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Last Reviewed / Modified On 27 Apr 2017.

Arizona Workers' Compensation Claim Handling Guidelines

Contents [hide]

DEFINITIONS

Employer

Employers subject to this chapter are the state, each county, city, town, municipal corporation and school district and every person who employs any workers or operatives regularly employed in the same business or establishment under contract of hire, including covered employees pursuant to a professional employer agreement, except domestic servants. Exempted employers of domestic servants may come under this chapter by complying with its provisions and the rules of the commission. For the purposes of this subsection, "regularly employed" includes all employments, whether continuous throughout the year, or for only a portion of the year, in the usual trade, business, profession or occupation of an employer.

A business that uses the services of a sole proprietor who has waived the sole proprietor's rights to workers' compensation coverage and benefits pursuant to section 23-961, subsection P is not liable for workers' compensation coverage or the payment of premiums for the sole proprietor.

The written agreement executed in compliance with subsection D of ARS 23-902 shall be null and void and create no presumption of an independent contractor relationship if the consent of either party is either:
1. Obtained through misrepresentation, false statements, fraud or intimidation.
2. Obtained through coercion or duress.

If any agreement is found to be null and void under subsection F of ARS 23-902 the insurance carrier is entitled to collect a premium.

Statutory Employer

When an employer procures work to be done for the employer by a contractor over whose work the employer retains supervision or control, and the work is a part or process in the trade or business of the employer, then the contractors and the contractor's employees, and any subcontractor and the subcontractor's employees, are, within the meaning of this section, employees of the original employer. For the purposes of this subsection, "part or process in the trade or business of the employer" means a particular work activity that in the context of an ongoing and integral business process is regular, ordinary or routine in the operation of the business or is routinely done through the business' own employees.

Employee

Every person in the service of the state or a county, city, town, municipal corporation or school district, including regular members of lawfully constituted police and fire departments of cities and towns, whether by election, appointment or contract of hire.

Every person in the service of any employer subject to this chapter, including aliens and minors legally or illegally permitted to work for hire, but not including a person whose employment is both:
(i) Casual.
(ii) Not in the usual course of the trade, business or occupation of the employer.

Lessees of mining property and their employees and contractors engaged in the performance of work that is a part of the business conducted by the lessor and over which the lessor retains supervision or control are within the meaning of this paragraph employees of the lessor, and are deemed to be drawing wages as are usually paid employees for similar work. The lessor may deduct from the proceeds of ores mined by the lessees the premium required by this chapter to be paid for such employees.

Regular members of volunteer fire departments organized pursuant to title 48, chapter 5, article 1, regular firemen of any volunteer fire department, including private fire protection service organizations, organized pursuant to title 10, chapters 24 through 40, volunteer firemen serving as members of a fire department of any incorporated city or town or an unincorporated area without pay or without full pay and on a part-time basis, and voluntary policemen and volunteer firemen serving in any incorporated city, town or unincorporated area without pay or without full pay and on a part-time basis, are deemed to be employees, but for the purposes of this chapter, the basis for computing wages for premium payments and compensation benefits for regular members of volunteer fire departments organized pursuant to title 48, chapter 5, article 1, or organized pursuant to title 10, chapters 24 through 40, regular members of any private fire protection service organization, volunteer firemen and volunteer policemen of these departments or organizations shall be the salary equal to the beginning salary of the same rank or grade in the full-time service with the city, town, volunteer fire department or private fire protection service organization, provided if there is no full-time equivalent then the salary equivalent shall be as determined by resolution of the governing body of the city, town or volunteer fire department or corporation.

Members of the department of public safety reserve, organized pursuant to section 41-1715, are deemed to be employees. For the purposes of this chapter, the basis for computing wages for premium payments and compensation benefits for a member of the department of public safety reserve who is a peace officer shall be the salary received by officers of the department of public safety for their first month of regular duty as an officer. For members of the department of public safety reserve who are not peace officers, the basis for computing premiums and compensation benefits is four hundred dollars a month.

Any person placed in on-the-job evaluation or in on-the-job training under the department of economic security's temporary assistance for needy families program or vocational rehabilitation program shall be deemed to be an employee of the department for the purpose of coverage under the state workers' compensation laws only. The basis for computing premium payments and compensation benefits shall be two hundred dollars per month. Any person receiving vocational rehabilitation services under the department of economic security's vocational rehabilitation program whose major evaluation or training activity is academic, whether as an enrolled attending student or by correspondence, or who is confined to a hospital or penal institution, shall not be deemed to be an employee of the department for any purpose.

Regular members of a volunteer sheriff's reserve, which may be established by resolution of the county board of supervisors, to assist the sheriff in the performance of the sheriff's official duties. A roster of the current members shall monthly be certified to the clerk of the board of supervisors by the sheriff and shall not exceed the maximum number authorized by the board. Certified members of an authorized volunteer sheriff's reserve shall be deemed to be employees of the county for the purpose of coverage under the Arizona workers' compensation laws and occupational disease disability laws and shall be entitled to receive the benefits of these laws for any compensable injuries or disabling conditions that arise out of and occur in the course of the performance of duties authorized and directed by the sheriff. Compensation benefits and premium payments shall be based upon the salary received by a regular full-time deputy sheriff of the county involved for the first month of regular patrol duty as an officer for each certified member of a volunteer sheriff's reserve. This subdivision shall not be construed to provide compensation coverage for any member of a sheriff's posse who is not a certified member of an authorized volunteer sheriff's reserve except as a participant in a search and rescue mission or a search and rescue training mission.

A working member of a partnership may be deemed to be an employee entitled to the benefits provided by this chapter upon written acceptance, by endorsement, at the discretion of the insurance carrier for the partnership of an application for coverage by the working partner. The basis for computing premium payments and compensation benefits for the working partner shall be an assumed average monthly wage of not less than six hundred dollars nor more than the maximum wage provided in section 23-1041 and is subject to the discretionary approval of the insurance carrier. Any compensation for permanent partial or permanent total disability payable to the partner shall be computed on the lesser of the assumed monthly wage agreed to by the insurance carrier on the acceptance of the application for coverage or the actual average monthly wage received by the partner at the time of injury.

The sole proprietor of a business subject to this chapter may be deemed to be an employee entitled to the benefits provided by this chapter on written acceptance, by endorsement, at the discretion of the insurance carrier of an application for coverage by the sole proprietor. The basis for computing premium payments and compensation benefits for the sole proprietor shall be an assumed average monthly wage of not less than six hundred dollars nor more than the maximum wage provided by section 23-1041 and is subject to the discretionary approval of the insurance carrier. Any compensation for permanent partial or permanent total disability payable to the sole proprietor shall be computed on the lesser of the assumed monthly wage agreed to by the insurance carrier on the acceptance of the application for coverage or the actual average monthly wage received by the sole proprietor at the time of injury.

A member of the Arizona National Guard, Arizona state guard or unorganized militia shall be deemed a state employee and entitled to coverage under the Arizona workers' compensation law at all times while the member is receiving the payment of the member's military salary from the state of Arizona under competent military orders or upon order of the governor. Compensation benefits shall be based upon the monthly military pay rate to which the member is entitled at the time of injury, but not less than a salary of four hundred dollars per month, nor more than the maximum provided by the workers' compensation law. No Arizona compensation benefits shall inure to a member compensable under federal law.

Certified ambulance drivers and attendants who serve without pay or without full pay on a part-time basis are deemed to be employees and entitled to the benefits provided by this chapter and the basis for computing wages for premium payments and compensation benefits for certified ambulance personnel shall be four hundred dollars per month.

Volunteer workers of a licensed health care institution may be deemed to be employees and entitled to the benefits provided by this chapter upon written acceptance by the insurance carrier of an application by the health care institution for coverage of such volunteers. The basis for computing wages for premium payments and compensation benefits for volunteers shall be four hundred dollars per month.

Personnel who participate in a search or rescue operation or a search or rescue training operation that carries a mission identifier assigned by the division of emergency management as provided in section 35-192.01 and who serve without compensation as volunteer state employees. The basis for computation of wages for premium purposes and compensation benefits is the total volunteer man-hours recorded by the division of emergency management in a given quarter multiplied by the amount determined by the appropriate risk management formula.

Personnel who participate in emergency management training, exercises or drills that are duly enrolled or registered with the division of emergency management or any political subdivision as provided in section 26-314, Subsection C and who serve without compensation as volunteer state employees. The basis for computation of wages for premium purposes and compensation benefits is the total volunteer man-hours recorded by the division of emergency management or political subdivision during a given training session, exercise or drill multiplied by the amount determined by the appropriate risk management formula.

Regular members of the Arizona game and fish department reserve, organized pursuant to section 17-214. The basis for computing wages for premium payments and compensation benefits for a member of the reserve is the salary received by game rangers and wildlife managers of the Arizona game and fish department for their first month of regular duty.

Every person employed pursuant to a professional employer agreement.

Borrowed Employee

The borrowed or lent employee doctrine applies where the employer performs the work itself, but does so using temporary or “lent” employees. The statutory part-or-process requirement need not be met. Evidence of a contract, express or implied, between the special employer and the employee must be established. Consent is a crucial factor in determining whether an employer is liable under the lent employee doctrine. The right to control analysis is the same as used under the independent contractor analysis.

Independent Contractor

A person engaged in work for a business, and who while so engaged is independent of that business in the execution of the work and not subject to the rule or control of the business for which the work is done, but is engaged only in the performance of a definite job or piece of work, and is subordinate to that business only in effecting a result in accordance with that business design, is an independent contractor.

A business that uses the services of an independent contractor and the independent contractor may prove the existence of an independent contractor relationship by executing a written agreement that complies with this subsection. The written agreement shall evidence that the business does not have the authority to supervise or control the actual work of the independent contractor or the independent contractor's employees. A written agreement executed in compliance with this subsection creates a rebuttable presumption of an independent contractor relationship between the parties if the written agreement contains a disclosure statement that the independent contractor is not entitled to workers' compensation benefits from the business. Unless the rebuttable presumption is overcome, no premium may be collected by the carrier on payments by the business to the independent contractor if a fully completed written agreement that satisfies the requirements of this subsection is submitted to the carrier. The written agreement shall be dated and contain the signatures of both parties and, unless otherwise provided by law, shall state that the business:
1. Does not require the independent contractor to perform work exclusively for the business. This paragraph shall not be construed as conclusive evidence that an individual who performs services primarily or exclusively for another person is an employee of that person.
2. Does not provide the independent contractor with any business registrations or licenses required to perform the specific services set forth in the contract.
3. Does not pay the independent contractor a salary or hourly rate instead of an amount fixed by contract.
4. Will not terminate the independent contractor before the expiration of the contract period, unless the independent contractor breaches the contract or violates the laws of this state.
5. Does not provide tools to the independent contractor.
6. Does not dictate the time of performance.
7. Pays the independent contractor in the name appearing on the written agreement.
8. Will not combine business operations with the person performing the services rather than maintaining these operations separately.

