Assigned to COMPS FOR
COMMITTEE
Assigned to COMPS FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
workers' compensation: employee definition; LLCs
Purpose
Requires a majority member of a limited liability company (LLC) or a majority shareholder of a corporation to opt-in to workers' compensation coverage.
Background
Workers' compensation allows for partial and total disability compensation for personal injuries arising out of and in the course of employment if: 1) the employment caused or contributed to the injury; 2) the employment created a necessary risk or danger inherent to the nature of the employment; or 3) the employer, its agent or other employees failed to exercise due care or comply with relevant employment laws (A.R.S. §§ 23-901 and 23-1021).
Employees receive workers’ compensation benefits for medical treatment and lost wages. After notifying the employer of the injury, an employee must receive medical, surgical and hospital benefits promptly and throughout the period of disability (A.R.S. § 23-1062).
Lost wage benefits are computed based on the employee's average monthly wage, ability to return to gainful employment and length or permanence of the sustained injury. The average monthly wage is based on earnings at the time of the injury, up to the statutory maximum (A.R.S. § 23-1041). The maximum average monthly wage for calendar year 2018 is $4,625.92 (Industrial Commission of Arizona).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires members who own more than 50 percent of a LLC and shareholders who own more than 50 percent of a corporation to accept coverage in writing to receive workers' compensation benefits.
2. Requires wage compensation to be computed based on the actual average monthly wage at the time of the injury or the assumed monthly wage agreed to by the insurer, whichever is lesser.
3. Sets, if agreed to by the insurer, the assumed average monthly wage at $600 or more, up to the statutory maximum, to compute premium payments and compensation benefits for majority members of LLCs and majority shareholders of corporations.
4. Makes technical changes.
5. Becomes effective on the general effective date.
House Action
BI 1/11/18 DPA 8-0-0-0
3rd Read 2/6/18 58-0-1-1
Prepared by Senate Research
February 22, 2018
GH/JP/lb