An Act To Improve the Workers' Compensation System
Maine Legislature, Session 127, LD 1553
Committee: Labor, Commerce, Research and Economic Development
Amends: 39-A MRSA §105, 39-A MRSA §105-A, 39-A MRSA §154, 39-A MRSA §322, 39-A MRSA §401, 39-A MRSA §407

Legislative Document 
No. 1553 
S.P. 608 
In Senate, January 12, 2016 
An Act To Improve the Workers' Compensation System 
Reported by Senator CUSHING of Penobscot for the Workers' Compensation Board 
pursuant to the Maine Revised Statutes, Title 39-A, section 152, subsection 11. 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed pursuant to Joint Rule 218. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  39-A MRSA §105, as amended by PL 2015, c. 297, §2, is further amended 
to read: 
§105.  Predetermination of independent contractor and construction subcontractor 
status 
1.  Predetermination permitted.  A worker, an employer or a workers' 
compensation insurance carrier, or any together, may apply to the board Bureau of 
Insurance for a predetermination of whether the status of an individual worker, group of 
workers or a job classification associated with the employer is that of an employee or an 
independent contractor. 
A.  The predetermination by the board Bureau of Insurance creates a rebuttable 
presumption that the determination is correct in any later claim for benefits under this 
Act proceeding under Title 24-A. 
B.  Nothing in this subsection requires a worker, an employer or a workers' 
compensation insurance carrier to request predetermination. 
1-A.  Predetermination permitted for construction subcontractors.  A person, as 
defined in section 105-A, subsection 1, paragraph E, may apply to the board Bureau of 
Insurance for a predetermination that the person performs construction work in a manner 
that would not make the person an employee of a hiring agent, as defined in section 
105-A, subsection 1, paragraph D. 
A.  The predetermination issued by the board Bureau of Insurance pursuant to this 
subsection is valid for one year and creates a rebuttable presumption that the 
determination is correct in any later claim for benefits under this Act proceeding 
under Title 24-A. 
B.  Nothing in this subsection requires a person, as defined in section 105-A, 
subsection 1, paragraph E, a worker, an employer or a workers’ compensation 
insurance carrier to request predetermination. 
1-B.  Predetermination permitted for a person engaged in harvesting forest 
products.  Pursuant to section 401, subsection 4, a landowner and a wood harvester 
together may apply to the Bureau of Insurance for a predetermination of whether the 
status of the wood harvester is that of an independent contractor. 
A.  A predetermination under this subsection related only to a person engaged in 
harvesting forest products is a conclusive presumption that the determination is 
correct. 
B.  Each party involved in or affected by the predetermination must be provided 
information on the workers' compensation laws and the effect of independent 
contractor status in relation to those laws. 
C.  A predetermination under this subsection related to a person engaged in 
harvesting forest products is effective for one calendar year or the duration of the 
contract, whichever is shorter. 
2.  Premium adjustment.  If it is determined that a predetermination does not 
withstand board or judicial scrutiny when raised in a subsequent workers' compensation 
claim proceeding under Title 24-A, then, depending on the final outcome of that 
subsequent proceeding, either the workers' compensation insurance carrier shall return 
excess premium collected or the employer shall remit premium subsequently due in order 
to put the parties in the same position as if the final outcome under the contested claim 
proceeding were predetermined correctly. 
3.  Predetermination submission.  A party may submit, on forms approved by the 
board Bureau of Insurance, a request for predetermination regarding the status of a person 
or job description as an employee, construction subcontractor, as defined in section 
105-A, subsection 1, paragraph B, or independent contractor.  The request is deemed to 
have been approved if the board Bureau of Insurance does not deny or take other 
appropriate action on the submission within 30 days. 
4.  Hearing.  A hearing, if requested by a party within 10 days of the board's Bureau 
of Insurance's decision on a petition, must be conducted under the Maine Administrative 
Procedure Act.  A ruling by the board or administrative law judge Bureau of Insurance 
under this section is final and not subject to review by the Superior Court. 
