45.1000 Scope of Rules
These rules establish the procedure for issuing administrative
citations, conducting hearings on citations and penalties, and assessing
penalties.
The Commissioner, after notice and an opportunity for a
hearing, may assess an administrative penalty against any person who violates
the Workers' Compensation statute or any rule adopted pursuant to it, or any
order issued by the Commissioner or the Workers' Compensation Division.
45.2000 Authority to Adopt Rules
45.2100. These rules are adopted
pursuant to
21 V.S.A. §§
602,
603,
604,
663b,
688,
689,
690(b),
692,
702,
704,
705, and
708.
(Employer liability and Workers' Compensation);
45.2200.
8 V.S.A. §§
4793(c) and
4803.
(Licensing requirements); and
45.2300. 3 V.S.A. §§ 809-815.
(Administrative Procedure).
45.3000 Issuance of Administrative Citations
45.3100. The Director of the Workers'
Compensation and Safety Division may issue an administrative citation to any
person, including an employee, employer, attorney, medical provider, insurer or
a representative of the insurer, if the Director determines after an
investigation that the person has:
45.3110. Refused or neglected to comply with
the provisions of the Workers' Compensation Act (21 V.S.A. Chapter
9);
45.3120. Refused or neglected
to comply with the rules promulgated pursuant to the Act;
45.3130. Refused or neglected to file in a
complete and timely fashion any reports required by the Act or the rules, or
when ordered to do so by the Commissioner;
45.3140. Refused or neglected to comply with
any interim or final order issued by the Commissioner or his or her
representative; or
45.3150.
Willfully made a false statement or representation for the purpose of obtaining
any benefit or payment for either himself or herself or any other
person.
45.3200. Service of
Citation.
The administrative citation shall be served on the person by
certified mail or personal service. Each citation shall be in writing and shall
specifically describe the nature of the violation and include a citation to the
specific statute, rule, or order alleged to have been violated. The citation
shall also state the amount of the administrative penalty imposed, the
debarment period if applicable, and the process for requesting a
hearing.
45.3300. Response.
The person served with an administrative citation shall have 20
days from the date of service to notify the Director in writing of his or her
intent to contest the administrative citation and penalty. If the person does
not file a notice contesting the citation, the citation and penalty shall be
deemed a final order of the Commissioner.
45.3400. Enforcement Authority Not Limited
Administrative citations and penalties issued under these rules
shall not limit the authority of the Commissioner to issue orders or seek
injunctive relief and penalties through the court, or to take any other
appropriate enforcement action authorized by law.
45.3500. Investigations and Determinations
Under
21 VSA §
663b.
45.3510. If an allegation of claimant fraud
is submitted to the Department, a determination shall be made as to whether
further investigation is warranted. If warranted, the Commissioner shall order
the Workers' Compensation insurer to investigate the specific allegations of
fraud and submit a written report to the Department.
45.3520. The report submitted to the
Department shall contain:
45.3521.
A description of all action taken to investigate the allegations;
45.3522. The names and contact information of
all persons interviewed, along with a copy of any statements taken;
45.3523. Copies of any photographs, videos,
or other recordings taken as part of the investigation; the reports of any
investigators hired as part of the investigation; and,
45.3524. The insurer's opinion as to whether
fraudulent activity has occurred.
45.3525. The insurer shall provide the
Department with a status report on its investigation every 30 days, until a
final report is submitted.
45.3526.
The investigation and report shall be in addition to any actions related to
adjusting the claim.
45.3530. Upon
receipt of the insurer's report the Commissioner shall determine whether it is
complete, or whether additional information is necessary. Once a completed
report is received, the Commissioner shall provide the claimant with an
opportunity to respond in person or in writing within 30 days.
45.3540. After providing the claimant an
opportunity to respond, the Commissioner shall make a determination as to
whether fraud has occurred, and may assess penalties and order reimbursement as
appropriate.
45.4000
Administrative Citation and Penalty Hearing
45.4100. A person contesting a citation and
penalty issued pursuant to Rule
45.3000 shall be entitled to
a hearing before the Commissioner within 60 days of filing the notice to
contest. The 60-day time frame may be extended by the Commissioner if the
person makes a written request for additional time to prepare for the
hearing.