PEO

A person engaged in the business of providing professional employer services is subject to this chapter regardless of whether the person uses the term professional employer organization, PEO, staff leasing company, registered staff leasing company, employee leasing company or any other name.

As long as the professional employer organization's professional employer agreement with a client remains in force, the professional employer organization shall be regarded as a co-employer of the employee.

The professional employer organization and its client shall be considered the employer for the purpose of coverage under this chapter and both the professional employer organization and its client shall be entitled to protection of the exclusive remedy set forth in section 23-1022. Both the professional employer organization and its client shall comply with sections 23-906 and 23-964.

When a professional employer organization enters into a professional employer agreement with a client in this state, the professional employer organization shall notify its workers' compensation insurance carrier and the commission. The notification shall be on a form approved by the commission and shall include the following information:
1. The name and business address of the client employer.
2. Whether all or a majority of the client employer's workforce is covered by the professional employer agreement.

3. Unless all of the client employer's workforce is covered by the professional employer agreement, the name of the client employer's workers' compensation insurance carrier that is insuring the client employer's obligation to secure compensation under section 23-961 for any employees who are not covered by the professional employer agreement. The professional employer organization shall also notify each client, in writing, of the client's obligation under section 23-961 to secure workers' compensation for any employees who are not covered by the professional employer agreement, even if such employees are hired after the execution of the professional employer agreement.

If a professional employer agreement is terminated, the professional employer organization shall immediately notify its workers' compensation insurance carrier and the commission, in writing, of the name of the client and the date of termination of the agreement.

EXCLUSIVE REMEDY

General Rule

The right to recover compensation pursuant to this chapter for injuries sustained by an employee or for the death of an employee is the exclusive remedy against the employer or any co-employee acting in the scope of his employment, and against the employer's workers' compensation insurance carrier or administrative service representative, except as provided by section 23-906, and except that if the injury is caused by the employer's willful misconduct, or in the case of a co-employee by the co-employee's willful misconduct, and the act causing the injury is the personal act of the employer, or in the case of a co-employee the personal act of the co-employee, or if the employer is a partnership, on the part of a partner, or if a corporation, on the part of an elective officer of the corporation, and the act indicates a willful disregard of the life, limb or bodily safety of employees, the injured employee may either claim compensation or maintain an action at law for damages against the person or entity alleged to have engaged in the willful misconduct.

"Willful misconduct" means an act done knowingly and purposely with the direct object of injuring another.

This section does not apply to an action for medical malpractice against any employee of a hospital maintained by the employer pursuant to section 23-1070. Any suit allowed by this subsection is subject to the lien rights provided by section 23-1023.

An employee of a public agency, as defined in section 11-951, who works under the jurisdiction or control of or within the jurisdictional boundaries of another public agency pursuant to a specific intergovernmental agreement or contract entered into between the public agencies as provided in section 11-952 is deemed to be an employee of both public agencies for the purposes of this section. The primary employer shall be solely liable for the payment of workers' compensation benefits for the purposes of this section.

Every public agency as defined in section 11-951 for which an intergovernmental agreement or contract is in effect shall post a notice pursuant to the provisions of section 23-906, in substantially the following form:

"All employees are hereby further notified that they may be required to work under the jurisdiction or control of or within the jurisdictional boundaries of another public agency pursuant to an intergovernmental agreement or contract, and under such circumstances they are deemed by the laws of Arizona to be employees of both public agencies for the purposes of workers' compensation."

JURISDICTION AND LIMITATIONS OF ACTIONS

General Rule

The Industrial Commission of Arizona is charged with the duties of the administration of this chapter, and with the adjudication of claims for compensation arising out of provisions of this chapter and any of its members or assistants so authorized may:
1. Hold hearings at any place within the state or without the state by agreement of the parties.
2. Administer oaths.
3. Issue and serve by the commission's representatives, or by any sheriff, subpoenas for the attendance of witnesses and claimants and the production of reports, papers, contracts, books, accounts, documents and testimony. The commission may require the attendance and testimony of employers, their officers and representatives before any proceeding of the commission, and the production by employees of books, records, papers and documents.
4. Generally provide for the taking of testimony and for the recording of proceedings held in accordance with this chapter.

The commission may make and declare all rules and regulations which are reasonably required in the performance of its duties, including but not limited to rules of practice and procedure in connection with hearing and review proceedings. Such rules and regulations may provide for informal prehearing conferences in order to expedite claim adjudication, amicably dispose of controversies, narrow issues and simplify the method of proof at hearings.

The commission may incur such expenses as it determines are reasonably necessary to perform its authorized functions, which expenses shall be a charge against the administrative fund.

The commission may charge any person with contempt who refuses to comply with any order of the commission, upon application to the superior court. Any person held in contempt may be punished by a fine of not to exceed one thousand dollars.

Extraterritorial Jurisdiction

If a worker who has been hired or is regularly employed in this state receives a personal injury by accident arising out of and in the course of the worker's employment, the worker is entitled to compensation according to the laws of this state even if the injury was received outside this state.

If a worker who is employed in this state and is subject to this chapter temporarily leaves this state incidental to that employment and receives an injury arising out of and in the course of employment, the worker, or beneficiaries of the worker if the injury results in death, is entitled to the benefits of this chapter as though the worker were injured in this state.

A worker from another state and the employer of the worker in that other state are exempt from this chapter while that worker is temporarily in this state doing work for an employer if all of the following are true:
1. The employer has furnished workers' compensation insurance coverage under the workers' compensation insurance or similar laws of a state other than Arizona so as to cover that worker's employment while in this state.
2. The extraterritorial provisions of this chapter are recognized in that other state.
3. Employers and workers who are covered in this state are likewise exempted from the application of the w orkers' compensation insurance act or similar laws of the other state.
4. The benefits under the workers' compensation insurance act or similar laws of the other state, or other remedies under a similar act or laws, are the exclusive remedy against the employer for any injury, whether resulting in death or not, received by the worker while temporarily working for that employer in this state.

A certificate from a duly authorized officer of the commission, the department of insurance or a similar department of another state certifying that the employer in the other state is insured in that state is prima facie evidence that the employer carries that workers' compensation insurance.

If in any appeal or other litigation the construction of the laws of another state is required, the courts shall take judicial notice of the laws of the other state.

For purposes of this section, a worker is deemed to be temporarily in a state doing work for an employer if, during the three hundred sixty-five days immediately preceding either the worker's date of injury or, in the case of an occupational disease or cumulative trauma claim, the worker's last date of injurious exposure, the worker performs fewer than ninety continuous days of required services in the state under the direction and control of the employer.

If a worker has a claim under the workers' compensation laws of another state, territory, province or foreign nation for the same injury or occupational disease as the claim filed in this state, the total amount of compensation paid or awarded under the other state's workers' compensation laws shall be credited against the compensation due under the workers' compensation laws of this state. The worker is entitled to the full amount of compensation due under the laws of this state. If compensation under the laws of this state is more than the compensation under the laws of the other state, or compensation paid the worker under the laws of the other state is recovered from the worker, the insurer shall pay any unpaid compensation to the worker up to the amount required by the claim under the laws of this state.

Claims made after the effective date of this section are subject to this section regardless of the date of injury.

Time Limitation

A hearing on any question relating to a claim shall not be granted unless the employee has previously filed an application for compensation within the time and in the manner prescribed by section section 23-1061 and the request for a hearing is filed within ninety days after the notice sent under section section 23-1061, subsection F or within ninety days of notice of a determination by the commission, insurance carrier or self-insuring employer under section 23-1047 or 23-1061, except that an employer who is subject to and fails to comply with section 23-961 or 23-962 must file a request for a hearing within thirty days of notice of a determination by the commission, or within ten days of all other awards issued by the commission.

As used in this section, "filed" means that the request for a hearing is in the possession of the commission. Failure to file with the commission within the required time by a party means that the determination by the commission, insurance carrier or self-insuring employer is final and res judicata to all parties. The Industrial Commission or any court shall not excuse a late filing unless any of the following applies:
1. The person to whom the notice is sent does not request a hearing because of justifiable reliance on a representation by the commission, employer or carrier. In this paragraph, "justifiable reliance" means that the person to whom the notice is sent has made reasonably diligent efforts to verify the representation, regardless of whether the representation is made pursuant to statutory or other legal authority.
2. At the time the notice is sent the person to whom it is sent is suffering from insanity or legal incompetence or incapacity, including minority.
3. The person to whom the notice is sent shows by clear and convincing evidence that the notice was not received.

The late filing shall not be excused if the person to whom the notice is sent or the person's legal counsel knew or, with the exercise of reasonable care and diligence, should have known of the fact of the notice at any time during the filing period.

Notice of Injury

Every employer affected by this chapter, and every physician who attends an injured employee of such employer, shall file with the commission and the employer's insurance carrier from time to time a full and complete report of every known injury to the employee arising out of or in the course of his employment and resulting in loss of life or injury. Such report shall be furnished to the commission and such insurance carrier at times and in the form and detail the commission prescribes, and the report shall make special answers to all questions required by the commission under its rules.

The commission shall fix a schedule of fees to be charged by physicians, physical therapists or occupational therapists attending injured employees and, subject to subsection C of this section, for prescription medicines required to treat an injured employee under this chapter. The commission shall annually review the schedule of fees.

If a schedule of fees for prescription medicines adopted pursuant to subsection B of this section includes provisions regarding the use of generic equivalent drugs, those provisions shall comply with section 32-1963.01,Subsection A and C through K. If the commission considers the adoption of fee schedule provisions that involve specific prices, values or reimbursements for prescription drugs, the commission shall base the adoption on studies or practices that are validated and accepted in the industry, including the applicability of formulas that use average wholesale price, plus a dispensing fee, and that have been made publicly available for at least one hundred eighty days before any hearing conducted by the commission.

