A.R.S. tit. 23 | Title 23 — Labor

Chapter 1 Industrial Commission

Article 1 In General

§ 23-101 Industrial commission; members; qualifications; appointment; terms; compensation; removal

A. There shall be an industrial commission of Arizona.

B. The commission shall be composed of five members appointed by the governor pursuant to section 38-211. Each member shall be appointed for a term of five years. Members' terms expire on the third Monday in January of the appropriate year. Not more than three members of the commission shall belong to the same political party. The chairman of the commission shall be appointed by and serve at the pleasure of the governor. The members of the commission shall have been residents of the state for at least five years immediately preceding their original appointment.

C. Each commissioner shall receive a salary of fifty dollars per day for each day in which the commissioner prepares for or attends a commission meeting. To receive the salary provided in this subsection, each commissioner shall provide documentation to the director of the commission that explains what commission duties were completed for the day in which the commissioner is seeking a salary.

D. The governor may remove a member of the commission for inefficiency, neglect of duty, malfeasance, misfeasance or nonfeasance in office.

§ 23-102 Payment of salaries of commissioners

The salaries of members of the commission shall be paid by the administrative fund.

§ 23-103 Organization; quorum

A majority of the commission shall constitute a quorum to transact business. When a vacancy occurs in the commission, the remaining commissioners may exercise all the powers of the commission until the vacancy is filled.

§ 23-104 Seal; copies of orders or records as evidence

A. The commission shall have an official seal for the authentication of its orders and proceedings. Upon the seal shall be engraved the words, "industrial commission of Arizona" and such other design as the commission prescribes.

B. Copies of orders of records of the commission certified by the secretary of the commission under its seal shall be admissible in evidence.

§ 23-105 Sites of offices and sessions; business hours; sessions and records; voting

A. The commission shall maintain its principal offices at the state capitol, but may maintain offices and hold meetings in any place within the state.

B. The commission offices shall be open for the transaction of business from eight o'clock a.m. until five o'clock p.m. each day from Monday through Friday, except on holidays. Sessions of the commission shall be public and all proceedings of the commission shall be shown on its records, which shall be a public record. The vote of each member shall be recorded.

§ 23-106 Capacity to sue and be sued; service of summons on commission

A. The commission may, in its name, sue and be sued.

B. Service of summons or other process on any member of the commission, or on the secretary thereof, shall be deemed service on the commission.

§ 23-107 General powers

A. The commission has full power, jurisdiction and authority to:

Formulate and adopt rules and regulations for effecting the purposes of this article.
Administer and enforce all laws for the protection of life, health, safety and welfare of employees in every case and under every law when such duty is not specifically delegated to any other board or officer, and, when such duty is specifically delegated, to counsel, advise and assist in the administration and enforcement of such laws and for such purposes may conduct investigations.
Promote the voluntary arbitration, mediation and conciliation of disputes between employers and employees.
License and supervise the work of private employment offices, bring together employers seeking employees and working people seeking employment, and make known the opportunities for employment in the state.
Collect, collate and publish all statistical and other information relating to employees, employers, employments and places of employment with other appropriate statistics.
Act as the regulatory agency insuring that workers' compensation carriers are processing claims in accordance with chapter 6 of this title.
Provide nonpublic, confidential or privileged documents, materials or other information to another state, local or federal regulatory agency for the purpose of the legitimate administrative needs of the programs administered by that agency if the recipient agency agrees and warrants that it has the authority to maintain and will maintain the confidentiality and privileged status of the documents, materials or other information.
Receive nonpublic documents, materials and other information from another state, local or federal regulatory agency to properly administer programs of the commission. The commission shall maintain as confidential or privileged any document, material or other information that is identified by the exchange agency as confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information.
Enter into agreements that govern the exchange of nonpublic documents, materials and other information that are consistent with paragraphs 7 and 8. The commission may request nondisclosure of information that is identified as privileged or confidential. Any disclosure pursuant to paragraph 7 or 8 or this paragraph is not a waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information.

B. Upon petition by any person that any employment or place of employment is not safe or is injurious to the welfare of any employee, the commission has power and authority, with or without notice, to make investigations necessary to determine the matter complained of.

C. The members of the commission may confer and meet with officers of other states and officers of the United States on matters pertaining to their official duties.

D. Notwithstanding any other law, the commission may protect from public inspection the financial information that is received from a private entity that applies to self-insure or that renews its self-insurance plan pursuant to section 23-961, subsection A if the information is kept confidential by the private entity in its ordinary and regular course of business.

§ 23-108 Director; employees; compensation and expenses

A. The commission shall employ a director who is appointed by the governor pursuant to section 38-211 and who serves at the pleasure of the governor. Subject to title 41, chapter 4, article 4, the director may employ personnel as deemed necessary by the provisions of this chapter, and chapters 2 and 6 of this title.

B. The compensation of the director shall be as determined pursuant to section 38-611. The director shall have such administrative ability, education and training as the commission determines.

C. The compensation of the director and commission employees and payment of subsistence and travel expenses allowed by law shall be paid from the administrative fund.

§ 23-108.01 Powers and duties of director

A. The director of the commission, under the supervision of the commission, shall administer the policies, powers and duties of the commission as prescribed by this chapter, and chapters 2 and 6 of this title.

B. The director of the commission may deny the salary of a commissioner if the commissioner does not provide documentation that explains what commission duties were completed for the day in which the commissioner is seeking a salary or if the commission duties were not related to preparing for or attending a commission meeting.

§ 23-108.02 Administrative law judges

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

B. The annual compensation of the chief administrative law judge and of the administrative law judges shall be as determined pursuant to section 38-611.

§ 23-108.03 Performance of certain powers and duties

A. The industrial commission of Arizona shall be responsible for determining the policy of the commission.

B. Any powers and duties prescribed by law to the commission in this chapter and chapters 2 and 6 of this title, whether ministerial or discretionary, may by resolution be delegated by the commission to the director or any of its department heads or assistants, provided, that the commission shall not delegate its power or duty to:

Make rules and regulations.
Commute awards to a lump sum.
License self-insurers.

C. The commission shall be responsible for the official acts of its employees acting in the name of the commission and by its delegated authority.

D. Labor department determinations, penalties and fines for labor violations shall be considered, authorized and determined by a vote of the commissioners. The commissioners shall consider whether a violation continues after the employer's course of conduct has ceased. For the purposes of this subsection, "labor department" means the labor department of the industrial commission of Arizona.

§ 23-109 Gifts and grants

The industrial commission may accept and expend public and private gifts and grants for the conduct of programs which are consistent with the overall purposes and objectives of the commission.

§ 23-110 Industrial commission ombudsman

A. The director of the industrial commission shall employ an ombudsman to assist recipients of workers' compensation benefits.

B. The ombudsman shall not provide legal advice but may provide information about the workers' compensation system and rules governing commission proceedings and may assist in clarifying the methods used to determine a person's workers' compensation benefits.

Chapter 2 Employment Practices and Working Conditions

Article 1 In General

§ 23-201 Obtaining labor by false pretenses; civil liability; classification

A. A person who employs for wages any person in any occupation, and who at the time of employing him does not have sufficient assets within the county in which the work or labor is to be performed over and above all exemptions allowed by law to cover the amount of wages accruing to the employee for the term of two weeks, and who makes false representations or pretenses as to having such assets, and after labor has been done by the employee under such employment, fails, upon the employee's discharge or resignation, or for a period of five days after the wages are payable, to pay the employee, on demand, the wages due, is guilty of obtaining labor under false pretenses.

B. Upon conviction, and in the same proceeding, judgment shall be rendered in favor of the employee and against the employer for all wages unpaid, together with a reasonable attorney's fee to be fixed by the court. The judgment shall also include compensation to the employee at the same rate at which the wages were agreed to be paid, from the time they became due until the judgment is satisfied.

C. The judgment shall be a first and prior lien against the property of the employer upon which the work and labor was performed.

D. Obtaining labor under false pretenses is a class 1 misdemeanor.

§ 23-202 Exaction of fee or gratuity as condition of employment prohibited; classification

It is unlawful for a person charged or entrusted by another with the employment or continuance in employment of any workmen or laborers to demand or receive, either directly or indirectly, from a workman or laborer employed or continued in employment through his agency or under his direction or control, a fee, commission or gratuity of any kind as the price or condition of the employment of the workman or laborer, or as the price or condition of his continuance in such employment. Any person charged or entrusted with employment of laborers or workmen for his principal, or under whose direction or control the workmen and laborers are engaged in work and labor for the principal, who violates a provision of this section is guilty of a class 2 misdemeanor.

§ 23-203 Compulsion or coercion of employee or another to buy from a particular person; classification

A person who knowingly compels, or in any manner seeks to coerce any employee or any person to purchase goods or supplies from any particular person is guilty of a class 2 misdemeanor.

§ 23-204 Employee benefits; state preemption; exemption; definition

A. The regulation of employee benefits, including nonwage compensation, paid and unpaid leave and other absences, meal breaks and rest periods, is of statewide concern. The regulation of nonwage employee benefits pursuant to this chapter and federal law is not subject to further regulation by a city, town or other political subdivision of this state.

B. This section does not apply to any employee benefit, including nonwage compensation, paid and unpaid leave and other absences, meal breaks and rest periods, provided by a city, town or other political subdivision of this state to any of its employees.

C. For the purposes of this section, "nonwage compensation" includes fringe benefits, welfare benefits, child or adult care plans, sick pay, vacation pay, severance pay, commissions, bonuses, retirement plan or pension contributions, other employment benefits provided in 29 United States Code section 2611 and other amounts promised to the employee that are more than the minimum compensation due an employee by reason of employment.

§ 23-205 Employee scheduling; state preemption; exemptions

A. A city, town or county may not adopt an ordinance, resolution or other regulation that requires an employer to alter or adjust any employee scheduling unless the alteration or adjustment is required by state or federal law. The regulation of employee scheduling is a matter of statewide concern and is not subject to further regulation by a city, town or county.

B. This section does not prohibit:

City, town or county scheduling requirements that apply to employees of the city, town or county.
A city or town from prescribing security personnel scheduling in specific accordance with a public safety plan ordinance that was adopted by a city or town on or before January 1, 2016.

§ 23-206 Employers; accommodations required

If an employer receives notice from an employee that the employee's sincerely held religious beliefs, practices or observances prevent the employee from taking the COVID-19 vaccination, the employer shall provide a reasonable accommodation unless the accommodation would pose an undue hardship and more than a de minimus cost to the operation of the employer's business.

Article 2 Employment of Unauthorized Aliens

§ 23-211 Definitions

In this article, unless the context otherwise requires:

"Agency" means any agency, department, board or commission of this state or a county, city or town that issues a license for purposes of operating a business in this state.
"Employ" means hiring an employee after December 31, 2007.
"Employee":

(a) Means any person who provides services or labor for an employer in this state for wages or other remuneration.

(b) Does not include an independent contractor.

"Employer" means any individual or type of organization that transacts business in this state, that has a license issued by an agency in this state and that employs one or more employees in this state. Employer includes this state, any political subdivision of this state and self-employed persons. In the case of an independent contractor, employer means the independent contractor and does not mean the person or organization that uses the contract labor.
"E-verify program" means the employment verification program as jointly administered by the United States department of homeland security and the social security administration or any of its successor programs.
"Independent contractor" means any individual or entity that carries on an independent business, that contracts to do a piece of work according to the individual's or entity's own means and methods and that is subject to control only as to results. Whether an individual or entity is an independent contractor is determined on a case-by-case basis through various factors, including whether the individual or entity:

(a) Supplies the tools or materials.

(b) Makes services available to the general public.

(d) Has an opportunity for profit or loss as a result of labor or service provided.

(e) Invests in the facilities for work.

(f) Directs the order or sequence in which the work is completed.

(g) Determines the hours when the work is completed.

"Intentionally" has the same meaning prescribed in section 13-105.
"Knowingly employ an unauthorized alien" means the actions described in 8 United States Code section 1324a. This term shall be interpreted consistently with 8 United States Code section 1324a and any applicable federal rules and regulations.
"License":

(a) Means any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business in this state.

(b) Includes:

(i) Articles of incorporation under title 10.

(ii) A certificate of partnership, a partnership registration or articles of organization under title 29.

(iii) A grant of authority issued under title 10, chapter 15.

(iv) Any transaction privilege tax license.

(i) Any license issued pursuant to title 45 or 49 or rules adopted pursuant to those titles.

(ii) Any professional license.

"Unauthorized alien" means an alien who does not have the legal right or authorization under federal law to work in the United States as described in 8 United States Code section 1324a(h)(3).

§ 23-212 Knowingly employing unauthorized aliens; prohibition; false and frivolous complaints; violation; classification; license suspension and revocation; affirmative defense

A. An employer shall not knowingly employ an unauthorized alien. If, in the case when an employer uses a contract, subcontract or other independent contractor agreement to obtain the labor of an alien in this state, the employer knowingly contracts with an unauthorized alien or with a person who employs or contracts with an unauthorized alien to perform the labor, the employer violates this subsection.

B. The attorney general shall prescribe a complaint form for a person to allege a violation of subsection A of this section. The complainant shall not be required to list the complainant's social security number on the complaint form or to have the complaint form notarized. On receipt of a complaint on a prescribed complaint form that an employer allegedly knowingly employs an unauthorized alien, the attorney general or county attorney shall investigate whether the employer has violated subsection A of this section. If a complaint is received but is not submitted on a prescribed complaint form, the attorney general or county attorney may investigate whether the employer has violated subsection A of this section. This subsection shall not be construed to prohibit the filing of anonymous complaints that are not submitted on a prescribed complaint form. The attorney general or county attorney shall not investigate complaints that are based solely on race, color or national origin. A complaint that is submitted to a county attorney shall be submitted to the county attorney in the county in which the alleged unauthorized alien is or was employed by the employer. The county sheriff or any other local law enforcement agency may assist in investigating a complaint. When investigating a complaint, the attorney general or county attorney shall verify the work authorization of the alleged unauthorized alien with the federal government pursuant to 8 United States Code section 1373(c). A state, county or local official shall not attempt to independently make a final determination on whether an alien is authorized to work in the United States. An alien's immigration status or work authorization status shall be verified with the federal government pursuant to 8 United States Code section 1373(c). A person who knowingly files a false and frivolous complaint under this subsection is guilty of a class 3 misdemeanor.

C. If, after an investigation, the attorney general or county attorney determines that the complaint is not false and frivolous:

The attorney general or county attorney shall notify the United States immigration and customs enforcement of the unauthorized alien.
The attorney general or county attorney shall notify the local law enforcement agency of the unauthorized alien.
The attorney general shall notify the appropriate county attorney to bring an action pursuant to subsection D of this section if the complaint was originally filed with the attorney general.

D. An action for a violation of subsection A of this section shall be brought against the employer by the county attorney in the county where the unauthorized alien employee is or was employed by the employer. The county attorney shall not bring an action against any employer for any violation of subsection A of this section that occurs before January 1, 2008. A second violation of this section shall be based only on an unauthorized alien who is or was employed by the employer after an action has been brought for a violation of subsection A of this section or section 23-212.01, subsection A.

E. For any action in superior court under this section, the court shall expedite the action, including assigning the hearing at the earliest practicable date.

F. On a finding of a violation of subsection A of this section:

For a first violation, as described in paragraph 3 of this subsection, the court:

(a) Shall order the employer to terminate the employment of all unauthorized aliens.

(b) Shall order the employer to be subject to a three year probationary period for the business location where the unauthorized alien performed work. During the probationary period the employer shall file quarterly reports in the form provided in section 23-722.01 with the county attorney of each new employee who is hired by the employer at the business location where the unauthorized alien performed work.

(c) Shall order the employer to file a signed sworn affidavit with the county attorney within three business days after the order is issued. The affidavit shall state that the employer has terminated the employment of all unauthorized aliens in this state and that the employer will not intentionally or knowingly employ an unauthorized alien in this state. The court shall order the appropriate agencies to suspend all licenses subject to this subdivision that are held by the employer if the employer fails to file a signed sworn affidavit with the county attorney within three business days after the order is issued. All licenses that are suspended under this subdivision shall remain suspended until the employer files a signed sworn affidavit with the county attorney. Notwithstanding any other law, on filing of the affidavit the suspended licenses shall be reinstated immediately by the appropriate agencies. For the purposes of this subdivision, the licenses that are subject to suspension under this subdivision are all licenses that are held by the employer specific to the business location where the unauthorized alien performed work. If the employer does not hold a license specific to the business location where the unauthorized alien performed work, but a license is necessary to operate the employer's business in general, the licenses that are subject to suspension under this subdivision are all licenses that are held by the employer at the employer's primary place of business. On receipt of the court's order and notwithstanding any other law, the appropriate agencies shall suspend the licenses according to the court's order. The court shall send a copy of the court's order to the attorney general and the attorney general shall maintain the copy pursuant to subsection G of this section.

(d) May order the appropriate agencies to suspend all licenses described in subdivision (c) of this paragraph that are held by the employer for not to exceed ten business days. The court shall base its decision to suspend under this subdivision on any evidence or information submitted to it during the action for a violation of this subsection and shall consider the following factors, if relevant:

(i) The number of unauthorized aliens employed by the employer.

(ii) Any prior misconduct by the employer.

(iii) The degree of harm resulting from the violation.

(iv) Whether the employer made good faith efforts to comply with any applicable requirements.

(v) The duration of the violation.

(vi) The role of the directors, officers or principals of the employer in the violation.

(vii) Any other factors the court deems appropriate.

For a second violation, as described in paragraph 3 of this subsection, the court shall order the appropriate agencies to permanently revoke all licenses that are held by the employer specific to the business location where the unauthorized alien performed work. If the employer does not hold a license specific to the business location where the unauthorized alien performed work, but a license is necessary to operate the employer's business in general, the court shall order the appropriate agencies to permanently revoke all licenses that are held by the employer at the employer's primary place of business. On receipt of the order and notwithstanding any other law, the appropriate agencies shall immediately revoke the licenses.
The violation shall be considered:

(a) A first violation by an employer at a business location if the violation did not occur during a probationary period ordered by the court under this subsection or section 23-212.01, subsection F for that employer's business location.

(b) A second violation by an employer at a business location if the violation occurred during a probationary period ordered by the court under this subsection or section 23-212.01, subsection F for that employer's business location.

G. The attorney general shall maintain copies of court orders that are received pursuant to subsection F of this section and shall maintain a database of the employers and business locations that have a first violation of subsection A of this section and make the court orders available on the attorney general's website.

H. On determining whether an employee is an unauthorized alien, the court shall consider only the federal government's determination pursuant to 8 United States Code section 1373(c). The federal government's determination creates a rebuttable presumption of the employee's lawful status. The court may take judicial notice of the federal government's determination and may request the federal government to provide automated or testimonial verification pursuant to 8 United States Code section 1373(c).

I. For the purposes of this section, proof of verifying the employment authorization of an employee through the e-verify program creates a rebuttable presumption that an employer did not knowingly employ an unauthorized alien.

J. For the purposes of this section, an employer that establishes that it has complied in good faith with the requirements of 8 United States Code section 1324a(b) establishes an affirmative defense that the employer did not knowingly employ an unauthorized alien. An employer is considered to have complied with the requirements of 8 United States Code section 1324a(b), notwithstanding an isolated, sporadic or accidental technical or procedural failure to meet the requirements, if there is a good faith attempt to comply with the requirements.