45.4200. Hearing Notice.
The hearing notice shall include the following:
45.4210. A statement of the time,
place, and nature of the hearing;
45.4220. A statement of the legal authority
and jurisdiction under which the hearing is to be held;
45.4230. A reference to the specific statute,
rule, or order involved in the hearing; and
45.4240. A short and plain statement of the
matters at issue.
45.4300. The
Commissioner shall appoint a hearing officer to hear the evidence, prepare
findings, and issue a decision. The procedures set forth in 3 V.S.A.
§§ 809-813, and § 815 shall apply to all hearings conducted
under these rules.
45.4400. The
person may appear at the hearing with counsel, present evidence, and examine
and cross-examine witnesses.
45.4500. Evidence shall be admitted at the
hearing as provided in
3 V.S.A. §
810.
45.4600. The hearing officer may compel by
subpoena the attendance and testimony of witnesses and the production of books
and records in accordance with
21 V.S.A.
§
603(a), and
3 V.S.A.
§§ 809a and 809b.
45.4700. Nothing in this section shall
prohibit the informal disposition of a citation by stipulation, agreed
settlement, consent order, or default. An informal disposition of the citation
may proceed using clear and simple documentation without complete adherence to
the requirements of this section.
45.5000 Administrative Penalties
45.5100. False Statement or
Representation.
45.5110. A person
who willfully makes a false statement or representation for the purpose of
obtaining any benefit or payment either for himself or herself or another
person shall be assessed an administrative penalty of not more than $
20,000.00, in accordance with
21 V.S.A. §
708.
45.5120. Except as provided in 45.5160 -
45.5190, the Commissioner shall not reduce a penalty imposed under rule 45.5110
if:
45.5130. The false statement or
representation was made to establish the compensability of the claim;
or
45.5140. The false statement or
representation involved falsifying medical records; or
45.5150. The false statement or
representation was sworn testimony.
45.5160. Penalty Reduction Factors.
The Commissioner may reduce the penalty if the person
demonstrates:
45.5170. That
the person has repaid or entered into an agreement to repay the benefits or
amounts received as a result of the false statement or representation;
and
45.5180. The benefit or payment
gained was less than the amount of the penalty; or
45.5190. The person has agreed to forfeit any
claim for additional Workers' Compensation benefits based on the alleged
workplace injury.
45.5200.
Forfeiture of Benefits.
45.5210. An
employee who willfully makes a false statement or representation of material
fact for the purpose of obtaining a Workers' Compensation benefit shall forfeit
all or a portion of his or her right to benefits based on the alleged workplace
injury.
45.5220. Partial Forfeiture
of Benefits.
45.5230. In the
Commissioner's discretion, an employee may forfeit only a portion of his or her
Workers' Compensation benefits if:
45.5240. The employee has repaid the benefits
or entered into an agreement to repay the benefits received as a result of the
false statement or representation; or
45.5250. The benefit or payment to be gained
was less than $ 1,000.00; or
45.5260. The benefit or payment to be gained
was limited to one portion of the Workers' Compensation benefit to which the
employee was entitled. In this instance, the benefits owed the employee that
were not received as a result of the false statement or representation shall
not be forfeit.
45.5300. Referral
to Department of Financial Regulation.
Whenever the Commissioner has reason to believe that an
employer has willfully made a false statement or representation for the purpose
of obtaining a lower Workers' Compensation premium, written notice and any
supporting documentation shall be provided to the Commissioner of Financial
Regulation along with a request to investigate and take any appropriate action
on the matter.
45.5400.
Debarment; False Statement or Representation.
45.5410. In addition to the penalties listed
in rule 45.5110 above, the Commissioner shall prohibit an employer who
willfully makes a false statement or representation for the purpose of deriving
any benefit, including a lower insurance premium, from contracting, directly or
indirectly, with the State or any of its subdivisions, for up to three
years.