Notwithstanding section 12-2235, information obtained by any physician or surgeon examining or treating an injured person shall not be considered a privileged communication, if such information is requested by interested parties for a proper understanding of the case and a determination of the rights involved. Hospital records of an employee concerning an industrial claim shall not be considered privileged if requested by an interested party in order to determine the rights involved. Medical information from any source pertaining to conditions unrelated to the pending industrial claim shall remain privileged.

When an accident occurs to an employee, the employee shall forthwith report the accident and the injury resulting therefrom to the employer, and any physician employed by the injured employee shall forthwith report the accident and the injury resulting therefrom to the employer, the insurance carrier and the commission.

When an accident occurs to an employee, the employer may designate in writing a physician chosen by the employer, who shall be permitted by the employee, or any person in charge of the employee, to make one examination of the injured employee in order to ascertain the character and extent of the injury occasioned by the accident. The physician so chosen shall forthwith report to the employer, the insurance carrier and the commission the character and extent of the injury as ascertained by him. If the accident is not reported by the employee or his physician forthwith, as required, or if the injured employee or those in charge of him refuse to permit the employer's physician to make the examination, and the injured employee is a party to the refusal, no compensation shall be paid for the injury claimed to have resulted from the accident. The commission may relieve the injured person or his dependents from the loss or forfeiture of compensation if it believes after investigation that the circumstances attending the failure on the part of the employee or his physician to report the accident and injury are such as to have excused them.

Within ten days after receiving notice of an accident, the employer shall inform his insurance carrier and the commission on such forms and in such manner as may be prescribed by the commission.

Immediately upon notice to the employer of an accident resulting in an injury to an employee, the employer shall provide the employee with the name and address of the employer's insurance carrier, the policy number and the expiration date.

Any person failing or refusing to comply with this section is guilty of a petty offense.

Statute of Limitations

Notwithstanding section 23-908, subsection E, no claim for compensation shall be valid or enforceable unless the claim is filed with the commission by the employee, or if resulting in death by the parties entitled to compensation, or someone on their behalf, in writing within one year after the injury occurred or the right thereto accrued. The time for filing a compensation claim begins to run when the injury becomes manifest or when the claimant knows or in the exercise of reasonable diligence should know that the claimant has sustained a compensable injury. Except as provided in subsection B of this section, neither the commission nor any court shall have jurisdiction to consider a claim which is not timely filed under this subsection, except if the employee or other party entitled to file the claim has delayed in doing so because of justifiable reliance on a material representation by the commission, employer or insurance carrier or if the employee or other party entitled to file the claim is insane or legally incompetent or incapacitated at the time the injury occurs or the right to compensation accrues or during the one-year period thereafter. If the insanity or legal incompetence or incapacity occurs after the one-year period has commenced, the running of the remainder of the one-year period shall be suspended during the period of insanity or legal incompetence or incapacity. If the employee or other party is insane or legally incompetent or incapacitated when the injury occurs or the right to compensation accrues, the one-year period commences to run immediately upon the termination of insanity or legal incompetence or incapacity. The commission upon receiving a claim shall give notice to the carrier.

Failure of an employee or any other party entitled to compensation to file a claim with the commission within one year or to comply with section 23-908 shall not bar a claim if the insurance carrier or employer has commenced payment of compensation benefits under section 23-1044, 23-1045 or 23-1046, except that the payments provided for by section 23-1046, subsection A, paragraph 1 and section 23-1065, subsection A shall not be considered compensation benefits for the purposes of this section.

Occupational Disease Claims

The occupational diseases as defined by section 23-901, paragraph 13, subdivision (c) shall be deemed to arise out of the employment only if all of the following six requirements exist:
1. There is a direct causal connection between the conditions under which the work is performed and the occupational disease.
2. The disease can be seen to have followed as a natural incident of the work as a result of the exposure occasioned by the nature of the employment.
3. The disease can be fairly traced to the employment as the proximate cause.
4. The disease does not come from a hazard to which workers would have been equally exposed outside of the employment.
5. The disease is incidental to the character of the business and not independent of the relation of employer and employee.
6. The disease after its contraction appears to have had its origin in a risk connected with the employment, and to have flowed from that source as a natural consequence, although it need not have been foreseen or expected.

Notwithstanding subsection A of this section 23-901.01 and section 23-1043.01, any disease, infirmity or impairment of a firefighter's or peace officer's health that is caused by brain, bladder, rectal or colon cancer, lymphoma, leukemia or aden carcinoma or mesothelioma of the respiratory tract and that results in disability or death is presumed to be an occupational disease as defined in section 23-901, paragraph 13, subdivision (c), and is deemed to arise out of employment. The presumption is granted if all of the following apply:

1. The firefighter or peace officer passed a physical examination before employment and the examination did not indicate evidence of cancer.
2. The firefighter or peace officer was assigned to hazardous duty for at least five years.
3. The firefighter or peace officer was exposed to a known carcinogen as defined by the international agency for research on cancer and informed the department of this exposure, and the carcinogen is reasonably related to the cancer.

Subsection B of section 23-901.01 applies to former firefighters and peace officers who are sixty-five years of age or younger.

Subsection B of section 23-901.01 does not apply to cancers of the respiratory tract if the firefighter or peace officer has smoked tobacco products.

For the purposes of section 23-901.01:
1. "Firefighter" means a full-time firefighter who was regularly assigned to hazardous duty.
2. "Peace officer" means a full-time peace officer who was regularly assigned to hazardous duty as a part of a special operations, special weapons and tactics, explosive ordinance disposal or hazardous materials response unit.

COMPENSABILITY

General Rule

Every employee coming within the provisions of this chapter who is injured, and the dependents of every such employee who is killed by accident arising out of and in the course of his employment, wherever the injury occurred, unless the injury was purposely self-inflicted, shall be entitled to receive and shall be paid such compensation for loss sustained on account of the injury or death, such medical, nurse and hospital services and medicines, and such amount of funeral expenses in the event of death, as are provided by this chapter.

Human Immunodeficiency Virus

A claim for a condition, infection, disease or disability involving or related to the human immunodeficiency virus or acquired immune deficiency syndrome shall include the occurrence of a significant exposure as defined in this section and, except as provided in subsection B of this section, shall be processed and determined under the provisions of this chapter and applicable principles of law.

Notwithstanding any other law, an employee who satisfies the following conditions presents a prima facie claim for a condition, infection, disease or disability involving or related to the human immunodeficiency virus or acquired immune deficiency syndrome if the medical evidence shows to a reasonable degree of medical probability that the employee sustained a significant exposure within the meaning of this section:
1. The employee's regular course of employment involves handling or exposure to blood or body fluids, other than tears, saliva or perspiration, including health care providers as defined in title 36, chapter 6, article 4, forensic laboratory workers, fire fighters, law enforcement officers, emergency medical technicians, paramedics and correctional officers.
2. Within ten calendar days after a possible significant exposure which arises out of and in the course of his employment, the employee reports in writing to the employer the details of the exposure. The employer shall notify its insurance carrier or claims processor of the report. Failure of the employer to notify the insurance carrier is not a defense to a claim by the employee.
3. The employee has blood drawn within ten days after the possible significant exposure, the blood is tested for the human immunodeficiency virus by antibody testing within thirty days after the exposure and the test results are negative.
4. The employee is tested or diagnosed, according to clinical standards established by the centers for disease control of the United States public health service, as positive for the presence of the human immunodeficiency virus within eighteen months after the date of the possible significant exposure.

On presentation or showing of a prima facie claim under this section, the employer may produce specific, relevant and probative evidence to dispute the underlying facts, to contest whether the exposure was significant as defined in this section, or to establish an alternative significant exposure involving the presence of the human immunodeficiency virus.

A person alleged to be a source of a significant exposure shall not be compelled by subpoena or other court order to release confidential human immunodeficiency virus related information either by document or by oral testimony. Evidence of the alleged source's human immunodeficiency virus status may be introduced by either party if the alleged source knowingly and willingly consents to the release of that information.

Notwithstanding title 36, chapter 6, article 4, medical information regarding the employee obtained by a physician or surgeon is subject to the provisions of section 23-908, subsection D.

The commission by rule shall prescribe requirements and forms regarding employee notification of the requirements of this section and the proper documentation of a significant exposure.

For the purposes of this section, "significant exposure" means contact of an employee's ruptured or broken skin or mucous membrane with a person's blood or body fluids, other than tears, saliva or perspiration, of a magnitude that the centers for disease control have epidemiologically demonstrated can result in transmission of the human immunodeficiency virus. For purposes of filing a claim under this section, significant exposure does not include sexual activity or illegal drug use.

Hepatitis C

A claim for a condition, infection, disease or disability involving or related to hepatitis C shall include the occurrence of a significant exposure as defined in this section and, except as provided in subsection B of this section, shall be processed and determined under this chapter and applicable principles of law.

Notwithstanding any other law, an employee who satisfies the following conditions presents a prima facie claim for a condition, infection, disease or disability involving or related to hepatitis C if the medical evidence shows to a reasonable degree of medical probability that the employee sustained a significant exposure within the meaning of this section:
1. The employee's regular course of employment involves handling of or exposure to blood or body fluids, other than tears, saliva or perspiration, including health care providers as defined in section 36-661, forensic laboratory workers, fire fighters, law enforcement officers, emergency medical technicians, paramedics and correctional officers.
2. Within ten calendar days after a possible significant exposure that arises out of and in the course of his employment, the employee reports in writing to the employer the details of the exposure. The employer shall notify its insurance carrier or claims processor of the report. Failure of the employer to notify the insurance carrier is not a defense to a claim by the employee.
3. The employee has blood drawn within ten days after the possible significant exposure, the blood is tested for hepatitis C by antibody testing within thirty days after the exposure and the test results are negative.
4. The employee is tested or diagnosed, according to clinical standards established by the centers for disease control of the United States public health service, as positive for the presence of hepatitis C within seven months after the date of the possible significant exposure.

On presentation or showing of a prima facie claim under this section, the employer may produce specific, relevant and probative evidence to dispute the underlying facts, to contest whether the exposure was significant as defined in this section, or to establish an alternative significant exposure involving the presence of hepatitis C.

