House Bill 7 (HB 7), as enacted by the 79th Legislature, Regular Session, amended the Labor Code to enhance the enforcement authority of the Division of Workers' Compensation (Division). Specifically, HB 7 provides the Division with the authority to assess administrative penalties of up to $25,000 per day per occurrence and each day of noncompliance constitutes a separate violation.
Due to HB 7 amendments to Labor Code §§415.001 - 415.025, the classification system for administrative violations (Class A, Class B, Class C, Class D) has been removed as well as the Mens rea or willful, intentional, and knowing element previously required for certain actions to constitute an administrative violation.
The increased maximum penalty allows the Division to seek enforcement actions more commensurate with the violation(s) committed and the penalty amount will be calculated in accordance with the criteria stated in Labor Code §415.021(c). Notices of intent to take enforcement action will no longer be issued and a penalty matrix will not be used to calculate penalties. The Division will prioritize complaints and violations and focus its resources on those that are more egregious and which have a greater impact on the system. The following are high priority examples of compliance that are essential for the efficient and effective operation of the workers' compensation system:
- Timely and appropriate payment of income benefits;
- Appropriate medical bill processing including sufficient communication between system participants;
- Compliance with all Division and Commissioner orders
Pursuant to HB 7 and Commissioner's Order DWC-06-0012, the Commissioner of Workers' Compensation has delegated the authority to initiate and pursue enforcement actions to the Commissioner of Insurance. The Texas Department of Insurance Enforcement Division (TDI Enforcement Division) will have the ability to perform this delegated function on behalf of the Division when it is determined to be appropriate.
As the Division discovers alleged violations, the TDI Enforcement Division and DWC Legal and Compliance staff will make every effort to meet with system participants to discuss the alleged violations in an effort to determine the causes of non-compliance and seek resolution. When warranted, enforcement actions will be pursued to deter future non-compliance.
The Division recommends that system participants become familiar with Chapter 415 of the Labor Code and review the HB 7 amendments relating to administrative violations.
Should you have any questions regarding this bulletin contact Stanton Strickland, Deputy Commissioner, Legal and Compliance Division at 512-804-4715 or by e-mail at Stan.Strickland@tdi.state.tx.us.
Albert Betts
Commissioner of Workers' Compensation
Texas Department of Insurance