K. It is an affirmative defense to a violation of subsection A of this section that the employer was entrapped. To claim entrapment, the employer must admit by the employer's testimony or other evidence the substantial elements of the violation. An employer who asserts an entrapment defense has the burden of proving the following by a preponderance of the evidence:

The idea of committing the violation started with law enforcement officers or their agents rather than with the employer.
The law enforcement officers or their agents urged and induced the employer to commit the violation.
The employer was not predisposed to commit the violation before the law enforcement officers or their agents urged and induced the employer to commit the violation.

L. An employer does not establish entrapment if the employer was predisposed to violate subsection A of this section and the law enforcement officers or their agents merely provided the employer with an opportunity to commit the violation. It is not entrapment for law enforcement officers or their agents merely to use a ruse or to conceal their identity. The conduct of law enforcement officers and their agents may be considered in determining if an employer has proven entrapment.

§ 23-212.01 Intentionally employing unauthorized aliens; prohibition; false and frivolous complaints; violation; classification; license suspension and revocation; affirmative defense

A. An employer shall not intentionally employ an unauthorized alien. If, in the case when an employer uses a contract, subcontract or other independent contractor agreement to obtain the labor of an alien in this state, the employer intentionally contracts with an unauthorized alien or with a person who employs or contracts with an unauthorized alien to perform the labor, the employer violates this subsection.

B. The attorney general shall prescribe a complaint form for a person to allege a violation of subsection A of this section. The complainant shall not be required to list the complainant's social security number on the complaint form or to have the complaint form notarized. On receipt of a complaint on a prescribed complaint form that an employer allegedly intentionally employs an unauthorized alien, the attorney general or county attorney shall investigate whether the employer has violated subsection A of this section. If a complaint is received but is not submitted on a prescribed complaint form, the attorney general or county attorney may investigate whether the employer has violated subsection A of this section. This subsection shall not be construed to prohibit the filing of anonymous complaints that are not submitted on a prescribed complaint form. The attorney general or county attorney shall not investigate complaints that are based solely on race, color or national origin. A complaint that is submitted to a county attorney shall be submitted to the county attorney in the county in which the alleged unauthorized alien is or was employed by the employer. The county sheriff or any other local law enforcement agency may assist in investigating a complaint. When investigating a complaint, the attorney general or county attorney shall verify the work authorization of the alleged unauthorized alien with the federal government pursuant to 8 United States Code section 1373(c). A state, county or local official shall not attempt to independently make a final determination on whether an alien is authorized to work in the United States. An alien's immigration status or work authorization status shall be verified with the federal government pursuant to 8 United States Code section 1373(c). A person who knowingly files a false and frivolous complaint under this subsection is guilty of a class 3 misdemeanor.

C. If, after an investigation, the attorney general or county attorney determines that the complaint is not false and frivolous:

The attorney general or county attorney shall notify the United States immigration and customs enforcement of the unauthorized alien.
The attorney general or county attorney shall notify the local law enforcement agency of the unauthorized alien.
The attorney general shall notify the appropriate county attorney to bring an action pursuant to subsection D of this section if the complaint was originally filed with the attorney general.

E. For any action in superior court under this section, the court shall expedite the action, including assigning the hearing at the earliest practicable date.

F. On a finding of a violation of subsection A of this section:

For a first violation, as described in paragraph 3 of this subsection, the court shall:

(a) Order the employer to terminate the employment of all unauthorized aliens.

(b) Order the employer to be subject to a five year probationary period for the business location where the unauthorized alien performed work. During the probationary period the employer shall file quarterly reports in the form provided in section 23-722.01 with the county attorney of each new employee who is hired by the employer at the business location where the unauthorized alien performed work.

(c) Order the appropriate agencies to suspend all licenses described in subdivision (d) of this paragraph that are held by the employer for a minimum of ten days. The court shall base its decision on the length of the suspension under this subdivision on any evidence or information submitted to it during the action for a violation of this subsection and shall consider the following factors, if relevant:

(i) The number of unauthorized aliens employed by the employer.

(ii) Any prior misconduct by the employer.

(iii) The degree of harm resulting from the violation.

(iv) Whether the employer made good faith efforts to comply with any applicable requirements.

(v) The duration of the violation.

(vi) The role of the directors, officers or principals of the employer in the violation.

(vii) Any other factors the court deems appropriate.

(d) Order the employer to file a signed sworn affidavit with the county attorney. The affidavit shall state that the employer has terminated the employment of all unauthorized aliens in this state and that the employer will not intentionally or knowingly employ an unauthorized alien in this state. The court shall order the appropriate agencies to suspend all licenses subject to this subdivision that are held by the employer if the employer fails to file a signed sworn affidavit with the county attorney within three business days after the order is issued. All licenses that are suspended under this subdivision for failing to file a signed sworn affidavit shall remain suspended until the employer files a signed sworn affidavit with the county attorney. For the purposes of this subdivision, the licenses that are subject to suspension under this subdivision are all licenses that are held by the employer specific to the business location where the unauthorized alien performed work. If the employer does not hold a license specific to the business location where the unauthorized alien performed work, but a license is necessary to operate the employer's business in general, the licenses that are subject to suspension under this subdivision are all licenses that are held by the employer at the employer's primary place of business. On receipt of the court's order and notwithstanding any other law, the appropriate agencies shall suspend the licenses according to the court's order. The court shall send a copy of the court's order to the attorney general and the attorney general shall maintain the copy pursuant to subsection G of this section.

For a second violation, as described in paragraph 3 of this subsection, the court shall order the appropriate agencies to permanently revoke all licenses that are held by the employer specific to the business location where the unauthorized alien performed work. If the employer does not hold a license specific to the business location where the unauthorized alien performed work, but a license is necessary to operate the employer's business in general, the court shall order the appropriate agencies to permanently revoke all licenses that are held by the employer at the employer's primary place of business. On receipt of the order and notwithstanding any other law, the appropriate agencies shall immediately revoke the licenses.
The violation shall be considered:

(a) A first violation by an employer at a business location if the violation did not occur during a probationary period ordered by the court under this subsection or section 23-212, subsection F for that employer's business location.

(b) A second violation by an employer at a business location if the violation occurred during a probationary period ordered by the court under this subsection or section 23-212, subsection F for that employer's business location.

J. For the purposes of this section, an employer that establishes that it has complied in good faith with the requirements of 8 United States Code section 1324a(b) establishes an affirmative defense that the employer did not intentionally employ an unauthorized alien. An employer is considered to have complied with the requirements of 8 United States Code section 1324a(b), notwithstanding an isolated, sporadic or accidental technical or procedural failure to meet the requirements, if there is a good faith attempt to comply with the requirements.

The idea of committing the violation started with law enforcement officers or their agents rather than with the employer.
The law enforcement officers or their agents urged and induced the employer to commit the violation.
The employer was not predisposed to commit the violation before the law enforcement officers or their agents urged and induced the employer to commit the violation.

§ 23-213 Employer actions; federal or state law compliance

This article shall not be construed to require an employer to take any action that the employer believes in good faith would violate federal or state law.

§ 23-214 Verification of employment eligibility; e-verify program; economic development incentives; list of registered employers

A. After December 31, 2007, every employer, after hiring an employee, shall verify the employment eligibility of the employee through the e-verify program and shall keep a record of the verification for the duration of the employee's employment or at least three years, whichever is longer.

B. In addition to any other requirement for an employer to receive an economic development incentive from a government entity, the employer shall register with and participate in the e-verify program. Before receiving the economic development incentive, the employer shall provide proof to the government entity that the employer is registered with and is participating in the e-verify program. If the government entity determines that the employer is not complying with this subsection, the government entity shall notify the employer by certified mail of the government entity's determination of noncompliance and the employer's right to appeal the determination. On a final determination of noncompliance, the employer shall repay all monies received as an economic development incentive to the government entity within thirty days of the final determination. For the purposes of this subsection:

"Economic development incentive" means any grant, loan or performance-based incentive from any government entity that is awarded after September 30, 2008. Economic development incentive does not include any tax provision under title 42 or 43.
"Government entity" means this state and any political subdivision of this state that receives and uses tax revenues.

C. Every three months the attorney general shall request from the United States department of homeland security a list of employers from this state that are registered with the e-verify program. On receipt of the list of employers, the attorney general shall make the list available on the attorney general's website.

§ 23-215 Employment eligibility; e-verify program; false documents; violation; classification

(Caution: 1998 Prop. 105 applies)

A. Any natural person who is not lawfully present in the United States shall not knowingly submit false information or documents to an employer to evade detection of employment eligibility under the e-verify program.

B. Any natural person who violates subsection A of this section is guilty of a class 1 misdemeanor, except that it is a class 6 felony if the person has been previously convicted of a violation of this section. The person is not eligible for probation, pardon, commutation or suspension of sentence or release on any other basis until the person has served a term of incarceration as determined by the court.

§ 23-216 Independent contractors; applicability

For the purposes of this article, independent contractor status applies to an individual who performs services and is not an employee pursuant to section 3508 of the internal revenue code.

Article 3 Youth Employment

§ 23-230 Definitions

In this article, unless the context otherwise requires:

"Automatic elevator" means a passenger or freight lift operated by push buttons so that the starting, moving, leveling, holding and opening and closing of the doors is entirely automatic.
"Clay construction product" means brick, hollow structural tile, sewer pipe, refractories, architectural terra cotta, glazed structural tile, roofing tile, stove lining, chimney pipes and tops, wall coping and drain tile.
"Construction" means building, altering, repairing, adding to, subtracting from, improving, moving, wrecking or demolishing a building, highway, road, railroad, excavation or other structure, project, development or improvement, including the erection and use of scaffolding or a similar structure and providing mechanical or structural service for a structure, project, development or improvement.
"Elevator" means a power-driven hoisting or lowering mechanism equipped with a car or platform which moves in guides in a substantially vertical direction. Elevator does not include dumbwaiters.
"Explosive" means ammunition, black powder, blasting caps, fireworks or any substance or combination of substances commonly used for the purpose of detonation and which, on exposure to any external force or condition, is capable of a relatively instantaneous release of gas and heat.
"Hazardous agricultural chemicals" means any substance that has a toxicity level that requires manufacturer or distributor labeling as category I, category II and category III toxicity in accordance with the regulations adopted by the administrator pursuant to the federal environmental pesticide control act of 1972, as amended.
"Logging" means felling timber, bucking or converting timber into logs, poles, piles, ties, bolts, pulpwood, chemical wood, excelsior wood, cordwood, fence posts or similar products, collecting, skidding, yarding, loading, transporting and unloading such products, constructing, repairing and maintaining roads, railroads, flumes or camps used in connection with logging, moving, installing, rigging and maintenance of machinery or equipment used in logging, operation of a sawmill, lath mill, shingle mill or cooperage stock mill in connection with the storing of logs and bolts, converting logs or bolts into sawed lumber, laths, shingles or cooperage stock and storing, drying and shipping lumber, laths, shingles and cooperage stock or other products of such mills.
"Manufacturing" means designing, assembling, fabricating, producing, constructing or preparing a product or part of a product before sale or use.
"Mine or quarry" means an underground or surface rock or mineral extracting, placer, dredging or bore-hole operation including all grinding and metal mills, washer plants and any other cutting, crushing, grinding, screening, sizing, washing or cleaning operation performed on extracted rocks or minerals.
"Motor vehicle" means an automobile, truck, truck tractor, trailer, semitrailer, motorcycle or similar vehicle propelled or drawn by mechanical power and designed for use as a means of transportation. Motor vehicle does not include a vehicle operated exclusively on rails.
"Outside helper" means a person who rides on a motor vehicle other than in the driver or passenger compartment for the purpose of transporting, loading or unloading items.
"Power-driven bakery machine" means a horizontal or vertical dough mixer, batter mixer, bread dividing, rounding or molding machine, dough brake, dough sheeter, combination bread slicing and wrapping machine, cake cutting band saw, cookie machine or cracker machine.
"Power-driven hoist" means an apparatus for raising or lowering a load by the application of a pulling or pushing force including a crane, derrick or forklift. Power-driven hoist does not include an elevator or an automatic elevator.
"Power-driven meat processing machine" means a meat patty forming machine, meat and bone cutting saw or knife, head splitter, guillotine cutter, snout puller, jaw puller, skinning machine, horizontal rotary washing machine, casing cleaning machine, grinding, mixing, chopping and hashing machines and meat presses.
"Power-driven metal working, forming, punching or shearing machine" means a machine, other than machine tools, which changes the shape of or cuts metal by means of dies, rolls, knives or similar tools which are mounted on rams, plungers or other moving parts.
"Power-driven paper products machine" means a platen die-cutting press, platen printing press, punch press which involves hand feeding of the machine, arm-type wirestitcher or stapler, circular or band saw, corner cutter or mitering machine, corrugating and single or double-lacing machine, envelope die-cutting press, guillotine paper cutter or shear, horizontal bar scorer, laminating or combining machine, sheeting machine, scrap paper baler or vertical slotter or other machine used in the remanufacture or conversion of paper or pulp into a finished product.
"Power-driven woodworking machine" means a fixed or portable machine or tool driven by power and used or designed for cutting, shaping, forming, surfacing, nailing, stapling, wire stitching, fastening, assembling, pressing or printing wood or veneer.
"Processing" means an activity involving an addition to, subtraction from, change in or cleaning of any food or foodstuff including filleting fish, dressing poultry or cracking nuts.
"Radiation" means ionizing radiation including gamma rays, x-rays, alpha and beta particles, high speed electrons, neutrons, protons and other nuclear particles or rays.
"Radioactive substance" means a solid, liquid or gaseous material or materials that spontaneously emit radiation.
"Roofing" means all work performed in connection with the application of weatherproofing materials and substances, including tar, pitch, asphalt, prepared paper, tile, slate, metal, translucent materials and shingles of asbestos, asphalt or wood, to roofs of buildings and other structures. Roofing includes all work performed in connection with installation of roofs, including related metal work, and alterations, additions, maintenance and repair including painting and coating of roofs.
"Silica refractory products" means items produced from raw materials and containing free silica as their main constituent.
"Warehousing" means loading, unloading, storing or otherwise moving any item or items to and from trucks, railroad cars, conveyors and buildings.
"Wrecking, demolition and shipbreaking" means all work, including cleanup and salvage work, performed on or at the site of the total or partial razing, demolishing or dismantling of a building, bridge, steeple, tower, chimney, other structure, motor vehicle, ship or other vessel.

§ 23-231 Prohibited employments of persons under the age of eighteen

A. Unless a variance is granted pursuant to section 23-241, a person shall not employ or allow a person under the age of eighteen years to work in, about or in connection with:

An establishment manufacturing or storing explosives, except a retail establishment if the employment does not include any handling of explosives other than prepackaged small arms ammunition. In this paragraph "small arms ammunition" means ammunition not exceeding .60 caliber in size, shotgun shells or blasting caps.
Occupations as a motor vehicle driver or outside helper, except for driving incidental to employment if the person has a valid license for operation of the vehicle and either:

(a) The total driving time does not exceed two hours per day or twenty-five per cent of the work period per day.

(b) The total mileage driven is fewer than fifty miles per day.

Mine or quarry occupations.
Logging occupations.
Occupations involving the operation, setup, repair, adjustment, oiling or cleaning of a power-driven woodworking machine.
Occupations involving exposure to radioactive substances and to radiation in excess of 0.5 rem per year.
Occupations involving the operation or assistance in the operation of a power-driven hoist with a capacity exceeding one ton or an elevator, except operation of an automatic elevator incidental to employment.
Occupations involving the operation of a power-driven metal working, forming, punching or shearing machine.
Occupations involving slaughtering, meat packing, processing or rendering of meat or the operation, setup, repair, adjustment, oiling or cleaning of a power-driven meat processing machine.
Occupations involving the operation of a power-driven bakery machine.
Occupations involving the operation of a power-driven paper products machine.
Occupations involving the manufacture of clay construction products or silica refractory products.
Occupations involving the operation of a power-driven saw.
Occupations involving wrecking, demolition and ship-breaking operations.
Occupations involving roofing operations or equipment attached to or placed on roofs.
Occupations in excavation or tunnel operations, except manual excavation, backfilling or working in trenches or other penetrations of the ground surface that do not exceed two feet in depth at any point.

B. The industrial commission may by regulation declare other occupations to be dangerous to lives or limbs or injurious to the health and morals of persons under the age of eighteen years and prohibit the employment or allowance to work in, about or in connection with the occupations by such persons unless a variance is granted.

§ 23-232 Prohibited employments of persons under the age of sixteen

A. In addition to the prohibited employments under section 23-231, unless a variance is granted pursuant to section 23-241, a person shall not employ or allow a person under the age of sixteen years to work in, about or in connection with:

Manufacturing.
Processing.
Laundering or dry cleaning in a commercial laundry.
Warehousing.
Construction.
Boiler, furnace or engine rooms.
Occupations, including window washing, involving work from a ladder, scaffold, window sill or similar structure or place more than five feet in height.
Any of the following activities in a retail food or gasoline service establishment:

(a) Maintenance or repair of machines or equipment of the establishment, except work in connection with cars and trucks if confined to dispensing gasoline and oil, courtesy service, car cleaning, washing and polishing but not including work involving the inflation of any tire mounted on a rim equipped with a removable retaining ring.

(b) Cooking and baking, except at soda fountains, lunch counters, snack bars or cafeteria serving counters.

(d) All work in preparation of meats for sale, except wrapping, sealing, labeling, weighing, pricing and stocking.

Any of the following activities in agriculture:

(a) Operating a tractor over twenty power take off horsepower that is not equipped with a rollover protective structure and seatbelts.

(b) Connecting or disconnecting an implement or any of its parts to or from a tractor over twenty power take off horsepower.

(c) Operating a corn picker, cotton picker, grain combine, hay mower, forage harvester, hay baler, potato harvester, mobile pea viner, feed grinder, crop dryer, forage blower, auger conveyor or self-unloading wagon, power post hole digger, power-driven nonwalking rotary type tiller, trencher or earthmoving equipment or potato combine. In this subdivision "operating" means starting, stopping, adjusting, feeding or any other activity regarding physical conduct associated with such machines and machinery.

(d) Working in a pen occupied by a bull, boar or stud horse maintained for breeding purposes, a sow with young pigs or a cow with a newborn calf.

(e) Felling, bucking, skidding or unloading timber with butt more than six inches in diameter.

(f) Picking or pruning from a ladder over eight feet in height.

(g) Riding on a tractor as a helper or driving a bus, truck or automobile.

(h) Working inside a fruit storage area or grain storage area designed to retain an oxygen deficient or toxic atmosphere, an upright silo within two weeks after silage has been added, a manure pit or operating a tractor for packing purposes in a horizontal silo.

(i) Handling hazardous agricultural chemicals.

(j) Handling explosives.

(k) Transporting, transferring or applying anhydrous ammonia.

B. The industrial commission may by regulation declare any other occupation to be dangerous to lives or limbs or injurious to the health and morals of persons under sixteen years of age and prohibit the employment or allowance to work in, about or in connection with the occupations by such persons unless a variance is granted.

§ 23-233 Permissible hours of labor for persons under the age of sixteen; exceptions; definition

A. Employment of persons under the age of sixteen shall be confined to:

Not more than forty hours in any one week when the person is not enrolled in a session of school or when school is not in session.
Not more than eighteen hours in any one week when the person is enrolled in any session of school when school is in session.
Not more than eight hours in any one day when the person is not enrolled in a session of school or on a day when school is not in session.
Not more than three hours in any one day when the person is enrolled in any session of school on a day when school is in session.

