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Chapter 23     Entire Code
‹ Chapter 22C  |  Chapter 24 › Printer Friendly Versions
Chapter 23  |  Article 23 - 2  |  Section 10
WVC 23 - CHAPTER 23. WORKERS' COMPENSATION.
WVC 23 - 2 - ARTICLE 2. EMPLOYERS AND EMPLOYEES SUBJECT TO CHAPTER; EXTRATERRITORIAL COVERAGE.

WVC 23 - 2 - 1 §23-2-1. Employers subject to chapter; elections not to provide certain coverages; notices; filing of business registration certificates.
(a) The State of West Virginia and all governmental agencies or departments created by it, including county boards of education, political subdivisions of the state, any volunteer fire department or company and other emergency service organizations as defined by article five, chapter fifteen of this code, and all persons, firms, associations and corporations regularly employing another person or persons for the purpose of carrying on any form of industry, service or business in this state, are employers within the meaning of this chapter and are required to subscribe to and pay premium taxes into the Workers' Compensation Fund for the protection of their employees and are subject to all requirements of this chapter and all rules prescribed by the Workers' Compensation Commission with reference to rate, classification and premium payment: Provided, That rates will be adjusted by the commission to reflect the demand on the compensation fund by the covered employer.

(b) The following employers are not required to subscribe to the fund, but may elect to do so:

(1) Employers of employees in domestic services;

(2) Employers of five or fewer full-time employees in agricultural service;

(3) Employers of employees while the employees are employed without the state except in cases of temporary employment without the state;

(4) Casual employers. An employer is a casual employer when the number of his or her employees does not exceed three and the period of employment is temporary, intermittent and sporadic in nature and does not exceed ten calendar days in any calendar quarter;

(5) Churches;

(6) Employers engaged in organized professional sports activities, including employers of trainers and jockeys engaged in thoroughbred horse racing; or

(7) Any volunteer rescue squad or volunteer police auxiliary unit organized under the auspices of a county commission, municipality or other government entity or political subdivision; volunteer organizations created or sponsored by government entities, political subdivisions; or area or regional emergency medical services boards of directors in furtherance of the purposes of the Emergency Medical Services Act of article four-c, chapter sixteen of this code: Provided, That if any of the employers described in this subdivision have paid employees, to the extent of those paid employees, the employer shall subscribe to and pay premium taxes into the Workers' Compensation Fund based upon the gross wages of the paid employees but with regard to the volunteers, the coverage remains optional.

(8) Any employer whose employees are eligible to receive benefits under the federal Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §901, et seq., but only for those employees eligible for those benefits.

(c) Notwithstanding any other provision of this chapter to the contrary, whenever there are churches in a circuit which employ one individual clergyman and the payments to the clergyman from the churches constitute his or her full salary, such circuit or group of churches may elect to be considered a single employer for the purpose of premium payment into the Workers' Compensation Fund.

(d) Employers who are not required to subscribe to the Workers' Compensation Fund may voluntarily choose to subscribe to and pay premiums into the fund for the protection of their employees and in that case are subject to all requirements of this chapter and all rules and regulations prescribed by the commission with reference to rates, classifications and premium payments and shall afford to them the protection of this chapter, including section six of this article, but the failure of the employers to choose to subscribe to and to pay premiums into the fund shall not impose any liability upon them other than any liability that would exist notwithstanding the provisions of this chapter.

(e) Any foreign corporation employer whose employment in this state is to be for a definite or limited period which could not be considered "regularly employing" within the meaning of this section may choose to pay into the Workers' Compensation Fund the premiums provided for in this section, and at the time of making application to the Workers' Compensation Commission, the employer shall furnish a statement under oath showing the probable length of time the employment will continue in this state, the character of the work, an estimate of the monthly payroll and any other information which may be required by the commission. At the time of making application the employer shall deposit with the commission to the credit of the Workers' Compensation Fund the amount required by section five of this article. That amount shall be returned to the employer if the employer's application is rejected by the commission. Upon notice to the employer of the acceptance of his or her application by the commission, he or she is an employer within the meaning of this chapter and subject to all of its provisions.

(f) Any foreign corporation employer choosing to comply with the provisions of this chapter and to receive the benefits under this chapter shall, at the time of making application to the commission in addition to other requirements of this chapter, furnish the commission with a certificate from the secretary of state, where the certificate is necessary, showing that it has complied with all the requirements necessary to enable it legally to do business in this state and no application of a foreign corporation employer shall be accepted by the commission until the certificate is filed.

(g) The following employers may elect not to provide coverage to certain of their employees under the provisions of this chapter:

(1) Any political subdivision of the state including county commissions and municipalities, boards of education, or emergency services organizations organized under the auspices of a county commission may elect not to provide coverage to any elected official. The election not to provide coverage does not apply to individuals in appointed positions or to any other employees of the political subdivision;

(2) If an employer is a partnership, sole proprietorship, association or corporation, the employer may elect not to include as an "employee" within this chapter, any member of the partnership, the owner of the sole proprietorship or any corporate officer or member of the board of directors of the association or corporation. The officers of a corporation or an association shall consist of a president, a vice president, a secretary and a treasurer, each of whom is elected by the board of directors at the time and in the manner prescribed by the bylaws. Other officers and assistant officers that are considered necessary may be elected or appointed by the board of directors or chosen in any other manner prescribed by the bylaws and, if elected, appointed or chosen, the employer may elect not to include the officer or assistant officer as an "employee" within the meaning of this chapter: Provided, That except for those persons who are members of the board of directors or who are the corporation's or association's president, vice president, secretary and treasurer and who may be excluded by reason of their positions from the benefits of this chapter even though their duties, responsibilities, activities or actions may have a dual capacity of work which is ordinarily performed by an officer and also of work which is ordinarily performed by a worker, an administrator or an employee who is not an officer, no other officer or assistant officer who is elected or appointed shall be excluded by election from coverage or be denied the benefits of this chapter merely because he or she is an officer or assistant officer if, as a matter of fact:

(A) He or she is engaged in a dual capacity of having the duties and responsibilities for work ordinarily performed by an officer and also having duties and work ordinarily performed by a worker, administrator or employee who is not an officer;

(B) He or she is engaged ordinarily in performing the duties of a worker, an administrator or an employee who is not an officer and receives pay for performing the duties in the capacity of an employee; or

(C) He or she is engaged in an employment palpably separate and distinct from his or her official duties as an officer of the association or corporation;

(3) If an employer is a limited liability company, the employer may elect not to include as an "employee" within this chapter a total of no more than four persons, each of whom are acting in the capacity of manager, officer or member of the company.

(h) In the event of election under subsection (g) of this section, the employer shall serve upon the commission written notice naming the positions not to be covered and shall not include the "employee's" remuneration for premium purposes in all future payroll reports, and the partner, proprietor or corporate or executive officer is not considered an employee within the meaning of this chapter after the notice has been served. Notwithstanding the provisions of subsection (g), section five of this article, if an employer is delinquent or in default or has not subscribed to the Fund even though it is obligated to do so under the provisions of this article, any partner, proprietor or corporate or executive officer shall not be covered and shall not receive the benefits of this chapter.

(i) "Regularly employing" or "regular employment" means employment by an employer which is not a casual employer under this section.

(j) Upon the termination of the commission, the criteria governing which employer shall or may subscribe to the Workers' Compensation Commission shall also govern which employers shall or may purchase Workers' Compensation insurance under article two-c of this chapter.

WVC 23 - 2 - 1 A §23-2-1a. Employees subject to chapter.
(a) Employees subject to this chapter are all persons in the service of employers and employed by them for the purpose of carrying on the industry, business, service or work in which they are engaged, including, but not limited to:

(1) Persons regularly employed in the state whose duties necessitate employment of a temporary or transitory nature by the same employer without the state;

(2) Every person in the service of the state or of any political subdivision or agency thereof, under any contract of hire, express or implied, and every appointed official or officer thereof while performing his or her official duties;

(3) Checkweighmen employed according to law;

(4) All members of rescue teams assisting in mine accidents with the consent of the owner who, in such case, shall be deemed the employer, or at the direction of the director of the department of mines;

(5) All forest firefighters who, under the supervision of the director of the department of natural resources or his or her designated representative, assist in the prevention, confinement and suppression of any forest fire; and

(6) Students while participating in a work-based learning experience with an employer approved as a part of the curriculum by the county board. The county board shall be the employer of record of students while participating in unpaid work-based experiences off school premises with employers other than the county board. Students in unpaid work-based learning experiences shall be considered to be paid the amount of wages so as to provide the minimum workers' compensation weekly benefits required by section six, article four of this chapter.

(b) The right to receive compensation under this chapter shall not be affected by the fact that a minor is employed or is permitted to be employed in violation of the laws of this state relating to the employment of minors, or that he or she obtained his or her employment by misrepresenting his or her age.

