workers' compensation benefits for the employer's employees; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          34A-1-102, as enacted by Laws of Utah 1997, Chapter 375
25          34A-2-206, as renumbered and amended by Laws of Utah 1997, Chapter 375
26          34A-2-209, as last amended by Laws of Utah 2009, Chapter 288
27          34A-2-211, as last amended by Laws of Utah 2017, Chapter 363
28          34A-6-303, as renumbered and amended by Laws of Utah 1997, Chapter 375
29     


30     Be it enacted by the Legislature of the state of Utah:
31          Section 1. Section 34A-1-102 is amended to read:
32          34A-1-102. Definitions.
33          Unless otherwise specified, as used in this title:
34          (1) "Certified mail" means a method of mailing by any carrier that is accompanied by
35     proof of delivery.
36          [(1)] (2) "Commission" means the Labor Commission created in Section 34A-1-103.
37          [(2)] (3) "Commissioner" means the commissioner of the commission appointed under
38     Section 34A-1-201.
39          Section 2. Section 34A-2-206 is amended to read:
40          34A-2-206. Furnishing information to division -- Employers' annual report --
41     Rights of division -- Examination of employers under oath -- Penalties.
42          (1) (a) Every employer shall furnish the division, upon request, all information required
43     by it to carry out the purposes of this chapter and Chapter 3, Utah Occupational Disease Act.
44          (b) In the month of July of each year every employer shall prepare and mail to the
45     division a statement containing the following information:
46          (i) the number of persons employed during the preceding year from July 1, to June 30,
47     inclusive;
48          (ii) the number of the persons employed at each kind of employment;
49          (iii) the scale of wages paid in each class of employment, showing the minimum and
50     maximum wages paid; and
51          (iv) the aggregate amount of wages paid to all employees.
52          (2) (a) The information required under Subsection (1) shall be furnished in the form
53     prescribed by the division.
54          (b) Every employer shall:
55          (i) answer fully and correctly all questions and give all the information sought by the
56     division under Subsection (1); or
57          (ii) if unable to comply with Subsection (2)(b)(i), give to the division, in writing, good

58     and sufficient reasons for the failure.
59          (3) (a) The division may require the information required to be furnished by this
60     chapter or Chapter 3, Utah Occupational Disease Act, to be made under oath and returned to
61     the division within the period fixed by it or by law.
62          (b) The division, or any person employed by the division for that purpose, shall have
63     the right to examine, under oath, any employer, or the employer's agents or employees, for the
64     purpose of ascertaining any information that the employer is required by this chapter or Chapter
65     3, Utah Occupational Disease Act, to furnish to the division.
66          (4) (a) The division may seek a penalty of not to exceed $500 for each offense to be
67     recovered in a civil action brought by the commission or the division on behalf of the
68     commission against an employer who:
69          (i) within a reasonable time to be fixed by the division and after the receipt of written
70     notice signed by the director or the director's designee specifying the information demanded
71     and served by certified mail or personal service, refuses to furnish to the division:
72          (A) the annual statement required by this section; or
73          (B) other information as may be required by the division under this section; or
74          (ii) willfully furnishes a false or untrue statement.
75          (b) All penalties collected under Subsection (4)(a) shall be paid into the Employers'
76     Reinsurance Fund created in Section 34A-2-702.
77          Section 3. Section 34A-2-209 is amended to read:
78          34A-2-209. Employer's penalty for violation -- Notice of noncompliance -- Proof
79     required -- Admissible evidence -- Criminal prosecution.
80          (1) (a) (i) An employer who fails to comply, and every officer of a corporation or
81     association that fails to comply, with Section 34A-2-201 is guilty of a class B misdemeanor.
82          (ii) Each day's failure to comply with Subsection (1)(a)(i) is a separate offense.
83          (b) If the division sends written notice of noncompliance by certified mail or personal
84     service to the last-known address of an employer, a corporation, or an officer of a corporation
85     or association, and the employer, corporation, or officer does not within 10 days of the day on