5.  Certificate.  The board Bureau of Insurance shall provide the petitioning party a 
certified copy of the decision regarding predetermination that is to be used as evidence at 
in a later hearing on benefits proceeding under Title 24-A. 
6.  Rulemaking.  The board is authorized to Bureau of Insurance may adopt 
reasonable rules pursuant to the Maine Administrative Procedure Act to implement the 
intent of this section, which is to afford speedy and equitable predetermination of 
employee, construction subcontractor, as defined in section 105-A, subsection 1, 
paragraph B, and independent contractor status. 
Sec. 2.  39-A MRSA §105-A, sub-§3, as enacted by PL 2009, c. 452, §5, is 
amended to read: 
3.  Penalties.  A person who is required to but hiring agent that fails to secure the 
payment of compensation with respect to persons deemed to be that person's by 
purchasing a workers' compensation policy or self-insuring as set forth in section 403 for 
the hiring agent's employees under this section as required by this Act is subject to the 
penalties under section 324, subsection 3 all applicable sections of this Act.  This 
subsection may not be construed as limiting in any way the board's authority to impose 
penalties when a hiring agent fails to secure the payment of compensation for the hiring 
agent's employees as required by this Act. 
Sec. 3.  39-A MRSA §154, sub-§6, ¶A, as amended by PL 2009, c. 109, §1 and 
affected by §2, is further amended to read: 
A.  The assessments levied under this section may not be designed to produce more 
than $10,000,000 beginning in the 2008-09 fiscal year, more than $10,400,000 
beginning in the 2009-10 fiscal year, more than $10,800,000 beginning in the 2010-
fiscal year or, more than $11,200,000 beginning in the 2011-12 fiscal year or more 
than $13,000,000 beginning in the 2016-17 fiscal year.  Assessments collected that 
exceed the applicable limit by a margin of more than 10% must be used to reduce the 
assessment that is paid by insured employers pursuant to subsection 3.  Any amount 
collected above the board's allocated budget and within the 10% margin must be used 
to create a reserve of up to 1/4 of the board's annual budget. 
Sec. 4.  39-A MRSA §322, sub-§1, as amended by PL 2015, c. 297, §17, is 
further amended to read: 
1.  Appeals.  Any party in interest may present a copy of the decision of the division 
or of the board, if the board has reviewed a decision pursuant to section 320, to the clerk 
of the Law Court within 20 days after receipt of notice of the filing of the decision by the 
division or the board.  Within 20 days after the copy is filed with the Law Court, the party 
seeking review by the Law Court shall file a petition seeking appellate review with the 
Law Court that sets forth a brief statement of the facts, the error or errors of law that are 
alleged to exist and the legal authority supporting the position of the appellant.  For 
purposes of an appeal from a decision issued pursuant to section 321-B, subsection 3, 
only a decision of the division may be reviewed on appeal. 
Sec. 5.  39-A MRSA §401, sub-§1, as amended by PL 2013, c. 87, §1, is further 
amended to read: 
1.  Private employers.  Every private employer, including an independent contractor 
who hires and pays employees, is subject to this Act and shall secure the payment of 
compensation in conformity with this section and sections 402 to 407 with respect to all 
employees, subject to the provisions of this section by purchasing a workers' 
compensation policy or self-insuring as set forth in section 403.  Unless employed by a 
private employer, a person engaged in harvesting forest products is subject to this Act and 
shall secure the payment of compensation in conformity with this section and sections 
to 407 by purchasing a workers' compensation policy or self-insuring as set forth in 
section 403 with respect to that person individually if that person is an employee as 
defined in section 102, subsection 11, paragraph B-1. 
A private employer who has not secured the payment of compensation under this section 
and sections 402 to 407 by purchasing a workers' compensation policy or self-insuring as 
set forth in section 403 is not entitled, in a civil action brought by an employee or the 
employee's representative for personal injuries or death arising out of and in the course of 
employment, to the defense set forth in section 103.  The employee of any such employer 
may, instead of bringing a civil action, claim compensation from the employer under this 
Act. 