WVC 23 - 2 - 1 B §23-2-1b. Special provisions as to premiums.

(a) Except as provided for in subsection (b) of this section, every executive officer of an association or of a corporation, any member of a partnership or owner of a sole proprietorship which has not elected to forgo coverage under this chapter for such officer, member or owner shall pay premiums based upon the actual salary paid to such employee up to an amount sufficient to qualify such employee to receive the maximum level of benefits, but in no event shall the basis for premium be less than the salary necessary to provide such employee with the minimum level of benefits.

(b) Every executive officer of a not-for-profit association or of a not-for-profit corporation which has not elected to forgo coverage under this chapter for such officer, member or owner shall pay premiums based upon the actual salary paid to such employee up to an amount sufficient to qualify such employee to receive the maximum level of benefits, but in no event shall the basis for premium be less than one hundred dollars.

(c) Every elected official or officer, whether full time or part time and including members of the Legislature, whose governmental entity elects coverage under this chapter for such elected official or officer, shall pay or have paid for him or her premiums based upon the actual salary paid to such elected official or officer up to an amount sufficient to qualify such elected official or officer to receive the maximum level of benefits, but in no event shall the basis for premium be less than the salary necessary to provide such elected official or officer with the minimum level of benefits. For the purposes of this subsection, an elected official or officer shall include a person appointed to an elected position to complete a term for that elected position.

(d) The premium and actual expenses in connection with governmental agencies and departments of the state of West Virginia shall be paid out of the state treasury from appropriations made for such agencies and departments, in the same manner as other disbursements are made by such agencies and departments.

(e) County commissions, municipalities, other political subdivisions of the state, county boards of education, emergency service organizations organized as aforesaid and volunteer fire departments or companies shall provide for the funds to pay their prescribed premiums into the fund and such premiums and premiums of state agencies and departments, including county boards of education, shall be paid into the fund in the same manner as herein provided for other employers subject to this chapter.

(f) County commissions and municipalities are hereby authorized to pay all or any part of the premiums prescribed for such emergency service organizations organized as aforesaid and such duly incorporated volunteer fire departments or companies as may provide services within the county or municipality.

WVC 23 - 2 - 1 C §23-2-1c. Extraterritorial coverage; approval and change of agreements.
(a) Whenever, with respect to an employee of an employer who is a subscriber in good standing to the workers' compensation fund or an employer who has elected to pay compensation directly, as provided in section nine of this article, there is a possibility of conflict with respect to the application of workers' compensation laws because the contract of employment is entered into and all or some portion of the work is performed or is to be performed in a state or states other than this state, the employer and the employee may agree to be bound by the laws of this state or by the laws of any other state in which all or some portion of the work of the employee is to be performed: Provided, That the executive director may review and accept or reject the agreement. The review shall be conducted in keeping with the executive director's fiduciary obligations to the workers' compensation fund which may include, among other things, the nexus of the employer and the employee to the state: Provided, however, That nothing in this section shall be construed as to require an agreement in those instances where subdivision (3), subsection (b), section one of this article or subdivision (1), subsection (a), section one-a of this article are applicable. All agreements shall be in writing and filed with the executive director within ten days after execution of the agreement but shall not become effective until approved by the executive director and shall, thereafter, remain in effect until terminated or modified by agreement of the parties similarly filed or by order of the executive director. If the parties agree to be bound by the laws of this state, an employee injured within the terms and provisions of this chapter is entitled to benefits under this chapter regardless of the situs of the injury or exposure to occupational pneumoconiosis or other occupational disease, and the rights of the employee and his or her dependents under the laws of this state shall be the exclusive remedy against the employer on account of injury, disease or death in the course of and as a result of the employment.

(b) If the parties agree to be bound by the laws of another state and the employer has complied with the laws of that state, the rights of the employee and his or her dependents under the laws of that state shall be the exclusive remedy against the employer on account of injury, disease or death in the course of and as a result of the employment without regard to the situs of the injury or exposure to occupational pneumoconiosis or other occupational disease.

(c) If the employee is a resident of a state other than this state and is subject to the terms and provisions of the workers' compensation law or similar laws of a state other than this state, the employee and his or her dependents are not entitled to the benefits payable under this chapter on account of injury, disease or death in the course of and as a result of employment temporarily within this state, and the rights of the employee and his or her dependents under the laws of the other state shall be the exclusive remedy against the employer on account of any injury, disease or death.

(d) If any employee or his or her dependents are awarded workers' compensation benefits or recover damages from the employer under the laws of another state for an injury received in the course of and resulting from the employment, the amount awarded or recovered, whether paid or to be paid in future installments, shall be credited against the amount of any benefits payable under this chapter for the same injury.

WVC 23 - 2 - 1 D §23-2-1d. Prime contractors and subcontractors liability.
(a) For the exclusive purposes of this section, the term "employer" as defined in section one of this article includes any primary contractor who regularly subcontracts with other employers for the performance of any work arising from or as a result of the primary contractor's own contract: Provided, That a subcontractor does not include one providing goods rather than services. For purposes of this subsection, extraction of natural resources is a provision of services. In the event that a subcontracting employer defaults on its obligations to make payments to the commission, then the primary contractor is liable for the payments. However, nothing contained in this section shall extend or except to a primary contractor or subcontractors the provisions of section six, six-a or eight of this article. This section is applicable only with regard to subcontractors with whom the primary contractor has a contract for any work or services for a period longer than sixty days: Provided, however, That this section is also applicable to contracts for consecutive periods of work that total more than sixty days. It is not applicable to the primary contractor with regard to sub-subcontractors. However, a subcontractor for the purposes of a contract with the primary contractor can itself become a primary contractor with regard to other employers with whom it subcontracts. It is the intent of the Legislature that no contractor, whether a primary contractor, subcontractor or sub-subcontractor, escape or avoid liability for any workers' compensation premium, assessment or tax. The executive director shall propose for promulgation a rule to effect this purpose on or before December 31, 2003.

(b) A primary contractor may avoid initial liability under subsection (a) of this section if it obtains from the executive director, prior to the initial performance of any work by the subcontractor's employees, a certificate that the subcontractor is in good standing with the Workers' Compensation Fund.

(1) Failure to obtain the certificate of good standing prior to the initial performance of any work by the subcontractor results in the primary contractor being equally liable with the subcontractor for all delinquent and defaulted premium taxes, premium deposits, interest and other penalties arising during the life of the contract or due to work performed in furtherance of the contract: Provided, That the commission is entitled to collect only once for the amount of premiums, premium deposits and interest due to the default, but the commission may impose other penalties on the primary contractor or on the subcontractor, or both.

(2) In order to continue avoiding liability under this section, the primary contractor shall request that the commission inform the primary contractor of any subsequent default by the subcontractor. In the event that the subcontractor does default, the commission shall notify the primary contractor of the default by placing a notice in the certified United States mail, postage prepaid, and addressed to the primary contractor at the address furnished to the commission by the primary contractor. The mailing is good and sufficient notice to the primary contractor of the subcontractor's default. However, the primary contractor is not liable under this section until the first day of the calendar quarter following the calendar quarter in which the notice is given and then the liability is only for that following calendar quarter and thereafter and only if the subcontract has not been terminated: Provided, That the commission is entitled to collect only once for the amount of premiums, premium deposits and interest due to the default, but the commission may impose other penalties on the primary contractor or on the subcontractor, or both.

(c) In any situation where a subcontractor defaults with regard to its payment obligations under this chapter or fails to provide a certificate of good standing as provided in this section, the default or failure is good and sufficient cause for a primary contractor to hold the subcontractor responsible and to seek reimbursement or indemnification for any amounts paid on behalf of the subcontractor to avoid or cure a workers' compensation default, plus related costs, including reasonable attorneys' fees, and to terminate its subcontract with the subcontractor notwithstanding any provision to the contrary in the contract.

(d) The provisions of this section are applicable only to those contracts entered into or extended on or after January 1, 1994.

(e) The commission may take any action authorized by section five-a of this article in furtherance of its efforts to collect amounts due from the primary contractor under this section.

(f) Effective upon termination of the commission, subsections (a) through (e), inclusive, of this section shall be applicable only to unpaid premiums due the commission or the Old Fund as provided in article two-c of this chapter.

(g) The Legislature finds that every prime contractor should be responsible to ensure that any subcontractor with which it directly contracts is either self-insured or maintains workers' compensation coverage throughout the periods during which the services of a subcontractor are used and, further, if the subcontractor is neither self-insured nor covered, then the prime contractor rather than the Uninsured Employer Fund should be responsible for the payment of statutory benefits. It is also the intent of the Legislature that this section not be used as the basis for expanding the liability of a prime contractor beyond the limited purpose of providing coverage in the limited circumstances and in the manner expressly addressed by this section: Provided, That receipt by the prime contractor of a certificate of coverage from a subcontractor shall be deemed to relieve the prime contractor of responsibility regarding the subcontractor's workers' compensation coverage.