B. A person shall not employ persons under the age of sixteen at night nor shall they be employed in solicitation sales or deliveries on a door-to-door basis between 7:00 p.m. and 9:30 p.m. on days preceding a day when school is in session and between 7:00 p.m. and 11:00 p.m. on days preceding a day when school is not in session.

C. The provisions of this section do not apply to persons who deliver newspapers to a consumer.

D. For the purpose of this section, "night" means:

On a day preceding a day when school is in session, those hours beginning at 9:30 p.m. and continuing until 6:00 a.m. on the succeeding day.
On a day preceding a day when school is not in session, those hours beginning at 11:00 p.m. and continuing until 6:00 a.m. on the succeeding day.

§ 23-234 Minimum age of newspaper carriers

No child under the age of ten years shall sell, expose for sale or otherwise offer for sale newspapers, magazines or periodicals in any street or public place.

§ 23-235 Exemptions

A. Sections 23-231, 23-232 and 23-233 do not apply to persons:

Employed by a grandparent, brother, sister, aunt, uncle, first cousin, stepparent or parent, including a relative of the same degree through marriage or adoption, or person in loco parentis in occupations in which the grandparent, brother, sister, aunt, uncle, first cousin, stepparent or parent or person in loco parentis owns at least ten percent of the employing organization and such owner is actively engaged in the daily operation of the organization, if either:

(a) The person is under eighteen years of age and is not engaged in manufacturing or mining occupations.

(b) The person is between sixteen and eighteen years of age and is engaged in manufacturing or mining occupations.

Employed as stars or performers in motion picture, theatrical, radio or television productions if before the beginning of production the production company provides the department of labor of the industrial commission with the name and address of the person, the length, location and hours of employment and any other information required by the department.
Involved in career education programs.
Involved in vocational or technical training school programs pursuant to title 15, chapter 7, article 5.
Employed as apprentices and registered by the bureau of apprenticeship and training of the United States department of labor in accordance with the standards established by that bureau or registered by the apprenticeship council or employed under a written apprenticeship agreement and conditions that are found by the secretary of labor to conform substantially with such federal or state standards.
Trained under either the 4-H federal extension service or the United States office of education vocational agriculture training programs, if employed outside school hours on the equipment for which they have been trained.
Who have completed vocational or career education programs approved by the department of education if the programs are directly related to the prohibited occupation or employment or if working in the prohibited occupation is part of the vocational or career education program.
Who are married.
Who have a high school diploma or its equivalent.
Who are minors and who have been emancipated pursuant to title 12, chapter 15.

B. Sections 23-231 and 23-232 do not apply to:

The operation of power-driven equipment used in the care and maintenance of lawns and shrubbery not connected to retail, food service and gasoline service establishments.
Clerical employment in an office in which duties are performed without exposure to the hazards described or defined in this article.

§ 23-236 Cease and desist order; time for compliance; civil penalty

A. When the commission has reasonable cause to believe that any person is violating any provision of this article or any rule or regulation adopted pursuant to this article it may forthwith serve upon such person by registered or certified mail or in person a cease and desist order. Such order shall state with particularity the act being done that constitutes the violation, shall state in its entirety the certain requirement, provision or rule or regulation being violated, and that the alleged violator is entitled to a hearing if such hearing is requested in writing within twenty days after the date of issuance of the order.

B. The cease and desist order shall include a civil penalty of not more than one thousand dollars against the person named in the order. The civil penalty is payable to the general fund.

§ 23-237 Hearings on cease and desist orders

A. A cease and desist order issued by the commission shall become final upon the expiration of the time during which a request for a hearing may be made pursuant to section 23-236 unless the person or persons named in such order have made a timely request for a hearing before the commission. The commission may refer the request for hearing to an administrative law judge for the conduct of the hearing. If a hearing is requested, the hearing shall be held thirty days from receipt of the request unless such time is extended by the commission or the administrative law judge to which it is assigned. Written notice of the time and place of the hearing shall be sent by the commission or the administrative law judge to the person or persons requesting the hearing at least fifteen days before the hearing. Such hearing shall be conducted pursuant to title 41, chapter 6, article 6.

B. If the commission, after the hearing, determines that the act or acts set forth in the cease and desist order constitute a violation of any provision of this article or of the rules adopted pursuant to this article, the commission shall affirm or modify the order accordingly.

C. The order issued by the commission after the hearing is final unless within thirty days after the date of mailing of a copy of such order to the person named in the order such person applies to the court of appeals for a writ of certiorari pursuant to section 23-951. The order shall contain a statement of this right of appeal.

§ 23-238 Injunctive relief

Upon the failure or refusal of a person to comply with a cease and desist order of the commission, the commission may file an action in the superior court of the county where the alleged violation occurred to restrain and enjoin the person from engaging in further acts violating the order. The court shall proceed as in other actions for injunctions. In the preliminary hearing in an action for an injunction or restraining order brought pursuant to this article, any findings of the commission shall be prima facie evidence of the fact or facts found therein until rebutted.

§ 23-239 Violation; classification

Any person who violates any provision of this article is guilty of a class 2 misdemeanor.

§ 23-240 Rules and regulations

The commission shall promulgate such rules and regulations as are necessary to carry out the provisions of this article.

§ 23-241 Application for variation; contents; notice; denial; hearing

A. A person who desires a variation from this article or a modification or renewal of a variation granted under this section shall file a written application with the director of the department of labor of the industrial commission containing the following information:

The name and address of the firm, the name and title of the person filing the application, the name and date of birth of the person under the age of eighteen years and the name and address of the school the person under the age of eighteen years is attending if the person is attending school.
The address of the place of employment involved and the type of business.
A specific description of the variation, modification or renewal sought.
A statement detailing how the granting of the variation would be in the best interests of the person under the age of eighteen years and the community.
A statement indicating any training the person under the age of eighteen years has received in the proposed employment, including a copy of certification of successful completion of any training program.
The maximum hours to be worked in the employment on a daily and weekly basis.
The scale of wages and the method and timing of payment of wages.
A statement of how the safety, health and personal well-being of the person under the age of eighteen years would be protected.
The name of the immediate supervisors and the frequency of supervision.
The approval of the parent or guardian.

B. The director, after conducting an investigation and evaluation of the jobsite and application, shall notify the parties concerned by mail of the granting of a variation, modification or renewal including any prescribed terms and conditions.

C. If a variation is granted, the employer shall retain a copy of the variation at the place of employment of the person under the age of eighteen years.

D. The director may decline to consider an application for a variation on a subject, issue or employer if a cease and desist order has been issued or an investigation is proceeding.

E. On denial of a variation, modification or renewal by the director, the applicant may request a hearing by the industrial commission. The industrial commission shall conduct the hearing pursuant to title 41, chapter 4, article 1.

§ 23-242 Applicability of other laws

No provision of this article alters or excuses noncompliance with any applicable federal statute or regulation relating to the employment of child labor. If both federal law and the provisions of this article are applicable, the law with the higher standard governs.

Article 5 Hours of Labor

§ 23-281 Operation of certain railroad employers on prescribed time

No railroad employer of two hundred fifty or more persons may operate business on other than the time as prescribed in section 1-242.

§ 23-282 Underground mine employees and hoisting engineers; twelve hour day; exceptions; violation; classification

A. The period of employment for all persons employed or engaged in mining activities in underground mines or underground workings or as hoisting engineers at underground mines shall not exceed twelve hours within any twenty-four hour period and the twelve hours shall include the time used in descending to and ascending from the point or place of work in an underground mine or underground workings place of work.

B. The period of employment prescribed in subsection B may be deviated from in the following instances:

In an emergency, where life or property is in imminent danger, the period of labor prescribed in subsection B may be prolonged during the continuance of the emergency.
The hours of employment may be changed from one part of the day to another at stated periods, the change not to occur more than once in any two weeks, and the employment may be for more than twelve hours during the day in which the change is made.
If the employer has adopted a policy of longer periods of employment based on a collective bargaining agreement between the employer and one or more labor organizations representing one or more affected employees that expressly authorizes longer periods of employment, but in no event longer than twelve hours in any twenty-four hour period, subject to compliance with the terms and conditions for implementing periods of employment in excess of eight hours as set forth in the collective bargaining agreement. For purposes of this paragraph, "affected employees" means all or any group of employees of the employer, regardless of whether or not the employees are members of a labor organization, whose periods of employment are limited pursuant to subsection B of this section.

C. Any person violating any provision of this section, and any person who, as foreman, manager, superintendent, director, or officer of a corporation, or as employer or superior officer of any person, knowingly commands, persuades, or allows any person to violate any provision of this section is guilty of a class 2 misdemeanor.

D. Each day this section is violated constitutes a separate offense.

§ 23-284 Laundry workers; exceptions; posting notice of hours of labor; arrangement of laundry rooms; violation; classification

A. No person shall be employed or permitted to work in the laundry department in a laundry establishment more than eight hours in any one day except when necessary to make repairs to prevent interruption of the ordinary running of the machinery or when a different apportionment of the hours of labor is made for the sole purpose of making a shorter day's work for one day of the week, or unless it appears that the employment is to make up for time lost on some previous day of the same week in consequence of a stoppage of the machinery upon which the person is employed or dependent for employment, and in no case shall the hours of labor exceed forty-eight hours in a week.

B. Every employer shall post in a conspicuous place in every room where persons are employed a printed notice stating the number of hours work required of them on each day of the week, and the employment of any person for a longer period in any day than that so stated is a violation of this section.

C. Every laundry room shall be constructed to provide at least six hundred cubic feet of air for each occupant and shall have not less than two windows arranged to admit a cross-current of external air.

D. A person violating any provision of this section is guilty of a petty offense.

§ 23-286.01 Agricultural operations

A driver transporting agricultural commodities or farm supplies for agricultural purposes shall not drive for any period after having been on duty sixteen hours following eight consecutive hours off duty or for any period after having been on duty for one hundred twelve hours in any consecutive seven day period except that:

A driver transporting special situation farm products from the field to cooling facilities or a driver transporting livestock from pasture to pasture, during one period of not more than twenty-eight consecutive days or a combination of two periods totaling not more than twenty-eight days in a calendar year, may drive for not more than twelve hours during any sixteen hour workday.
The director of the department of public safety, for good cause, may temporarily waive the maximum on-duty time limits applicable to any seven day period if an emergency exists due to inclement weather, natural disaster or an adverse economic condition that threatens to disrupt the orderly movement of farm products during harvest for the duration of the emergency. For purposes of this paragraph, an emergency does not include a strike or labor dispute.

§ 23-287 Requiring railroad employee to work longer than sixteen consecutive hours; classification

A company operating a railroad in whole or in part within the state which requires a conductor, engineer, fireman, brakeman, telegraph operator or any employee who has worked in his respective capacity for sixteen consecutive hours, except in case of casualty, or actual necessity, to go on duty again, or to perform any work until he has at least nine hours rest, or an officer or agent of such company who violates or permits to be violated any provision of this section, is guilty of a petty offense.

Article 6 Minimum Wages for Minors

§ 23-311 Definitions

In this article, unless the context otherwise requires:

"Commission" means the industrial commission of Arizona.
"Directory order" means a temporary order which becomes mandatory as provided in this article.
"Employee" means every minor in receipt of or entitled to compensation for labor performed for any employer.
"Employer" means every person, firm, corporation, agent, manager, representative, contractor, subcontractor, principal or other person having control or direction of any minor employed at any labor, or responsible directly or indirectly for the wages of another.
"Fair wage" means a wage both fairly and reasonably commensurate with the value of the service or class of service rendered, and sufficient to meet the minimum cost of living necessary for health.
"Mandatory order" means an order the violation of which is subject to the penalties prescribed in section 23-329, subsection B.
"Minor" means a person of either sex under the age of eighteen years. A minor employed as a part time worker whose principal occupation is that of student actually attending public or private school shall not be deemed engaged in an employment within the scope of this article.
"Occupation" means any class of work in any industry, trade, business, or branch thereof, in which minors are gainfully employed, but does not include domestic service in the home of an employer or agricultural labor.
"Oppressive and unreasonable wage" means a wage which is both less than the fair and reasonable value of the services rendered and less than sufficient to meet the minimum cost of living necessary for health.
"Wage" or "wages" means any compensation for labor measured by time, piece, or otherwise.
"Wage board" means a board created as provided in section 23-314.

§ 23-312 Powers and duties of commission

The commission or any authorized representative may:

Investigate and ascertain the wages of minors employed in any occupation.
Enter the place of business or employment of any employer of minors in any occupation for the purpose of examining and inspecting all books, registers, payrolls, and other records of the employer which in any manner pertain to or have a bearing upon the question of wages of minors and for the purpose of ascertaining whether the orders of the commission have been and are being complied with.
Require from the employer full and correct written statements of the wages paid to all minors in his employment when the commission or any authorized representative thereof deems necessary.

§ 23-313 Investigation of wage rates

The commission, on the petition of twenty or more residents of the state engaged in any particular occupation, shall cause an investigation to be made of the wages being paid to minors in that occupation to ascertain whether any substantial number of minors in the occupation are receiving oppressive and unreasonable wages as defined in section 23-311. If, on the basis of information in the possession of the commission, with or without a special investigation, the commission is of the opinion that a substantial number of minors in any occupation or occupations are receiving oppressive and unreasonable wages as defined in section 23-311, it shall appoint a wage board, as described in section 23-314, to report upon the establishment of minimum fair wage rates for minors in such occupation or occupations.

§ 23-314 Wage board; membership; organization; quorum; compensation

A. A wage board shall be composed of three representatives of the employees in any occupation, trade or industry and an equal number of representatives chosen from among the employers in the occupation, trade or industry, and one industrial commissioner who shall be chairman.

B. The commission shall appoint as the members of the wage board the representatives of the employers to be selected from nominations submitted by employers and representatives from the employees employed in the occupation, trade or industry from nominations submitted by the employees in the occupation, trade or industry. All persons appointed as the representatives by the commission shall be citizens of the state and shall be selected from individuals engaged in the occupation, trade or industry for which a wage is being investigated.

C. Two-thirds of the members of the wage board constitute a quorum. The recommendations or report of the wage board shall require a vote of not less than a majority of all its members.

D. Members of the wage board, other than the industrial commissioner, shall, while engaged in a conference, receive five dollars per day and the necessary cost of transportation.

E. The commission shall make and establish from time to time rules and regulations governing the selection of a wage board and its manner of procedure not inconsistent with this article.

§ 23-315 Classification of employments by wage board

A wage board may differentiate and classify employment in any occupation according to the nature of the service rendered and recommend appropriate minimum fair wage rates for different employments. A wage board shall give due consideration in the classification of employment to such items of compensation in employment as board and lodging or other factors that may be component parts of the total wage rate paid. A wage board may also recommend minimum fair wage rates varying with localities, if in the judgment of the wage board conditions make local differentiation proper and do not effect an unreasonable discrimination against a locality.

§ 23-316 Establishment of minimum fair wage; procedure; criteria

In establishing a minimum fair wage for any service or class of service under this article, the commission, or the wage board, without being bound by any technical rules of evidence or procedure, shall:

Take into account all relevant circumstances affecting the value of the service or class of service rendered.
Be guided by like considerations as would guide a court in an action for the reasonable value of services rendered where services are rendered at the request of an employer without contract as to the amount of the wage to be paid.
Consider the wages paid in the state for work of like or comparable character by employers who voluntarily maintain minimum fair wage standards.
Consider the minimum cost of living.

§ 23-317 Learner and apprentice wage rates

A wage board may recommend a suitable scale of wage rates for learners and apprentices in any occupation. The scale of learners' and apprentices' wage rates may be less than the regular minimum fair wage rates recommended for experienced minors in the occupation, but the board shall fix a definite period for which the scale of wages for learners and apprentices shall be paid.

§ 23-318 Power of wage board to administer oaths, issue subpoenas and take depositions

A. The chairman of a wage board may administer oaths and require by subpoena the attendance and testimony of witnesses, the production of all books, records, and other evidence relative to matters under investigation. The subpoenas shall be signed and issued by the chairman of the wage board, and shall be served and shall have the same effect as if issued from superior courts.

B. Obedience to subpoenas issued by authority of the wage board shall be enforced in the superior court of the county in which the subpoena is issued.

C. A wage board may cause depositions of witnesses residing within or without the state to be taken in the manner prescribed for taking depositions in civil actions in the superior courts.

§ 23-319 Notice of hearing on wage matters

Upon fixing the time and place for holding a hearing for considering wage matters referred to in this article, and at least fourteen days before the date of the hearing, the commission shall give public notice of the time, place and purpose thereof.

§ 23-320 Duty of commission to provide information to wage board

The commission shall present to a wage board promptly upon its organization all the evidence and information in its possession relating to wages of minors working in occupations over which the wage board has authority to investigate as provided by this article, and all other information which the commission deems relevant to the establishment of a minimum fair wage for such minors, and shall present to the wage board witnesses whom the commission deems material. A wage board may summon other witnesses or request the commission to furnish additional information to aid in its deliberation.

§ 23-321 Report of wage board; action by commission

A. Within ten days after its organization a wage board shall submit a report which shall include its recommendations of minimum fair wage standards for minors in the occupations the wage board was appointed to investigate. If the report is not submitted within ten days, the commission shall appoint a new wage board.

B. A report from a wage board submitted to the commission shall be accepted or rejected by the commission within ten days after its submission. If the report is rejected, the commission shall resubmit the matter to the same wage board or to a new wage board with a statement of reasons for resubmission.

§ 23-322 Directory orders

A. If the report of a wage board is approved, the commission shall make and publish a directory order which shall define minimum fair rates in the occupation or occupations as recommended in the report of the wage board. The report shall include proposed administrative regulations the commission deems appropriate to complete the report of the wage board and to protect and maintain the minimum fair wage standards established. The administrative regulations shall include, among other things, regulations defining and governing learners and apprentices, their rates, number, piece rates or their relation to time rates, overtime or part-time rates, bonuses or special pay for special or extra work.

B. After a directory minimum fair wage order has been in effect for sixty days, and no appeal has been taken, it shall become mandatory.

§ 23-323 Posting of wage orders

Every employer subject to a minimum fair wage order, whether directory or mandatory, shall keep a copy of the order posted in a conspicuous place where minors are employed. Employers shall be furnished copies of orders on request without charge.

§ 23-324 Reconsideration of minimum wages in effect over a year

At any time after a minimum fair wage order has been in effect for one year or more, the commission may on its own motion, and shall, on petition of twenty or more residents of the state engaged in any particular occupation, reconsider the minimum fair wage rates set therein and reconvene the same wage board or appoint a new board to recommend whether or not the wage rate or rates contained in the order should be revised. The report of the wage board shall be dealt with in the manner prescribed in this article.

§ 23-325 Judicial review of commission decisions; scope of review; appeal procedure; action of reviewing court

A. All questions of fact arising under this article, except as otherwise provided, shall be decided by the commission, but there shall be the right of appeal from the decision of the commission on any question of law or fact, and there shall be a right of review by the superior court on any decision on a question of law or fact included or embodied in a decision or order of the commission.