The following employers are not liable under this section for securing the payment of 
compensation in conformity with this section and sections 402 to 407 by purchasing a 
workers' compensation policy or self-insuring as set forth in section 403 with respect to 
the employees listed, nor deprived of the defenses listed in section 103: 
A.  Employers of employees engaged in domestic service; 
B.  Employers of employees engaged in agriculture or aquaculture as seasonal or 
casual laborers, if the employer maintains coverage by an employer's liability 
insurance policy with total limits of not less than $25,000 and medical payment 
coverage of not less than $5,000. 
(1)  As used in this subsection, "casual" means occasional or incidental.  
"Seasonal" refers to laborers engaged in agricultural or aquacultural employment 
beginning at or after the commencement of the planting or seeding season and 
ending at or before the completion of the harvest season; and 
C.  Employers of agricultural or aquacultural laborers, if the employer maintains an 
employer's liability insurance policy with total limits of not less than $100,000 
multiplied by the number of full-time equivalent agricultural or aquacultural laborers 
employed by that employer and medical payment coverage of not less than $5,000, 
and either: 
(1)  The employer has 6 or fewer concurrently employed agricultural or 
aquacultural laborers; or 
(2)  The employer has more than 6 agricultural or aquacultural laborers but the 
total number of hours worked by all such laborers in a week does not exceed 240 
and has not exceeded 240 at any time during the 52 weeks immediately preceding 
an injury. 
For purposes of this paragraph, seasonal and casual workers, immediate family 
members of unincorporated employers and immediate family members of bona fide 
owners of at least 20% of the voting stock of an incorporated employer are not 
considered agricultural or aquacultural laborers. "Immediate family members" means 
parents, spouses, brothers, sisters and children and the spouses of parents, brothers, 
sisters and children. 
The burden of proof to establish an exempt status under this subsection is on the 
employer claiming the exemption. 
Sec. 6.  39-A MRSA §401, sub-§2, as enacted by PL 1991, c. 885, Pt. A, §8 and 
affected by §§9 to 11, is amended to read: 
2.  Governmental bodies.  The State and every county, city and town is subject to 
this Act and shall secure the payment of compensation in conformity with sections 402 to 
by purchasing a workers' compensation policy or self-insuring as set forth in section 
403. 
Sec. 7.  39-A MRSA §401, sub-§3, as amended by PL 1999, c. 364, §5, is further 
amended to read: 
3.  Failure to conform.  The failure of any private employer or of any person 
engaged in harvesting forest products not exempt under subsection 1 or of any 
governmental body, as defined in subsection 2, to procure insurance coverage for secure 
the payment of compensation pursuant to sections 402 to 407 with respect to all 
employees by purchasing a workers' compensation policy or self-insuring as set forth in 
section 403 constitutes failure to secure payment of compensation provided for by this 
Act within the meaning of section 324, subsection 3, and subjects the employer or a 
person engaged in harvesting forest products to the penalties prescribed by that section.  
For purposes of this subsection, the term "insurance coverage" includes authorization by 
the Superintendent of Insurance to self-insure. An employer that purchases a workers' 
compensation policy or self-insures as set forth in section 403 and misclassifies one or 
more employees as independent contractors has not complied with the coverage 
provisions of this Act and is subject to all applicable penalties for failure to secure 
payment of compensation with respect to all misclassified employees. 
Sec. 8.  39-A MRSA §401, sub-§4, as amended by PL 2011, c. 643, §12 and 
affected by §14, is further amended to read: 
4.  Liability of landowner.  A landowner subject to this Act who contracts to have 
wood harvested from the landowner's property by a contractor who, as an employer, is 
subject to this Act and who has not complied with the provisions of this section and who 
does not comply with the provisions of this section prior to the date of an injury or death 
for which a claim is made is liable to pay to any person employed by the contractor in the 
execution of the work any compensation under this Act that the landowner would have 
been liable to pay if that person had been immediately employed by the landowner. 