(h) On after the effective date of the reenactment of this section in 2009, if an employee of a subcontractor suffers an injury or disease and, on the date of injury or last exposure, his or her employer did not have workers' compensation coverage or was not an approved self-insured employer, and the prime contractor did not obtain certification of coverage from the subcontractor, then that employee may file a claim against the prime contractor for which the subcontractor performed services on the date of injury or last exposure, and such claim shall be administered in the same manner as claims filed by injured employees of the prime contractor: Provided, That a subcontractor that subcontracts with another subcontractor shall, with respect to such subcontract, is the prime contractor for the purposes of this section: Provided, however, That the provisions of this subsection do not relieve a subcontractor from any requirements of this chapter, including the duty to maintain coverage on its employees. The subcontractor shall provide proof of continuing coverage to the prime contractor by providing a certificate showing current as well as renewal or replacement coverage during the term of the contract between the prime contractor and the subcontractor. The subcontractor shall provide notice to the prime contractor within two business days of cancellation of expiration of coverage.

(i) Notwithstanding that an injured employee of a subcontractor is eligible for workers' compensation benefits pursuant to this section from the prime contractor's carrier or the self-insured prime contractor, whichever is applicable, a subcontractor who has failed to maintain workers' compensation coverage on its employees:

(1) May not claim the exemption from liability provided by sections six and six-a of this article;

(2) May be held liable to an injured employee pursuant to the provisions of section eight of this article; and

(3) Is the designated employer for the purposes of any "deliberate intention" action brought by the injured worker pursuant to the provisions of section two, article four of this chapter.

(j) If a claim of an injured employee of a subcontractor is accepted or conditionally accepted into the Uninsured Employer Fund, both the prime contractor and subcontractor are jointly and severally liable for any payments made by the fund, and the Insurance Commissioner may seek recovery of the payments, plus administrative costs and attorneys' fees, from the prime contractor, the subcontractor, or both: Provided, That a prime contractor who is held liable pursuant to this subsection for the payment of benefits to an injured employee of a subcontractor may recover the amount of such payments from the subcontractor, plus reasonable attorneys' fee and costs: Provided, however, That if a prime contractor has performed due diligence in all matters requiring an verifying a subcontractor's maintenance of insurance coverage, than the prime contractor is not liable for any claim made hereunder against the subcontractor.

WVC 23 - 2 - 2 §23-2-2. Commission to be furnished information by employers, State Tax Commissioner and division of unemployment compensation; secrecy of information; examination of employers, etc.; violation a misdemeanor.
(a) Every employer shall furnish the executive director, upon request, all information required by him or her to carry out the purposes of this chapter. Every employer shall have a continuous and ongoing duty to maintain current information about its activities, risks and rates on the books of the commission. The Executive Director, or any person employed by the commission for that purpose, may examine under oath any employer or officer, agent or employee of any employer.

(b) Notwithstanding the provisions of any other statute to the contrary, specifically, but not exclusively, sections five and five-b, article ten, chapter eleven of this code and section eleven, article ten, chapter twenty-one-a of this code, the Executive Director of the Workers' Compensation Commission may receive the following information:

(1) Upon written request to the State Tax Commissioner: The names, addresses, places of business and other identifying information of all businesses receiving a business franchise registration certificate and the dates thereof; and the names and social security numbers or other tax identification numbers of the businesses and of the businesses' workers and employees, if otherwise collected, and the quarterly or other applicable reporting period and annual gross wages or other compensation paid to the workers and employees of businesses reported pursuant to the requirement of withholding of tax on income.

(2) Upon written application to the Division of Unemployment Compensation: In addition to the information that may be released to the Workers' Compensation Commission for the purposes of this chapter under the provisions of chapter twenty-one-a of this code, the names, addresses and other identifying information of all employing units filing reports and information pursuant to section eleven, article ten, chapter twenty-one-a of this code as well as information contained in those reports regarding the number and names, addresses and social security numbers of employees employed and the gross quarterly or other applicable reporting period wages paid by each employing unit to each identified employee.

(c) All information acquired by the Workers' Compensation Commission pursuant to subsection (b) of this section shall be used only for auditing premium payments, assisting in a wage determination, assisting in the determination of employment status and registering businesses under the single point of registration program as set forth in article twelve, chapter eleven of this code. The Workers' Compensation Commission, upon receiving the business franchise registration certificate information made available pursuant to subsection (b) of this section, shall contact all businesses receiving a business franchise registration certificate and provide all necessary forms to register the business under the provisions of this article. Any officer or employee of this state who uses the information obtained under this section in any manner other than the one stated in this section or elsewhere authorized in this code, or who divulges or makes known in any manner any of the information obtained under this section, is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one thousand dollars or incarcerated in the county or regional jail for not more than one year, or both together with cost of prosecution.

(d) Reasonable costs of compilation and production of any information made available pursuant to subsection (b) of this section shall be charged to the Workers' Compensation Commission.

(e) Information acquired by the commission pursuant to subsection (b) of this section is not subject to disclosure under the provisions of chapter twenty-nine-b of this code.

(f) The right to request, gather and maintain information set forth in this section shall transfer to the Insurance Commissioner and the industrial council upon termination of the commission.

WVC 23 - 2 - 3 §23-2-3. Report forms and other forms for use of employers.
The commission, and effective upon termination of the commission, the insurance commissioner, shall prepare and furnish report forms for the use of employers subject to this chapter. Every employer receiving from the commission any form or forms with direction for completion and returning to the commission shall return the form, within the period fixed by the commission, completed as to answer fully and correctly all pertinent questions in the form, and if unable to do so, shall give good and sufficient reasons for the failure. Every employer subject to the provisions of this chapter shall make application to the commission on the forms prescribed by the commission for that purpose; and any employer who terminates his or her business or for any other reason is no longer subject to this chapter shall immediately notify the commission on forms to be furnished by the commission for that purpose.

WVC 23 - 2 - 4 §23-2-4. Classification of industries; rate of premiums; authority to adopt various systems; accounts.
(a) The executive director with approval of the board of managers is authorized to establish by rule a system for determining the classification and distribution into classes of employers subject to this chapter, a system for determining rates of premium taxes applicable to employers subject to this chapter, a system of multiple policy options with criteria for subscription and criteria for an annual employer's statement providing both benefits liability information and rate determination information.

(1) In addition, the rule shall provide for, but not be limited to:

(A) Rate adjustments by industry or individual employer, including merit rate adjustments;

(B) Notification regarding rate adjustments prior to the quarter in which the rate adjustments will be in effect;

(C) Chargeability of claims; and

(D) Any further matters that are necessary and consistent with the goals of this chapter;

(2) The rule shall require the establishment of a program under which the commissioner may grant discounts on premium rates for employers who meet either of the following requirements:

(A) Have not incurred a compensable injury for one year or more and who maintain an employee safety committee or similar organization and make periodic safety inspections of the workplace;

(B) Successfully complete a loss prevention program, including establishment of a drug-free workplace, prescribed by the commission's safety and loss control office and conducted by the commission or by any other person approved by the commission;

(3) The rule shall be consistent with the duty of the Executive Director and the board of managers to fix and maintain the lowest possible rates of premium taxes consistent with the maintenance of a solvent Workers' Compensation Fund and the reduction of any deficit that may exist in the fund and in keeping with their fiduciary obligations to the fund;

(4) The rule shall be consistent with generally accepted accounting principles;

(5) The rule shall be consistent with classification and rate-making methodologies found in the insurance industry; and

(6) The rule shall be consistent with the principles of promoting more effective workplace health and safety programs as contained in article two-b of this chapter.

(b) In accordance with generally accepted accounting principles, the Workers' Compensation Commission shall keep an accurate accounting of all money or moneys earned, due and received by the Workers' Compensation Fund and of the liability incurred and disbursements made against the fund; and an accurate account of all money or moneys earned, due and received from each individual subscriber and of the liability incurred and disbursements made against the same.

(c) Prospective rates set in accordance with the provisions of this article shall at all times be financially sound in accordance with generally accepted accounting principles and fully fund the prospective claim obligations for the year in which the rates were made. Rates, surcharges or assessments for deficit management and deficit reduction purposes shall be fair and equitable, financially sound in accordance with generally accepted accounting principles and sufficient to meet the payment obligations of the fund.