86     which the notice is delivered provide to the division proof of compliance, the notice and failure
87     to provide proof constitutes prima facie evidence that the employer, corporation, or officer is in
88     violation of this section.
89          (2) (a) If the division has reason to believe that an employer is conducting business
90     without securing the payment of compensation in a manner provided in Section 34A-2-201, the
91     division may give notice of noncompliance by certified mail or personal service to the
92     following at the last-known address of the following:
93          (i) the employer; or
94          (ii) if the employer is a corporation or association:
95          (A) the corporation or association; or
96          (B) the officers of the corporation or association.
97          (b) If an employer, corporation, or officer described in Subsection (2)(a) does not,
98     within 10 days of the day on which the notice is delivered, provide to the division proof of
99     compliance, the employer and every officer of an employer corporation or association is guilty
100     of a class B misdemeanor.
101          (c) Each day's failure to comply with Subsection (2)(a) is a separate offense.
102          (3) A fine, penalty, or money collected or assessed under this section shall be:
103          (a) deposited in the Uninsured Employers' Fund created by Section 34A-2-704;
104          (b) used for the purposes of the Uninsured Employers' Fund specified in Section
105     34A-2-704; and
106          (c) collected by the Uninsured Employers' Fund administrator in accordance with
107     Section 34A-2-704.
108          (4) A form or record kept by the division or its designee pursuant to Section 34A-2-205
109     is admissible as evidence to establish noncompliance under this section.
110          (5) The commission or division on behalf of the commission may prosecute or request
111     the attorney general or district attorney to prosecute a criminal action in the name of the state to
112     enforce this chapter or Chapter 3, Utah Occupational Disease Act.
113          Section 4. Section 34A-2-211 is amended to read:

114          34A-2-211. Notice of noncompliance to employer -- Enforcement power of
115     division -- Penalty.
116          (1) (a) In addition to the remedies [specified] described in Section 34A-2-210, if the
117     division has reason to believe that an employer is conducting business without securing the
118     payment of benefits in [a manner provided in] accordance with Section 34A-2-201, the division
119     [may give that employer] shall deliver written notice of the noncompliance to the employer by
120     certified mail or personal service to the employer's last-known address [of the employer].
121          (b) If the employer does not [remedy the default] demonstrate compliance with Section
122     34A-2-201 to the division within 15 days after the day on which the notice is delivered, the
123     division [may] shall issue an order requiring the employer to appear before the division and
124     show cause why the employer should not be ordered to comply with Section 34A-2-201.
125          (c) If the division finds that an employer has failed to [provide for the payment of
126     benefits in a manner provided in] comply with Section 34A-2-201, the division [may] shall
127     require the employer to comply with Section 34A-2-201.
128          (2) (a) [Notwithstanding Subsection (1)] Except as provided in Subsection (2)(d), after
129     the division makes a finding of noncompliance described in Subsection (1)(c), the division
130     [may] shall, in accordance with Title 63G, Chapter 4, Administrative Procedures Act, and this
131     Subsection (2), impose a penalty against the employer [under this Subsection (2):].
132          [(i) subject to Title 63G, Chapter 4, Administrative Procedures Act; and]
133          [(ii) if the division believes that an employer of one or more employees is conducting
134     business without securing the payment of benefits in a manner provided in Section 34A-2-201.]
135          (b) [The] Except as provided in Subsection (2)(e), a penalty imposed under Subsection
136     (2)(a) shall be the greater of:
137          (i) $1,000; or
138          (ii) three times the amount of the premium the employer would have paid for workers'
139     compensation insurance based on the rate filing of the workers' compensation insurance carrier
140     that provides workers' compensation insurance under Section 31A-22-1001, during the period
141     of noncompliance.

142          (c) For purposes of Subsection (2)(b)(ii):
143          (i) the premium is calculated by applying rates and rate multipliers to the payroll basis
144     under Subsection (2)(c)(ii), using the highest rated employee class code applicable to the
145     employer's operations; and
146          (ii) the payroll basis is 150% of the state's average weekly wage multiplied by the
147     highest number of workers employed by the employer during the period of the employer's
148     noncompliance multiplied by the number of weeks of the employer's noncompliance up to a
149     maximum of 156 weeks.
150          (d) The division may waive the penalty described in this Subsection (2) if:
151          (i) (A) the finding of noncompliance is the first finding of noncompliance against the
152     employer under this section;
153          (B) the period of noncompliance was less than 180 days;
154          (C) the employer is currently in compliance with Section 34A-2-201; and
155          (D) no injury was reported to the division in accordance with Section 34A-2-407
156     during the period of noncompliance; or
157          (ii) (A) the employer is a corporation;
158          (B) each employee of the corporation is an officer of the corporation; and
159          (C) the employer is currently in compliance with Section 34A-2-201.
160          (e) (i) The division may reduce the penalty described in this Subsection (2) if:
161          (A) the finding of noncompliance is the first finding of noncompliance against the
162     employer under this section;
163          (B) the employer is currently in compliance with Section 34A-2-201;
164          (C) no injury was reported to the division in accordance with Section 34A-2-407
165     during the period of noncompliance; and
166          (D) upon request from the division, the employer submits to the division the
167     employer's payroll records related to the period of noncompliance.
168          (ii) (A) The reduced penalty shall be an amount equal to the premium the employer
169     would have paid for workers' compensation insurance based on the rate filing of the workers'

