HB2368 - 502R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 23-1023, Arizona Revised Statutes, is amended to read:

START_STATUTE23-1023. Liability of third person to injured employee; election of remedies

A. If an employee who is entitled to compensation under this chapter is injured, or killed or further aggravates a previously accepted industrial injury by the negligence or wrong of another person not in the same employ, the injured employee, or in event of death the injured employee's dependents, may pursue the injured person's remedy against the other person.

B. If the employee who is entitled to compensation under this chapter or the employee's dependents do not pursue a remedy pursuant to this section against the other person by instituting an action within one year after the cause of action accrues, or if after instituting the action, the employee or the employee's dependents fail to fully prosecute the claim and the action is dismissed, all of the following apply:

1. The insurance carrier or self-insured employer may institute an action against the other person.

2. Any dismissal that is entered for lack of prosecution of an action instituted by the employee or the employee's dependents shall not prejudice the right of the insurance carrier or self-insured employer to recover the amount of benefits paid.

3. If the statute of limitations of the claim is one year after the cause of action accrues, the insurance carrier or self-insured employer may file the action prior to one year after the cause of action accrues.

4. The claim may be prosecuted or compromised by the insurance carrier or the person liable for the self‑insured employer or may be reassigned in its entirety to the employee or the employee's dependents. After the reassignment, the employee who is entitled to compensation, or the employee's dependents, shall have the same rights to pursue the claim as if it had been filed within the first year.

C. The employee or the employee's dependents shall provide the insurance carrier or the self-insured employer written notice of the intention to bring an action against a third party and shall provide to the insurance carrier or self-insured employer timely and periodic notice of all pleadings and rulings concerning the status of the pending action. In any action instituted by the employee or the employee's dependents, the insurance carrier or the self-insured employer shall have the right to intervene at any time to protect the insurance carrier's or the self‑insured employer's interests.

D. If the employee proceeds against the other person, compensation and medical, surgical and hospital benefits shall be paid as provided in this chapter and the insurance carrier or other person liable to pay the claim shall have a lien on the amount actually collectable from the other person to the extent of such compensation and medical, surgical and hospital benefits paid. This lien shall not be subject to a collection fee. The amount actually collectable shall be the total recovery less the reasonable and necessary expenses, including attorney fees, actually expended in securing the recovery. In any action arising out of an aggravation of a previously accepted industrial injury, the lien shall only apply to amounts expended for compensation and treatment of the aggravation. The insurance carrier or person shall contribute only the deficiency between the amount actually collected and the compensation and medical, surgical and hospital benefits provided or estimated by this chapter for the case. Compromise of any claim by the employee or the employee's dependents at an amount less than the compensation and medical, surgical and hospital benefits provided for shall be made only with written approval of the insurance carrier or self‑insured employer liable to pay the claim.

E. For purposes of this section, the commission shall have the same rights as an insurance carrier or self-insured employer.END_STATUTE

Sec. 2. Section 23-1041, Arizona Revised Statutes, is amended to read:

START_STATUTE23-1041. Basis for computing compensation; definition

A. Every employee of an employer within the provisions of this chapter who is injured by accident arising out of and in the course of employment, or the employee’s dependents in the event of the employee’s death, shall receive the compensation fixed in this chapter on the basis of the employee's average monthly wage at the time of injury.

B. If the injured or killed employee has not been continuously employed for the period of thirty days immediately preceding the injury or death, the average monthly wage shall be such amount as, having regard to the previous wage of the injured employee or of other employees of the same or most similar class working in the same or most similar employment in the same or neighboring locality, reasonably represents the monthly earning capacity of the injured employee in the employment in which the injured employee is working at the time of the accident.

C. If the employee is working under a contract by which the employee is guaranteed an amount per diem or per month, notwithstanding the contract price for such labor, the employee or the employee’s subordinates or employees working under the terms of such contract or the employee’s or their dependents in case of death shall be entitled to receive compensation on the basis only of the guaranteed wage as set out in the contract of employment, whether paid on a per diem or monthly basis, but in no event shall the basis be less than the wages paid to employees for similar work not under contract.

D. Notwithstanding any other provision of this chapter, in computing the average monthly wage there shall be excluded from such computation all wages or other compensation for services in excess of:

1. One thousand three hundred twenty‑five dollars per month for employees injured before January 1, 1988.

2. One thousand six hundred fifty dollars per month for employees injured from and after December 31, 1987 but before July 1, 1989.

3. One thousand eight hundred dollars per month for employees injured from and after June 30, 1989 but before July 1, 1991.

4. Two thousand one hundred dollars per month for employees injured from and after June 30, 1991 but before August 6, 1999.

5. Two thousand four hundred dollars per month for employees injured on or after August 6, 1999 but before January 1, 2008.

6. Three thousand dollars per month for employees injured from and after December 31, 2007 but before January 1, 2009.

7. Three thousand six hundred dollars per month for employees injured from and after December 31, 2008 but before January 1, 2010.

8. The amount adopted by the commission under subsection E for employees injured on or after January 1, 2010.

E. For purposes of subsection D, paragraph 8, the commission, not later than August 1 of each calendar year, beginning August 1, 2009, shall adopt an amount that adjusts the amount from the prior year to reflect the annual percentage increase in the Arizona mean wage published by the department of economic security using the bureau of labor statistics occupational employment statistics data coded for all occupations cost index for the prior calendar year. The amount adopted by the commission shall be effective for the following calendar year and shall apply to all injuries occurring during that calendar year. In adopting the amount under this subsection, the commission shall not decrease the amount from the prior year or increase the amount more than five per cent from the prior year.

F. Prior to a determination of the average monthly wage, compensation shall be paid on a basis of a minimum monthly wage of two hundred dollars for employees eighteen years of age or over.

G. For the purposes of this section, "monthly wage" means the average wage paid during and over the month in which the employee is killed or injured. END_STATUTE