(d) Notwithstanding any provision of subsection (c) of this section to the contrary, except for those increases made effective for fiscal year two thousand four by action of the compensation programs performance council heretofore established in article three, chapter twenty-one-a of this code taken prior to the effective date of the amendment and reenactment of this section, base rates, assessments and surcharges, except for individual employer merit rate adjustments, shall not be increased during fiscal years two thousand four and two thousand five: Provided, That the portion of the rate increase attributable to claims management incentive adjustments, as determined by the compensation programs performance council for fiscal year two thousand four prior to the effective date of the amendment and reenactment of this section by the Legislature in the year two thousand three, shall not be considered a part of the employer's premium taxes and shall not be subject to collection by the commission.

(e) Claims management incentive adjustments, whether imposed in a manner that would result in either a debit or a credit to any employer's account, shall not be considered by the board of managers in its future rate determinations.

WVC 23 - 2 - 5 §23-2-5. Application; payment of premium taxes; gross wages; payroll report; deposits; delinquency; default; reinstatement; payment of benefits; notice to employees; criminal provisions; penalties.
(a) For the purpose of creating a Workers' Compensation Fund, each employer who is required to subscribe to the fund or who elects to subscribe to the fund shall pay premium taxes calculated as a percentage of the employer's gross wages payroll as defined by the commission at the rate determined by the commission and then in effect plus any additional premium taxes developed from rates, surcharges or assessments as determined by the commission. At the time each employer subscribes to the fund, the application required by the commission shall be filed and a premium deposit equal to the first quarter's estimated premium tax payment shall be remitted. The minimum quarterly or other reporting period premium to be paid by any employer is twenty-five dollars.

(1) Thereafter, the premium taxes shall be paid quarterly or at other payment intervals established by the commission on or before the last day of the month following the end of the quarter or designated payment interval and shall be the prescribed percentage of the entire gross wages of all employees, from which net payroll is calculated and paid, during the preceding quarter or other designated payment interval. The commission may require employers, in accordance with the provisions of rules proposed by the executive director and promulgated by the board of managers, to report gross wages and pay premium taxes monthly or at other intervals.

(2) Every subscribing employer shall make a gross wages payroll report to the commission for the preceding reporting period. The report shall be on the form or forms prescribed by the commission and shall contain all information required by the commission.

(3) After subscribing to the fund, each employer shall remit with each premium tax payment an amount calculated to be sufficient to maintain a premium deposit equal to the premium payment for the previous reporting period. The commission may reduce the amount of the premium deposit required from seasonal employers for those reporting periods during which employment is significantly reduced. If the employer pays premium tax on a basis other than quarterly, the commission may require the deposit to be based upon some other time period. The premium deposit shall be credited to the employer's account on the books of the commission and used to pay premium taxes and any other sums due the fund when an employer becomes delinquent or in default as provided in this article.

(4) All premium taxes and premium deposits required by this article to be paid shall be paid by the employers to the commission, which shall maintain a record of all sums so received. Any sum mailed to the commission is considered to be received on the date the envelope transmitting it is postmarked by the United States Postal Service. All sums received by the commission shall be deposited in the State Treasury to the credit of the Workers' Compensation Commission in the manner now prescribed by law.

(5) The commission shall encourage employer efforts to create and maintain safe workplaces, to encourage loss prevention programs and to encourage employer-provided wellness programs, through the normal operation of the experience rating formula, seminars and other public presentations, the development of model safety programs and other initiatives as may be determined by the executive director and the board of managers.

(b) Failure of an employer to timely pay premium taxes as provided in subsection (a) of this section, to timely file a payroll report or to maintain an adequate premium deposit shall cause the employer's account to become delinquent. No employer will be declared delinquent or be assessed any penalty for the delinquency if the commission determines that the delinquency has been caused by delays in the administration of the fund. The commission shall, in writing, within sixty days of the end of each reporting period notify all delinquent employers of their failure to timely pay premium taxes, to timely file a payroll report or to maintain an adequate premium deposit. Each employer who fails to timely file any payroll report or timely pay the premium tax due with the report, or both, for any reporting period commencing on and after the first day of July, one thousand nine hundred ninety-five, shall pay a late reporting or payment penalty of the greater of fifty dollars or a sum obtained by multiplying the premium tax due with the report by the penalty rate applicable to that reporting period. The penalty rate to be used in a Workers' Compensation Commission's fiscal year is calculated annually on the first day of each fiscal year. The penalty rate used to calculate the penalty for each reporting period in a fiscal year is the quotient, rounded to the nearest higher whole number percentage rate, obtained by dividing the sum of the prime rate plus four percent by four. The prime rate is the rate published in the Wall Street Journal on the last business day of the commission's prior fiscal year reflecting the base rate on corporate loans posted by at least seventy-five percent of the nation's thirty largest banks. The late penalty shall be paid with the most recent reporting period's report and payment and is due when that reporting period's report and payment are filed. If the late penalty is not paid when due, it may be charged to and collected by the commission from the employer's premium deposit account or otherwise as provided by law. The notification shall demand the filing of the delinquent payroll report and payment of delinquent premium taxes, the penalty for late reporting or payment of premium taxes or premium deposit, the interest penalty and an amount sufficient to maintain the premium deposit before the end of the third month following the end of the preceding reporting period. Interest shall accrue and be charged on the delinquent premium payment and premium deposit pursuant to section thirteen of this article.

(c) Whenever the commission notifies an employer of the delinquent status of its account, the notification shall explain the legal consequence of subsequent default by an employer required to subscribe to the fund and the legal consequences of termination of an electing employer's account.

(d) Failure by the employer, who is required to subscribe to the fund and who fails to resolve the delinquency within the prescribed period, shall place the account in default and shall deprive the default employer of the benefits and protection afforded by this chapter, including section six of this article, and the employer is liable as provided in section eight of this article. The default employer's liability under these sections is retroactive to midnight of the last day of the month following the end of the reporting period for which the delinquency occurs. The commission shall notify the default employer of the method by which the employer may be reinstated with the fund. The commission shall also notify the employees of the employer by written notice as hereinafter provided in this section.

(e) Failure by any employer, who voluntarily elects to subscribe, to resolve the delinquency within the prescribed period shall place the account in default and shall automatically terminate the election of the employer to pay into the Workers' Compensation Fund and shall deprive the employer and the employees of the default elective employer of the benefits and protection afforded by this chapter, including section six of this article, and the employer is liable as provided in section eight of this article. The default employer's liability under that section is retroactive to midnight of the last day of the month following the end of the payment period for which the delinquency occurs. Employees who were the subject of the default employer's voluntary election to provide them the benefits afforded by this chapter shall have the protection terminated at the time of their employer's default.

(f) (1) Except as provided in subdivision (3) of this subsection, any employer who is required to subscribe to the fund and who is in default on the effective date of this section or who subsequently defaults, and any employer who has elected to subscribe to the fund and who defaults and whose account is terminated prior to the effective date of this section or whose account is subsequently terminated, shall be restored immediately to the benefits and protection of this chapter only upon the filing of all delinquent payroll and other reports required by the commission and payment into the fund of all unpaid premiums, an adequate premium deposit, accrued interest and the penalty for late reporting and payment. Interest is calculated as provided by section thirteen of this article.

The commission shall not have the authority to waive either premium or accrued interest: Provided, That until termination of the commission, the commissioner shall have the authority to waive either premium or accrued interest if the waiver is part of the full and final resolution of administrative or civil litigation. The provisions of section seventeen of this article apply to any action or decision of the commission under this section.

(2) The commission may restore a defaulted or terminated employer through a reinstatement agreement. The reinstatement agreement shall require the payment in full of all premium taxes, premium deposits, the penalty for late reporting and payment, past accrued interest and future interest calculated pursuant to the provisions of section thirteen of this article. Notwithstanding the filing of a reinstatement application or the entering into of a reinstatement agreement, the commission is authorized to file a lien against the employer as provided by section five-a of this article. In addition, entry into a reinstatement agreement is discretionary with the commission. Its discretion shall be exercised in keeping with the fiduciary obligations owed to the Workers' Compensation Fund. If the commission declines to enter into a reinstatement agreement and if the employer does not comply with the provisions of subdivision (1) of this subsection, the commission may proceed with any of the collection efforts provided by section five-a of this article or as otherwise provided by this code. Applications for reinstatement shall: (A) Be made upon forms prescribed by the commission; (B) include a report of the gross wages payroll of the employer which had not been reported to the commission during the entire period of delinquency and default. The gross wages information shall be certified by the employer or its authorized agent; and (C) include a payment of a portion of the liability equal to one half of one percent of the gross payroll during the period of delinquency and default or equal to another portion of the liability determined by rule but not to exceed the amount of the entire liability due and owing for the period of delinquency and default. An employer who applies for reinstatement is entitled to the benefits and protection of this chapter on the day a properly completed and acceptable application which is accompanied by the application payment is received by the commission: Provided, That if the commission reinstates an employer subject to the terms of a reinstatement agreement, the subsequent failure of the employer to make scheduled payments or to pay accrued or future interest in accordance with the reinstatement agreement or to timely file current reports and to pay current premiums within the month following the end of the period for which the report and payment are due, or to otherwise maintain its account in good standing or, if the reinstatement agreement does not require earlier restoration of the premium deposit, to restore the premium deposit to the required amount by the end of the repayment period shall cause the reinstatement application and the reinstatement agreement to be null, void and of no effect, and the employer is denied the benefits and protection of this chapter effective from the date that the employer's account originally became delinquent.

