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Amendments to Wisconsin Worker's Compensation Act Effective April 1, 2008

By Michael Progar

A number of amendments to the Wisconsin Worker's Compensation Act became effective on April 1, 2008. In part, the amendments make significant changes to the insurance requirements for PEOs and employee leasing companies, which are summarized below.

• A PEO or employee leasing company that contracts to provide the nontemporary ongoing employee workforce of a client is liable for any worker's compensation payable to the leased employee, and may not seek or receive reimbursement from the client for any payments made as a result of that liability. S. 102.315(2).
• With certain exceptions, a PEO or employee leasing company must obtain an insurance policy under which the insurer issues separate worker's compensation policies for each of the clients that are insured (multiple coordinated policy). The multiple coordinated policy must name both the PEO or employee leasing company and the client as named insureds, and must designate either, but not both, as the first named insured. The insurer may issue a multiple coordinated policy for a client only if all of the client's employees are leased employees and covered under the policy. However, an insured may issue a multiple coordinated policy for a divided work force (where some of the client's employees are leased and others are not) if the client notifies the DWD of its intent to have a plan under which two policies are issued to cover its employees (divided workforce plan), using new form WKC-15783-E, Employer Notice of Divided-Workforce under s. 102.315(6)(b), Wis. Stats.
• A PEO or employee leasing company may also insure its worker's compensation liability by obtaining a single insurance policy in its name covering more than one of its clients (master policy). S. 102.315(4).
• Worker's compensation liability may be also be insured as to a group of clients, each of which falls below the threshold at which employers are experience rated (small clients, $6,000 in unmodified annual premium as of April 1, 2008), by obtaining a master policy. The PEO or leasing company must provide to the DWD notice using new form WKC-15784-E, Employee Leasing Company Notification of a client covered under a master policy for small clients under s. 102.315(5)(b), Wis. Stats., and the insurance company must provide notice using new form WKC-15785-E, Wisconsin Proof of Coverage under a master policy for small clients under s. 103.315(5)(c), Wis. Stats.
• An insurer may issue a policy covering only the leased employees of a client that has a divided workforce. The client must insure its own nonleased employees, and must agree to assume full responsibility to pay any worker's compensation payable as required by the DWD should a dispute arise between insurers as to liability for any injury sustained while a divided workforce is in effect, pending final resolution of the dispute.
• A leased employee of a PEO or employee leasing company who makes a claim for worker's compensation against it is prohibited from making a claim or bringing a tort action against the client for which the employee performed services.
• A PEO or employee leasing company is no longer required to submit to the DWD form WKC-15242-E, Wisconsin Employee Leasing Company Client Report under s. 102.31(2m)(a), Wis. Stats., or form WKC-15243-E, Wisconsin Employee Leasing Company Client Termination Notification under s. 102.31(2m(b), Wis. Stats.

Following is a summary of some of the other changes resulting from the amendments.

• The maximum weekly benefit rates for PPD are increased. For injuries occurring on and after April 1, 2008, the rate is increased to $272; for injuries occurring on and after January 1, 2009, the rate will be increased to $282.
• The maximum amount of attorney fees payable in cases of admitted liability, where there is no dispute as to the amount of compensation due, and in which no hearing or appeal is necessary, is increased from $100 to $250.
• The interest credit for advancement and lump sum payments is reduced from 7% to 5%.

Full post as published by Doherty & Progar Workers' Comp on April 11, 2008 (boomark / email).