45.5420. Any prohibition
from contracting with the State shall be made only after consultation with the
Commissioner of Buildings and General Services or the Secretary of
Transportation, or other agencies as appropriate. When the Commissioner
believes that debarment is appropriate, the Commissioner shall provide written
notice and supporting documentation to the Commissioner of Buildings and
General Services or the Secretary of Transportation or other Agency or
Department head as appropriate. The debarment shall be ordered if no objection
is raised by the Department or Agency consulted within five business days of
receiving notice of the proposed debarment. If an objection is raised, the
Commissioner shall consider it, but in his or her discretion may order the
debarment nevertheless.
45.5440. An
initial violation shall subject the employer to a debarment period of one
year.
45.5450. A second violation
occurring within three years of the previous violation shall subject the
employer to a debarment period of two years.
45.5460. A third or subsequent violation
occurring within three years of the most recent violation shall subject the
employer to a debarment period of three years.
45.5470. The Commissioner may reduce the
period of debarment if the employer demonstrates that the non-compliance was
the result of a good faith misunderstanding of the law's requirements,
excusable neglect, or other mitigating factor.
45.5500. Administrative Penalty; Failure to
Insure.
45.5510. An employer that
fails to comply with the requirements of
21 V.S.A. §
687 (maintaining workers' compensation
insurance or self-insurance as required by law) shall be assessed an
administrative penalty of not more than $ 100.00 per day for the first seven
days that the employer neglected to secure coverage and not more than $ 150.00
for every day thereafter. An employer shall ensure that any subcontractor it
has hired for a particular job is in compliance with
21 V.S.A. §
687.
The per day penalty shall be based on the annual- North
American Classification System (NAICS) for the employer. NAICS groupings for
Industry Sector may be found in the appendix to this rule.
45.5511. For employers with NAICS Industry
Sectors 11, 51, 52, 53, 54, 55, 61, 71, 92, the penalty shall be $ 30 per day
for each day without insurance for an initial violation. If a second violation
occurs within three years of the initial violation, the per day penalty shall
be doubled. If a third violation occurs within three years of the initial
violation the penalty shall be assessed at the full statutory rate.
45.5512. For employers with NAICS Industry
Sectors 31, 32, 33, 42, 44, 45, 62 the penalty shall be $ 40 per day for each
day without insurance for an initial violation. If a second violation occurs
within three years of the initial violation, the per day penalty shall be
doubled. If a third violation occurs within three years of the initial
violation the penalty shall be assessed at the full statutory rate.
45.5513. For employers with NAICS Industry
Sectors 21, 22, 23, 48, 49, 56, 72, 81 the penalty shall be $ 50 per day for
each day without insurance for an initial violation. If a second violation
occurs within three years of the initial violation, the per day penalty shall
be doubled. If a third violation occurs within three years of the initial
violation the penalty shall be assessed at the full statutory rate.
45.5520. Penalty Reduction Factors.
The Commissioner may reduce the penalty assessed under section
45.5500 if the employer demonstrates:
45.5530. That the failure to secure or
maintain Workers' Compensation insurance was inadvertent or the result of
excusable neglect and was promptly corrected;
45.5540. That the penalty amount
significantly exceeds the amount of any premium expenditures that would have
been paid if an insurance policy had been properly secured or maintained;
or
45.5550. That the small size of
the employer and the non-hazardous nature of the employment presented minimal
risk to employees.
45.5560. Failure
to Insure; Stop-Work Order.
45.5570. If an employer fails to comply with
the requirements of
21 V.S.A. §
687 after investigation by the Commissioner,
the Commissioner shall issue an emergency stop-work order to the employer.
Additionally, an employer that fails to secure Workers' Compensation coverage
after being ordered in writing to do so by the Commissioner shall be assessed
an administrative penalty of up to $ 250.00 for every day the employer fails to
obtain coverage after being ordered to do so, and may also be assessed an
administrative penalty of up to $ 250.00 per employee for every day that the
employer has failed to secure the ordered Workers' Compensation
coverage.
45.5571. The stop-work
order shall clearly state the name of the employer, the penalties for violating
the order, the process for having the order rescinded, and the method to appeal
the order.
45.5572. A stop-work
order may be appealed pursuant to VRCP 75.