A person alleged to be a source of a significant exposure shall not be compelled by subpoena or other court order to release confidential hepatitis C related information either by document or by oral testimony. Evidence of the alleged source's hepatitis C status may be introduced by either party if the alleged source knowingly and willingly consents to the release of that information.

Notwithstanding title 36, chapter 6, article 4, medical information regarding the employee obtained by a physician or surgeon is subject to section 23-908, subsection D.

The commission by rule shall prescribe requirements and forms regarding employee notification of the requirements of this section and the proper documentation of a significant exposure.

For the purposes of this section, "significant exposure" means contact of an employee's ruptured or broken skin or mucous membrane or other significant unbroken surface area with a person's blood or body fluids, other than tears, saliva or perspiration, of a magnitude that the centers for disease control have epidemiologically demonstrated can result in transmission of hepatitis C. For purposes of filing a claim under this section, significant exposure does not include sexual activity or illegal drug use.

Heart

A heart-related or perivascular injury, illness or death shall not be considered a personal injury by accident arising out of and in the course of employment and is not compensable pursuant to this chapter unless some injury, stress or exertion related to the employment was a substantial contributing cause of the heart-related or perivascular injury, illness or death.

If compensation is payable for a heart-related or perivascular injury, illness or death, the only employer liable is the employee's last employer in whose employment the above requirements are met.

Psychological Injury

A mental injury, illness or condition shall not be considered a personal injury by accident arising out of and in the course of employment and is not compensable pursuant to this chapter unless some unexpected, unusual or extraordinary stress related to the employment or some physical injury related to the employment was a substantial contributing cause of the mental injury, illness or condition.

If compensation is payable for a mental injury, illness or condition, the only employer liable is the employee's last employer in whose employment theabove requirements are met.

Occupational Diseases

The occupational diseases as defined bysection 23-901, paragraph 13, subdivision (c) shall be deemed to arise out of the employment only if all of the following six requirements exist:
1. There is a direct causal connection between the conditions under which the work is performed and the occupational disease.
2. The disease can be seen to have followed as a natural incident of the work as a result of the exposure occasioned by the nature of the employment.
3. The disease can be fairly traced to the employment as the proximate cause.
4. The disease does not come from a hazard to which workers would have been equally exposed outside of the employment.
5. The disease is incidental to the character of the business and not independent of the       relation of employer and employee.
6. The disease after its contraction appears to have had its origin in a risk connected with the employment, and to have flowed from that source as a natural consequence, although it need not have been foreseen or expected.

Notwithstanding subsection A of this section and section 23-1043.01, any disease, infirmity or impairment of a firefighter's or peace officer's health that is caused by brain, bladder, rectal or colon cancer, lymphoma, leukemia or aden carcinoma or mesothelioma of the respiratory tract and that results in disability or death is presumed to be an occupational disease as defined in section 23-901, paragraph 13, section 23-901 subdivision (c) and is deemed to arise out of employment. The presumption is granted if all of the following apply:
1. The firefighter or peace officer passed a physical examination before employment and the examination did not indicate evidence of cancer.
2. The firefighter or peace officer was assigned to hazardous duty for at least five years.
3. The firefighter or peace officer was exposed to a known carcinogen as defined by the international agency for research on cancer and informed the department of this exposure, and the carcinogen is reasonably related to the cancer.

Subsection B of this section applies to former firefighters and peace officers who are sixty-five years of age or younger.

Subsection B of this section does not apply to cancers of the respiratory tract if the firefighter or peace officer has smoked tobacco products.

For the purposes of this section:
1. "Firefighter" means a full-time firefighter who was regularly assigned to hazardous duty.
2. "Peace officer" means a full-time peace officer who was regularly assigned to hazardous duty as a part of a special operations, special weapons and tactics, explosive ordinance disposal or hazardous materials response unit.

Hernias

All hernias are considered injuries within the provisions of this chapter causing incapacitating conditions or permanent disability, and until otherwise ordered by the commission, the following rules for rating hernias shall govern:
1. Real traumatic hernia is an injury to the abdominal wall of sufficient severity to puncture or tear asunder the wall, and permit the exposure or protrusion of the abdominal viscera or some part thereof. Such injury will be compensated as a temporary total disability and as a partial permanent disability, depending upon the lessening of the injured individual's earning capacity.
2. All other hernias, whenever occurring or discovered and whatsoever the cause, except as under paragraph 1 of this section, are considered diseases causing incapacitating conditions or permanent partial disability, but the permanent partial disability and the causes thereof are considered to be as shown by medical facts to have either existed from birth, to have been years in formation, or both, and are not compensatory, unless it is proved:
(a) That the immediate cause, which calls attention to the presence of the hernia, was a sudden effort or severe strain or blow received while in the course of employment.
(b) That the descent of the hernia occurred immediately following the cause.
(c) That the cause was accompanied or immediately followed by severe pain in the hernial region.
(d) That the facts in subdivisions (a), (b) and (c) of this paragraph were of such severity that they were noticed by the claimant and communicated immediately to one or more persons.

If the facts in subdivisions (a), (b), (c) and (d) of this paragraph are proven, the hernias are considered to be aggravations of previous ailments or diseases, and will be compensated as such for time lost only to a limited extent, depending upon the nature of the proof submitted and the result of the local medical examination, but for not to exceed two months. Hernias of every kind shall be compensated pursuant to this paragraph unless the claimant proves to the satisfaction of the commission by a preponderance of the evidence that the hernia is a real traumatic hernia as defined in paragraph 1.

EXCLUSIONS AND DEFENSES

Course of Employment

In order for an injury to be compensable it must be in the course of employment. The course of employment deals with the time, place and circumstances under which the injury occurred.

Bunkhouse Rule

An employee required to live on the employer’s premises injured while reasonably using those premises is considered in the course of employment, even if the injury occurs outside of business hours.

Traveling Employees

The provisions of this chapter shall apply to employers and their employees engaged in intrastate and also in interstate and foreign commerce for whom a rule of liability or method of compensation has been or may be established by the United States only to the extent that their mutual connection with intrastate work is clearly separate and distinguishable from interstate or foreign commerce

Going and Coming Rule

Generally, employees injured while travelling to and from work are not covered. There are exceptions to the rule.
1.       Going and Coming on Premises – An employee injured while on the employer’s premises will generally be covered, unless they are found to be using an unsafe route.
2.       Travel Between Premises - An employee injured while travelling between two premises of the employer will be covered
3.       Special Errand – Employees injured while travelling off the employers premise will be covered if the errand is a mojor factor in the injury, and not just incidental to the injury.
4.       Work vehicle – Employees injured while travelling to and from work in a work vehicle will be covered.
5.       Paid Travel Time –Employees injured while driving to work, who are paid by their employers for the travel time to work will be covered.
6.       Paid Travel Expenses – Employees injured while driving to work, who are provided expnses from the employer will be covered only if when looking at the totality of the circumstances the court finds the travel time substanitially benefits the employer.
7.       Dual Purpose Trips – Employees injured while travelling for both business and personal errands will be covered if the business portion of the travel would have proceeded even if the personal errand was cancelled.
8.       Deviations – Employees injured while travelling for personal reasons who then deviate for business purposes will be covered during the business deviation part of the travel. However, if the trip was a business trip, and the employee deviates for a personal purpose and is injured, the employee will only be covered if the injury occurs after the employee has resumed the business portion of the trip; these cases are very fact specific.

Arising out of

For an injury to be compensable it must arise out of the employment; that is there must be a causal connection to the employment.

Acts of Nature

In cases where an employee is injured because of storms, temperature extremes, or contagious diseases the court will determine whether the neutral risk of these acts became work-related using the positional risk test.

Random Accidents

In cases where an employee is injured by a random accident the courts will find the injury covered if the employee was injured because they were at that particular place, at that particular time, because of work.

Unexplained deaths and falls

Unexplained deaths and falls are presumed to arise out of employment and will be covered unless it is shown that it occurred outside the course of employment.

Intentionally Self-Inflicted Injury or Death

Intentionally self-inflicted injuries or death are not covered by the Arizona Workers’ Compensation Act.

Employee’s Intoxication

An intoxicated employee who is injured will be covered unless that employee’s intoxication was so great as to constitute an abandonment of employment.

Assaults

Assaults by a third party against an employee because of his employment are covered. Assaults by co-workers are covered unless the assault by the co-worker was for personal reasons.

BENEFITS

Calculation of Average Monthly Wage

Every employee of an employer within the provisions of this chapter who is injured by accident arising out of and in the course of employment, or the employee's dependents in the event of the employee's death, shall receive the compensation fixed in this chapter on the basis of the employee's average monthly wage at the time of injury.

If the injured or killed employee has not been continuously employed for the period of thirty days immediately preceding the injury or death, the average monthly wage shall be such amount as, having regard to the previous wage of the injured employee or of other employees of the same or most similar class working in the same or most similar employment in the same or neighboring locality, reasonably represents the monthly earning capacity of the injured employee in the employment in which the injured employee is working at the time of the accident.

If the employee is working under a contract by which the employee is guaranteed an amount per diem or per month, notwithstanding the contract price for such labor, the employee or the employee's subordinates or employees working under the terms of such contract or the employee's or their dependents in case of death shall be entitled to receive compensation on the basis only of the guaranteed wage as set out in the contract of employment, whether paid on a per diem or monthly basis, but in no event shall the basis be less than the wages paid to employees for similar work not under contract.

Notwithstanding any other provision of this chapter, in computing the average monthly wage there shall be excluded from such computation all wages or other compensation for services in excess of:
1. One thousand three hundred twenty-five dollars per month for employees injured before January 1, 1988.
2. One thousand six hundred fifty dollars per month for employees injured from and after December 31, 1987 but before July 1, 1989.
3. One thousand eight hundred dollars per month for employees injured from and after June 30, 1989 but before July 1, 1991.
4. Two thousand one hundred dollars per month for employees injured from and after June 30, 1991 but before August 6, 1999.
5. Two thousand four hundred dollars per month for employees injured on or after August 6, 1999 but before January 1, 2008.
6. Three thousand dollars per month for employees injured from and after December 31, 2007 but before January 1, 2009.
7. Three thousand six hundred dollars per month for employees injured from and after December 31, 2008 but before January 1, 2010.
8. The amount adopted by the commission under subsection E for employees injured on or after January 1, 2010.