(3) Any employer who fails to maintain its account in good standing with regard to subsequent premium taxes and premium deposits after filing an application for reinstatement and prior to the final resolution of an application for reinstatement by entering into a reinstatement agreement or by payment of the liability in full as provided in subdivision (1) of this subsection shall cause the reinstatement application to be null, void and of no effect and the employer shall be denied the benefits and protection of this chapter effective from the date that the employer's account originally became delinquent.

(4) Following any failure of an employer to comply with the provisions of a reinstatement agreement, the commission may make and continue with any of the collection efforts provided by this chapter or elsewhere in this code even if the employer files another reinstatement application.

(g) With the exception noted in subsection (h), section one of this article, no employee of an employer required by this chapter to subscribe to the Workers' Compensation Fund shall be denied benefits provided by this chapter because the employer failed to subscribe or because the employer's account is either delinquent or in default.

(h) (1) The provisions of this section shall not deprive any individual of any cause of action which has accrued as a result of an injury or death which occurred during any period of delinquency not resolved in accordance with the provisions of this article, or subsequent failure to comply with the terms of the repayment agreement.

(2) Upon withdrawal from the fund or termination of election of any employer, the employer shall be refunded the balance due the employer of its deposit, after deducting all amounts owed by the employer to the Workers' Compensation Fund and other agencies of this state, and the commission shall notify the employees of the employer of the termination in the manner as the commission may consider best and sufficient.

(3) Notice to employees provided in this section shall be given by posting written notice that the employer is defaulted under the compensation law of West Virginia and in the case of employers required by this chapter to subscribe and pay premiums to the fund, that the defaulted employer is liable to its employees for injury or death, both in Workers' Compensation benefits and in damages at common law or by statute; and in the case of employers not required by this chapter to subscribe and pay premiums to the fund, but voluntarily electing to do so as provided in this article, that neither the employer nor the employees are protected by the law as to any injury or death sustained after the date specified in the notice. The notice shall be in the form prescribed by the commission and shall be posted in a conspicuous place at the chief works of the employer, as it appears in records of the commission. If the chief works of the employer cannot be found or identified, the notices shall be posted at the front door of the courthouse of the county in which the chief works are located, according to the commission's records. Any person who shall, prior to the reinstatement of the employer, as provided in this section, or prior to sixty days after the posting of the notice, whichever shall first occur, remove, deface or render illegible the notice, shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined one thousand dollars. The notice shall state this provision upon its face. The commission may require any sheriff, deputy sheriff, constable or other official of the State of West Virginia, authorized to serve civil process, to post the notice and to make return thereof of the fact of the posting to the commission. Any failure of the officer to post any notice within ten days after he or she has received the notice from the commission, without just cause or excuse, constitutes a willful failure or refusal to perform a duty required of him or her by law within the meaning of section twenty-eight, article five, chapter sixty-one of this code. Any person actually injured by reason of the failure has an action against the official, and upon any official bond he or she may have given, for the damages as the person may actually have incurred, but not to exceed, in the case of any surety upon the bond, the amount of the penalty of the bond. Any official posting the notice as required in this subdivision is entitled to the same fee as is now or may hereafter be provided for the service of process in suits instituted in courts of record in the state of West Virginia. The fee shall be paid by the commission out of any funds at its disposal, but shall be charged by the commission against the account of the employer to whose delinquency the notice relates.

WVC 23 - 2 - 5 A §23-2-5a. Collection of premiums from defaulting employers; interest and penalties; civil remedies; creation and enforcement of lien against employer and purchaser; duty of Secretary of State to register liens; distraint powers; insolvency proceedings; Secretary of State to withhold certificates of dissolution; injunctive relief; bond; attorney fees and costs.
(a) The Workers' Compensation Commission in the name of the state may commence a civil action against an employer who, after due notice, defaults in any payment required by this chapter. If judgment is against the employer, the employer shall pay the costs of the action. A civil action under this section shall be given preference on the calendar of the court over all other civil actions. Upon prevailing in a civil action, the commission is entitled to recover its attorneys' fees and costs of action from the employer.

(b) In addition to the provisions of subsection (a) of this section, any payment, interest and penalty due and unpaid under this chapter is a personal obligation of the employer immediately due and owing to the commission and shall, in addition, be a lien enforceable against all the property of the employer: Provided, That the lien shall not be enforceable as against a purchaser (including a lien creditor) of real estate or personal property for a valuable consideration without notice, unless docketed as provided in section one, article ten-c, chapter thirty-eight of this code: Provided, however, That the lien may be enforced as other judgment liens are enforced through the provisions of said chapter and the same is considered deemed by the circuit court to be a judgment lien for this purpose.

(c) In addition to all other civil remedies prescribed, the commission may in the name of the state, after giving appropriate notice as required by due process, distrain upon any personal property, including intangible property, of any employer delinquent for any payment, interest and penalty thereon. If the commission has good reason to believe that the property or a substantial portion of the property is about to be removed from the county in which it is situated, upon giving appropriate notice, either before or after the seizure, as is proper in the circumstances, the commission may likewise distrain in the name of the state before the delinquency occurs. For that purpose, the commission may require the services of a sheriff of any county in the state in levying the distress in the county in which the sheriff is an officer and in which the personal property is situated. A sheriff collecting any payment, interest and penalty thereon is entitled to the compensation as provided by law for his or her services in the levy and enforcement of executions. Upon prevailing in any distraint action, the commission is entitled to recover its attorneys' fees and costs of action from the employer.

(d) In case a business subject to the payments, interest and penalties thereon imposed under this chapter is operated in connection with a receivership or insolvency proceeding in any state court in this state, the court under whose direction the business is operated shall, by the entry of a proper order or decree in the cause, make provisions, so far as the assets in administration will permit, for the regular payment of the payments, interest and penalties as they become due.

(e) The Secretary of State of this state shall withhold the issuance of any certificate of dissolution or withdrawal in the case of any corporation organized under the laws of this state or organized under the laws of any other state and admitted to do business in this state, until notified by the commission that all payments, interest and penalties thereon against the corporation which is an employer under this chapter have been paid or that provision satisfactory to the commission has been made for payment.

(f) In any case when an employer required to subscribe to the fund defaults in payments of premium, premium deposits, penalty or interest thereon, for as many as two reporting periods, which reporting periods need not be consecutive, and remains in default after due notice, the commission may bring action in the circuit court of Kanawha County to enjoin the employer from continuing to carry on the business in which the liability was incurred: Provided, That the commission may as an alternative to this action require the delinquent employer to file a bond in the form prescribed by the commission with satisfactory surety in an amount not less than fifty percent more than the payments, interest and penalties due.

WVC 23 - 2 - 5 B §23-2-5b.
Repealed.

Acts, 2003 2nd Ex. Sess., Ch. 27.

WVC 23 - 2 - 5 C §23-2-5c. Statute of limitations; effective date for new payments; previous payments due not affected.
For payments due after the effective date of the amendment and reenactment of this section during the year one thousand nine hundred ninety-three, every action or process to collect any premium, premium deposit, interest or penalty due from an employer pursuant to this article by the executive director shall be brought or issued within five years next after the date on which the employer is required by the section imposing the premium, premium deposit, interest or penalty to file a report and pay the amount due thereunder. The limitation provided by this section shall also apply to enforcement of the lien, if any, securing the payment of the premium, premium deposit, interest or penalty, but shall not apply in the event of fraud or in the event the employer wholly fails to file the report required by the section imposing the premium, premium deposit, interest or penalty. For payments that were due prior to the effective date of this section, there continues to be no limitation on when actions or processes may be brought or issued. For every debt collectible under this section which first becomes due and owing after the effective date of the amendment and reenactment of this section during the year two thousand three, every action or process to collect the debt shall be brought or issued within ten years after the date on which the employer is required to file a report and pay the amount assessed or owed to the commission.

WVC 23 - 2 - 5 D §23-2-5d. Uncollectible receivables; write-offs.
Notwithstanding any other provision to the contrary, the executive director, with the approval of the board of managers, may write-off any uncollected receivable due under the provisions of this article or article four of this chapter which the executive director and the board of managers determine uncollectible.

