Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Employer Liability topic
No spam. Unsubscribe anytime.
Panel releases bill expanding liability for principal owners over unpaid workers' comp
Summary
The committee released A‑3724, which would allow subrogation to pursue unpaid workers' compensation benefits from principal owners as well as employers; business groups warned it could pierce the corporate veil and chill investment, while proponents argued for accountability.
The Assembly Labor Committee released Assembly Bill 37‑24, a proposal to expand liability so principal owners of an employer could be pursued for penalties and benefits related to a failure to provide workers' compensation insurance.
The clerk told the panel the bill would require the director of the Division of Workers' Compensation to impose existing penalties and expand subrogation reach to include principal owners when collecting benefits related to an employee's injury from an uninsured employer.
Business witnesses opposed the bill at the hearing, arguing it could inappropriately pierce the corporate veil and expose investors or minority owners who are not operationally responsible for a business. "You can own 25% of a company, be totally liable for everything that happens now," one business witness said and warned that it could discourage business formation.
Committee members debated the policy's scope; some said it was necessary to hold owners accountable when employers evade insurance obligations, and others said the bill needed refinement to avoid unfairly punishing passive investors. The clerk recorded a motion to release the bill and later announced the bill was released for further consideration.