For purposes of paragraph 8, the commission, not later than August 1 of each calendar year, beginning August 1, 2009, shall adopt an amount that adjusts the amount from the prior year to reflect the annual percentage increase in the bureau of labor statistics employment cost index for the prior calendar year. The amount adopted by the commission shall be effective for the following calendar year and shall apply to all injuries occurring during that calendar year. In adopting the amount under this subsection, the commission shall not decrease the amount from the prior year or increase the amount more than five per cent from the prior year.

Prior to a determination of the average monthly wage, compensation shall be paid on a basis of a minimum monthly wage of two hundred dollars for employees eighteen years of age or over.

For the purposes of this section, "monthly wage" means the average wage paid during and over the month in which the employee is killed or injured.

Basis for computing average monthly wage of minor permanently incapacitated

If it is established by competent evidence that an injured employee is under eighteen years of age and his incapacity is permanent, his average monthly earning capacity shall be deemed, within the limits fixed by sections 23-1041 and 23-1046, to be the monthly amount which under ordinary circumstances he would probably be able to earn at the age of eighteen years in the occupation in which he was employed at the time of injury, or in any occupation to which he would reasonably have been promoted if he had not been injured. If the probable earnings at the age of eighteen years cannot be reasonably determined, his average earnings shall be based upon four dollars per day for a six-day week.

Temporary Total Disability

For temporary total disability the following compensation shall be paid:
1.       Compensation of sixty-six and two-thirds per cent of the average monthly wage shall be paid during the period of disability.
2.        If there are persons dependent for support upon the employee, compensation shall be paid as provided in this section, with an additional allowance of twenty-five dollars per month for such dependents during the period of disability. The additional allowance shall not be based upon a per capita number of dependents but shall reflect a total monthly benefit increase of exactly twenty-five dollars.

Temporary Partial Disability

For temporary partial disability there shall be paid during the period thereof sixty-six and two-thirds per cent of the difference between the wages earned before the injury and the wages which the injured person is able to earn thereafter. Unemployment benefits received during the period of temporary partial disability and fifty per cent of retirement and pension benefits received from the insured or self-insured employer during the period of temporary partial disability shall be considered wages able to be earned.

Permanent Total Disability

For permanent total disability, compensation of sixty-six and two-thirds per cent of the average monthly wage. In the absence of proof to the contrary, disability shall be deemed total and permanent if caused by:
1. The total and permanent loss of sight of both eyes.
2. The loss by separation of both feet.
3. The loss by separation of both hands.
4. An injury to the spine resulting in permanent and complete paralysis of both legs or both arms, or one leg and one arm.
5. An injury to the skull resulting in incurable imbecility or insanity.
6. The loss by separation of one hand and one foot.all be paid during the life of the injured person.

The enumeration in this section is not exclusive, and in all other cases permanent total disability shall be determined in accordance with the facts and in accordance with the provisions of section 23-1047.

Permanent Partial Disability

Disability shall be deemed permanent partial disability if caused by any of the following specified injuries, and compensation of fifty-five per cent of the average monthly wage of the injured employee, in addition to the compensation for temporary total disability, shall be paid for the period given in the following schedule:
1. For the loss of a thumb, fifteen months.
2. For the loss of a first finger, commonly called the index finger, nine months.
3. For the loss of a second finger, seven months.
4. For the loss of a third finger, five months.
5. For the loss of the fourth finger, commonly called the little finger, four months.
6. The loss of a distal or second phalange of the thumb or the distal or third phalange of the first, second, third or fourth finger, shall be considered equal to the loss of one-half of the thumb or finger, and compensation shall be one-half of the amount specified for the loss of the entire thumb or finger.
7. The loss of more than one phalange of the thumb or finger shall be considered as the loss of the entire finger or thumb, but in no event shall the amount received for more than one finger exceed the amount provided for the loss of a hand.
8. For the loss of a great toe, seven months.
9. For the loss of a toe other than the great toe, two and one-half months.
10. The loss of the first phalange of any toe shall be considered equal to the loss of one-half of the toe and compensation shall be one-half of the amount for one toe.
11. The loss of more than one phalange shall be considered as the loss of the entire toe.
12. For the loss of a major hand, fifty months, or of a minor hand, forty months.
13. For the loss of a major arm, sixty months, or of a minor arm, fifty months.
14. For the loss of a foot, forty months.
15. For the loss of a leg, fifty months.
16. For the loss of an eye by enucleation, thirty months.
17. For the permanent and complete loss of sight in one eye without enucleation, twenty-five months.
18. For permanent and complete loss of hearing in one ear, twenty months.
19. For permanent and complete loss of hearing in both ears, sixty months.
20. The permanent and complete loss of the use of a finger, toe, arm, hand, foot or leg may be deemed the same as the loss of any such member by separation.
21. For the partial loss of use of a finger, toe, arm, hand, foot or leg, or partial loss of sight or hearing, fifty per cent of the average monthly wage during that proportion of the number of months in the foregoing schedule provided for the complete loss of use of such member, or complete loss of sight or hearing, which the partial loss of use thereof bears to the total loss of use of such member or total loss of sight or hearing. In this paragraph, "loss of use" means a loss of physical function of the affected member, sight or hearing. The effect on an employee's ability to return to the employee's occupation at the time of the injury shall not be considered in establishing the percentage of loss under this section, except that if the employee is unable to return to the work the employee was performing at the time the employee was injured due to the total or partial loss of use, compensation pursuant to this section shall be calculated based on seventy-five per cent of the average monthly wage.
22. For permanent disfigurement about the head or face, which shall include injury to or loss of teeth, the commission may, in accordance with the provisions of section 23-1047, allow such sum for compensation thereof as it deems just, in accordance with the proof submitted, for a period of not to exceed eighteen months. be earned.

Vocational Rehabilitation

Carriers and self-insured employers are not required to provide vocational rehabilitation to injured workers. The Industrial Commission of Arizona Special Fund Division does have a program where an injured employee will recieve vocational rehabilitation if accepted to the program.

Loss of Earnings Capacity

In cases of permanent partial disability under Permanent Partial Disability paragraph 22 and when the physical condition of the injured employee becomes stationary, or in the case of permanent total disability not enumerated in section 23-1045, and under section 23-1045, Subsection D, or in death cases under section 23-1046, subsection B, the employer or insurance carrier within thirty days shall notify the commission and request that the claim be examined and further compensation, if any, be determined. A copy of all medical reports necessary to make such determination also shall be furnished to the commission. The employer or insurance carrier may commence payment of a permanent disability award without waiting for a determination under subsection B of this section.

Within thirty days after the commission receives the medical reports, the claims shall be examined and further compensation, including a permanent disability award, if any, determined under the commission's supervision. If necessary, the commission may require additional medical or other information with respect to the claim and may postpone the determination for not more than sixty additional days. Any determination under this subsection may include necessary adjustments in any compensation paid or payable.

The commission shall mail a copy of the determination to all interested parties. Any such party may request a hearing under section 23-941 on the determination made under subsection B of this section within ninety days after copies of the determination are mailed.

Any person receiving permanent compensation benefits shall report annually on the anniversary date of the award to the self-insured employer or insurance carrier all of the person's earnings for the prior twelve-month period. In the event the person fails to make such report the self-insured employer or insurance carrier shall notify the person that such report has not been received and that payment of further benefits will be suspended unless such report of earnings is filed within thirty days. After thirty days have elapsed from the date of such notice, the self-insured employer or insurance carrier may issue a notice to the person suspending payment of further benefits and no further payments need be made until such report of earnings is filed.

Any person receiving permanent compensation benefits from the special fund established by section 23-1065 shall report annually on the anniversary date of the award to the Industrial Commission all of the person's earnings for the prior twelve-month period. In the event the person fails to make such report the industrial commission shall notify the person that such report has not been received and that payment of further benefits will be suspended unless such report of earnings is filed within thirty days. After thirty days have elapsed from the date of such notice, the industrial commission may issue a notice to the person suspending payment of further benefits and no further payments need be made until such report of earnings is filed.

In cases not enumerated in Permanent Partial Disability, if the injury causes permanent partial disability for work, the employee shall receive during such disability compensation equal to fifty-five per cent of the difference between the employee's average monthly wages before the accident and the amount which represents the employee's reduced monthly earning capacity resulting from the disability, but the payment shall not continue after the disability ends, or the death of the injured employee, and in case the partial disability begins after a period of total disability, the period of total disability shall be deducted from the total period of compensation.

The commission, when the physical condition of the injured employee becomes stationary, shall determine the amount which represents the reduced monthly earning capacity and upon such determination make an award of compensation which shall be subject to change in any of the following events:
1. Upon a showing of a change in the physical condition of the employee subsequent to such findings and award arising out of the injury resulting in the reduction or increase of the employee's earning capacity.
2. Upon a showing of a reduction in the earning capacity of the employee arising out of such injury where there is no change in the employee's physical condition, subsequent to the findings and award.
3. Upon a showing that the employee's earning capacity has increased subsequent to such findings and award.

In determining the amount which represents the reduced monthly earning capacity consideration shall be given, among other things, to any previous disability, the occupational history of the injured employee, the nature and extent of the physical disability, the type of work the injured employee is able to perform subsequent to the injury, any wages received for work performed subsequent to the injury and the age of the employee at the time of injury. If the employee is unable to return to work or continue working in any employment after the injury due to the employee's termination from employment for reasons that are unrelated to the industrial injury, the commission may consider the wages that the employee could have earned from that employment as representative of the employee's earning capacity. A determination of earning capacity that is based on wages that could have been earned from previously terminated employment is subject to change and an employee retains the right to later establish that the employee's reduced earning capacity is related in whole or in part to the industrial injury.