WVC 23 - 2 - 6 §23-2-6. Exemption of contributing employers from liability.
Any employer subject to this chapter who subscribes and pays into the workers' compensation fund the premiums provided by this chapter or who elects to make direct payments of compensation as provided in this section is not liable to respond in damages at common law or by statute for the injury or death of any employee, however occurring, after so subscribing or electing, and during any period in which the employer is not in default in the payment of the premiums or direct payments and has complied fully with all other provisions of this chapter. Continuation in the service of the employer shall be considered a waiver by the employee and by the parents of any minor employee of the right of action as aforesaid, which the employee or his or her parents would otherwise have: Provided, That in case of employers not required by this chapter to subscribe and pay premiums into the workers' compensation fund, the injured employee has remained in the employer's service with notice that his or her employer has elected to pay into the workers' compensation fund the premiums provided by this chapter, or has elected to make direct payments as aforesaid.

WVC 23 - 2 - 6 A §23-2-6a. Exemption from liability of officers, managers, agents, representatives or employees of contributing employers.

The immunity from liability set out in the preceding section shall extend to every officer, manager, agent, representative or employee of such employer when he is acting in furtherance of the employer's business and does not inflict an injury with deliberate intention.

WVC 23 - 2 - 7 §23-2-7. Benefits of chapter may not be waived by contract or regulation.
No employer or employee shall exempt himself from the burden or waive the benefits of this chapter by any contract, agreement, rule or regulation, and any such contract, agreement, rule or regulation shall be pro tanto void.

WVC 23 - 2 - 8 §23-2-8. Liability of employer electing not to pay or defaulting in payment of premiums; certain common-law defenses prohibited; exceptions.

All employers required by this chapter to subscribe to and pay premiums into the workers' compensation fund, except the state of West Virginia, the governmental agencies or departments created by it, and municipalities and political subdivisions of the state, and who do not subscribe to and pay premiums into the workers' compensation fund as required by this chapter and have not elected to pay individually and directly or from benefit funds compensation and expenses to injured employees or fatally injured employees' dependents under the provisions of section nine of this article, or having so subscribed or elected, shall be in default in the payment of same, or not having otherwise fully complied with the provisions of section five or section nine of this article, shall be liable to their employees (within the meaning of this article) for all damages suffered by reason of personal injuries sustained in the course of employment caused by the wrongful act, neglect or default of the employer or any of the employer's officers, agents or employees while acting within the scope of their employment and in the course of their employment and also to the personal representatives of such employees where death results from such personal injuries, and in any action by any such employee or personal representative thereof, such defendant shall not avail himself of the following common-law defenses: The defense of the fellow-servant rule; the defense of the assumption of risk; or the defense of contributory negligence; and further shall not avail himself of any defense that the negligence in question was that of someone whose duties are prescribed by statute: Provided, That such provision depriving a defendant employer of certain common-law defenses under the circumstances therein set forth shall not apply to an action brought against a county court, board of education, municipality, or other political subdivision of the state or against any employer not required to cover his employees under the provisions of this chapter.

WVC 23 - 2 - 9 §23-2-9. Election of employer or employers' group to be self-insured and to provide own system of compensation; exceptions; self administration; rules; penalties; regulation of self-insurers.
(a) Notwithstanding any provisions of this chapter to the contrary, the following types of employers or employers' groups may apply for permission to self-insure their workers' compensation risk.

(1) The types of employers are:

(A) Any employer who is of sufficient capability and financial responsibility to ensure the payment to injured employees and the dependents of fatally injured employees of benefits provided in this chapter at least equal in value to the compensation provided for in this chapter;

(B) Any employer or group of employers as provided in paragraph (A) of this subdivision of such capability and financial responsibility that maintains its own benefit fund or system of compensation to which its employees are not required or permitted to contribute and whose benefits are at least equal in value to those provided in this chapter; or

(C) Any employer who is signatory to a collective bargaining agreement that allows for participation in a group workers' compensation insurance program may join with any other employer or employers that are signatory to a collective bargaining agreement or agreements that allow for participation in a group workers' compensation program and jointly apply to the Insurance Commissioner to collectively self-insure their obligations under this chapter. The employers must collectively meet the conditions set forth in paragraph (A) or (B) of this subdivision. There shall be joint and several liability for all employers who choose to jointly self-insure under the provisions of this article.

(2) In order to be approved for self-insurance status, the employer shall:

(A) Submit all information requested by the Insurance Commissioner;

(B) Provide security or bond, in an amount and form determined by the Insurance Commissioner, which shall balance the employer's financial condition based upon an analysis of its audited financial statements and the full accrued value of current liability for future claim payments based upon generally accepted actuarial and accounting principles of the employer's existing and expected liability;

(C) Meet the financial responsibility requirements set forth in rules promulgated by the board of managers or industrial council;

(D) Obtain and maintain a policy of excess insurance if required to do so by the Insurance Commissioner; and

(E) Have an effective health and safety program at its workplaces.

(3) Upon a finding that the employer has met all of the requirements of this section and any rules promulgated thereunder, the employer may be permitted self-insurance status. An annual review of each self-insurer's continuing ability to meet its obligations and the requirements of this section shall be made by the Insurance Commissioner. At the time of such review, the Insurance Commissioner may require that the self-insured employer post a bond or security or obtain and maintain an excess insurance policy. This review shall also include a recalculation of the amount of any security, bond or policy of excess insurance previously required to be posted or obtained under any provision of this chapter or any rules promulgated thereunder. Failure to provide the required amount or form of security or bond or to obtain or maintain the required excess insurance policy may cause the employer's self-insurance status to be terminated by the Insurance Commissioner.

(4) Whenever a self-insured employer furnishes security or bond, including replacement and amended bonds and other securities, as surety to ensure the employer's or guarantor's payment of all obligations under this chapter for which the security or bond was furnished, the security or bond shall be in the most current form or forms approved and authorized by the commission or Insurance Commissioner for use by the employer or its guarantors, surety companies, banks, financial institutions or others in its behalf for that purpose.

(b) (1) Notwithstanding any provision in this chapter to the contrary, self-insured employers shall, effective the first day of July, two thousand four, administer their own claims. The Insurance Commissioner shall, pursuant to rules promulgated by the board of managers or industrial council, regulate the administration of claims by employers granted permission to self-insure their obligations under this chapter. A self-insured employer shall comply with rules promulgated by the board of managers or industrial council governing the self-administration of its claims.

(2) An employer or employers' group that self-insures its risk and self-administers its claims shall exercise all authority and responsibility granted to the Insurance Commissioner or private carriers in this chapter and provide notices of action taken to effect the purposes of this chapter to provide benefits to persons who have suffered injuries or diseases covered by this chapter. An employer or employers' group granted permission to self-insure and self-administer its obligations under this chapter shall at all times be bound and shall comply fully with all of the provisions of this chapter. Furthermore, all of the provisions contained in article four of this chapter pertaining to disability and death benefits are binding on and shall be strictly adhered to by the self-insured employer in its administration of claims presented by employees of the self-insured employer. Violations of the provisions of this chapter and such rules relating to this chapter as may be approved by the board of managers or industrial council may constitute sufficient grounds for the termination of the authority for any employer to self-insure its obligations under this chapter.

(c) Each self-insured employer shall, on or before the last day of the first month of each quarter or other assigned reporting period, file with the Insurance Commissioner a certified statement of the total gross wages and earnings of all of the employer's employees subject to this chapter for the preceding quarter or other assigned reporting period.

(d) (1) If a self-insured employer defaults in the payment of any portion of surcharges or assessments required under this chapter or rules promulgated thereunder, or in any payment required to be made as benefits provided by this chapter to the employer's injured employees or dependants of fatally injured employees, the Insurance Commissioner shall, in an appropriate case, determine the full accrued value based upon generally accepted actuarial and accounting principles of the employer's liability, including the costs of all awarded claims and of all incurred but not reported claims. The amount determined may, in an appropriate case, be assessed against the employer. The Insurance Commissioner may demand and collect the present value of the defaulted liability. Interest shall accrue upon the demanded amount as provided in section thirteen of this article until the liability is fully paid. Payment of all amounts then due to the Insurance Commissioner and to the employer's employees is a sufficient basis for reinstating the employer to good standing with Insurance Commissioner and removing the employer from default status.

(2) The assessments and surcharges required to be paid by self-insured employers pursuant to the provisions of this chapter and the rules promulgated thereunder are special revenue taxes under and according to the provisions of state workers' compensation law and are considered to be tax claims, as priority claims or administrative expense claims according to those provisions under the law provided in the United States bankruptcy code, Title 11 of the United States Code. In addition, as the same was previously intended by the prior provisions of this section, this amendment and reenactment is for the purpose of clarification of the taxing authority of the Insurance Commissioner.