45.5580. Debarment; Violation of Stop-Work
Order.
45.5590. In addition to the
penalties listed in Rule 45.5570 above, the Commissioner shall prohibit an
employer that has been issued a stop-work order pursuant to
21 V.S.A.
§
692(b) from
contracting, directly or indirectly, with the State or any of its subdivisions,
for up to three years.
45.5591.
Prior to issuing any debarment penalty, the Commissioner shall consult with the
Commissioner of Buildings and General Services and the Secretary of
Transportation, or other agencies as appropriate. The consultation may occur
informally provided that a written or electronic record of that consultation
naming the employer involved, a description of the violation(s), the proposed
debarment period, and any response received from the Commissioner of Buildings
and General Services or the Secretary of Transportation is maintained. The
debarment shall be ordered if no objection is raised by the Department or
Agency consulted within five business days of receiving notice of the proposed
debarment. If an objection is raised, the Commissioner shall consider it, but
in his or her discretion may order the debarment nevertheless.
45.5592. An administrative determination
shall be issued to advise the employer of the debarment period and the
employer's appeal rights.
45.5593.
In establishing a debarment period under this section, the Commissioner may
consider any relevant mitigating factors, including the employer's good faith
or excusable neglect, or the impact of debarment on public health and
safety.
45.5594. An initial
violation shall result in a debarment period of one year, prior to
consideration of any mitigating factors.
45.5595. A second violation occurring within
three years from the previous violation shall result in a debarment period of
two years, prior to consideration of any mitigating factors.
45.5596. A third or subsequent violation
occurring within three years from the most recent violation shall result in a
debarment period of three years, prior to consideration of any mitigating
factors.
45.5597. Notwithstanding
any mitigating factors, the debarment period shall not be less than the period
during which the employer was in violation of
21 V.S.A. §
687.
45.6000 Severability Clause
In the event any part or provision of these rules is held to be
illegal, this shall not have the effect of making void or illegal any of the
other parts or provisions of these rules.
45.6600 Other Penalties
45.6610. Non-compliance with an interim or
final order.
Any person, including an employer or Workers' Compensation
insurance carrier who fails to comply with an interim or final order of the
Commissioner shall be assessed a penalty of $ 500.00. An additional penalty of
$ 100.00 per day shall be assessed for each day the person fails to comply
after the date set for compliance. The total penalty shall not exceed $
5,000.00. The Commissioner may reduce the penalty if the person demonstrates
that non-compliance was the result of excusable neglect.
45.6620. A self-insured employer or Workers'
Compensation insurance carrier that fails to ensure that any of its agents or
subcontractors complies with the Workers' Compensation statute or rules, or
with an interim or final order of the Department, shall be assessed a penalty
of $ 500.00 for a first offense. A first offense shall be defined as one
instance of failing to comply with the statute, rule, or order in one claim.
The employer or a Workers' Compensation insurance carrier shall be assessed an
additional penalty of $ 500.00 for each additional instance of failing to
comply but shall not be assessed a penalty in excess of $ 5,000.00. In
addition, the agent or subcontractor of an employer or insurer who refuses or
neglects to comply shall be assessed a penalty of $ 50.00 for each instance of
refusing or neglecting to comply with the Act, but shall not be assessed a
penalty in excess of $ 5,000.00.
45.6630. Penalty; Failure to Submit Forms or
Reports; Technical Violations
45.6635. An employer that fails to submit a
First Report of Injury (Form 1) within 72 hours of receiving notice or
knowledge of a claimed work-related injury causing an absence of one day or
more, or necessitating medical attendance, shall be assessed a penalty of $
100.00 for each violation.
45.6640
An employer that fails to provide an employee with a copy of the First Report
of Injury (Form 1) promptly, after filing it with the Department, shall be
assessed a penalty of $ 50.00 for each violation.
45.6650. Any person, including an employer or
Workers' Compensation insurance carrier who fails to submit any form required
by the Workers' Compensation statute or rules to be filed with the Department
shall be assessed a penalty of $ 100.00 for each violation.