The commission may adopt a schedule for rating loss of earning capacity and reasonable and proper rules to carry out the provisions of this section. In all cases involving this section, except for cases under subsection B of this section, or in cases involving a request pursuant to section 23-1061, Subsection J for disability compensation, if any issue is raised regarding whether the injured employee has suffered a loss of earning capacity because of an inability to obtain or retain suitable work, the following apply:

1. The employer or carrier may present evidence showing that the inability to obtain suitable work is due, in whole or in part, to economic or business conditions, or other factors unrelated to the industrial injury. The injured employee may present evidence showing that the inability to obtain suitable work is due, in whole or in part, to the industrial injury or limitations resulting from the injury. The administrative law judge shall consider all such evidence in determining whether and to what extent the injured employee has sustained any loss of earning capacity.
2. In cases involving loss of employment, the employer or carrier may present evidence showing that the injured employee was terminated from employment or has not obtained suitable work, or both, due, in whole or in part, to economic or business conditions, or other factors unrelated to the injury. The injured employee may present evidence showing that such termination or inability to obtain suitable work is due, in whole or in part, to the industrial injury or limitations resulting from the injury. The administrative law judge shall consider all such evidence in determining whether and to what extent the injured employee has sustained any loss or additional loss of earning capacity.

Any single injury or disability that is listed in Permanent Partial Disability and that is not converted into an injury or disability compensated under section 6.6 by operation of this section shall be treated as scheduled under Permanent Partial Disability of this section regardless of its actual effect on the injured employee's earning capacity.

Disfigurement/Scarring

For permanent disfigurement about the head or face, which shall include injury to or loss of teeth, the commission may, in accordance with the provisions of section 23-1047, allow such sum for compensation thereof as it deems just, in accordance with the proof submitted, for a period of not to exceed eighteen months. be earned.

Loss of Sight

For the loss of an eye by enucleation, thirty months. For the permanent and complete loss of sight in one eye without enucleation, twenty-five months. Loss of sight in both eyes compensation of sixty-six and two-thirds per cent of the average monthly wage

Loss of Hearing

For permanent and complete loss of hearing in one ear, twenty months. For permanent and complete loss of hearing in both ears, sixty months.

Death Benefits

In case of an injury causing death, the compensation therefor shall be known as a death benefit and shall be payable in the amount, for the period, and to and for the benefit of the following: Burial expenses, not to exceed five thousand dollars, in addition to the compensation.

Widow/Widower

To the surviving spouse, if there are no children, sixty-six and two-thirds per cent of the average monthly wage of the deceased, to be paid until such spouse's death or remarriage, with two years' compensation in one sum upon remarriage. To the surviving spouse if there are surviving children, thirty-five per cent of the average monthly wage of the deceased, to be paid until such spouse's death or remarriage with two years' compensation in one sum upon remarriage. When all surviving children are no longer eligible for benefits, the surviving spouse's benefits shall be paid as if there were no children.

Death Benefits/Children

To the surviving children, an additional thirty-one and two-thirds per cent of the average monthly wage, to be divided equally among them until the age of eighteen years, until the age of twenty-two years if the child is enrolled as a full-time student in any accredited educational institution, or if over eighteen years and incapable of self-support when the child becomes capable of self-support. In the event of the subsequent death or remarriage of the surviving spouse, the surviving child's or children's benefits shall be computed pursuant to paragraph 3.

Paragraph 3. To a single surviving child, in the case of the subsequent death or remarriage of a surviving husband or wife, or if there is no surviving husband or wife, sixty-six and two-thirds per cent of the average monthly wage of the deceased, or if there is more than one surviving child, sixty-six and two-thirds per cent to be divided equally among the surviving children. Compensation to any such child shall cease upon death, upon marriage or upon reaching the age of eighteen years, except, if over eighteen years and incapable of self-support, when he becomes capable of self-support, or if over eighteen years of age and enrolled as a full-time student in any accredited educational institution, when the child reaches age twenty-two.

Death Benefits/Parents and Siblings

To a parent, if there is no surviving husband, wife or child under the age of eighteen years, if wholly dependent for support upon the deceased employee at the time of his death, twenty-five per cent of the average monthly wage of the deceased during dependency, with an added allowance of fifteen per cent if two dependent parents survive, and, if neither parent is wholly dependent, but one or both partly dependent, fifteen percent divided between them share and share alike.

To brothers or sisters under the age of eighteen years, if there is no surviving husband or wife, dependent children under the age of eighteen years or dependent parent, the following shall govern: If one of the brothers or sisters is wholly dependent upon the deceased employee for support at the time of injury causing death, twenty-five per cent of the average monthly wage until the age of eighteen years. If more than one brother or sister is wholly dependent, thirty-five per cent of the average monthly wage at the time of injury causing death, divided among such dependents share and share alike. If none of the brothers or sisters is wholly dependent, but one or more are partly dependent, fifteen per cent divided among such dependents share and share alike.

If the deceased employee leaves dependents only partially dependent upon his earnings for support at the time of the injury, the monthly compensation shall be equal to such proportion of the monthly payments for the benefit of persons totally dependent as the amount contributed by the employee to such partial dependents bears to the average wage of the deceased at the time of the injury resulting in his death. The duration of compensation to partial dependents shall be fixed by the commission in accordance with the facts shown, and in accordance with the provisions of section 23-1047, but shall in no case exceed compensation for one hundred months.

In the event of death of a dependent before expiration of the time named in the award, the funeral expenses of such person, not to exceed eight hundred dollars, shall be paid.

Medical Benefits

Promptly, on notice to the employer, every injured employee shall receive medical, surgical and hospital benefits or other treatment, nursing, medicine, surgical supplies, crutches and other apparatus, including artificial members, reasonably required at the time of the injury, and during the period of disability. Such benefits shall be termed "medical, surgical and hospital benefits."

Refusal of Medical Treatment

No compensation shall be payable for the death or disability of an employee if his death is caused by, or insofar as his disability may be aggravated, caused or continued by an unreasonable refusal or neglect to submit to or follow any competent or reasonable surgical treatment or medical aid.

SUBROGATION OR CREDIT

General Rule

If the employee proceeds against the other person, compensation and medical, surgical and hospital benefits shall be paid as provided in this chapter and the insurance carrier or other person liable to pay the claim shall have a lien on the amount actually collectable from the other person to the extent of such compensation and medical, surgical and hospital benefits paid. This lien shall not be subject to a collection fee. The amount actually collectable shall be the total recovery less the reasonable and necessary expenses, including attorney fees, actually expended in securing the recovery. In any action arising out of an aggravation of a previously accepted industrial injury, the lien shall only apply to amounts expended for compensation and treatment of the aggravation. The insurance carrier or person shall contribute only the deficiency between the amount actually collected and the compensation and medical, surgical and hospital benefits provided or estimated by this chapter for the case. Compromise of any claim by the employee or the employee's dependents at an amount less than the compensation and medical, surgical and hospital benefits provided for shall be made only with written approval of the insurance carrier or self-insured employer liable to pay the claim.

For purposes of this section, the commission shall have the same rights as an insurance carrier or self-insured employer.

LITIGATION AND APPEAL

Workers’ Compensation Judge Proceedings

Subject to the provisions of section 23-947, any interested party may file a request for a hearing concerning a claim.

A request for a hearing shall be made in writing, signed by or on behalf of the interested party and including his address, stating that a hearing is desired, and filed with the commission.

The commission shall refer the request for the hearing to the administrative law judge division for determination as expeditiously as possible. The presiding administrative law judge may dismiss a request for hearing when it appears to his satisfaction that the disputed issue or issues have been resolved by the parties. Any interested party who objects to such dismissal may request a review pursuant to section 23-943.

At least twenty days' prior notice of the time and place of the hearing shall be given to all parties in interest by mail at their last known address. In the case of a hearing concerning suspension of benefits, pursuant to section 23-1026, 23-1027 or 23-1071, only ten days' prior notice need be given. Hearings shall be held in the county where the workman resided at the time of the injury or such other place selected by the administrative law judge.

A record of all proceedings at the hearing shall be made but need not be transcribed unless a party applies to the court of appeals for a writ of certiorari pursuant to section 23-951. The record of the proceedings if not transcribed, shall be kept for at least two years but may be destroyed after such time if a transcription is not requested.

Except as otherwise provided in this section and rules or procedure established by the commission, the administrative law judge is not bound by common law or statutory rules of evidence or by technical or formal rules of procedure and may conduct the hearing in any manner that will achieve substantial justice.

Any party shall be entitled to issuance and service of subpoenas under the provisions of section 23-921. Any party or his representative may serve such subpoenas.

Any interested party or his authorized agent shall be entitled to inspect any claims file of the commission, provided that such authorization is filed in writing with the commission.

Within thirty days after the date of notice of hearing any interested party to a hearing before the commission may file an affidavit for change of administrative law judge against any hearing officer of the commission hearing such matters or commencing to hear such matter, setting forth any of the grounds as provided in subsection J of this section, and the administrative law judge shall immediately transfer the matter to another officer of the commission who shall preside therein. Not more than one change of administrative law judge shall be granted to any one party.

Grounds which may be alleged as provided in subsection I of this section for change of administrative law judge are:
1. That the administrative law judge has been engaged as counsel in the hearing prior to appointment as administrative law judge.
2. That the administrative law judge is otherwise interested in the hearing.
3. That the administrative law judge is of kin or otherwise related to a party to the hearing.
4. That the administrative law judge is a material witness in the hearing.
5. That the party filing the affidavit has cause to believe and does believe that on account of the bias, prejudice, or interest of the administrative law judge he cannot obtain a fair and impartial hearing.

After final disposition of the proceedings in which they are used, exhibits marked for identification or introduced as evidence at hearings or proceedings which cannot be readily copied, photocopied, mechanically reproduced or otherwise preserved as a document for inclusion in the record of the proceedings may be disposed of in the following manner:
1. By written notice, the attorneys of record, or if none, the parties, shall be notified that the counsel or the party introducing such exhibit may claim it at the industrial commission within sixty days.
2. After sixty days following notification, any such exhibit remaining in the custody of the industrial commission shall be disposed of as state surplus property pursuant to the direction of the department of administration, surplus property division. A written description of any such exhibit shall be included in the record to preserve its identity.

Appointment of Administrative Law Judges

The commission shall appoint administrative law judges of the commission who shall be members of the Arizona state bar.

Investigatory Powers

For the purpose of making an investigation with regard to any employment or place of employment, the commission may appoint, by an order in writing, a member of the commission or any other competent person who is a resident of the state, an agent whose duties shall be prescribed in the order.

In the discharge of his duties, the agent shall have the inquisitorial powers granted by this chapter to the commission and the same powers with regard to taking testimony as a referee or master appointed by a superior court. The recommendation made by such agent shall be advisory only and shall not preclude taking further evidence or making further investigations.