(e) The commission may create, implement, establish and administer a perpetual self-insurance security risk pool of funds, sureties, securities, insurance provided by private insurance carriers or other states' programs, and other property, of both real and personal properties, to secure the payment of obligations of self-insured employers. If a pool is created, the board of managers shall adopt rules for the organizational plan, participation, contributions and other payments which may be required of self-insured employers under this section. The board of managers may adopt a rule authorizing the commission to assess each self-insured employer in proportion according to each employer's portion of the unsecured obligation and liability or to assess according to some other method provided by rule which shall properly create and fund the risk pool to serve the needs of employees, employers and the Workers' Compensation Fund by providing adequate security. The board of managers establishing a security risk pool may authorize the executive director to use any assessments, premium taxes and revenues and appropriations as may be made available to the commission. Effective upon termination of the commission, all statutory and regulatory authority provided to the commission and board of managers over pools created pursuant to this section, as such pools are defined in section two, article two-c of this chapter, shall transfer to the Insurance Commissioner.

(f) Any self-insured employer which has had a period of inactivity due to the nonemployment of employees which results in its reporting of no wages on reports to the Insurance Commissioner for a period of four or more consecutive quarters may have its status inactivated and shall apply for reactivation to status as a self-insured employer prior to its reemployment of employees. Despite the inactivation, the self-insured employer shall continue to make payments on all awards for which it is responsible. Upon application for reactivation of its status as an operating self-insured employer, the employer shall document that it meets the eligibility requirements needed to maintain self-insured employer status under this section and any rules adopted to implement it. If the employer is unable to requalify and obtain approval for reactivation, the employer shall, effective with the date of employment of any employee, purchase workers' compensation insurance as provided in article two-c of this chapter, but shall continue to be a self-insurer as to the prior period of active status and to furnish security or bond and meet its prior self-insurance obligations.

(g) In any case under the provisions of this section that requires the payment of compensation or benefits by an employer in periodical payments and the nature of the case makes it possible to compute the present value of all future payments, the commission may, in its discretion, at any time compute and permit to be paid into the Workers' Compensation Fund an amount equal to the present value of all unpaid future payments on the award or awards for which liability exists in trust. Thereafter, the employer shall be discharged from any further portion of premium tax liability upon the award or awards and payment of the award or awards shall be assumed by the commission. Upon termination of the commission, the process herein described will no longer be permitted. Self-insured employers may thereafter withdraw from self-insured status and purchase workers' compensation insurance as provided in article two-c of this chapter, but said self-insured employers shall remain liable for their self-insured employer claims liabilities for each claim with a date of injury or last exposure prior to the effective date of insurance coverage.

(h) Any employer subject to this chapter, who elects to carry the employer's own risk by being a self-insured employer and who has complied with the requirements of this section and of any applicable rules, shall not be liable to respond in damages at common law or by statute for the injury or death of any employee, however occurring, after the election's approval and during the period that the employer is allowed to carry the employer's own risk.

(i) An employer may not hire any person or group to self-administer claims under this chapter as a third-party administrator unless the person or group has been determined to be qualified to be a third-party administrator by the Insurance Commissioner pursuant to rules adopted by the board of managers or industrial council. Any person or group whose status as a third-party administrator has been revoked, suspended or terminated by the Insurance Commissioner shall immediately cease administration of claims and shall not administer claims unless subsequently authorized by the Insurance Commissioner.

(j) All regulatory, oversight and document-gathering authority provided to the commission under this section shall transfer to the Insurance Commissioner and the industrial council upon termination of the commission.

WVC 23 - 2 - 9 A §23-2-9a. Sanctions for default by self-insured employers; rulemaking authority.
Whenever the authority of an employer to self-insure its obligations under this chapter is terminated and such employer is thereafter in default in the payment of any portion of surcharges or assessments required under this chapter or by rules promulgated thereunder, or in any payment required to be made as benefits provided by this chapter to the employer's injured employees or dependents of fatally injured employees, such employer shall be ineligible for government contracts to the same extent as an employer in "employer default," as provided for in section ten-a, article three, chapter five-a of this code, and shall also be subject to the license and permit revocation and termination sanctions to the same extent as employers in "employer default" pursuant to the provisions of subdivision (1), subsection (e), section nineteen, article two-c of this chapter. The Insurance Commissioner shall propose rules, as provided in section five, article two-c of this chapter, establishing administrative penalties for nonpayment of obligations under this chapter.

WVC 23 - 2 - 10 §23-2-10. Application of chapter to interstate commerce.
(a) In case any employer within the meaning of this chapter is also engaged in interstate or foreign commerce, and for whom a rule of liability or method of compensation has been established by the Congress of the United States, this chapter applies to him or her only to the extent that his or her mutual connection with work in this state is clearly separable and distinguishable from his or her interstate work, and to the extent that the work in this state is clearly separable and distinguishable from his or her interstate work, the employer is subject to the terms and provisions of this chapter in like manner as all other employers under this chapter. Payments of premiums shall be on the basis of the payroll of those employees who perform work in this state only.

(b) Unless and until the Congress of the United States has by appropriate legislation established a rule of liability or method of compensation governing employers and employees engaged in commerce within the purview of the commerce clause of the United States Constitution (article I, section 8), section one of this article applies without regard to the interstate or intrastate character or nature of the work or business engaged in.

WVC 23 - 2 - 11 §23-2-11. Partial invalidity of chapter.
If any employer is adjudicated to be outside the lawful scope of this chapter, the chapter shall not apply to him or her or his or her employee; or if any employee is adjudicated to be outside the lawful scope of this chapter, because of remoteness of his or her work from the hazard of his or her employer's work, the adjudication shall not impair the validity of this chapter in other respects and in every case an accounting in accordance with the justice of the case shall be had of moneys received. If the provisions of this chapter for the creation of the workers' compensation fund, or the provisions of this chapter making the compensation to the employee provided in it exclusive of any other remedy on the part of the employee, is held invalid, the entire chapter shall be invalidated and an accounting according to the justice of the case shall be had of money received. In other respects an adjudication of invalidity of any part of this chapter shall not affect the validity of the chapter as a whole or any part of this chapter.

WVC 23 - 2 - 12 §23-2-12. Effect of repeal or invalidity of chapter on action for damages.
If the provisions of this chapter relating to compensation for injuries to, or death of, workers are repealed or adjudged invalid or unconstitutional, the period intervening between the occurrence of any injury or death and the repeal, or the final adjudication of invalidity or unconstitutionality, shall not be computed as a part of the time limited by law for the commencement of any action relating to the injuries or death, but the amount of any compensation which may have been paid on account of injury or death shall be deducted from any judgment for damages recovered on account of the injury or death.

WVC 23 - 2 - 13 §23-2-13. Interest on past-due payments; reinstatement agreements.
Effective the first day of July, one thousand nine hundred ninety-nine, payments unpaid on the date on which due and payable shall immediately begin bearing interest as specified in this section. The interest rate per annum for each fiscal year shall be calculated as the greater of the commission's current discount rate or the prime rate plus four percent, each rounded to the nearest whole percent. The discount rate shall be determined by the board of managers on an annual basis. The prime rate shall be the rate published in the Wall Street Journal on the last business day of the commission's prior fiscal year reflecting the base rate on corporate loans posted by at least seventy-five percent of the nation's thirty largest banks. This same rate of interest shall be applicable to all reinstatement agreements entered into by the commission pursuant to section five of this article on and after the effective date of this section: Provided, That if an employer enters into a subsequent reinstatement agreement within seven years of the date of the first agreement, the interest rate shall be eighteen percent per annum. Interest shall be compounded quarterly until payment plus accrued interest is received by the commission: Provided, however, That on and after the date of execution of a reinstatement agreement, for determining future interest on any past-due premium, premium deposit, and past compounded interest thereon, any reinstatement agreement entered into by the commission shall provide for a simple rate of interest, determined in accordance with the provisions of this section which is not subject to change during the life of the reinstatement agreement for the future interest. Interest collected pursuant to this section shall be paid into the workers' compensation fund: Provided further, That in no event shall the rate of interest charged a political subdivision of the state or a volunteer fire department pursuant to this section exceed ten percent per annum.

WVC 23 - 2 - 14 §23-2-14. Sale or transfer of business; attachment of lien for premium, etc.; payments due; criminal penalties for failure to pay; creation and avoidance or elimination of lien; enforcement of lien; successor liability.
(a) If any employer sells or otherwise transfers substantially all of the employer's assets, so as to give up substantially all of the employer's capacity and ability to continue in the business in which the employer has previously engaged:

(1) The employer's premium taxes, premium deposits, interest and other payments owed to the commission are due and owing to the commission upon the execution of the agreement of sale or other transfer;

(2) Any repayment agreement entered into by the employer with the commission pursuant to section five of this article terminates upon the execution of the agreement of sale or other transfer and all amounts owed to the commission but not yet paid become due; and

(3) Upon execution of an agreement of sale or other transfer, as aforesaid, the commission shall continue to have a lien, as provided for in section five-a of this article, against all of the remaining property of the employer as well as all of the sold or transferred assets. The lien constitutes a personal obligation of the employer.