B. The review may be had by filing, within thirty days after the decision of the commission, an action in the superior court of the county wherein the contract of employment was entered. The commission shall be named defendant in the action. Summons shall issue and be served as in civil actions. The county attorney of the county where the action is filed shall represent the commission.

C. Within twenty days after the date of service of summons on the commission a transcript of the evidence and testimony offered at the hearing shall be filed with the clerk of the court, and the review shall be had upon the transcript offered and upon other evidence. The review shall not stay the order of the commission until the order is reversed, vacated or modified by the court.

D. Upon setting aside a decision of the commission, the court may recommit the controversy and remand the record in the case for further proceedings.

E. Either party may appeal to the supreme court from the judgment in the time and manner provided for appeals from superior courts in civil actions.

§ 23-326 Special licenses to work for less than minimum wage

In an occupation for which minimum fair wage rates have been established, the commission may issue to a minor, including a learner or apprentice, whose earning capacity is impaired by age, physical or mental deficiency, or injury, a special license authorizing employment at wages less than the minimum fair wage rates and for a period of time fixed by the commission or the wage board which shall be stated in the license.

§ 23-327 Action by employee for recovery of wages; amount of recovery

If a minor is paid less than the minimum fair wage to which such minor is entitled under a mandatory minimum fair wage order, such minor may recover in a civil action an amount which is treble the full amount of the minimum wage, together with costs and a reasonable attorney's fee to be allowed by the court on the basis of time and effort expended by counsel in behalf of the plaintiff-employee if judgment is rendered against the employer, less any amount actually paid to the employee by the employer. Any agreement between the employee and the employer to work for less than the mandatory minimum fair wages is not a defense to the action.

§ 23-328 Contract or agreement for employment of minor at oppressive wage void

It is contrary to public policy for an employer to employ a minor in an occupation at an oppressive and unreasonable wage as defined by section 23-311, and any contract, agreement or understanding for, or in relation to such employment, is void.

§ 23-329 Violations; classification

A. An employer or his agent, or the officer or agent of a corporation, who knowingly discharges, or in any other manner discriminates against an employee, because the employee has served, or is about to serve, on a wage board, or has testified, or is about to testify before a wage board, or in any other investigation or proceeding under or related to this article, or because the employer believes that the employee may serve on a wage board, or may testify before a wage board or in an investigation or proceeding under this article, or who deducts any part of any wages or compensation, other than as prescribed by law, when due a minor, is guilty of a petty offense.

B. An employer or his agent, or the officer or agent of a corporation, who knowingly pays or agrees to pay to a minor employee less than the wage rates applicable to the minor under a mandatory minimum fair wage order is guilty of a class 3 misdemeanor.

C. An employer or his agent, or the officer or agent of a corporation, who fails to keep the records required by this article or to furnish the records to the commission or an authorized representative of the commission upon request is guilty of a petty offense.

Article 6.1 Equal Wages

§ 23-340 Definitions

In this article, unless the context otherwise requires:

"Commission" means the industrial commission of Arizona.
"Employee" means every woman or man in receipt of or entitled to compensation for labor performed for any employer.
"Employer" means this state and any political subdivision of this state which receives state tax monies and every person, firm, corporation, agent, manager, representative, contractor, subcontractor, principal or other person having control or direction of any woman or man employed at any labor, or responsible directly or indirectly for the wages of another.
"Wage" or "wages" means any compensation for labor measured by time, piece, or otherwise.

§ 23-341 Equal wage rates; variations; penalties; enforcement

A. Notwithstanding the other provisions of this chapter, no employer shall pay any person in his employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for the same quantity and quality of the same classification of work, provided, that nothing herein shall prohibit a variation of rates of pay for male and female employees engaged in the same classification of work based upon a difference in seniority, length of service, ability, skill, difference in duties or services performed, whether regularly or occasionally, difference in the shift or time of day worked, hours of work, or restrictions or prohibitions on lifting or moving objects in excess of specified weight, or other reasonable differentiation, factor or factors other than sex, when exercised in good faith.

B. Any employer who violates subsection A of this section is liable to the employee affected in the amount of the wages of which such employee is deprived by reason of such violation.

C. Any affected employee may register with the commission a complaint that the wages paid to such employee are less than the wages to which such employee is entitled under this section.

D. The commission shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to such employees.

E. Any employee receiving less than the wage to which such employee is entitled under this section may recover in a civil action the balance of such wages, together with the costs of suit, notwithstanding any agreement to work for a lesser wage.

F. Any action based upon or arising under this section shall be instituted within six months after the date of the alleged violation, but in no event shall any employer be liable for any pay due under this section for more than thirty days prior to receipt by the employer of written notice of claim thereof from the employee.

G. The burden of proof shall be upon the person bringing the claim to establish that the differentiation in rate of pay is based upon the factor of sex and not upon other differences, factor or factors.

Article 7 Payment of Wages

§ 23-350 Definitions

In this article, unless the context otherwise requires:

"Department" means the labor department of the industrial commission of Arizona.
"Employee" means any person who performs services for an employer under a contract of employment either made in this state or to be performed wholly or partly within this state.
"Employer" means any individual, partnership, association, joint stock company, trust or corporation, the administrator or executor of the estate of a deceased individual or the receiver, trustee or successor of any of such persons employing any person. Employer also includes this state and any county, municipality, school district or other political subdivision of this state.
"Hours worked" includes all time an employee is employed.
"Minimum wage" means the nondiscretionary minimum compensation due an employee by reason of employment, including the employee's commissions, but excluding tips or gratuities.
"Payroll card account" means an account that is directly or indirectly established through an employer and to which electronic fund transfers of an employee's wages are made on a recurring basis whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution or any other person.
"Wages" means nondiscretionary compensation due an employee in return for labor or services rendered by an employee for which the employee has a reasonable expectation to be paid whether determined by a time, task, piece, commission or other method of calculation.

§ 23-351 Designation of paydays for employees; payment; exceptions; violation; classification; applicability; definition

A. Each employer in this state shall designate two or more days in each month, not more than sixteen days apart, as fixed paydays for payment of wages to the employees.

B. Notwithstanding subsection A of this section, each employer in this state whose principal place of business is located outside of this state and whose payroll system is centralized outside of this state may designate one or more days in each month as fixed paydays for payment of wages to the following employees:

Professional, administrative or executive employees or employees employed in the capacity of an outside salesman as those terms are defined under the fair labor standards act of 1938, as amended.
Employees employed in a supervisory capacity as defined under the national labor relations act.

C. Each employer, on each of the regular paydays, shall pay to the employees all wages due the employees up to that date, except:

In the case of employees remaining in the service of any such employer, with the exception of school district employees or persons employed by an employee leasing firm that contracts with a school district, all wages other than overtime or exception pay not to exceed five days of labor may be withheld. School districts or employee leasing firms that contract with a school district may withhold wages for up to seven business days during their normal two-week payroll processing cycle. An employer other than a school district or employee leasing firm that contracts with a school district may satisfy the requirements of this paragraph by any of the following:

(a) Personally delivering the wages to the employee not later than five business days after the end of the most recent pay period.

(b) Depositing the wages in the United States mail not later than five business days after the end of the most recent pay period for delivery to an address specified by the employee.

(c) Personally delivering the wages to the employee not later than ten days after the end of the most recent pay period for an employer whose payroll system is centralized outside of this state.

In the case of employees of school districts or of the Arizona state schools for the deaf and the blind, the annual salary may be prorated in any number of payments, and the employee may select whether to have the salary prorated or paid during the actual months worked. If the employee's salary is prorated, all payments still due at the close of the school attendance year or fiscal year may at the option of the employee be paid in either a lump sum or paid within a period of two months after the close of the fiscal year. If the employee's salary is prorated, the employee's salary under the contract may be prorated into equal payments and paid beginning with the first pay period that the employee works.
Overtime or exception pay shall be paid not later than sixteen days after the end of the most recent pay period.

D. An employer may choose one of the following methods to pay wages to employees under subsection A of this section:

In lawful currency of the United States.
In negotiable bank checks.
In the case of this state or any political subdivision of this state, warrants payable on demand and bearing even date with the payday.
With the written consent of the employee, by deposit on the payday to the employee's credit at a financial institution of the employee's choice that is a member of the federal deposit insurance corporation or any other comparable federal or state agency.
If the employer has offered deposit on the payday to the employee's credit at a financial institution of the employee's choice that is a member of the federal deposit insurance corporation or any other comparable federal or state agency and the employee does not provide consent and does not designate a financial institution, by deposit on the payday to the employee's credit to a payroll card account.

E. When an employee's wages are paid by deposit in a financial institution the employee shall be furnished with a written or electronic statement of the employee's earnings and withholdings. Any wage deposit plan adopted by an employer shall entitle the employee to one withdrawal for each deposit, free of any service charge to the employee. The consent of an employee for payment of wage by deposit in a financial institution shall not constitute a prior assignment of wages to the financial institution and is revocable at any time before the transmittal to the financial institution by the employer. A person shall not be denied employment, be discharged or be reprimanded for refusal to consent to payment of wage by deposit in a financial institution.

F. When an employee's wages are paid to a payroll card account the employee shall be furnished with a written or electronic statement of the employee's earnings and withholdings. A payroll card account plan adopted by an employer shall entitle the employee to one free withdrawal for each deposit of wages per pay period but not more frequently than once per week. An employer shall also provide a list of all fees associated with the use of an employer provided payroll card account to an employee who receives wages by deposit to a payroll card account.

G. Subsection B of this section does not apply to employees whose salaries are subject to provisions of collective bargaining agreements.

H. Each employer in this state, in its discretion, may pay all wages due to an employee by deposit on the payday at a financial institution of the employee's choice or, if the employee does not designate a financial institution, to a payroll card account. For the purposes of this subsection, "financial institution" means a member of the federal deposit insurance corporation or of any other comparable federal or state agency.

I. Any employer who violates this section is guilty of a petty offense.

J. The provisions of subsection C, paragraph 1 of this section relating to the payment of wages by an employee leasing firm that contracts with a school district apply only to employees of the employee leasing firm who are placed at a school district and not to any other employees who are employed or contracted by the employee leasing firm.

K. For the purposes of this section, "employee leasing firm" means a company that places its contracted, leased and coemployed employees in administrator, certified, classified or extracurricular positions with a school district.

§ 23-352 Withholding of wages

No employer may withhold or divert any portion of an employee's wages unless one of the following applies:

The employer is required or empowered to do so by state or federal law.
The employer has prior written authorization from the employee. An employer shall not withhold wages under a written authorization from the employee past the date specified by the employee in a written revocation of the authorization, unless the withholding is to resolve a debt or obligation to the employer or a court orders otherwise.
There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee.

§ 23-353 Payment of wages of discharged employee; violation; classification

A. When an employee is discharged from the service of an employer, he shall be paid wages due him within seven working days or the end of the next regular pay period, whichever is sooner.

B. When an employee quits the service of an employer he shall be paid in the usual manner all wages due him no later than the regular payday for the pay period during which the termination occurred. If requested by the employee, such wages shall be paid by mail.

C. Every employer, including this state and its political subdivisions, shall pay wages or compensation due an employee under this section in lawful money of the United States by negotiable check, draft, money order or warrant, in the case of the state or any political subdivision, which can be immediately redeemed in cash at a bank or other financial institution, payable on demand or by deposit in a financial institution of employee's choice and dated not later than the day upon which the check, draft, money order or warrant is given, and not otherwise.

D. A person violating this section is guilty of a petty offense.

§ 23-354 Preference of wages in insolvency proceedings or upon death of employer

A. In assignments of property for benefit of creditors or in proceedings in insolvency, the wages of salesmen, clerks or laborers employed by the debtor or insolvent, to the amount of two hundred dollars each for services rendered within sixty days previous to such assignment or insolvency proceedings, are preferred claims and shall be paid by the trustee, receiver, or assignee before any other creditor is paid.

B. Upon the death of an employer, such wages of such employees rank in priority next after the funeral expenses, expenses of the last sickness, the charges and expenses of administering upon the estate and the allowance to the surviving spouse and infant children, and shall be paid before any other claims against the estate of the deceased person.

§ 23-355 Action by employee to recover wages; amount of recovery

A. Except as provided in subsection B of this section, if an employer, in violation of this chapter, fails to pay wages due any employee, the employee may recover in a civil action against an employer or former employer an amount that is treble the amount of the unpaid wages.

B. This section does not authorize a county school superintendent to issue a warrant in violation of section 15-304 or in violation of any other provision of law.

§ 23-356 Wage claims

A. Instead of proceeding under section 23-355, an employee may file a written claim with the department for unpaid wages against an employer if the amount of such wages does not exceed $12,000 and if such claim is filed within one year of the accrual of such claim.

B. The department may, on behalf of an employee, or the employee may obtain judgment and execution, garnishment, attachment or other available remedies for collection of unpaid wages established by final determination by the department.

C. The department may receive payment on wage claims on behalf of employees. The department may deposit, pursuant to sections 35-146 and 35-147, monies it receives as payment on wage claims in a special state fund for disbursement to wage claimants on proper authorization by the department.

§ 23-357 Investigation of wage and nonwage compensation claims

A. The department shall investigate wage and nonwage claims timely filed under section 23-356 to determine if wages are due or if a dispute exists between the parties to the claim.

B. Upon completion of its investigation, the department shall notify the parties to the claim of its findings in writing, which may include a finding that a dispute exists which cannot be resolved by the department's investigation. If it is determined that the claim for unpaid wages is valid, the department shall direct that the unpaid wages be paid by the party responsible for their payment.

§ 23-358 Review of department determination

A. A party aggrieved by a determination under section 23-357 may seek review pursuant to title 12, chapter 7, article 6.

B. If the department's determination finds that there is a dispute which cannot be resolved by investigation, the employee may attempt to recover the amount of wages claimed to be due by instituting a civil action pursuant to section 23-355.

§ 23-359 Effect of department determination

Unless review is sought pursuant to section 23-358, the department's determination shall be final upon the expiration of the time for seeking review. A final determination by the department shall be in writing and signed by the director. The final determination may be filed, recorded and executed upon in the same manner as provided by law for judgments and shall draw interest at the same rate as a judgment from the date of final determination. A final determination of the department which determines or purports to determine the validity or amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off by the employer shall be binding and conclusive only as to the amount of wages to be paid the employee, if any, and shall not in any way preclude the employer from raising and litigating such counterclaim or claim in a civil action.

§ 23-360 Penalty

An employer who has been ordered by the department pursuant to section 23-357 or a court to pay wages due an employee and who fails to do so within ten days after the order becomes final is liable to pay the employee an amount which is equal to treble the amount of the unpaid wages and which shall be subject to interest at the legal rate.

§ 23-361 Rules and regulations

The commission may adopt such rules and regulations as necessary for the purpose of administering and enforcing this article.

§ 23-361.01 Employer requirements; cash payments; unlawful practices; civil penalty

A. An employer that has two or more employees and pays hourly wages or salary by cash to any employee shall comply with all of the following:

The income tax withholding laws prescribed in title 43, chapter 4.
The employer reporting laws prescribed in section 23-722.01.
The employment security laws prescribed in chapter 4 of this title.
The workers' compensation laws prescribed in chapter 6 of this title.

B. For a violation of subsection A of this section, the attorney general may bring an action in superior court against an employer. On a finding of a violation of subsection A of this section, the court shall order the employer to pay a civil penalty that is equal to treble the amount of all withholdings, payments, contributions or premiums that the employer failed to remit as prescribed by subsection A of this section or five thousand dollars for each employee for whom a violation was committed, whichever is greater.

C. The court shall transmit the monies collected pursuant to subsection B of this section to the state treasurer, and the state treasurer shall deposit the monies in the state general fund. Monies deposited in the state general fund pursuant to this subsection shall be equally appropriated to the department of education and the department of health services for the purposes of offsetting increased costs to this state by unauthorized aliens.

D. The civil penalty under this section is in addition to any other penalties that may be imposed by law.

§ 23-361.02 Paycheck deductions; authorization; civil penalty; definition

A. For deductions after October 1, 2011, a public or private employer in this state shall not deduct any payment from an employee's paycheck for political purposes unless the employee annually provides written or electronic authorization to the employer for the deduction.

B. If a deduction is made from an employee's paycheck for multiple purposes after October 1, 2011, the employer shall obtain a statement from each entity to which the deductions are paid that indicates the payment is not used for political purposes or a statement that indicates the maximum percentage of the payment that is used for political purposes. The employer shall not deduct any payment beyond that specified for nonpolitical purposes without the annual written or electronic permission of the employee.

C. The attorney general shall adopt rules that describe the acceptable forms of employee authorization and entity statements under this section.

D. If an employer knowingly deducts payments in violation of subsection A of this section or an entity provides an inaccurate statement under this section, the respective employer or entity is subject to a civil penalty of at least ten thousand dollars for each violation. The attorney general shall impose and collect the civil penalties under this subsection and shall deposit, pursuant to sections 35-146 and 35-147, all civil penalties collected pursuant to this section in the state general fund.

E. This section does not apply to any of the following:

A single deduction for nonpolitical purposes.
Deductions for savings or charitable contributions.
Deductions for employee health care, retiree or welfare benefits.
Deductions for state, local or federal taxes.
Deductions for contributions to a separate segregated fund pursuant to 2 United States Code section 441b(b) or section 16-916.
Any deduction otherwise required by law.

F. If an employee has authorized a deduction from the employee's paycheck under this section and the employee resigns membership in the association or organization for which the deduction was authorized, the employee's authorization for the deduction is rescinded upon the employer's receipt from the employee of written notice of the resignation. The employer shall have one pay period to process the rescission.

G. This section does not preempt any federal law.

H. For the purposes of this section, employee does not include any public safety employee, including a peace officer, firefighter, corrections officer, probation officer or surveillance officer, who is employed by this state or a political subdivision of this state.

I. For the purposes of this section, "political purposes" means supporting or opposing any candidate for public office, political party, referendum, initiative, political issue advocacy, political action committee or other similar group.

§ 23-362 Minimum wage; prohibition

(L97, Ch. 51, sec. 1. Caution: 1998 Prop. 105 applies.)

A. The legislature declares that the establishment of a uniform minimum wage is a matter of statewide concern.

B. No political subdivision of this state may establish, mandate or otherwise require a minimum wage that exceeds the federal minimum wage prescribed in 29 United States Code section 206.

Article 8 Minimum Wage and Employee Benefits

§ 23-362 (Version 2) Definitions

(2006 Prop. 202, sec. 2. Caution: 1998 Prop. 105 applies.)

As used in this article, unless the context otherwise requires:

A. "Employee" means any person who is or was employed by an employer but does not include any person who is employed by a parent or a sibling, or who is employed performing babysitting services in the employer's home on a casual basis.

B. "Employer" includes any corporation, proprietorship, partnership, joint venture, limited liability company, trust, association, political subdivision of the state, individual or other entity acting directly or indirectly in the interest of an employer in relation to an employee, but does not include the state of Arizona, the United States, or a small business.

C. "Small business" means any corporation, proprietorship, partnership, joint venture, limited liability company, trust, or association that has less than five hundred thousand dollars in gross annual revenue and that is exempt from having to pay a minimum wage under section 206(a) of title 29 of the United States Code.

D. "Employ" includes to suffer or permit to work; whether a person is an independent contractor or an employee shall be determined according to the standards of the federal fair labor standards act, but the burden of proof shall be upon the party for whom the work is performed to show independent contractor status by clear and convincing evidence.

