ARIZONA STATE SENATE
Forty-eighth Legislature, First Regular Session
FINAL AMENDED
FACT SHEET FOR H.B. 2195
workers’ compensation; death benefits
Purpose
Increases the cap on workers’ compensation benefits and the amount of compensation that is paid to the surviving children of a worker whose death is caused by an employment-related injury under specified circumstances.
Background
The Arizona Constitution requires an employer to pay compensation to any injured employee, or to the employee’s dependents in the case of death, if, in the course of employment, the employee’s injury or death from any accident that arises out of and in the course of employment is caused in whole or in part by a necessary risk or danger of the job or a necessary risk or danger inherent in the job’s nature (Ariz. Const., Art. 18 § 8).
Pursuant to statute, compensation is based on the employee’s average monthly wage at the time of injury, which was capped at $2,400 in 1999. In the case of death, benefits include burial expenses up to $5,000 and monthly compensation to the surviving dependents, the amount of which depends on whether or not there is a surviving spouse and surviving children. Compensation to dependents is paid as follows:
|
Surviving Dependents |
Amount of Compensation |
|
Surviving Spouse/No Surviving Minor Children |
· 66 2/3 percent of the deceased’s average monthly wage to the surviving spouse until death or remarriage. |
|
Surviving Spouse/Surviving Minor Children |
· 35 percent of the deceased’s average monthly wage to the surviving spouse until death or remarriage. · 31 2/3 percent of the deceased’s average monthly wage to be divided equally among the surviving children. |
|
No Surviving Spouse or Deceased or Remarried Surviving Spouse/Surviving Minor Children |
· 25 percent to a single surviving child OR · 25 percent for one child and 15 percent for each additional child, not to exceed a total of 66 2/3 percent, to be divided equally among all surviving children. |
Compensation to a child ceases when the child reaches 18 years of age, or 22 years of age if the child is a full-time student, or, if the child is incapable of self-support, when the child becomes capable of self-support. Additionally, upon remarriage, a spouse must receive two years’ compensation in one sum. If there is no surviving spouse and no surviving children, statute provides for the award of compensation to dependent parents and dependent siblings under 18 years of age.
An increase in the payment of compensation due to the injury or death of an employee could have an impact on the workers’ compensation insurance premiums paid by employers. Any fiscal impact associated with this legislation is undetermined.
Provisions
1. Increases, to $3,000 for employees injured in 2008 and $3,600 for employees injured in 2009, the cap on the average monthly wage that may be used to calculate workers’ compensation benefits.
2. Requires the Industrial Commission of Arizona (ICA), beginning August 1, 2009, to adjust annually by August 1 the cap on the average monthly wage to reflect the annual percentage increase in the Arizona mean wage published by the Department of Economic Security using the Bureau of Labor Statistics data for all occupations for the prior calendar year. The amount adopted applies to all injuries occurring during the following calendar year.
3. Prohibits the ICA from decreasing the cap from the prior year or increasing the cap more than five percent from the prior year.
4. Requires the amount of compensation paid to and divided among any number of surviving children of a deceased employee, if there is no surviving spouse or if the surviving spouse dies or remarries, to be 66 2/3 percent of the deceased employee’s average monthly wage, as opposed to an amount between 25 percent and 66 2/3 percent depending on the number of children.
5. Makes technical changes.
6. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Increases the cap on the average monthly wage.
Amendments Adopted by Committee of the Whole
1. Increases further the cap on the average monthly wage.
2. Requires the ICA to adjust the cap annually.
3. Removes the requirement to pay compensation before the average monthly wage is determined.
4. Removes the definition of “monthly wage.”
Amendments Adopted by Conference Committee
1. Restores the requirement to pay compensation before the average monthly wage is determined.
2. Restores the definition of “monthly wage.”
House Action Senate Action
COM 2/7/07 DP 9-0-0-1 CED 3/28/07 DPA 7-0-1-0
3rd Read 3/15/07 58-0-2 -0 3rd Read 6/11/07 24-2-4-0
Final Read 6/20/07 57-0-3-0 Final Read 6/20/07 21-1-8-0
Signed by the Governor 7/2/07
Chapter 271
Prepared by Senate Research
July 12, 2007
LB/jas