170     compensation insurance carrier that provides workers' compensation insurance under Section
171     31A-22-1001, during the period of noncompliance.
172          (B) The division shall calculate the amount described in Subsection (2)(e)(ii)(A) using
173     the payroll records described in Subsection (2)(e)(i)(D).
174          (f) The division may reinstate the full penalty amount against an employer if the
175     Uninsured Employers' Fund is ordered to pay benefits for an injury that occurred but was not
176     reported during the period of noncompliance for which the division waived or assessed a
177     reduced penalty under this subsection.
178          (3) A penalty imposed under Subsection (2) shall be:
179          (a) deposited in the Uninsured Employers' Fund created by Section 34A-2-704;
180          (b) used for the purposes of the Uninsured Employers' Fund specified in Section
181     34A-2-704; and
182          (c) collected by the Uninsured Employers' Fund administrator in accordance with
183     Section 34A-2-704.
184          (4) (a) An employer who disputes a determination, imposition, or amount of a penalty
185     imposed under Subsection (2) shall request a hearing before an administrative law judge within
186     30 days of the date of issuance of the administrative action imposing the penalty or the
187     administrative action becomes a final order of the commission.
188          (b) An employer's request for a hearing under Subsection (4)(a) shall specify the facts
189     and grounds that are the basis of the employer's objection to the determination, imposition, or
190     amount of the penalty.
191          (c) An administrative law judge's decision under this Subsection (4) may be reviewed
192     pursuant to Part 8, Adjudication.
193          (5) An administrative action issued by the division under this section shall:
194          (a) be in writing;
195          (b) be sent by certified mail or personal service to the last-known address of the
196     employer;
197          (c) state the findings and administrative action of the division; and

198          (d) specify its effective date, which may be:
199          (i) immediate; or
200          (ii) at a later date.
201          (6) A final order of the commission under this section, upon application by the
202     commission made on or after the effective date of the order to a court of general jurisdiction in
203     any county in this state, may be enforced by an order to comply:
204          (a) entered ex parte; and
205          (b) without notice by the court.
206          Section 5. Section 34A-6-303 is amended to read:
207          34A-6-303. Enforcement procedures -- Notification to employer of proposed
208     assessment -- Notification to employer of failure to correct violation -- Contest by
209     employer of citation or proposed assessment -- Procedure.
210          (1) (a) If the division issues a citation under Subsection 34A-6-302(1), it shall within a
211     reasonable time after inspection or investigation, notify the employer by certified mail or
212     personal service of the assessment, if any, proposed to be assessed under Section 34A-6-307
213     and that the employer has 30 days to notify the Division of Adjudication that the employer
214     intends to contest the citation, abatement, or proposed assessment.
215          (b) If, within 30 days from the receipt of the notice issued by the division, the employer
216     fails to notify the Division of Adjudication that the employer intends to contest the citation,
217     abatement, or proposed assessment, and no notice is filed by any employee or representative of
218     employees under Subsection (3) within 30 days, the citation, abatement, and assessment, as
219     proposed, is final and not subject to review by any court or agency.
220          (2) (a) If the division has reason to believe that an employer has failed to correct a
221     violation for which a citation has been issued within the time period permitted, the division
222     shall notify the employer by certified mail or personal service:
223          (i) of the failure;
224          (ii) of the assessment proposed to be assessed under Section 34A-6-307; and
225          (iii) that the employer has 30 days to notify the Division of Adjudication that the

226     employer intends to contest the division's notification or the proposed assessment.
227          (b) The period for corrective action does not begin to run until entry of a final order by
228     the commission.
229          (c) If the employer fails to notify the Division of Adjudication, in writing, within 30
230     days from the receipt of notification issued by the division, that the employer intends to contest
231     the notification or proposed assessment, the notification and assessment, as proposed, is final
232     and not subject to review by any court or agency.
233          (3) (a) If an employer notifies the Division of Adjudication that the employer intends to
234     contest a citation issued under Subsection 34A-6-302(1), or notification issued under
235     Subsection (1) or (2), or if, within 30 days of the issuance of a citation under Subsection
236     34A-6-302(1), any employee or representative of employees files a notice with the division
237     alleging that the period of time fixed in the citation for the abatement of the violation is
238     unreasonable, the division shall advise the commissioner of the notification, and the
239     commissioner shall provide an opportunity for a hearing.
240          (b) Upon a showing by an employer of a good faith effort to comply with the
241     abatement requirements of a citation, and that the abatement has not been completed because of
242     factors beyond the employer's reasonable control, the division, after an opportunity for
243     discussion and consideration, shall issue an order affirming or modifying the abatement
244     requirements in any citation.