E. "Wage" means monetary compensation due to an employee by reason of employment, including an employee's commissions, but not tips or gratuities.

F. "Law enforcement officer" means the attorney general, a city attorney, a county attorney or a town attorney.

G. "Commission" means the industrial commission of Arizona, any successor agency, or such other agency as the governor shall designate to implement this article.

§ 23-363 Minimum wage

(Caution: 1998 Prop. 105 applies)

A. Employers shall pay employees no less than the minimum wage, which shall be not less than:

$10 on and after January 1, 2017.
$10.50 on and after January 1, 2018.
$11 on and after January 1, 2019.
$12 on and after January 1, 2020.

B. The minimum wage shall be increased on January 1, 2021 and on January 1 of successive years, by the increase in the cost of living. The increase in the cost of living shall be measured by the percentage increase as of August of the immediately preceding year over the level as of August of the previous year of the consumer price index (all urban consumers, U.S. city average for all items) or its successor index as published by the U.S. department of labor or its successor agency, with the amount of the minimum wage increase rounded to the nearest multiple of five cents.

C. For any employee who customarily and regularly receives tips or gratuities from patrons or others, the employer may pay a wage up to $3.00 per hour less than the minimum wage if the employer can establish by its records of charged tips or by the employee's declaration for federal insurance contributions act (FICA) purposes that for each week, when adding tips received to wages paid, the employee received not less than the minimum wage for all hours worked. Compliance with this provision will be determined by averaging tips received by the employee over the course of the employer's payroll period or any other period selected by the employer that complies with regulations adopted by the commission.

§ 23-364 Enforcement

(Caution: 1998 Prop. 105 applies)

A. The commission is authorized to enforce and implement this article and may promulgate regulations consistent with this article to do so. For purposes of this section: (1) "article" shall mean both article 8 and article 8.1 of this chapter; (2) "earned paid sick time" is as defined in section 23-371, Arizona Revised Statutes; (3) "employer" shall refer to the definition of employer in section 23-362, Arizona Revised Statutes, for purposes of minimum wage enforcement and shall refer to the definition of employer in section 23-371, Arizona Revised Statutes, for purposes of earned paid sick time enforcement; and (4) "retaliation" shall mean denial of any right guaranteed under article 8 and article 8.1 of this chapter and any threat, discharge, suspension, demotion, reduction of hours, or any other adverse action against an employee for the exercise of any right guaranteed herein including any sanctions against an employee who is the recipient of public benefits for rights guaranteed herein. Retaliation shall also include interference with or punishment for in any manner participating in or assisting an investigation, proceeding or hearing under this article.

B. No employer or other person shall discriminate or subject any person to retaliation for asserting any claim or right under this article, for assisting any other person in doing so, or for informing any person about their rights. Taking adverse action against a person within ninety days of a person's engaging in the foregoing activities shall raise a presumption that such action was retaliation, which may be rebutted by clear and convincing evidence that such action was taken for other permissible reasons.

C. Any person or organization may file an administrative complaint with the commission charging that an employer has violated this article as to any employee or other person. When the commission receives a complaint, the commission may review records regarding all employees at the employer's worksite in order to protect the identity of any employee identified in the complaint and to determine whether a pattern of violations has occurred. The name of any employee identified in a complaint to the commission shall be kept confidential as long as possible. Where the commission determines that an employee's name must be disclosed in order to investigate a complaint further, it may so do only with the employee's consent.

D. Employers shall post notices in the workplace, in such format specified by the commission, notifying employees of their rights under this article. Employers shall provide their business name, address, and telephone number in writing to employees upon hire. Employers shall maintain payroll records showing the hours worked for each day worked, and the wages and earned paid sick time paid to all employees for a period of four years. Failure to do so shall raise a rebuttable presumption that the employer did not pay the required minimum wage rate or earned paid sick time. The commission may by regulation reduce or waive the recordkeeping and posting requirements herein for any categories of small employers whom it finds would be unreasonably burdened by such requirements. Employers shall permit the commission or a law enforcement officer to inspect and copy payroll or other business records, shall permit them to interview employees away from the worksite, and shall not hinder any investigation. Such information provided shall keep confidential except as is required to prosecute violations of this article. Employers shall permit an employee or his or her designated representative to inspect and copy payroll records pertaining to that employee.

E. A civil action to enforce this article may be maintained in a court of competent jurisdiction by a law enforcement officer or by any private party injured by a violation of this article.

F. Any employer who violates recordkeeping, posting, or other requirements that the commission may establish under this article shall be subject to a civil penalty of at least $250 dollars for a first violation, and at least $1000 dollars for each subsequent or willful violation and may, if the commission or court determines appropriate, be subject to special monitoring and inspections.

G. Any employer who fails to pay the wages or earned paid sick time required under this article shall be required to pay the employee the balance of the wages or earned paid sick time owed, including interest thereon, and an additional amount equal to twice the underpaid wages or earned paid sick time. Any employer who retaliates against an employee or other person in violation of this article shall be required to pay the employee an amount set by the commission or a court sufficient to compensate the employee and deter future violations, but not less than one hundred fifty dollars for each day that the violation continued or until legal judgment is final. The commission and the courts shall have the authority to order payment of such unpaid wages, unpaid earned sick time, other amounts, and civil penalties and to order any other appropriate legal or equitable relief for violations of this article. Civil penalties shall be retained by the agency that recovered them and used to finance activities to enforce this article. A prevailing plaintiff shall be entitled to reasonable attorney's fees and costs of suit.

H. A civil action to enforce this article may be commenced no later than two years after a violation last occurs, or three years in the case of a willful violation, and may encompass all violations that occurred as part of a continuing course of employer conduct regardless of their date. The statute of limitations shall be tolled during any investigation of an employer by the commission or other law enforcement officer, but such investigation shall not bar a person from bringing a civil action under this article. No verbal or written agreement or employment contract may waive any rights under this article.

I. The legislature may by statute raise the minimum wage established under this article, extend coverage, or increase penalties. A county, city, or town may by ordinance regulate minimum wages and benefits within its geographic boundaries but may not provide for a minimum wage lower than that prescribed in this article. State agencies, counties, cities, towns and other political subdivisions of the state may consider violations of this article in determining whether employers may receive or renew public contracts, financial assistance or licenses. This article shall be liberally construed in favor of its purposes and shall not limit the authority of the legislature or any other body to adopt any law or policy that requires payment of higher or supplemental wages or benefits, or that extends such protections to employers or employees not covered by this article.

§ 23-365 Reliance on administrative rule or regulation

(Added with a 1998 Prop. 105 clause pursuant to L07, Ch. 272)

In any action or proceeding commenced on or after January 1, 2007, an employer or other entity is not liable if the employer or entity fails to pay the minimum wage if the employer or entity proves that the act or omission was in good faith, conformed with and relied on an administrative regulation, order, ruling, approval or interpretation, administrative practice or enforcement policy issued by the commission pursuant to and in accordance with the commission’s authority under this article. This defense, if established, bars the action or proceeding, notwithstanding that after the act or omission, the administrative regulation, order, ruling, approval, interpretation, practice or enforcement policy is modified or rescinded or is determined by judicial authority to be invalid.

Article 8.1 Earned Paid Sick Time

§ 23-371 Definitions

(Caution: 1998 Prop. 105 applies)

For purposes of this article:

A. "Abuse" means an offense prescribed in section 13-3623, Arizona Revised Statutes.

B. "Commission" is as defined in section 23-362, Arizona Revised Statutes.

C. "Domestic violence" is as defined in section 13-3601, Arizona Revised Statutes.

D. "Earned paid sick time" means time that is compensated at the same hourly rate and with the same benefits, including health care benefits, as the employee normally earns during hours worked and is provided by an employer to an employee for the purposes described in section 23-373 of this article, but in no case shall this hourly amount be less than that provided under the Fair Labor Standards Act of 1938 (29 United States Code section 206(A)(1)) or section 23-363, Arizona Revised Statutes.

E. "Employ" is as defined in section 23-362, Arizona Revised Statutes.

F. "Employee" is as defined in section 23-362, Arizona Revised Statutes. Employee includes recipients of public benefits who are engaged in work activity as a condition of receiving public assistance.

G. "Employer" includes any corporation, proprietorship, partnership, joint venture, limited liability company, trust, association, political subdivision of the state, individual or other entity acting directly or indirectly in the interest of an employer in relation to an employee, but does not include the State of Arizona or the United States.

H. "Family member" means:

Regardless of age, a biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, a child to whom the employee stands in loco parentis, or an individual to whom the employee stood in loco parentis when the individual was a minor;
A biological, foster, stepparent or adoptive parent or legal guardian of an employee or an employee's spouse or domestic partner or a person who stood in loco parentis when the employee or employee's spouse or domestic partner was a minor child;
A person to whom the employee is legally married under the laws of any state, or a domestic partner of an employee as registered under the laws of any state or political subdivision;
A grandparent, grandchild or sibling (whether of a biological, foster, adoptive or step relationship) of the employee or the employee's spouse or domestic partner; or
Any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

I. "Retaliation" is as defined in section 23-364, Arizona Revised Statutes.

J. "Sexual violence" means an offense prescribed in: (a) title 13, chapter 14, Arizona Revised Statutes, except for sections 13-1408 and 13-1422; or (b) sections 13-1304(A)(3), 13-1307, 13-3019, 13-3206, 13-3212, 13-3552, 13-3553, 13-3554, or 13-3560, Arizona Revised Statutes.

K. "Stalking" means an offense prescribed in section 13-2923, Arizona Revised Statutes.

L. "Year" means a regular and consecutive 12-month period as determined by the employer.

§ 23-372 Accrual of earned paid sick time

(Caution: 1998 Prop. 105 applies)

A. Employees of an employer with 15 or more employees shall accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees shall not be entitled to accrue or use more than 40 hours of earned paid sick time per year, unless the employer selects a higher limit.

B. Employees of an employer with fewer than 15 employees shall accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees shall not be entitled to accrue or use more than 24 hours of earned paid sick time per year, unless the employer selects a higher limit.

C. In determining the number of employees performing work for an employer for compensation during a given week, all employees performing work for compensation on a full-time, part-time or temporary basis shall be counted. In situations in which the number of employees who work for an employer for compensation per week fluctuates above and below 15 employees per week over the course of the year, an employer is required to provide earned paid sick time pursuant to subsection A of this section if it maintained 15 or more employees on the payroll for some portion of a day in each of 20 different calendar weeks, whether or not the weeks were consecutive, in either the current or the preceding year (irrespective of whether the same individuals were in employment in each day).

D. All employees shall accrue earned paid sick time as follows:

Earned paid sick time as provided in this section shall begin to accrue at the commencement of employment or on July 1, 2017, whichever is later. An employer may provide all earned paid sick time that an employee is expected to accrue in a year at the beginning of the year.
An employee may use earned paid sick time as it is accrued, except that an employer may require an employee hired after July 1, 2017, to wait until the ninetieth calendar day after commencing employment before using accrued earned paid sick time, unless otherwise permitted by the employer.
Employees who are exempt from overtime requirements under the Fair Labor Standards Act of 1938 (29 United States Code section 213(A)(1)) will be assumed to work 40 hours in each work week for purposes of earned paid sick time accrual unless their normal work week is less than 40 hours, in which case earned paid sick time accrues based upon that normal work week.
Earned paid sick time shall be carried over to the following year, subject to the limitations on usage in subsections A and B. Alternatively, in lieu of carryover of unused earned paid sick time from one year to the next, an employer may pay an employee for unused earned paid sick time at the end of a year and provide the employee with an amount of earned paid sick time that meets or exceeds the requirements of this article that is available for the employee's immediate use at the beginning of the subsequent year.
If an employee is transferred to a separate division, entity or location, but remains employed by the same employer, the employee is entitled to all earned paid sick time accrued at the prior division, entity or location and is entitled to use all earned paid sick time as provided in this section. When there is a separation from employment and the employee is rehired within nine months of separation by the same employer, previously accrued earned paid sick time that had not been used shall be reinstated. Further, the employee shall be entitled to use accrued earned paid sick time and accrue additional earned paid sick time at the re-commencement of employment.
When a different employer succeeds or takes the place of an existing employer, all employees of the original employer who remain employed by the successor employer are entitled to all earned paid sick time they accrued when employed by the original employer, and are entitled to use earned paid sick time previously accrued.
At its discretion, an employer may loan earned paid sick time to an employee in advance of accrual by such employee.

E. Any employer with a paid leave policy, such as a paid time off policy, who makes available an amount of paid leave sufficient to meet the accrual requirements of this section that may be used for the same purposes and under the same conditions as earned paid sick time under this article is not required to provide additional paid sick time.

F. Nothing in this article shall be construed as requiring financial or other reimbursement to an employee from an employer upon the employee's termination, resignation, retirement or other separation from employment for accrued earned paid sick time that has not been used.

§ 23-373 Use of earned paid sick time

(Caution: 1998 Prop. 105 applies)

A. Earned paid sick time shall be provided to an employee by an employer for:

An employee's mental or physical illness, injury or health condition; an employee's need for medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition; an employee's need for preventive medical care;
Care of a family member with a mental or physical illness, injury or health condition; care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition; care of a family member who needs preventive medical care;
Closure of the employee's place of business by order of a public official due to a public health emergency or an employee's need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency, or care for oneself or a family member when it has been determined by the health authorities having jurisdiction or by a health care provider that the employee's or family member's presence in the community may jeopardize the health of others because of his or her exposure to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease; or
Notwithstanding section 13-4439, Arizona Revised Statutes, absence necessary due to domestic violence, sexual violence, abuse or stalking, provided the leave is to allow the employee to obtain for the employee or the employee's family member:

(a) Medical attention needed to recover from physical or psychological injury or disability caused by domestic violence, sexual violence, abuse or stalking;

(b) Services from a domestic violence or sexual violence program or victim services organization;

(d) Relocation or taking steps to secure an existing home due to the domestic violence, sexual violence, abuse or stalking; or

(e) Legal services, including but not limited to preparing for or participating in any civil or criminal legal proceeding related to or resulting from the domestic violence, sexual violence, abuse or stalking.

B. Earned paid sick time shall be provided upon the request of an employee. Such request may be made orally, in writing, by electronic means or by any other means acceptable to the employer. When possible, the request shall include the expected duration of the absence.

C. When the use of earned paid sick time is foreseeable, the employee shall make a good faith effort to provide notice of the need for such time to the employer in advance of the use of the earned paid sick time and shall make a reasonable effort to schedule the use of earned paid sick time in a manner that does not unduly disrupt the operations of the employer.

D. An employer that requires notice of the need to use earned paid sick time where the need is not foreseeable shall provide a written policy that contains procedures for the employee to provide notice. An employer that has not provided to the employee a copy of its written policy for providing such notice shall not deny earned paid sick time to the employee based on non-compliance with such a policy.

E. An employer may not require, as a condition of an employee's taking earned paid sick time, that the employee search for or find a replacement worker to cover the hours during which the employee is using earned paid sick time.

F. Earned paid sick time may be used in the smaller of hourly increments or the smallest increment that the employer's payroll system uses to account for absences or use of other time.

G. For earned paid sick time of three or more consecutive work days, an employer may require reasonable documentation that the earned paid sick time has been used for a purpose covered by subsection A. Documentation signed by a heath care professional indicating that earned paid sick time is necessary shall be considered reasonable documentation for purposes of this section. In cases of domestic violence, sexual violence, abuse or stalking, one of the following types of documentation selected by the employee shall be considered reasonable documentation:

A police report indicating that the employee or the employee's family member was a victim of domestic violence, sexual violence, abuse or stalking;
A protective order; injunction against harassment; a general court order; or other evidence from a court or prosecuting attorney that the employee or employee's family member appeared, or is scheduled to appear, in court in connection with an incident of domestic violence, sexual violence, abuse, or stalking;
A signed statement from a domestic violence or sexual violence program or victim services organization affirming that the employee or employee's family member is receiving services related to domestic violence, sexual violence, abuse, or stalking;
A signed statement from a witness advocate affirming that the employee or employee's family member is receiving services from a victim services organization;
A signed statement from an attorney, member of the clergy, or a medical or other professional affirming that the employee or employee's family member is a victim of domestic violence, sexual violence, abuse, or stalking; or
An employee's written statement affirming that the employee or the employee's family member is a victim of domestic violence, sexual violence, abuse, or stalking, and that the leave was taken for one of the purposes of subsection A, paragraph 4 of this section. The employee's written statement, by itself, is reasonable documentation for absences under this paragraph. The written statement does not need to be in an affidavit format or notarized, but shall be legible if handwritten and shall reasonably make clear the employee's identity, and if applicable, the employee's relationship to the family member.

H. The provision of documentation under subsection G does not waive or diminish any confidential or privileged communications between a victim of domestic violence, sexual violence, abuse, or stalking with one or more of the individuals named in subsection G.

I. An employer may not require that documentation under subsection G explain the nature of the health condition or the details of the domestic violence, sexual violence, abuse or stalking.

§ 23-374 Exercise of rights protected; retaliation prohibited

(Caution: 1998 Prop. 105 applies)

A. It shall be unlawful for an employer or any other person to interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under this article.

B. An employer shall not engage in retaliation or discriminate against an employee or former employee because the person has exercised rights protected under this article. Such rights include but are not limited to the right to request or use earned paid sick time pursuant to this article; the right to file a complaint with the commission or courts or inform any person about any employer's alleged violation of this article; the right to participate in an investigation, hearing or proceeding or cooperate with or assist the commission in its investigations of alleged violations of this article; and the right to inform any person of his or her potential rights under this article.

C. It shall be unlawful for an employer's absence control policy to count earned paid sick time taken under this article as an absence that may lead to or result in discipline, discharge, demotion, suspension, or any other adverse action.

D. Protections of this section shall apply to any person who mistakenly but in good faith alleges violations of this article.

§ 23-375 Notice

(Caution: 1998 Prop. 105 applies)

A. Employers shall give employees written notice of the following at the commencement of employment or by July 1, 2017, whichever is later: employees are entitled to earned paid sick time and the amount of earned paid sick time, the terms of its use guaranteed under this article, that retaliation against employees who request or use earned paid sick time is prohibited, that each employee has the right to file a complaint if earned paid sick time as required by this article is denied by the employer or the employee is subjected to retaliation for requesting or taking earned paid sick time, and the contact information for the commission where questions about rights and responsibilities under this article can be answered.

B. The notice required in subsection A shall be in English, Spanish, and any language that is deemed appropriate by the commission.

C. The amount of earned paid sick time available to the employee, the amount of earned paid sick time taken by the employee to date in the year and the amount of pay the employee has received as earned paid sick time shall be recorded in, or on an attachment to, the employee's regular paycheck.

D. The commission shall create and make available to employers, in English, Spanish, and any language deemed appropriate by the commission, model notices that contain the information required under subsection A for employers' use in complying with subsection A.

E. An employer who violates the notice requirements of this section shall be subject to a civil penalty according to section 23-364(F), Arizona Revised Statutes.

§ 23-376 Regulations

(Caution: 1998 Prop. 105 applies)

The commission shall be authorized to coordinate implementation and enforcement of this article and shall promulgate appropriate guidelines or regulations for such purposes.