(b) Notwithstanding any provisions of section five-a of this article to the contrary, in the event that a new employer acquires by sale or other transfer or assumes all or substantially all of a predecessor employer's assets:

(1) Any liens for payments owed to the commission for premium taxes, premium deposits, interest or other payments owed to the commission by the predecessor employer shall be extended to the successor employer;

(2) Any liens held by the commission against the predecessor employer's property shall be extended to all of the assets of the successor employer; and

(3) Liens acquired in the manner described in subdivisions (1) and (2) of this subsection are enforceable by the commission to the same extent as provided for the enforcement of liens against the predecessor employer in section five-a of this article.

(c) Notwithstanding the provisions of section five-a of this article to the contrary, if any employer as described in subsection (a) of this section sells or otherwise transfers a portion of the employer's assets so as to affect the employer's capacity to do business:

(1) The employer's premium taxes, premium deposits, interest and other payments owed to the commission are due and owing to the commission upon the execution of the agreement of sale or other transfer;

(2) Any repayment agreement entered into by the employer with the commission pursuant to section five of this article terminates upon the execution of the aforesaid agreement of sale or other transfer and all amounts owed to the commission but not yet paid shall become due; and

(3) Upon execution of an agreement of sale or other transfer, as aforesaid, the commission shall continue to have a lien, as provided for in section five-a of this article, against all of the remaining property of the employer as well as all the sold or transferred assets. The lien constitutes a personal obligation of the employer.

(d) If an employer subject to subsection (a), (b) or (c) of this section pays to the commission, prior to the execution of an agreement of sale or other transfer, a sum sufficient to retire all of the indebtedness that the employer would owe at the time of the execution, the commission shall issue a certificate to the employer stating that the employer's account is in good standing with the commission and that the assets may be sold or otherwise transferred without the attachment of the commission's lien. An agreement of sale or other transfer may provide for the creation of an escrow account into which the employers shall pay the full amount owed to the commission. The subsequent timely payment of that full amount to the commission operates to place both employers in good standing with the commission to the extent of the predecessor employer's liabilities retroactive to the date of sale or other transfer. In the event that the employer would not owe any sum to the commission on the aforesaid date of execution, a certificate shall also be issued to the employer upon the employer's request stating that the employer's account is in good standing with the commission and that the assets may be sold or otherwise transferred without the attachment of the commission's lien.

(e) As used in this article, the term "assets" means all property of whatever type in which the employer has an interest including, but not limited to, goodwill, business assets, customers, clients, contracts, access to leases such as the right to sublease, assignment of contracts for the sale of products, operations, stock of goods or inventory, accounts receivable, equipment or transfer of substantially all of its employees.

(f) The transfer of any assets of the employer is presumed to be a transfer of all or substantially all of the assets if the transfer affects the employer's capacity to do business. The presumption can be overcome upon petition presented and an administrative hearing in accordance with section seventeen of this article.

(g) The provisions of this section are expressly intended to impose upon successor employers the duty of obtaining from the commission or predecessor employer, prior to the date of the acquisition, a valid "certificate of good standing to transfer a business or business assets" to verify that the predecessor employer's account with the commission is in good standing.

WVC 23 - 2 - 15 §23-2-15. Liabilities of successor employer; waiver of payment by commission; assignment of predecessor employer's premium rate to successor.
(a) At any time prior to or following the acquisition described in subsection (a), (b) or (c), section fourteen of this article, the buyer or other recipient may file a certified petition with the commission requesting that the commission waive the payment by the buyer or other recipient of premiums, premium deposits, interest and imposition of the modified rate of premiums attributable to the predecessor employer or other penalty, or any combination thereof. The commission shall review the petition by considering the following seven factors:

(1) The exact nature of the default;

(2) The amount owed to the commission;

(3) The solvency of the fund;

(4) The financial condition of the buyer or other recipient;

(5) The equities exhibited towards the fund by the buyer or other recipient during the acquisition process;

(6) The potential economic impact upon the state and the specific geographic area in which the buyer or other recipient is to be or is located, if the acquisition were not to occur; and

(7) Whether the assets are purchased in an arms-length transaction.

Unless requested by a party or by the commission, no hearing need be held on the petition. However, any decision made by the commission on the petition shall be in writing and shall include appropriate findings of fact and conclusions of law. The decision shall be effective ten days following notice to the public of the decision unless an objection is filed in the manner provided in this section. Notice shall be given by the commission's filing with the secretary of state, for publication in the state register, of a notice of the decision. At the time of filing the notice of its decision, the commission shall also file with the secretary of state a true copy of the decision. The publication shall include a statement advising that any person objecting to the decision must file, within ten days after publication of the notice, a verified response with the commission setting forth the objection and the basis for the objection. If any objection is filed, the commission shall hold an administrative hearing, conducted pursuant to article five, chapter twenty-nine-a of this code, within fifteen days of receiving the response unless the buyer or other recipient consents to a later hearing. Nothing in this subsection shall be construed to be applicable to the seller or other transferor or to affect in any way a proceeding under sections five and five-a of this article.

(b) In the factual situations set forth in subsection (a), (b) or (c), section fourteen of this article, if the predecessor's modified rate of premium tax, as calculated in accordance with section four of this article, is greater than the manual rate of premium tax, as calculated in accordance with that section, for other employers in the same class or group, and if the new employer does not already have a modified rate of premium, it shall also assume the predecessor employer's modified rates for the payment of premiums as determined under sections four and five of this article until sufficient time has elapsed for the new employer's experience record to be combined with the experience record of the predecessor employer so as to calculate the new employer's own modified rate of premium tax.

WVC 23 - 2 - 16 §23-2-16. Acceptance or assignment of premium rate.
(a) If a new corporate employer which is not subject to the provisions of section fifteen of this article is created by the officers or shareholders of a preexisting corporate employer and if the new corporate employer and the preexisting corporate employer: (1) Are managed by the same, or substantially the same, management personnel; (2) have a common ownership by at least forty percent of each corporation's shareholders; (3) are in the same class or group as determined by the executive director under the provisions of section four of this article; and (4) if the preexisting corporate employer's account is in good standing with the commission, at the time the new corporate employer registers with the commission, the new corporate employer may request that the commission assign to it the same rate of payment of premiums as that assigned to the preexisting corporate employer. If the executive director decides that the granting of the request is in keeping with his or her fiduciary obligations to the workers' compensation fund, the executive director may grant the request of the employer.

(b) If a new corporate employer which is not subject to the provisions of section fifteen of this article is created by the officers or shareholders of a preexisting corporate employer and if the new corporate employer and the preexisting corporate employer: (1) Are managed by the same, or substantially the same, management personnel; (2) have a common ownership by at least forty percent of each corporation's shareholders; and (3) are in the same class or group as determined by the executive director under the provisions of section four of this article, at any time within one year of the new corporate employer's registration with the commission, the executive director may decide that, in keeping with his or her fiduciary obligations to the workers' compensation fund, the new corporate employer shall be assigned the same rate of payment of premiums as that assigned to the preexisting corporate employer at any time within the aforesaid one-year period: Provided, That if the new corporate employer fails to reveal to the commission on the forms provided by the commission that its situation meets the factual requirements of this section, the commission may demand payment from the new corporate employer in an amount sufficient to eliminate the deficiency in payments by the new corporate employer from the date of registration to the date of discovery plus interest thereon as provided for by section thirteen of this article. The commission may use its powers pursuant to section five-a of this article to collect the amount due.

WVC 23 - 2 - 17 §23-2-17. Employer right to hearing; content of petition; appeal.
Notwithstanding any provision in this chapter to the contrary and notwithstanding any provision in section five, article five, chapter twenty-nine-a of this code to the contrary, in any situation where an employer objects to a decision or action of the executive director made under the provisions of this article, the employer is entitled to file a petition demanding a hearing upon the decision or action. The petition must be filed within thirty days of the employer's receipt of notice of the disputed executive director's decision or action or, in the absence of such receipt, within sixty days of the date of the executive director's making the disputed decision or taking the disputed action, the time limitations being hereby declared to be a condition of the right to litigate the decision or action and therefore jurisdictional.

The employer's petition shall clearly identify the decision or action disputed and the bases upon which the employer disputes the decision or action. Upon receipt of a petition, the executive director shall schedule a hearing which shall be conducted in accordance with the provisions of article five, chapter twenty-nine-a of this code. An appeal from a final decision of the executive director shall be taken in accord with the provisions of articles five and six of said chapter: Provided, That all appeals shall be taken to the circuit court of Kanawha County.

WVC 23 - 2 - 18 §23-2-18.
Repealed.

Acts, 1995 Reg. Sess., Ch. 253.

Note: WV Code updated with legislation passed through the 2014 1st Special Session
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