Reasoned Decision

Upon the conclusion of any hearing, or prior thereto with concurrence of the parties, the administrative law judge shall promptly and not later than thirty days after the matter is submitted for decision determine the matter and make an award in accordance with his determination.

In the event of the demise, resignation, retirement, termination of employment, or other incapacitation of the presiding administrative law judge, the award shall be determined by the chief administrative law judge or his appointee.

The award shall become a part of the commission file. A copy of the award shall be sent forthwith by mail to all parties in interest.

The award is final when entered unless within thirty days after the date on which a copy of the award is mailed to the parties, one of the parties files a request for review under section 23-943. The award shall contain a statement explaining the rights of the parties under section 23-943.

Request for Review

The request for review of an administrative law judge award need only state that the party requests a review of the award. The request may be accompanied by a memorandum of points and authorities, in which event any other interested party shall have fifteen days from the date of filing in which to respond. Failure to respond will not be deemed an admission against interest.

The request for review shall be filed with the administrative law judge division and copies of the request shall be mailed to all other parties to the proceeding.

When review has been requested, the record of such oral proceedings at the hearings before the administrative law judge for purposes of the review shall be transcribed at the expense of the commission.

Notice of the review shall be given to the parties by mail.

The review shall be made by the presiding administrative law judge and shall be based upon the record and the memoranda submitted under the provisions of subsection A of this section.

The presiding administrative law judge may affirm, reverse, rescind, modify or supplement the award and make such disposition of the case as is determined to be appropriate. A decision upon review shall be made within sixty days after the review has been requested, with preference being given to those cases not receiving compensation.

The decision upon review shall become a part of the commission file and a copy thereof sent by mail to the parties.

The decision upon review shall be final unless within thirty days after the date of mailing of copies of such decision to the parties, one of the parties applies to the court of appeals for a writ of certiorari pursuant to section 23-951. The decision shall contain a statement explaining the rights of the parties under this section and section 23-951.

Court of Appeals Special Action

Any party affected by an award by the commission or by a decision upon review under the provisions of section 23-943 or by an order under the provisions of section 23-237 may apply to the court of appeals for a writ of certiorari to review the lawfulness of the award, order or decision upon review.

The writ of certiorari provided by subsection A of this section and by section 23-943 shall be made returnable within ten days and shall direct the commission to certify its record, proceedings and evidence to the court of appeals. The court of appeals may quash or dismiss the writ of certiorari upon the grounds of dismissal applicable to civil appeals. The review shall be limited to determining whether or not the commission acted without or in excess of its power and, if findings of fact were made, whether or not such findings of fact support the award, order or decision. If necessary, the court may review the evidence.

Each party to the proceedings before the commission may appear in the court of appeals.

The court of appeals shall enter judgment either affirming or setting aside the award, order or decision.

The rules of civil procedure relating to certiorari shall apply so far as applicable and not in conflict with this chapter.

Appeal to Supreme Court

The Supreme Court’s primary judicial duties under Article VI, §5 of the Arizona Constitution, are to review appeals and to provide rules of procedure for all the courts in Arizona. It is the highest court in the state of Arizona and is often called the court of last resort. The Supreme Court has discretionary jurisdiction, meaning that the court may refuse to review the findings of the lower court.

SETTLEMENT

1. Pursuant to the Supreme Court's directive in Safeway Stores v. Industrial Commission, 152 Ariz. 42, 730 P.2d 219 (1986), the Industrial Commission has authority to approve settlement agreements. The parties must show the right of recovery is uncertain, that a genuine dispute in good faith exists, and that the proposed settlement agreement is in the best interest of the parties. The sides must also demonstrate that the applicant has read and understands the terms of the settlement, no coercion, duress, fraud misrepresentations or undisclosed additional agreements have been used to achieve the settlement.

2. Informal Settlement Conferences: The ALJ may schedule a prehearing conference before the hearing to identify the issues, discuss possible witnesses, review procedures, and address other matters relevant to your case. R20-5-140. These conferences are usually conducted by telephone.

INSURANCE

General Rule

Employers shall secure workers' compensation to their employees in one of the following ways:
1. By insuring and keeping insured the payment of such compensation with an insurance carrier authorized by the director of insurance to write workers' compensation insurance in this state.
2. By furnishing to the commission satisfactory proof of financial ability to pay the compensation directly or through a workers' compensation pool approved by the commission in the amount and manner and when due as provided in this chapter. The requirements of this paragraph may be satisfied by furnishing to the commission satisfactory proof that the employer is a member of a workers' compensation pool approved by the commission pursuant to section 23-961.01. The commission may require a deposit or any other security from the employer for the payment of compensation liabilities in an amount fixed by the commission, but not less than one hundred thousand dollars for workers' compensation liabilities. If the employer does not fully comply with the provisions of this chapter relating to the payment of compensation, the commission may revoke the authority of the employer to pay compensation directly.

An employer may not secure compensation to comply with this chapter by any mechanism other than as provided in this section. No insurance, combination or other program may be marketed, offered or sold as workers' compensation that does not comply with this section. An employer violates this chapter if the employer purchases or secures its obligations under this chapter through a substitute for workers' compensation that does not comply with this section.

Insurance carriers that transact the business of workers' compensation insurance in this state shall be subject to the rules of the director of insurance.

The director of insurance shall not issue to an insurance carrier a certificate of authority that authorizes the insurance carrier to transact workers' compensation insurance until the insurer deposits with the state treasurer, through the director of insurance, cash or securities. The amount of cash or securities required under this subsection shall be at least equal to the greater of the following amounts:
1. One hundred thousand dollars.
2. The sum of subdivisions (a) and (b) of this paragraph less credits for approved reinsurance computed as of the preceding December 31 or other time as requested by the department of insurance for workers' compensation insurance written subject to the laws of this state:
(a) The aggregate of the present values at six per cent interest of all determined and estimated future direct reported loss and loss expense payments on compensation claims incurred more than three years immediately before the preceding December 31 or other time as requested by the department of insurance.
(b) The aggregate of the amounts determined for each of the three years immediately before the preceding December 31 or other time as requested by the department of insurance that equals the greater of the following:
(i) Sixty-five per cent of the earned premiums for the year less all direct reported loss and loss expense payments made on compensation claims incurred in the corresponding year.
(ii) The present value at six per cent interest of all determined and estimated future direct reported loss and loss expense payments on compensation claims incurred in that year.

On or before April 15 and on any date that the department of insurance specifically requests, an insurance carrier shall file with the department of insurance the information necessary to compute the required amount to be deposited pursuant to subsection D of this section and shall deposit any required additional amount.

An insurance carrier shall maintain at all times a deposit of cash or securities with the state treasurer, through the director of insurance, in an amount that is not less than the amount required under this section.

Cash or securities deposited pursuant to this section are subject to approval by the director of insurance at all times. The director of insurance shall hold the cash or securities for fulfillment of the obligations of the insurance carrier, including an insurance carrier acting as a reinsurer, under this chapter. The commission shall have a lien against the cash or securities deposited to the extent the special fund is liable to pay the obligations secured by the cash or securities.

Except in the event of nonpayment of premiums, each insurance carrier shall carry a risk to the conclusion of the policy period unless the policy is cancelled by the employer or unless one or both of the parties to a professional employer agreement terminate the agreement. The policy period shall be agreed upon by the insurance carrier and the employer.

At least thirty days' notice shall be given by the insurance carrier to the employer and to the commission of any cancellation or nonrenewal of a policy if the cancellation or nonrenewal is at the election of the insurance carrier. The insurance carrier shall promptly notify the commission of any cancellation by the employer or failure of the employer to renew the policy. The failure to give notice of nonrenewal if the nonrenewal is at the election of the insurance carrier shall not extend coverage beyond the policy period. An insurance carrier shall notify the commission on a form prescribed by the commission that it has insured an employer for workers' compensation promptly after undertaking to insure the employer.

Every insurance carrier on or before March 1 of each year shall pay to the state treasurer for the credit of the administrative fund, in lieu of all other taxes on workers' compensation insurance, a tax of not more than three per cent on all premiums collected or contracted for during the year ending December 31 next preceding, less the deductions from such total direct premiums for applicable cancellations, returned premiums and all policy dividends or refunds paid or credited to policyholders within this state and not reapplied as premiums for new, additional or extended insurance. Every self-insured employer, including workers' compensation pools, on or before March 31 of each year shall pay a tax of not more than three per cent of the premiums that would have been paid by the employer if the employer had been fully insured by an insurance carrier authorized to transact workers' compensation insurance in this state during the preceding calendar year. The commission shall adopt rules that shall specify the premium plans and methods to be used for the calculation of rates and premiums and that shall be the basis for the taxes assessed to self-insured employers. The tax shall be not less than two hundred fifty dollars per annum and shall be computed and collected by the commission and paid to the state treasurer for the credit of the administrative fund at a rate not exceeding three per cent to be fixed annually by the industrial commission. The rate shall be no more than is necessary to cover the actual expenses of the industrial commission in carrying out its powers and duties under this title. Any quarterly payments of tax pursuant to subsection L of this section shall be deducted from the tax payable pursuant to this subsection.

An insurance carrier may reduce the amount of premiums paid by an employer by up to five per cent if all of the following apply:
1. The insured employer complies with the drug testing policy requirements prescribed in section 23-493.04.
2. The insured employer conducts drug testing of prospective employees.
3. The insured employer conducts drug testing of an employee after the employee has been injured.
4. The insured employer allows the employer's insurance carrier to have access to the drug testing results under paragraphs 2 and 3 of this subsection.

Any insurer that, pursuant to this section, paid or is required to pay a tax of two thousand dollars or more for the preceding calendar year shall file a quarterly report, in a form prescribed by the commission, accompanied by a payment in an amount equal to the tax due at the rates prescribed in subsection J of this section for premiums determined pursuant to subsection J of this section or an amount equal to twenty-five per cent of the tax paid or required to be paid pursuant to subsection J of this section for the preceding calendar year. The quarterly payments shall be due and payable on or before the last day of the month following the close of the quarter and shall be made to the state treasurer.

If an overpayment of taxes results from the method prescribed in subsection L of this section the industrial commission may refund the overpayment without interest.

An insurer who fails to pay the tax prescribed by subsection J or L of this section or the amount prescribed by section 23-1065, subsection A is subject to a civil penalty equal to the greater of twenty-five dollars or five per cent of the tax or amount due plus interest at the rate of one per cent per month from the date the tax or amount was due.