45.6660. An employer or insurance carrier
that fails to comply with
21 V.S.A. §
640a shall be assessed a penalty of $
500.00.
45.6670. An employer or
Workers' Compensation insurance carrier that fails to file any interim or final
report required by
21 V.S.A. §§
701,
702,
or
703
shall be assessed a penalty of $ 100.00 for each violation.
45.6680. An employer or Workers' Compensation
insurance carrier that fails to file any statistical report requested by the
Commissioner or his or her designee pursuant to
21 V.S.A. §
704 shall be assessed a penalty of $
1,000.00.
45.6690. The penalty for
any administrative or technical violation not otherwise noted in this section
shall be $ 500.00.
45.7000
Violations of 21 VSA Section 690(b)
45.7100. The Commissioner may issue a written
request directing an employer to provide a Workers' Compensation Compliance
Statement. Upon receipt of a request the employer shall provide all information
required by
21 VSA §
690(b) within thirty days of
receiving the request. An employer may request additional time in which to
respond, and if good cause is demonstrated, the Commissioner may grant
additional time to respond.
45.7200. An employer that fails to comply
with a request for a compliance statement within thirty days, or if an
extension is granted, by the extension date may be subject to a penalty of up
to $ 5000.00 a week until compliance occurs.
45.72100. The penalty for a first offense
shall be $ 1000.00 for the first week of noncompliance and shall increase $
500.00 for each subsequent week up to a maximum of $ 5000.00 per week. The
penalty for subsequent failures to comply with a request for a compliance
statement shall be $ 5000.00 per week
45.72200. Penalty Reduction Factors
The Commissioner may reduce the penalty assessed under this
section if the employer demonstrates:
That the failure to provide a compliance statement was
inadvertent or the result of excusable neglect and was promptly corrected;
or,
The assessed penalty is out of proportion with the small size
of the employer.
Falsifying Compliance Statement
45.7300. An employer that falsifies
information on a compliance statement shall be subject to an administrative
penalty of $ 5000.00 for each week that the falsification occurred.
45.8000 Severability
In the event any part or provision of these rules is held
invalid, the invalidity shall not affect the remainder of the rules that can be
given effect without the invalid provision, and to this end these rules are
severable.
45.9000
Effective Date
These Rules are effective February 13, 2017
Appendix to Rule 45. 2012 NAICS.
The following table provides a general description of the two
digit NAICS sector codes and the corresponding Rule 45 penalty section.
|
Rule 45 Section
|
Sector
|
Description
|
|
$S 45.5511
|
11
|
Agriculture, Forestry, Fishing and Hunting
|
|
$S 45.5513
|
21
|
Mining, Quarrying, and Oil and Gas Extraction
|
|
$S 45.5513
|
22
|
Utilities
|
|
$S 45.5513
|
23
|
Construction
|
|
$S 45.5512
|
31-33
|
Manufacturing
|
|
$S 45.5512
|
42
|
Wholesale Trade
|
|
$S 45.5512
|
44-45
|
Retail Trade
|
|
$S 45.5513
|
48-49
|
Transportation and Warehousing
|
|
$S 45.5511
|
51
|
Information
|
|
$S 45.5511
|
52
|
Finance and Insurance
|
|
$S 45.5511
|
53
|
Real Estate and Rental and Leasing
|
|
$S 45.5511
|
54
|
Professional, Scientific, and Technical Services
|
|
$S 45.5511
|
55
|
Management of Companies and Enterprises
|
|
$S 45.5513
|
56
|
Administrative and Support and Waste Management and
Remediation Services
|
|
$S 45.5511
|
61
|
Educational Services
|
|
$S 45.5512
|
62
|
Health Care and Social Assistance
|
|
$S 45.5511
|
71
|
Arts, Entertainment, and Recreation
|
|
$S 45.5513
|
72
|
Accommodation and Food Services
|
|
$S 45.5513
|
81
|
Other Services (except Public Administration)
|
|
$S 45.5511
|
92
|
Public Administration
|
More detailed information on NAICS Codes and industry sectors
is available at: https://www.census.gov/cgi-bin/sssd/naics/naicsrch§chart=2012