§ 23-377 Confidentiality and nondisclosure

(Caution: 1998 Prop. 105 applies)

An employer may not require disclosure of details relating to domestic violence, sexual violence, abuse or stalking or the details of an employee's or an employee's family member's health information as a condition of providing earned paid sick time under this article. If an employer possesses health information or information pertaining to domestic violence, sexual violence, abuse or stalking about an employee or employee's family member, such information shall be treated as confidential and not disclosed except to the affected employee or with the permission of the affected employee.

§ 23-378 Encouragement of more generous earned paid sick time policies; no effect on more generous policies or laws

(Caution: 1998 Prop. 105 applies)

A. Nothing in this article shall be construed to discourage or prohibit an employer from the adoption or retention of an earned paid sick time policy more generous than the one required herein.

B. Nothing in this article shall be construed as diminishing the obligation of an employer to comply with any contract, collective bargaining agreement, employment benefit plan or other agreement providing more generous paid sick time to an employee than required herein. Nothing in this article shall be construed as diminishing the rights of public employees regarding paid sick time or use of paid sick time.

C. Nothing in this article shall be construed to supersede any provision of any local law that provides greater rights to paid sick time than the rights established under this article.

§ 23-379 Other legal requirements

(Caution: 1998 Prop. 105 applies)

A. Nothing in this article shall be interpreted or applied so as to create a conflict with federal law.

B. This article provides minimum requirements pertaining to earned paid sick time and shall not be construed to preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy, or standard that provides for greater accrual or use by employees of earned paid sick time or that extends other protections to employees.

§ 23-380 Public education and outreach

(Caution: 1998 Prop. 105 applies)

The commission may develop and implement a multilingual outreach program to inform employees, parents and persons who are under the care of a health care provider about the availability of earned paid sick time under this article. This program may include the distribution of notices and other written materials in English, Spanish, and any language deemed appropriate by the commission to all child care and elder care providers, domestic violence shelters, schools, hospitals, community health centers and other health care providers.

§ 23-381 Collective bargaining agreements

(Caution: 1998 Prop. 105 applies)

All or any portion of the earned paid sick time requirements of this article shall not apply to employees covered by a valid collective bargaining agreement, to the extent that such requirements are expressly waived in the collective bargaining agreement in clear and unambiguous terms. No provisions of article 8.1 shall apply to employees covered by a collective bargaining agreement in effect on the effective date of this act until the stated expiration date in the collective bargaining agreement.

Article 9 Wages and Hours of Public Employees

§ 23-391 Overtime pay; workweek

A. Subject to availability of appropriated monies, an employee of this state or any political subdivision who serves in a position determined by the law enforcement merit system council, the director of the department of administration, the Arizona board of regents, the board of directors for the Arizona state schools for the deaf and the blind or the governing body of a political subdivision, in the discretion of the board or body, to be eligible for overtime compensation and who is required to work in excess of the person's normal workweek shall be compensated for the excess time at the following rates:

One and one-half times the regular rate at which the person is employed or one and one-half hours of compensatory time off for each hour worked if overtime compensation is mandated by federal law.
If federal law does not mandate overtime compensation, the regular rate of pay or compensatory leave on an hour-for-hour basis at the discretion of the board or governing body.

B. Notwithstanding subsection A of this section, this state or a political subdivision may provide, by action of the law enforcement merit system council, the Arizona board of regents, the board of directors for the Arizona state schools for the deaf and the blind or the director of the department of administration in the case of this state or of the governing body of the political subdivision, for a workweek of forty hours in less than five days for certain classes of employees employed by this state or the political subdivision.

C. For state agencies of the state personnel system, unless otherwise provided by law, the state workweek is the period of seven consecutive days starting Saturday at 12:00 a.m. and ending Friday at 11:59 p.m. Notwithstanding any other law, the director of the department of administration may authorize a workday, for the method and purpose of recording time entries to be included in a workweek and a pay period for employees of this state who are in the correctional officer class series of the state department of corrections or who are employed at the Arizona state hospital and who are regularly scheduled to work a shift that spans two calendar days, defined as the day a majority of the hours are regularly scheduled to be worked. If the regularly scheduled hours are equally split between two calendar days, the workday is defined as the day the shift ends. Scheduled shift start and end times shall not be adjusted to avoid the payment of overtime.

§ 23-392 Overtime compensation for certain law enforcement or probation officer activities; option; definitions

A. Subject to subsection B of this section, any person engaged in law enforcement activities shall be compensated for each hour worked in excess of forty hours in one work week, unless otherwise agreed to by the employer and the person engaged in law enforcement activities, at the option of the employer at the following rates:

One and one-half times the regular rate at which the person is employed or one and one-half hours of compensatory time off for each hour worked if by the person's job classification overtime compensation is mandated by federal law.
If by the person's job classification federal law does not mandate overtime compensation, the person shall receive the regular rate of pay or compensatory leave on an hour for hour basis.

B. If an employee and employer have an agreement pursuant to subsection A of this section regarding the employee's alternate work period and the employee becomes employed in a new position with the employer, the employee may terminate the existing alternate work period agreement.

C. Subsection A of this section does not preempt agreements that supplant, revise or otherwise alter the provisions of this section, including preexisting agreements between the employer and the law enforcement officer or the law enforcement officer's lawful representative association.

D. Any person engaged in probation officer activities shall be compensated for each hour worked in excess of eighty hours in a two week work period at the option of the employer at the following rates:

One and one-half times the regular rate at which the person is employed or one and one-half hours of compensatory time off for each hour worked if by the person's job classification overtime compensation is mandated by federal law.
If by the person's job classification federal law does not mandate overtime compensation, the person shall receive the regular rate of pay or compensatory leave on an hour for hour basis.

E. Paid leave may be considered hours worked for the purpose of calculating overtime.

F. The director of the department of public safety may establish alternate work periods, in accordance with federal law, for the purpose of determining overtime compensation for those employees of the air rescue section of the department of public safety.

G. Notwithstanding subsection E of this section, an alternate work period established by the director of the department of public safety for the purpose of determining overtime compensation shall not exceed twenty-eight days or one hundred sixty hours.

H. For the purposes of this section:

"Person engaged in law enforcement activities":

(a) Means:

(i) A law enforcement officer as defined by section 38-1001.

(ii) A peace officer as defined by section 41-1701.

(iii) Any security personnel responsible for controlling or maintaining custody of inmates in correctional institutions maintained by this state or a county, city or town.

(iv) Any law enforcement personnel under section 41-1714 responsible for directly assisting law enforcement officers in the performance of law enforcement activities.

(b) Does not include any person employed in a bona fide executive or administrative capacity as defined by the employer.

"Person engaged in probation officer activities":

(a) Means a probation officer or surveillance officer who is appointed pursuant to section 8-203, 12-251 or 12-259.

(b) Does not include any person employed in a bona fide executive or administrative capacity as defined by the employer.

Article 10 Division of Occupational Safety and Health

§ 23-401 Definitions

In this article, unless the context otherwise requires:

"Board" means a review board established pursuant to section 23-422.
"Commission" means the industrial commission of Arizona.
"De minimis violation" means a condition or practice that, although undesirable, has no direct or immediate relationship to safety or health.
"Director" means the director of the division.
"Division" means the division of occupational safety and health within the commission.
"Employee" means any person performing services for an employer, including any person defined as an employee pursuant to section 23-901, except employees engaged in household domestic labor.
"Employer" means any individual or type of organization, including this state and all political subdivisions of this state, that has in its employ one or more individuals performing services for it in employment and includes self-employed persons, but does not include employers of household domestic labor.
"Interested party" means the commission and the commission's agents, the employer and the affected employees of such employer.
"Model system" means an exemplary and voluntary implemented worker safety and health management system that:

(a) Exceeds basic compliance with occupational safety and health laws and regulations.

(b) Meets the requirements adopted by the division pursuant to section 23-432.

"Non-serious violation" means a condition or practice in a place of employment that does not constitute a serious violation but that violates a standard or regulation and has a direct or immediate relationship to safety or health, unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of such condition or practice.
"Program" means the voluntary protection program or any other program under which the director recognizes and partners with workplaces that have implemented a model system.
"Recognized hazard" means an unsafe or unhealthful condition or practice recognized as such with respect to the standard of knowledge in the industry.
"Regulation" means any written regulation of occupational safety and health governing places of employment formulated pursuant to section 23-410, exclusive of standards, and shall have the same meaning as and include the term "rule".
"Serious violation" means a condition or practice in a place of employment that violates a standard, regulation or section 23-403, subsection A and produces a substantial probability that death or serious physical harm could result, unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of such condition or practice.
"Standard" means any occupational safety and health standard that has been adopted and promulgated by a nationally recognized standards-producing organization or the federal government and shall have the same meaning as, and include the term "code".
"Trade secret" means a plan or process, tool, mechanism, or compound not patented, known only to its owner and those of the owner's employees to whom it is necessary to confide it, or other information that the employer treats as confidential and has a reasonable basis for doing so.
"Workplace" means a location or site wherein work, either temporary or permanent, is being conducted in connection with an industry, trade or business.

§ 23-402 Applicability

Nothing in this article shall apply to working conditions of employees with respect to which any state agency acting under section 274(b) of the atomic energy act of 1954, as amended, or under title 27, chapter 3, Arizona Revised Statutes, exercises statutory authority to prescribe or enforce standards or regulations affecting occupational safety or health.

§ 23-403 Employer's duty

A. Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.

B. Each employer shall comply with occupational safety and health standards and all regulations and orders issued pursuant to this article.

C. Notwithstanding subsection A of this section, a condition or practice which is common within an industry is not deemed a recognized hazard unless a standard or regulation concerning the condition or practice has been developed pursuant to section 23-410 or 23-414.

§ 23-404 Employee's duty

Each employee shall comply with occupational safety and health standards and all rules, regulations and orders issued pursuant to this article which are applicable to his own actions and conduct.

§ 23-405 Duties and powers of the industrial commission relative to occupational safety and health

The commission shall:

Administer the provisions of this article through the division of occupational safety and health.
Appoint the director of the division of occupational safety and health.
Cooperate with the federal government to establish and maintain an occupational safety and health program as effective as the federal occupational safety and health program.
Promulgate standards and regulations as required, pursuant to section 23-410, and promulgate such other rules and regulations as are necessary for the efficient functioning of the division.
Have the authority to issue reasonable temporary, experimental and permanent variances pursuant to sections 23-411 and 23-412.
Exercise such other powers as are necessary to carry out the duties and requirements of this article.

§ 23-406 Division of occupational safety and health; director; appointment; qualifications; compensation

A. There shall be a division of occupational safety and health within the industrial commission.

B. The director of the division of occupational safety and health shall be the administrative head of the division under the control of the commission. The director shall be appointed by the commission and shall serve at the pleasure of the commission.

C. The director shall be:

A person who has been employed in the safety or health profession a minimum of ten years in the aggregate and is currently engaged in the broad practice of safety or health or one of its relevant specialties or holds a degree from an accredited college or university appropriate to the field of safety and health and has a minimum of five years' experience in the broad practice of safety or one of its relevant specialties, and has been registered or licensed by a state agency as a professional appropriate to his field of safety and health or has been certified as competent within the broad practice of safety or health or one of its relevant specialties by an organization recognized as qualified by the American society of safety engineers or American industrial hygiene association.
Competent to deal with the planning, design and needs of business operations as the use of such operations relates to the safe, convenient and economic performance of their business functions, with not less than three years' experience in an administrative capacity in the field of occupational safety and health.

D. The salary of the director shall be determined pursuant to section 38-611.

§ 23-407 Duties and powers of the division

The division on behalf of the commission shall:

Recommend all standards, rules or changes thereto, pursuant to section 23-410, to the commission for the commission's approval or disapproval.
Have the authority to enforce all such standards or rules, after adoption by the commission, pursuant to the procedures and requirements of this article.
Implement an occupational safety and health program that includes the following duties and responsibilities:

(a) Development of a statewide occupational safety and health education and training program to acquaint employers, supervisors, employees and employee representatives with the most modern and effective techniques of accident prevention and occupational health control.

(b) Development of training programs for employees of the division, and where necessary develop certification programs for recognition of competent, trained personnel.

(c) Planning, organizing, conducting or attending occupational safety and health seminars, conferences and meetings designed for management, supervisory personnel, employees and employer representatives and establishing liaison with other safety and health groups as may be necessary.

(d) Definition and establishment of necessary research projects.

(e) Arrangement and procurement of necessary contractual services and training aids.

(f) Development of specific occupational safety and health programs for employer and employee representative groups.

Develop and maintain an effective program of collection, compilation and analysis of occupational safety and health statistics. The division shall compile statistics on work injuries and illnesses that shall include all disabling, serious or significant injuries and illnesses whether or not involving loss of time from work, other than minor injuries requiring only first aid treatment and that do not involve medical treatment, loss of consciousness, restriction of work or motion or transfer to another job.
Coordinate the responsibilities and functions of other state agencies and political subdivisions of the state with regard to occupational safety and health in order to develop a comprehensive statewide program.
Contract with the office of administrative hearings to conduct hearings and adjudicate contested cases on an employer filing a notice of contest of a citation, proposed penalty or abatement period pursuant to this article. The decisions of the office of administrative hearings shall be subject to appeal to the review board established pursuant to this article.

§ 23-408 Inspection of places and practices of employment; closing conference; prohibitions; employee initiation of investigation; violation; classification; injunction

A. Except as prescribed in section 23-432, subsection E, the director of the division of occupational safety and health, or the director's authorized representative, on presentation of credentials, shall be permitted to inspect places of employment, question employees and investigate conditions, practices or matters in connection with employment subject to this article at reasonable times, as the director or the director's authorized representative may deem appropriate to determine whether any person has violated any provision of this article or any rule or regulation issued pursuant to this article or that may aid in the enforcement of this article. An employer or other person shall not refuse to admit the director or the director's authorized representatives to any place or refuse to permit the inspection if the proper credentials are presented and the inspection is made at a reasonable time.

B. In making inspections and investigations, the director or the director's authorized representative may require the attendance and testimony of witnesses and the production of evidence under oath. Witnesses shall be paid the same fees and mileage paid to witnesses in the courts of this state. If any person fails or refuses to obey such an order, the director or the director's authorized representative may apply to any superior court in any county where the person is found, resides or transacts business for an order requiring the person to produce evidence and to give testimony as ordered. Failure to obey such an order is contempt of court.

C. The director or the director's authorized representative shall inspect at least every six months any operation that mixes rock, sand, gravel or similar materials with water and cement or with asphalt and that is not included in the definition of mine in section 27-301. The director or the director's authorized representative shall monitor and work with the mine inspector only to the extent necessary to ensure this state's compliance with federal occupational safety and health act standards, (P.L. 91-596).

D. Notice of an intended inspection shall not be given to an employer before the time of actual entry on the workplace, except by specific authorization by the director.

E. A representative of the employer and a representative authorized by the employer's employees shall be given an opportunity to accompany the director or the director's authorized representative during the physical inspection of any workplace for the purpose of aiding the inspection. Where there is no authorized employee representative, the director or the director's authorized representative shall consult a reasonable number of employees concerning matters of safety and health in the workplace.

F. The director may not allow any individual to accompany a compliance safety and health officer when conducting inspections for the industrial commission of Arizona pursuant to this section unless the individual is any of the following:

An employee of the employer being inspected.
A safety consultant, attorney or other agent of the employer or a person present with the consent of the employer.
The authorized employee representative. For the purposes of this paragraph, "authorized employee representative" means an agent of a labor organization that has a collective bargaining relationship with the employer who represents employees who are members of the collective bargaining unit.
A third party who is required by law to accompany the compliance safety and health officer to ensure that the state plan is at least as effective as the standards of the occupational safety and health act of 1970 (P.L. 91-596; 84 Stat. 1590).
Otherwise required by law to be present.

G. The employer may require the following conditions for a third party who accompanies a compliance safety and health officer during an inspection pursuant to subsection F of this section:

That not more than one individual be present unless otherwise required by law.
That the individual follow all workplace safety rules regarding personal protective equipment applicable to all visitors for the workplace.
That the individual is required to complete any safety trainings applicable to all visitors of the workplace.
That the individual sign a confidentiality agreement with respect to the use of confidential information that is learned during the inspection that has the same terms as required for other visitors.
That nonemployees, other than the compliance safety and health officer, are prohibited from entering areas that contain trade secrets. The compliance safety and health officer may consult with a reasonable number of employees who work in the identified trade secret area on matters of safety and health, even if those employees are not joining the inspection. Information obtained by the commission or its representatives during the inspection that contains or that may reveal a trade secret is subject to section 23-426.

H. Except as provided in section 23-426, information and facts developed by the commission, the director or any employee of the commission or division in the course of any inspection or investigation are public records subject to inspection pursuant to title 39, chapter 1, article 2, if, pursuant to section 23-415, subsection D, the inspection or investigation has been closed or a citation has been issued. Such information and facts shall not be admissible in any court or before any administrative body except pursuant to this article. Notwithstanding this subsection, the director or any commission employee is not required to appear at any deposition, trial or hearing concerning a division inspection or investigation unless the appearance is related to a hearing held pursuant to this article. Hearings held pursuant to this article are open to the public.

I. During the inspection or investigation and in deciding whether to recommend and issue a citation, the director or the director's authorized representative and the commission may consider whether an employee has committed misconduct by violating the employer's policies, if any, regarding substance abuse while working, as evidenced by the results of testing for substance abuse or other evidence of impairment while working.

J. An employee of the division or the commission may not:

Before, during or after an inspection or investigation, communicate to an employer that the employer should not be represented by an attorney or that the employer may be treated more favorably by the division or the commission if the employer is not represented by an attorney.
Conduct an audio recording of an oral statement provided during an interview without the knowledge and consent of the person being interviewed. The employee of the division or the commission shall inform the person being interviewed of the person's right to receive a copy of the recorded oral statement within a reasonable time.
Obtain a written statement during an interview without informing the person of the person's right to receive a copy of the written statement within a reasonable time.

K. An employee or a representative of employees who believes that a violation of a safety or health standard or regulation exists that threatens physical harm or that an imminent danger exists may request an investigation by giving notice to the director or the director's authorized representative of the violation or danger. Any notice shall be in writing, set forth with reasonable particularity the grounds for the notice and be signed by the employees or representative of the employees. On the request of the employee giving the notice, the employee's name and the names of other employees referred to in the notice shall not appear on any copy of the notice or any record published, released or made available. If on receipt of the notice the director determines that there are reasonable grounds to believe that the violation or danger exists, the director shall make an investigation in accordance with this article as soon as practicable to determine if the violation or danger exists. If the director determines there are no reasonable grounds to believe that a violation or danger exists, the director shall notify the employees or representative of the employees in writing of the determination.

L. Any person who violates any provision of this section is guilty of a class 2 misdemeanor.

M. The commission, or the commission's authorized representative, in addition to initiating an action under subsection K of this section, may file in the superior court in the county where the inspection was refused a verified complaint against an employer who violates subsection A of this section and request an injunction against continued refusal to permit an inspection.

N. At least thirty days before the industrial commission of Arizona submits the state plan proposal or proposed adoption to the United States occupational safety and health administration, the commission shall submit the state plan proposal or proposed adoption to the joint legislative audit committee, which may review and recommend that the commission amend the state plan proposal or proposed adoption.