An insurance carrier authorized to write workers' compensation insurance may not assess an employer premiums for services provided by a contractor alleged to be an employee under section 23-902, subsection B or C, unless the carrier has done both of the following:
1. Prepared written audit or field investigation findings establishing that all applicable factors for determining employment status under section 23-902 have been met.
2. Provided a copy of such findings to the employer in advance of assessing a premium.

Notwithstanding section 23-901, paragraph 6, subdivision (i), a sole proprietor may waive the sole proprietor's rights to workers' compensation coverage and benefits if both the sole proprietor and the insurance carrier of the employer subject to this chapter for which the sole proprietor performs services sign and date a waiver that is substantially in the following form:

I am a sole proprietor, and I am doing business as (name of sole proprietor) . I am performing work as an independent contractor for (name of employer) . I am not the employee of (name of employer) for workers' compensation purposes, and, therefore, I am not entitled to workers' compensation benefits from (name of employer) . I understand that if I have any employees working for me, I must maintain workers' compensation insurance on them.

_________________________        _________________________

Sole proprietor                                    Date

_________________________        _________________________

Insurance carrier                             Date

Particular Requirements

Every policy of insurance covering the liability of the employer for workers' compensation shall cover the entire liability of the employer to his employees covered by the policy or contract, and be deemed to contain the following provisions:
1. That as between the employee and the insurance carrier the notice to or knowledge of the occurrence of the injury on the part of the employer shall be deemed notice or knowledge of the insurance carrier.
2. That jurisdiction of the employer shall be jurisdiction of the insurance carrier.
3. That the insurance carrier shall be bound by and subject to the orders, findings, decisions and awards rendered against the employer for payment of compensation.
4. That the insolvency or bankruptcy of the employer and his discharge therein shall not relieve the insurance carrier or workers' compensation pool from payment of compensation for injuries or death sustained by an employee during the life of the policy or contract.

Notwithstanding the provisions of section 23-963, an insurance carrier authorized to transact workers' compensation insurance in this state may offer deductible coverage to employers. Deductible coverage shall be effected by attaching a benefits deductible endorsement to the policy. The endorsement shall specify whether loss adjustment expenses are to be treated as advancements within the deductible to be reimbursed by the employer. The policyholder exercising the deductible option shall choose only one deductible amount. Premium reductions for deductibles shall be determined before application of any experience modification, premium surcharge or premium discount. If an insurance carrier offers deductible coverage to an employer, the employer shall submit a certified copy of the employer's most recent financial statement to the insurance carrier to justify the deductible amount the employer chooses. The insurance carrier shall retain a copy of the financial statement for three years.

Any compensable claim for benefits shall be paid by the carrier. The employer shall reimburse the carrier for any deductible amounts paid by the carrier. The employer is liable for reimbursement up to the limit of the chosen deductible. The payment or nonpayment of deductible amounts by the insured employer to the carrier shall be treated under the policy in the same manner as payment or nonpayment of premiums.

The nonpayment of deductible amounts by the insured employer to the carrier under subsection B of this section shall not relieve the insurance carrier from payment of compensation for injuries or death sustained by an employee during the period of time the agreement, contract or policy was in effect. No agreements, contracts or policies providing deductible amounts for workers' compensation coverage shall be terminated retroactively for nonpayment of deductible amounts.

Losses subject to the deductible shall be reported and recorded as losses for purposes of calculating rates for a policyholder on the same basis as losses under policies providing first dollar coverage

General Rule Where Employer is Uninsured

Employers who are subject to and who fail to comply with section 23-961 or 23-962 shall not be entitled to the benefits of this chapter during the period of noncompliance, but shall be liable in an action under any other applicable law of the state. In such action the defendant shall not avail himself of the defenses of assumption of risk or contributory negligence. In all such actions proof of the injury shall constitute prima facie evidence of negligence on the part of the employer and the burden shall be upon the employer to show freedom from negligence resulting in the injury.

An employee of such an employer, or the employee's dependents in case death ensued, in lieu of proceeding against the employer by civil action in court, may file an application with the commission for compensation in accordance with this chapter, and the commission shall hear and determine the application for compensation in the manner other claims are heard and determined before the commission. Except for a protest of compensability, an employer who protests or petitions the commission for relief of actions or determinations made by the special fund established by section 23-1065 shall be in compliance with section 23-961 or 23-962. The employer's protest or petition shall include proof that the employer is complying with section 23-961 or 23-962. The proof shall be either a copy of the declaration page of the workers' compensation insurance policy under section 23-961, subsection A, paragraph 1 or a notice to the commission that the employer is in good standing with the commission under section 23-96, subsection A, paragraph 2. The compensation so determined shall be paid from the special fund to the person entitled as provided in this section.

The special fund may begin the payment of medical or compensation benefits on a claim which involves an employer who has failed to secure compensation as required by section 23-961 and which is processed under subsection B of this section, pending finality of a notice, a determination, an order or a finding and award on a claim, condition or other matter accepted by the special fund. After payment begins, the payment shall not be interrupted if there is a protest, petition for hearing, request for review or appeal to a higher court by an employer unless, before a notice, determination or order is final, the special fund issues a notice, determination or order that rescinds or amends its prior action or terminates the payment of medical or compensation benefits. Any overpayment of medical or compensation benefits that occurs shall be credited or adjusted against any future liability on the same claim. Any overpayment of medical or compensation benefits to a claimant for a claim, condition or matter that is finally determined to be noncompensable shall be borne by the special fund.

The commission may spend monies from the special fund that relate to a claim under this section and shall include as part of an employer's liability under this section those expenditures for the employment or contracting of medical, rehabilitation or labor market consultants, experts or examiners that are necessary for processing and determining benefits and assisting in determining the liability of the special fund on a claim.

The employer shall be notified of the employer's liability to the special fund periodically and this notice shall include a ten per cent penalty of the amount expended by the special fund or a penalty of one thousand dollars, whichever is greater, plus interest on the amount expended and the penalty pursuant to section 44-1201. The payments made from the special fund pursuant to the award plus the penalty shall act as a judgment against the employer. The commission shall file the award in the office of the clerk of the superior court in any county in the state and such award shall be entered in the civil order book and judgment docket and when so filed and entered shall be a lien for eight years from the date of the award upon the property of the employer located in the county. Execution may issue thereon within eight years in the same manner and with like effect as if the award were a judgment of the superior court. The commission may recover reasonable attorney fees incurred pursuant to this section. Any civil penalties and interest assessed pursuant to this section shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund and any payments and attorney fees shall be deposited in the special fund account.

An employer with one or more employees who is required to comply with this chapter but who fails to obtain coverage through an insurance carrier or as a self-insurer shall be subject to an action by the commission to apply to the court for an injunction which shall cause the employer to cease the operation of business until such employer complies with the provisions of law pertaining thereto.

The commission and other state and local governmental agencies may exchange information concerning employers who fail to comply with section 23-961 or 23-962 with other federal, state or local governmental agencies. This exchange of information shall be made only for the purpose of the valid administrative needs of the programs administered by the commission or other agencies and shall not be made for the purpose of criminal prosecution of an employer.

The commission may assess a civil penalty of one thousand dollars on an uninsured employer if the commission makes an award for a noncompensable claim against the employer and finds that:
1. At the time of the accident for which the claim was made the employer was subject to this chapter.
2. The employer was not insured pursuant to this chapter.

The commission may issue an order assessing a civil penalty of not to exceed one thousand dollars on an employer who is subject to this chapter and who is not insured pursuant to this chapter. The order is final against the employer unless the employer requests a hearing before the commission within fifteen working days after a copy of the order is mailed to the employer. The employer's request for hearing shall specify the facts and grounds that are the basis of the employer's objection to the order issued under this subsection. Following the hearing the commission may affirm, reverse or modify its order and shall serve a copy of its decision by first class mail on the employer. An employer aggrieved by this decision may seek judicial review pursuant to title 12, chapter 7, article 6.

If the commission has assessed a civil penalty under this section against an employer within the previous five years for failure to secure workers' compensation as required under this chapter, the commission may assess an additional civil penalty against the employer that:
1. Does not exceed five thousand dollars for the second failure to secure the payment of compensation.
2. Does not exceed ten thousand dollars for a third or subsequent failure to secure the payment of compensation. As an aggravating factor only, the commission may consider the economic benefit that the employer received by failing to comply with this chapter.

In determining the amount of the final penalty under subsection H, I or J of this section, the commission may consider any relevant factor to waive or reduce the penalty, including:
1. The history of the employer's noncompliance with section 23-961 or 23-962.
2. The history of no insurance claims filed against the employer.
3. Whether the failure to secure workers' compensation coverage was inadvertent. For the purposes of this paragraph, "inadvertent" includes a lapse in coverage of not more than thirty days if there is a change of insurance carrier, a change of ownership or a change in the form of the business.
4. Whether the failure to secure workers' compensation coverage was because the employer was a victim of fraud, misrepresentation or gross negligence by an insurance agent or broker or by a person whom a reasonable person would believe is an insurance agent or broker.

Civil penalties assessed pursuant to section 23-961 subsections H, I and J of this section are payable to the state general fund and shall act as a judgment in the same manner as prescribed in subsection E of this section. Recovery of attorney fees and accrual of interest are the same as prescribed in subsection E of this section.

The commission may compromise or otherwise settle a disputed claim with an employee of an employer who is subject to and who fails to comply with section section 23-961 or 23-962 by filing a notice of compromise and settlement or notice of stipulation with the presiding administrative law judge. The notice shall be served on the employer at the last known mailing address as shown on the records of the commission. The employer shall keep the commission informed of its current mailing address once the employer has been notified by the commission of the filing of a claim against the employer. If the employer does not request a hearing protesting the terms of the agreement or stipulation within ten working days of the service of the notice, the commission and the employee may execute the agreement or stipulation without the consent of the employer, subject to the approval of the presiding administrative law judge. Any payments made to the employee pursuant to this subsection shall be paid from the special fund and are subject to reimbursement and collection from the employer in the same manner as other payments made pursuant to this chapter.

Damages by Action at Law Where Employer is Uninsured

An employee, or his legal representative in event death results, who exercises any option to institute a proceeding in court against his employer waives any right to compensation.

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