A landowner is not liable for compensation if at the time the landowner enters into the 
contract with the contractor, the landowner applies for and receives a predetermination of 
the independent status of the contractor as set forth in section 105, subsection 1-B, the 
landowner requests and receives a certificate of independent status, issued by the board 
Bureau of Insurance on an annual basis to a contractor, certifying that the contractor 
harvests forest products in a manner that would not make the contractor an employee of 
the landowner or the landowner requests and receives a certificate of insurance, issued by 
the contractor's insurance carrier, certifying that the contractor has obtained the required 
coverage and indicating the effective dates of the policy, and if the landowner requests 
and receives at least annually similar certificates indicating continuing coverage during 
the performance of the work.  A landowner who receives a predetermination of the 
contractor's status as independent contractor or a certificate of independent status is only 
relieved of liability under this paragraph if the contract for wood harvesting expressly 
states that the independent contractor will not hire any employees to assist in the wood 
harvesting without first providing the required certificate of insurance to the landowner. 
Notwithstanding section 105, subsection 1, paragraph A, a predetermination under 
section 105 related only to a person engaged in harvesting forest products is a conclusive 
presumption that the determination is correct and section 105, subsection 2 does not apply 
to that determination.  Each party involved in or affected by the predetermination must be 
provided information on the workers' compensation laws and the effect of independent 
contractor status in relation to those laws.  A predetermination under section 105 related 
to a person engaged in harvesting forest products is effective for one calendar year or the 
duration of the contract, whichever is shorter. 
A landowner required to pay compensation under this section is entitled to be 
indemnified by the contractor and may recover the amount paid in an action against that 
contractor.  A landowner may demand that the contractor enter into a written agreement 
to reimburse the landowner for any loss incurred under this section due to a claim filed 
for compensation and other benefits.  The employee is not entitled to recover at common 
law against the landowner for any damages arising from such injury if the employee takes 
compensation from that landowner. 
Landowners willfully acting to circumvent the provisions of this section by using 
coercion, intimidation, deceit or other means to encourage persons who would otherwise 
be considered employees within the meaning of this Act to pose as contractors for the 
purpose of evading this section are liable subject to the provisions of section 324, 
subsection 3.  Nothing in this section may be construed to prohibit an employee from 
becoming a contractor subject to the provisions of section 102, subsection 13-A. 
Sec. 9.  39-A MRSA §407, as enacted by PL 1991, c. 885, Pt. A, §8 and affected 
by §§9 to 11, is amended to read: 
§407.  Preservation of existing employer status 
An employer with a currently approved workers' compensation policy or a currently 
accepted self-insurance workers' compensation policy under sections 401 to 407 is 
deemed to be in compliance with this Act until the expiration or cancellation date of the 
current assent based on the policy or plan that has misclassified one or more employees 
has intentionally failed to secure payment of compensation within the meaning of section 
324, subsection 3 and is subject to the penalties prescribed by that section.  
Notwithstanding this section, all workers' compensation policies and self-insured 
workers' compensation policies must include a provision requiring payment of benefits 
under this Act to an employee even if the employee was misclassified on the date of 
injury or death. 
SUMMARY 
This bill makes the following changes to the Maine Workers' Compensation Act of 
1992. 
1.  It transfers the predetermination of independent contractor status process to the 
Department of Professional and Financial Regulation, Bureau of Insurance. 
2.  It establishes that rebuttable presumptions granted as a result of a request for a 
predetermination are admissible only in proceedings arising under the Maine Revised 
Statutes, Title 24-A.  Conclusive predeterminations received by landowners continue to 
be admissible in proceedings under the Maine Workers' Compensation Act of 1992. 
3.  It modifies the law after the Law Court's decision in Workers' Compensation 
Board Abuse Investigation Unit v. Nate Holyoke Builders, Inc., et al., 2015 ME 99 and 
ensures employers that misclassify employees as independent contractors are subject to 
penalties under the Maine Workers' Compensation Act of 1992. 
4.  It increases the Workers' Compensation Board's assessment cap starting in fiscal 
year 2016-17. 
5.  It establishes that appeals to the Law Court from the Workers' Compensation 
Board are from decisions of the Workers' Compensation Board's Appellate Division and 
not an individual administrative law judge.