§ 23-409 Advisory committees

A. The commission shall create an occupational safety and health advisory committee to assist the commission in drafting standards and regulations. The committee may be asked to perform other functions as may be necessary. The committee shall be appointed by the commission and shall be composed of a reasonably balanced representation of regulated industries, including agriculture, and labor and other persons knowledgeable in safety and health and shall serve at the will of the commission. The commission may establish other committees as it deems necessary. The advisory committees may be paid their reasonable and necessary travel and other expenses in accordance with standard travel regulations.

B. The director shall be an ex officio member of any advisory committee established pursuant to this section.

§ 23-410 Development of standards and rules

A. Safety and health standards and rules shall be formulated in the following manner:

The division shall either propose adoption of national consensus standards or federal standards or draft such rules as it considers necessary after conducting sufficient investigations through the division's employees and through consultation with the occupational safety and health advisory committee and other persons knowledgeable in the business for which the standards or rules are being formulated.
Proposed standards or rules, or both, shall be submitted to the commission for its approval. If the commission approves the proposed standards or rules, or both, it shall promulgate them in accordance with the procedures established in title 41, chapter 6.

B. The division shall not propose standards or rules for products distributed or used in interstate commerce which are different from federal standards for such products unless such standards are required by compelling local conditions and do not unduly burden interstate commerce.

C. Any standards or rules promulgated under this section shall prescribe the use of labels or other appropriate forms of warning as are necessary to insure that employees are apprised of all recognized hazards to which they are exposed, relevant symptoms and appropriate emergency treatment and proper conditions and precautions of safe use or exposure. Where appropriate such standards or rules shall also prescribe suitable protective equipment and control or technological procedures to be used in connection with such hazards and shall provide for monitoring or measuring employee exposure at such locations and intervals and in such manner as may be necessary for the protection of employees. In addition, where appropriate, any such standards or rules shall prescribe the type and frequency of medical examinations or other tests which shall be made available, by the employer or at his cost, to employees exposed to such hazards in order to most effectively determine whether the health of such employees is adversely affected by such exposure. Any standards or rules promulgated pursuant to this section shall assure, as far as possible, that no employee will suffer material impairment of health or functional capacity even if such employee has regular exposure to the hazard dealt with by such standard for the period of his working life.

D. In case of conflict between standards and rules, the rules shall take precedence.

E. Any person who may be adversely affected by a standard or rule issued under this article may at any time prior to the sixtieth day after such standard or rule is promulgated file a complaint challenging the validity of such standard or rule with the superior court in the county in which the person resides or has his principal place of business, for a judicial review of such standard or rule. The filing of such a complaint shall not, unless otherwise ordered by the court, operate as a stay of the standard or rule. The determinations of the commission shall be conclusive if supported by substantial evidence in the record considered as a whole.

§ 23-411 Temporary and experimental variances

A. Any employer may apply to the commission for a temporary order granting a variance from a standard or regulation or any provision thereof promulgated under this article.

B. Such temporary order shall be granted only if the employer files an application which meets the requirements of subsection C of this section and establishes all of the following:

He is unable to comply with a standard or regulation by its effective date because of unavailability of professional or technical personnel or of materials and equipment needed to come into compliance with the standard or regulation or because necessary construction or alteration of facilities cannot be completed by the effective date.
He is taking all available steps to safeguard his employees against the hazards covered by the standard or regulation.
He has an effective program for coming into compliance with the standard or regulation as quickly as practicable. Any temporary order issued under this section shall prescribe the practices, means, methods, operations and processes which the employer must adopt and use while the order is in effect and state in detail his program for coming into compliance with the standard or regulation. Such a temporary order may be granted only after notice to employees and an opportunity for a hearing before the commission. A hearing must be requested within twenty days of such notice to employees. The commission may issue one interim order to be effective until a decision is made on the basis of the hearing. No temporary order may be in effect for longer than the period needed by the employer to achieve compliance with the standard or regulation or six months, whichever is shorter, except that such an order may be renewed not more than once so long as the requirements of this section are met and if an application for renewal is filed at least sixty days prior to the expiration date of the order. No interim renewal of an order may remain in effect for longer than one hundred eighty days.

C. An application for a temporary order under this section shall contain all of the following:

A specification of the standard or regulation or portion thereof from which the employer seeks a variance.
A representation by the employer, supported by representations from qualified persons having firsthand knowledge of the facts represented, that he is unable to comply with the standard or regulation or portion thereof and a detailed statement of the reasons therefor.
A statement of the steps he has taken and will take with specific dates to protect employees against the hazard covered by the standard or regulation.
A statement of when he expects to be able to comply with the standard or regulation and what steps he has taken and what steps he will take with dates specified to come into compliance with the standard or regulation.
A certification that he has informed his employees of the application by giving a copy thereof to their authorized representative, posting a statement giving a summary of the application and specifying where a copy may be examined at the place or places where notices to employees are normally posted and by other appropriate means. A description of how employees have been informed shall be contained in the certification. The information to employees shall also inform them of their right to petition the commission for a hearing.

D. The commission is authorized to grant an experimental variance from any standard or regulation or portion thereof whenever it determines that such variance is necessary to permit an employer to participate in an experiment approved by the commission and designed to demonstrate or validate new and improved techniques to safeguard the safety or health of workers. An employer applying for an experimental variance must comply with the requirements of subsection C, paragraphs 1, 3 and 5 of this section.

§ 23-412 Permanent variances

Any affected employer may apply to the commission for a rule or order for a variance from a standard or regulation promulgated under this article. Affected employees shall be given notice of each such application and an opportunity to participate in a hearing. The commission shall issue such rule or order if it determines on the record, after opportunity for an inspection where appropriate and a hearing before the commission that the proponent of the variance has demonstrated by a preponderance of the evidence that the conditions, practices, means, methods, operations or processes used or proposed to be used by an employer will provide employment and places of employment to his employees which are as safe and healthful as those which would prevail if he complied with the standard or regulation. The rule or order so issued shall prescribe the conditions the employer must maintain, the practices, means, methods, operations and processes which he must adopt and utilize to the extent they differ from the standard or regulation in question. Such a rule or order may be modified or revoked upon application by an employer, employees or by the commission on its own motion, in the manner prescribed for its issuance under this section at any time after six months from its issuance.

§ 23-413 Protest of validity of order

Any interested party adversely affected by a rule or order issued under sections 23-411 or 23-412 may appeal in accordance with the procedures established in sections 23-945 and 23-946.

§ 23-414 Emergency temporary standards

A. The commission may provide for emergency temporary standards or regulations to take immediate effect upon filing with the secretary of state, if the commission or the United States occupational safety and health administration determines that employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards and that such emergency standard or regulation is necessary to protect employees from such danger.

B. Such emergency temporary standards or regulations shall be effective until superseded by standards or regulations promulgated in accordance with the procedures prescribed in section 23-410.

C. Upon filing such a standard or regulation with the secretary of state the commission shall commence a proceeding in accordance with section 23-410 and the emergency temporary standard or regulation shall serve as a proposed standard or regulation for the proceeding. The commission shall promulgate a standard or regulation under this subsection no later than six months after filing of the emergency temporary standard or regulation.

§ 23-415 Citations

A. If the director, following an inspection or investigation determines that there is reasonable cause to believe that violation exists he shall with reasonable promptness issue a citation to the employer. Each citation shall be in writing and shall contain the following:

A particular description of the nature of the violation, including a reference to the provision of this article, or of any standard or regulation alleged to have been violated.
A reasonable time for the abatement of the violation.
A notice that the employer may request a hearing pursuant to section 23-420 if he is aggrieved by the citation.

B. A certified mail delivery receipt or a signed verification of delivery in person shall be prima facie evidence of receipt of a citation.

C. Each citation issued under this section or a copy or copies thereof shall be prominently posted at or near each place a violation referred to in the citation existed.

D. No citation may be issued after the expiration of a period of six months from the date of the inspection or investigation which produced evidence of the violation.

§ 23-416 De minimis violations

The division may issue an advisory notice setting forth de minimis violations of standards and regulations which shall carry no penalty, unless the employer wilfully and repeatedly violates such standard or regulation, in which case the division may refer the matter to the commission for appropriate action pursuant to section 23-418.

§ 23-417 Enforcement procedure

A. If the director, following an inspection or investigation, issues a citation pursuant to section 23-415 the director, within a reasonable time after termination of the inspection or investigation, shall notify the employer by mail of any penalty proposed to be assessed pursuant to section 23-418 and that the employer has fifteen working days within which to notify the director in writing if the employer wishes to contest the citation or proposed assessment of penalty. If the employer fails to notify the director in writing within fifteen working days of receipt of the notice that the employer intends to contest the citation or penalty and a notice is not filed by any employee or representative of employees pursuant to subsection D of this section within such time, the citation and the assessment, as proposed, shall be a final order of the commission and not subject to review by any court or agency, except that the director may excuse any late notification to contest a citation only if the employer to whom the notice was sent shows by clear and convincing evidence that the notice was not received.

B. The period allowed for correction of a violation shall not begin to run until the entry of a final order in the case of any review proceedings pursuant to this section initiated by the employer in good faith and not solely for delay or avoidance of penalties. If the division has reason to believe an employer has failed to correct a violation for which a citation has been issued within the period allowed, the director shall notify the employer by mail of such failure, of the penalty proposed to be assessed pursuant to section 23-418 and that the employer has fifteen working days within which to notify the director in writing if the employer wishes to contest the notification or proposed assessment of penalty. If the employer fails to notify the director in writing within fifteen working days of receipt of the notice that the employer intends to contest the notice or penalty, the notice and assessment, as proposed, shall be deemed a final order of the commission and not subject to review by any court or agency.

C. Any employer who corrects the violations for which a citation was issued within the period allowed shall so notify the director in writing.

D. Any affected employee or employee representative may request a hearing to appeal the period allowed an employer to abate a particular violation pursuant to section 23-420 if the affected employee or employee representative files the appeal with the director within the abatement period allowed in the citation or within fifteen days after the date of receipt of the citation, whichever is shorter.

E. On a showing by an employer of a good faith effort to comply with the abatement requirements of a citation, and that abatement has not been completed because of factors beyond the reasonable control of the employer, the commission or its authorized designee, after an opportunity for a hearing as provided in section 23-420, shall issue an order affirming or modifying the abatement requirements in such citation. The rules of procedure prescribed by the commission shall provide affected employees or representatives of affected employees an opportunity to participate as parties to hearings under this subsection.

§ 23-418 Penalties; violation; classification

A. Any employer who wilfully or repeatedly violates the requirements of section 23-403 or any standard or regulation adopted pursuant to section 23-410 or 23-414 or this article may be assessed a civil penalty for each wilful violation of not more than the maximum civil penalty, but not less than the minimum civil penalty, for wilful or repeated violations adopted by the United States occupational safety and health administration pursuant to the federal civil penalties inflation adjustment act improvements act of 2015 (P.L. 114-74; 129 Stat. 599).

B. Any employer who has received a citation for a serious violation of this article shall be assessed a civil penalty for each such violation of not more than the maximum civil penalty for serious violations adopted by the United States occupational safety and health administration pursuant to the federal civil penalties inflation adjustment act improvements act of 2015 (P.L. 114-74; 129 Stat. 599).

C. Any employer that has received a citation for a nonserious violation of this article may be assessed a civil penalty for each such violation of not more than the maximum civil penalty for nonserious violations adopted by the United States occupational safety and health administration pursuant to the federal civil penalties inflation adjustment act improvements act of 2015 (P.L. 114-74; 129 Stat. 599).

D. Any employer that fails to correct a violation for which a citation has been issued within the abatement period allowed for its correction, which shall be suspended in case of a review proceeding before an administrative law judge or the review board initiated by the employer in good faith and not solely for delay or avoidance of penalties, may be assessed a civil penalty of not more than the maximum civil penalty for abatement violations adopted by the United States occupational safety and health administration pursuant to the federal civil penalties inflation adjustment act improvements act of 2015 (P.L. 114-74; 129 Stat. 599) for each day during which such failure or violation continues after the abatement date.

E. Any employer that knowingly violates the requirements of section 23-403 or any standard or regulation adopted pursuant to section 23-410 or 23-414 or this article and that violation causes death to an employee is guilty of a class 6 felony, except that if the conviction is for a second or subsequent violation the employer is guilty of a class 5 felony.

F. Any person who knowingly gives advance notice of any inspection to be conducted under this article without authority from the director is guilty of a class 2 misdemeanor.

G. A person who knowingly makes any false statement, representation or certification in any application, record, report, plan or other document filed or required to be maintained pursuant to this article is guilty of a class 2 misdemeanor.

H. Any employer that violates any of the posting requirements of this article shall be assessed a civil penalty for each violation of not more than the maximum civil penalty for posting violations adopted by the United States occupational safety and health administration pursuant to the federal civil penalties inflation adjustment act improvements act of 2015 (P.L. 114-74; 129 Stat. 599).

I. The commission shall have authority to assess all civil penalties provided in this section, giving due consideration to the appropriateness of the penalty with respect to the gravity of the violation, the number of employees employed by the employer, the good faith of the employer and the history of previous violations under this article.

J. Civil penalties owed under this article shall be paid to the commission for deposit in the state general fund. After an order or decision on a civil penalty becomes final pursuant to section 23-417, 23-421 or 23-423, the civil penalty shall act as a judgment against the employer. The commission shall file the civil penalty in the office of the clerk of the superior court in any county in this state and the clerk shall enter the civil penalty in the civil order book and judgment docket. When the civil penalty is filed and entered it is a lien for eight years after the date of the final order or decision on the property of the employer located in the county. Execution may issue on the civil penalty within eight years in the same manner and with like effect as a judgment of the superior court. The civil penalty judgment shall accrue interest pursuant to section 44-1201. The commission may recover reasonable attorney fees incurred pursuant to this section.

§ 23-418.01 Additional penalty for wilful or repeated violation causing employee permanent disability or death covered by workers' compensation; payment to employee; enforcement

A. An additional penalty of twenty-five thousand dollars shall be assessed by the commission against an employer who is assessed a penalty under section 23-418, subsection A for each employee injury resulting in permanent disability or death if the commission finds all of the following:

The employee injury resulting in permanent disability or death was caused by the violation for which the employer is assessed a penalty under section 23-418, subsection A.
Compensation benefits are paid under chapter 6 of this title either:

(a) To the injured employee.

(b) In the event of death, to the employee's dependents. The requirement of this subdivision is satisfied if an employee did not have any dependents for which compensation benefits would have otherwise been paid under chapter 6 of this title.

The violation for which the employer is assessed a penalty under section 23-418, subsection A did not result from the injured or deceased employee's disobedience to specific instructions given to the employee regarding the job condition causing the employee's injury or death or relating to the safety standards applicable to that job condition.

B. Each additional penalty assessed under subsection A of this section shall be paid to the injured employee, or in the event of death, the employee's dependents or the employee's estate if the employee did not have any dependents, in addition to the benefits paid under chapter 6 of this title.

C. If an employer requests a hearing on an additional penalty assessed under this section, the commission shall refer the request for hearing to the office of administrative hearings for determination. An additional penalty under this section that becomes final shall operate as a judgment against the employer and may be enforced by either the commission or the injured employee, or in the case of death, the employee's dependents or the employee's estate if the employee did not have any dependents, and all lawful remedies for the collection of judgments, including provisional remedies, shall be available. This section does not create any right of action or recovery against the employer's workers' compensation insurance carrier, and the additional penalty provided by this section is not a compensation benefit under chapter 6 of this title and is not subject to the payment of attorney fees.

§ 23-419 Imminent dangers

A. The superior court has jurisdiction upon filing of a verified complaint by the commission to restrain any conditions or practices in any place of employment which are such that a danger exists which could reasonably be expected to cause death or serious physical harm immediately or before the imminence of such danger can be eliminated through the enforcement procedures otherwise provided by this article. Any order issued under this section may require such steps to be taken as may be necessary to avoid, correct or remove such imminent danger and prohibit the employment or presence of any individual in locations or under conditions where such imminent danger exists, except individuals whose presence is necessary to avoid, correct or remove such imminent danger or to maintain the capacity of a continuous process operation to resume normal operations or where a cessation of operations is necessary, to permit such to be accomplished in a safe and orderly manner.

B. Upon the filing of any such complaint the superior court has jurisdiction to grant such injunctive relief or temporary restraining order pending the outcome of an enforcement proceeding pursuant to this article. The proceeding shall be as provided by the rules of civil procedure.

C. Whenever, and as soon as the commission or its authorized representative concludes that conditions or practices described in subsection A exist in any place of employment, it shall inform the affected employees and employers of the danger and that it is recommending that relief be sought.

D. If the commission or its authorized representative arbitrarily or capriciously fails to seek relief under this section, any employee who may be injured by reason of such failure or the representative of such employees may bring an action against the commission in superior court for a writ of mandamus to compel the commission to seek such an order and for such further relief as may be appropriate.

§ 23-420 Hearing rights and procedures

A. Subject to section 23-417, an interested party may request a hearing.

B. A request for hearing shall be made in writing, signed by or on behalf of the interested party and including the requesting party's address and e-mail address, stating that a hearing is desired, and mailed or e-mailed to the commission. The request shall also state with particularity the violation, abatement period or penalty that is being protested. Any violation, abatement period or penalty not protested within the time limit specified on the citation or penalty notice will be deemed admitted.

C. The commission shall refer the request for hearing to the office of administrative hearings for determination as expeditiously as possible. The administrative law judge assigned to hear a case arising out of this article shall either be employed or contracted by the office of administrative hearings.

D. At least five days before any hearing, notice of the time and place of the hearing shall be given to all parties in interest by mail at their last known address. The hearing shall be held in the county where the violation has occurred or such other place as selected by the administrative law judge.

E. A record of all proceedings at the hearing shall be kept but need not be transcribed unless a party requests a review of the decision of the administrative law judge.

F. Except as otherwise provided in this section and by rules of procedure promulgated by the commission pursuant to section 23-405, paragraph 4, the administrative law judge is not bound by common law or statutory rules of evidence or by technical or formal rules of procedure and shall conduct the hearing in any manner that will achieve substantial justice.

G. An interested party is entitled to the issuance of subpoenas for the attendance of witnesses, parties and the production of reports, papers, contracts, books, accounts, documents and testimony that are relevant and material to the issue. The commission or the administrative law judge shall issue such subpoenas. The commission may initiate contempt proceedings against any person who refuses to comply with a duly issued subpoena, on application to the superior court. Any person held in contempt may be punished by a fine of not more than one thousand dollars.

§ 23-421 Decisions of the administrative law judge; definition

A. On the conclusion of any hearing, or before the conclusion of any hearing with concurrence of the parties, the administrative law judge shall promptly and not later than thirty days after the matter is submitted for decision decide the matter in accordance with the administrative law judge's determination. The administrative law judge may affirm, reverse or modify the disputed action and any penalty.

B. The decision shall be filed with the commission. A copy of the decision shall be sent immediately by mail or e-mail to all parties in interest.

C. The decision is final unless within fifteen days after the date on which a copy of the decision is mailed or e-mailed to the parties one of the parties requests a review under section 23-423. The request for review shall be filed within fifteen days from the date of mailing or e-mailing of the decision. For the purposes of this section, "filed" means deposited in the United States mail, postage prepaid or actually received at an office of the industrial commission. The decision shall contain a statement explaining these rights and the rights of the parties under section 23-423.

§ 23-422 Review board

A. A review board is established within the commission to hear and rule on appeals of administrative law judge decisions generated in this article. The board shall consist of five members who are appointed by the governor and who by reason of training, education or experience are qualified to carry out the powers and duties of the board. The board shall elect a chairman from the board's membership.

