Virginia Workers’ Compensation Legislative Update

EFFECTIVE July 1, 2020

The Virginia Legislature has passed a new law, adding § 65.2-601.2 to the Workers’ Compensation Act. The law was passed to address Virginia falling behind other states in the average time a worker remains unpaid for workers’ compensation benefits.

Beginning July 1, 2020, the Virginia Workers’ Compensation Commission will issue a 30-Day Order Claim Filed on all claims filed pursuant to § 65.2-601. A response to the order will be considered a required report under § 65.2-902 (penalty of $500+ for failure to file a first report of injury). A failure to timely file the required report may result in the assessment of a $500 civil penalty for each failure and up to $5,000 if such failure is determined to be willful.

This law formalizes by statute what was previously known as a “20-day Order – Claim Filed.” The 20-day Order was issued by the Commission in every claim and similarly required the carrier to respond whether the claim was accepted or denied, or whether more information was needed. Failure to respond to the 20-day Order would lead to a Pre-Contempt Order, Contempt Order, and then a Show Cause Order regarding the potential assessment of sanctions and often took months to enforce.

This new law gives the Commission enforcement power over the failure of the employer/insurer to respond to the claim in a timely fashion. The statute states that fines “may” be assessed. The Commission has not indicated how it intends to implement the enforcement of this new power, but we strongly recommend employers, carriers and third-party administrators take this seriously under the assumption that the Commission intends to achieve the goal of timely responses and payments of benefits.

Finally, we note that the law only specifies “employers” are required to respond to the 30-day Order. However, the Act defines an “Employer” as “ (i) any person, the Commonwealth or any political subdivision thereof and any individual, firm, association or corporation, or the receiver or trustee of the same, or the legal representative of a deceased employer, using the service of another for pay and (ii) any volunteer fire company or volunteer emergency medical services agency electing to be included and maintaining coverage as an employer under this title. If the employer is insured, it includes his insurer so far as applicable.” Va. Code Ann. § 65.2-101 Therefore, we believe the insurer could be found jointly and severally responsible for any penalty. The insurance policy contract terms could also govern who pays any such penalty.

As always, our attorneys are available to answer any questions or provide further assistance.
The full text of the new law:

VIRGINIA ACTS OF ASSEMBLY — 2020 SESSION
CHAPTER 1086

An Act to amend the Code of Virginia by adding a section numbered 65.2-601.2, relating to workers’ compensation; employer to provide statement of intent. [H 46]
Approved April 10, 2020

Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 65.2-601.2 as follows:

§ 65.2-601.2. Notice to employee of employer’s intent.
A. Whenever an employee makes a claim pursuant to § 65.2-601, the Commission shall order the employer to advise the employee, within 30 days following the date of such order, whether the employer

• (i) intends to accept the claim,
• (ii) intends to deny the claim, or
• (iii) is unable to determine whether it intends to accept or deny the claim because the employer lacks sufficient information from the employee or a third party to make such determination.

If the employer responds that it intends to deny the claim, the response shall provide reasons therefor. If the employer responds that it is unable to determine whether it intends to accept or deny the claim because it lacks sufficient information from the employee or a third party to make such determination, the response shall identify the additional information that the employer needs from the employee or a third party in order to make such determination.

B. The employer’s response to the order shall be considered a required report for the purposes of § 65.2-902.

C. The employer’s response to the order shall not be considered part of the hearing record.

D. An employer may, if the employee consents, send any response required by this section to the employee by email.