EMPLOYMENT (GENERAL); WORKERS' COMPENSATION;

WORKERS' COMPENSATION;

You asked how often out-of-state employees working in Connecticut for out-of-state employers receive workers’ compensation benefits here even though their employers do not contribute to Connecticut’s system. You also wanted to know, if this is happening, what law allows this practice.

SUMMARY

The number of cases of uninsured out-of-state employees sustaining injuries here while working for out-of-state employers and collecting Connecticut workers’ compensation benefits appears to be growing, according to Workers’ Compensation Commission and Treasurer’s Office officials. In FY 2002-03 a dozen such cases were assigned to the Second Injury Fund, administered by the treasurer. Thomas Corrigan, deputy assistant treasurer for the Second Injury Fund, said that before this past fiscal year such cases were not frequent enough for officials to notice the trend.

Fund officials reserve $ 40,000 per case to cover the average payout in these situations. These workers qualify for coverage under an exemption in the state Workers’ Compensation Act, which generally prohibits coverage for out-of-state employees.

The cases commonly involve New York state contractors who bring uninsured day laborers into Connecticut for home improvement or other small jobs, usually in Fairfield County, Corrigan said. When these laborers are injured on the job, they qualify for compensation under state law that provides uninsured employees coverage by the Second Injury Fund, the fund designated to handle this.

STATUTORY EXCEPTIONS FOR OUT-OF-STATE EMPLOYEES

Generally, the Workers’ Compensation Act prohibits out-of-state employees who are injured in Connecticut from receiving compensation, but it allows two exceptions (CGS § 31-275 (9)(B)(vi)). The day laborers fall under the exception allowing out-of-state employees to qualify if they work for “an employer pursuant to an employment contract to be performed primarily in this state. ” The Workers’ Compensation Commission has ruled that day laborers are under contract with their employer, even though they may work for their employers on a day-to-day basis.

(The other statutory exception allows an out-of-state worker to qualify if he spends at least 50% of his employment time at a place of employment or business facility in Connecticut. )

When Michelle Truglia appeared before the Judiciary Committee on May 20, 2003 regarding her nomination as a workers’ compensation commissioner, she outlined the issue and gave details of one case she handled as an assistant attorney general in the workers’ compensation unit.

“My latest case is on a chimney repair for someone in Darien. [The uninsured employee] climbed up on the roof… and fell off and has suffered hundreds of thousands of dollars in medical bills and lost wages for a broken back, a broken foot, and head injuries,” she told the committee. “The Second Injury Fund is having to pay that because his New York employer, who neither had insurance in New York or Connecticut, went back to Long Island and left him here to [be treated] and the fund is having to pick that up even though this gentleman pays no taxes in the State of Connecticut and does not contribute to the Second Injury Fund. ”

SECOND INJURY FUND

The Second Injury Fund is a state-run workers’ compensation fund financed by an assessment on employers’ workers’ compensation insurance plans (including those who self-insure). As with standard workers’ compensation, it compensates employees for lost wages and medical expenses related to work injuries. The fund was originally established after World War II to encourage employers to hire disabled veterans by reducing the employers’ financial liability for providing compensation insurance coverage for disabled veterans. These veterans were perceived as being likely to sustain a second, and probably more debilitating, work-related injury.

In 1995, the legislature enacted a law that basically closed the fund to any new cases of employees with second injuries (PA 95-277). It did this because the fund’s annual expenses and long-term liabilities had skyrocketed when increases in workers’ compensation costs and broad transfer criteria gave employers and insurers an incentive to shift cases out of the standard workers’ compensation system to the fund. A workers’ compensation commissioner must rule that a case is eligible to be assigned to the Second Injury Fund.

Today the fund is still open to cases of uninsured, injured employees; dependents of certain deceased employees; and situations when an employee works two jobs and is injured at one. (In the latter situation, the Second Injury Fund picks up the expense for the lost wages of the other job without costing that employer. ) The fund can also be used for several narrowly tailored instances such as paying benefits during the appeal of a compensation award. If the employee loses the appeal he must reimburse the fund.

JM: ts