B. Before appointment by the governor, a prospective member of the board shall submit a full set of fingerprints to the governor for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.

C. Members of the board shall be appointed to five-year terms, except that of the members first appointed, one each shall serve for a term of one, two, three, four and five years. A vacancy occurring on the board other than by expiration of a term shall be filled in the manner original appointments were made, for the unexpired portion of the term. The governor may remove members of the board for inefficiency, neglect of duty, malfeasance or nonfeasance in office. The board shall meet as often as necessary to hold review hearings as provided in section 23-423, at times and places as the chairman may determine. A quorum of the board shall be present in order to conduct review hearings or other business. All decisions of the board shall be determined by a majority decision.

D. The commission shall employ a staff necessary for the efficient administration of the board's activities. All personnel of the board shall be under the supervision of the director of the commission and shall be paid from the general fund, subject to legislative appropriation.

E. Board members shall receive compensation pursuant to section 38-611, which shall be paid from the general fund, subject to legislative appropriation.

F. The monies appropriated to carry out the purposes of subsections D and E of this section shall be appropriated to the commission, shall not exceed twenty thousand dollars per year and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The monies shall be kept separate and apart from other monies of the commission and shall be available only to the board.

G. A member of the board shall not participate on a matter with which the member is personally associated. If a member is disqualified pursuant to this subsection or is unable to participate for any other reason on a particular matter, the governor shall appoint a person as a temporary member to participate in the hearing. The person shall meet the qualifications of subsection A of this section.

§ 23-423 Review board rights and procedures; definition

A. A request for review to the review board shall be filed with the commission within fifteen days after the date the decision was mailed or e-mailed to the parties and copies of the request shall be mailed to all other parties to the proceeding before the administrative law judge. For the purposes of this section, "filed" means deposited in the United States mail, postage prepaid or actually received by the commission.

B. The request for review shall state the grounds for review and whether oral argument is requested.

C. When review has been requested, the record of such oral proceedings at the hearing before the administrative law judge for purposes of the review shall be transcribed at the expense of the party requesting review. The record shall be certified to be true and correct by the office of administrative hearings.

D. The board shall give the parties notice of review by mail or e-mail.

E. If oral argument is requested, a hearing date shall be established and notice of the hearing date will be sent with the notice of review to the parties.

F. The review of the board shall be based on the record submitted to it under subsection C of this section and such oral argument as may be requested and received. If the board determines that a case has been improperly, incompletely or otherwise insufficiently developed or heard by the administrative law judge, it may remand the case to the administrative law judge for further evidence taking, correction or other necessary action.

G. The board may affirm, reverse, modify or supplement the decision of the administrative law judge and make such disposition of the case as it determines to be appropriate. The board shall make a decision within thirty days after review has been submitted.

H. The decision of the board shall be filed with the commission and a copy of the decision sent by mail or e-mail to the parties. All decisions of the review board shall be in writing. Decisions of the review board shall be made by a majority vote of the review board. A decision of the review board is binding on the director and the division with respect to the parties involved in the particular appeal. The director shall have the right to seek judicial review of a review board decision irrespective of whether or not the director appeared or participated in the appeal to the review board.

I. The decision of the board is final unless within ten days after the date of service of copies of such decision on the parties, one of the parties applies to the court of appeals for a writ of certiorari to review the lawfulness of the decision. A copy of such application shall be forthwith transmitted to the clerk of the court, to the review board, to the commission and to the other parties and within ten days therefrom, the commission shall certify the record, proceedings and evidence before the administrative law judge and the review board to the court of appeals. On such filing, the court shall have jurisdiction of the proceedings and of the question determined therein, and shall have power to make and enter on the pleadings, testimony and proceedings set forth in such record a decree affirming, modifying or setting aside in whole or in part, the order of the review board and enforcing the same to the extent that such order is affirmed or modified. The commencement of proceedings under this subsection does not, unless ordered by the court, operate as a stay of the order of the review board. No objection that has not been urged before the review board shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. The findings of the review board with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive. If any party applies to the court for leave to adduce additional evidence and shows to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the hearing before the administrative law judge, the court may order such additional evidence to be taken before the administrative law judge and to be made a part of the record. Petitions filed under this subsection shall be heard expeditiously and the decision of the review board shall contain a statement of this right of appeal.

§ 23-425 Employee discharge or discrimination

A. No person shall discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this article or has testified or is about to testify in any such proceeding or because of the exercise by such employee on behalf of himself or others of any right afforded by this article.

B. Any employee who believes that he has been discharged or otherwise discriminated against by any person in violation of this section may within thirty days after such violation occurs, file a complaint with the commission alleging such discrimination. Upon receipt of such complaint, the commission shall cause such investigation to be made as it deems appropriate. If upon such investigation, the commission determines that the provisions of this section have been violated, it shall bring an action in any appropriate superior court against such person. In any such action the superior court shall have jurisdiction for cause shown to restrain violations of subsection A and order all appropriate relief including rehiring or reinstatement of the employee to his former position with back pay.

C. Within ninety days of the receipt of a complaint filed under this section the commission shall notify the complainant of its determination under subsection B.

§ 23-426 Confidentiality of trade secrets

All information reported to or likewise obtained by the commission or its representatives in connection with any inspection or investigation under this article which contains or which might reveal a trade secret shall be considered confidential for the purpose of this article, except that such information may be disclosed to other representatives of the division or commission concerned with carrying out this article or when relevant in any proceeding under this article. In any such proceeding, the director, the commission, the administrative law judge, the review board or the courts shall issue orders as may be appropriate to protect the confidentiality of trade secrets.

§ 23-427 Employer recordkeeping

A. Each employer shall make, keep and preserve, and make available to the commission such records regarding his activities relating to this article as the commission may prescribe by regulations as necessary or appropriate for the enforcement of this article or for developing information regarding the causes and prevention of occupational accidents and illnesses. In order to carry out the provisions of this subsection such regulations may include provisions requiring employers to conduct periodic inspections. The commission shall also issue regulations requiring that employers, through posting of notices or other appropriate means, keep their employees informed of their protections and obligations under this article including the provisions of applicable standards.

B. The commission shall prescribe regulations requiring employers to maintain accurate records of and to make periodic reports on work-related deaths, injuries and illnesses other than minor injuries requiring only first aid treatment and which do not involve medical treatment, loss of consciousness, restriction of work or motion or transfer to another job.

C. The commission shall issue regulations requiring employers to maintain accurate records of employee exposures to potentially toxic materials or harmful physical agents which are required to be monitored or measured under section 23-410. Such regulations shall provide employees or their representatives with an opportunity to observe such monitoring or measuring and to have access to the records thereof. Such regulations shall also make appropriate provision for each employee or former employee to have access to such records as will indicate his own exposure to toxic materials or harmful physical agents. Each employer shall promptly notify any employee who has been or is being exposed to toxic materials or harmful physical agents in concentrations or at levels which exceed those prescribed by an applicable occupational safety and health standard promulgated under section 23-410 and shall inform any employee who is being thus exposed of the corrective action being taken.

D. Any information obtained by the commission under this article shall be obtained with a minimum burden upon employers, especially those operating small businesses. Unnecessary duplication of efforts in obtaining information shall be reduced to the maximum extent feasible, with concern for the required federal information.

E. No recordkeeping or information requirements promulgated by the commission shall eliminate an employer's responsibility under the federal law to provide information required by the secretary of labor.

§ 23-428 State legal representation

A. The office of the chief counsel of the industrial commission of Arizona may appear for and represent the commission or the director or his authorized representative in any civil litigation brought under this article.

B. In any criminal proceeding initiated under this article, the office of the chief counsel of the industrial commission of Arizona may appear for, represent and prosecute in the name of the state of Arizona.

§ 23-429 Employer and employee representation

Notwithstanding the provisions of section 32-261, any affected employee or employer may designate any person or persons to represent him for the purpose of proceedings before any administrative law judge or review board under this article.

§ 23-430 Political subdivision jurisdiction

A. Nothing in this article shall prevent any county, city or other political subdivision of the state or any court from asserting jurisdiction over any occupational safety or health issue with respect to which no standard or regulation is in effect under section 23-410 or 23-414.

B. Any county, city or other political subdivision of this state which at any time desires to assume responsibility for development or enforcement of occupational safety and health standards or regulations relating to any occupational safety or health issue with respect to which a state standard or regulation has been promulgated under section 23-410 or 23-414 shall submit a plan for the development or enforcement of such standards and regulations to the commission.

C. The commission may approve any plan submitted under subsection B of this section, if such plan is as effective as the state development or enforcement program and does not conflict with the requirements of the United States department of labor under the occupational safety and health act of 1970.

D. The commission shall periodically review any development or enforcement program approved under subsection C of this section, and shall reassume all responsibility therein for the development or enforcement of occupational safety and health standards and regulations if the commission determines that the program of any such county, city or other political subdivision is not as effective as the state program.

§ 23-431 Standards of competency

The commission may establish requirements and standards of competency for individuals involved in inspecting, constructing, relocating, altering, dismantling, maintaining or repairing elevators, dumbwaiters, escalators, moving walks, boilers and pressure vessels.

§ 23-432 Voluntary protection and other model system implementation programs; exemption

A. The division shall adopt definitions, regulations and standards necessary for the operation of the program in a manner that will promote safe and healthy workplaces throughout this state. Standards for the program shall include the following requirements for participation:

Upper management leadership and active and meaningful employee involvement.
Systematic assessment of occupational hazards.
Comprehensive hazard prevention, mitigation and control programs.
Employee safety and health training.
Safety and health program evaluation by the division to ensure that a workplace continuously meets the standards and regulations.

B. Applications for participation in the program shall be submitted by the workplace's management. Applications shall include documentation establishing to the satisfaction of the division that the employer meets all requirements for program participation.

C. The division shall provide for on-site evaluations by the division's consultation section of each workplace that has applied to participate in the program to determine that the applicant's workplace complies with the requirements for program participation.

D. A workplace's continued participation in the program is conditioned on compliance with the requirements for program participation, as determined by periodic, planned on-site evaluations by the division.

E. During periods in which a workplace is a program participant, the workplace is exempt from inspections or investigations under section 23-408. This exception does not apply to inspections or investigations of the workplace arising from complaints, referrals, fatalities, catastrophes, nonfatal accidents or significant toxic chemical releases.

F. Any workplace that was a participant in the uncodified voluntary protection program or any other program that implements a model system conducted by the division before August 9, 2017 may continue as a participant in the program established pursuant to this section. Beginning on August 9, 2017, the continued participation by such a workplace in the program is conditioned on the workplace's compliance with the requirements for program participation adopted by the division.

§ 23-433 Consulting program

A. The division shall develop a consulting program utilizing visits to the workplace of employers to provide consultation and advice to such employers. Such visits:

May be conducted only upon request by an employer for consultation and advice on the interpretation or applicability of standards, possible alternative ways of complying with applicable standards or other matters related to accident prevention, occupational health or obligations pursuant to this article.
Shall be limited to matters specified in the request.

B. If, after evaluating such request, the director determines an alternative means of providing consultation is more appropriate and equally effective, he may provide such alternative means rather than consultation at the workplace.

C. The director shall make recommendations regarding solutions to matters within the scope of the workplace consultation.

D. No visit pursuant to this section shall be regarded as an inspection or investigation pursuant to section 23-415. No citation shall be issued nor shall any civil penalties be proposed upon such visit, except that nothing in this section shall affect in any manner any provision of this article the purpose of which is to eliminate imminent danger violations.

Article 11 Safety Conditions for Boilers, Pressure Vessels and Lined Hot Water Heaters

§ 23-471 Definitions

In this article, unless the context otherwise requires:

"Authorized representative" means the boiler chief and boiler inspector employed by the division.
"Boiler" means a closed vessel in which water or other liquid is heated, steam or vapor is generated or steam or vapor is superheated, or any combination thereof, under pressure or vacuum for a use that is external to itself, by the direct application of heat from the combustion of fuels or from electricity.
"Certificate" means a certificate of competency.
"Certificate inspection" means an internal inspection, when construction permits, otherwise it means as complete an inspection as possible.
"Commission" means the industrial commission of Arizona.
"Director" means the director of the division of occupational safety and health.
"Division" means the division of occupational safety and health of the commission.
"Heating boilers" means a steam or vapor boiler operating at a pressure not exceeding fifteen pounds per square inch or a hot water boiler operating at a pressure not exceeding one hundred sixty pounds per square inch or a temperature not exceeding two hundred fifty degrees Fahrenheit.
"High temperature water boiler" means a water boiler intended for operation at pressures in excess of one hundred sixty pounds per square inch or temperatures in excess of two hundred fifty degrees Fahrenheit.
"Interested party" means the commission, agents of the commission and any owner or operator who has been issued a notice of violation.
"Lined hot water heater" means a fired lined water heater with linings providing corrosion resistance for supplying potable hot water for commercial purposes. Lined hot water heaters are exempted when none of the following limitations are exceeded:

(a) Heat input of two hundred thousand British thermal units per hour.

(b) Water temperature of two hundred ten degrees Fahrenheit.

"Owner" or "operator" means any individual or type of organization, including this state and all political subdivisions of this state, that has title to or controls, or has the duty to control, the operation of one or more boilers, pressure vessels or lined hot water heaters.
"Power boiler" means a boiler in which steam or other vapor is generated at a pressure more than fifteen pounds per square inch.
"Pressure vessel" means a container for the containment of pressure, either internal or external. The pressure may be obtained from an external source, or by the application of heat from a direct or indirect source, or any combination thereof.
"Process boiler" means a heating boiler or a power boiler used for processing purposes where the make-up water exceeds ten percent.

§ 23-472 Administration

The division shall administer the provisions of this article.

§ 23-473 Owner's and operator's duty

Every owner or operator of any boiler, pressure vessel or lined hot water heater shall:

Furnish, maintain and provide safe and adequate boilers, pressure vessels or lined hot water heaters.
Comply with all standards and regulations issued pursuant to this article.

§ 23-474 Duties of commission

The commission shall:

Administer this article through the division of occupational safety and health.
Adopt standards and regulations pursuant to section 23-475 and adopt other rules as are necessary.
Exercise other powers as are necessary to carry out the duties and requirements of this article.

§ 23-475 Duties of division

The division shall:

Certify special inspectors as provided in section 23-485.
Inspect boilers, pressure vessels and lined hot water heaters under this article, except that beginning on July 1, 2017 the division may not inspect boilers, pressure vessels and lined hot water heaters.
Establish a schedule to require regular boiler, pressure vessel and lined hot water heater inspections.
Recommend standards, regulations and amendments to the standards and regulations to the commission for approval or disapproval.
Enforce, under section 23-478, all standards and regulations adopted by the commission.

§ 23-476 Safety standards and regulations

A. Safety standards and regulations shall be formulated in the following manner:

The division shall either propose adoption of national consensus standards or federal standards or draft such regulations as it considers necessary after conducting sufficient investigation through the division's employees and through consultation with the boiler advisory board and other persons knowledgeable in the business for which the standards or regulations are being formulated.
Proposed standards or regulations, or both, shall be submitted to the commission for its approval.

B. Any person who may be adversely affected by a standard or regulation issued pursuant to this article may at any time prior to the sixtieth day after such standard or regulation is promulgated file a complaint challenging the validity of such standard or regulation with the superior court of the county in which the person resides or has his or her principal place of business, for a judicial review of such standard or regulation. The filing of such a complaint shall not, unless otherwise ordered by the court, operate as a stay of the standard or regulation. The determinations of the commission shall be conclusive if supported by substantial evidence in the record considered as a whole.

C. In case of conflict between standards and regulations, the regulations shall take precedence.

§ 23-477 Notice requesting investigation

A. Any person may make a request for an investigation by the division into alleged violations of section 23-473 by giving notice to the director or the director's authorized representative of such violation or danger. Such notice shall be reduced to writing, set forth with reasonable particularity the grounds for the notice and be signed.

B. If upon receipt of such notification the director determines that there are reasonable grounds to believe that such violation or danger exists, the director shall make an investigation pursuant to this article as soon as practicable to determine if such violation or danger exists. If the director determines there are no reasonable grounds to believe that a violation or danger exists, the director shall notify the requesting party in writing of such determination.

§ 23-478 Enforcement

A. If the division, following an inspection or investigation determines that there is reasonable cause to believe that there exists a violation of a standard or regulation the division shall issue a notice of violation directing any repairs, improvements, changes or additions necessary to eliminate the hazard. Each notice of violation shall be in writing, delivered either by mail or in person and shall contain the following:

A particular description of the nature of the violation, including a reference to the provision of this article or of any standard or regulation alleged to have been violated.
A reasonable time for the abatement of the violation.

B. Each notice of violation issued pursuant to this section or a copy or copies of such notice of violation shall be prominently posted at or near each place a violation referred to in the notice of violation existed.

C. If in the opinion of the director or the director's authorized representative the continued operation of the defective boiler, pressure vessel or lined hot water heater constitutes an immediate danger to the safety of the occupants of the establishment or the persons operating such boiler, pressure vessel or lined hot water heater the director or director's authorized representative may condemn such device and require the boiler, pressure vessel or lined hot water heater to be returned to a condition allowing safe operation before use of the boiler, pressure vessel or lined hot water heater is resumed.

D. On failure of an owner or operator to comply with either the requirements of a notice of violation issued pursuant to subsection A of this section or condemnation pursuant to this subsection, the commission may file an action in the superior court in the county where the violation occurred to enjoin the owner or operator from engaging in further acts in violation of the requirements of the notice of violation or the condemnation. Any person found to be in contempt of an injunctive order of the court shall be fined not less than fifty nor more than three hundred dollars with each day of violation constituting a separate contempt.

§ 23-479 Hearing rights and procedures

A. Any interested party may request a hearing before the commission to contest the notice of violation issued pursuant to this article.

B. A request for hearing shall be made in writing, signed by or on behalf of the interested party and include such party's address. The request shall also state with particularity the violation or abatement period which is being protested. The request for hearing shall be filed within fifteen days from the issuance of the notice of violation or the notice of violation will be deemed final and admitted. For the purposes of this section "filed" means actually received at an office of the commission.

C. 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 if it appears that the disputed issues have been resolved by the parties. Any interested party who objects to such dismissal may request a review pursuant to section 23-481.

D. 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. Hearings shall be held in the county where the alleged violation occurred or such other place selected by the administrative law judge.

E. 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 petition for special action pursuant to section 23-483. The record of the proceedings if not transcribed shall be kept for at least two years.

F. 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.

G. Any party shall be entitled to issuance and service of subpoenas under the general subpoena powers of the commission. Any party or a representative may serve such subpoenas.

H. Any interested party or an authorized agent shall be entitled to inspect the file of the commission if such authorization is filed in writing with the commission.

I. 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 administrative law judge 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. The administrative law judge shall immediately transfer the matter to another administrative law judge of the commission who shall preside. Not more than one change of administrative law judge shall be granted to any one party.

J. Grounds which may be alleged for change of administrative law judge are that:

The administrative law judge has been engaged as counsel in the hearing prior to appointment as administrative law judge.
The administrative law judge is otherwise interested in the hearing.
The administrative law judge is related to a party to the hearing.
The administrative law judge is a material witness in the hearing.
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.

§ 23-480 Decisions of administrative law judge; contents; disposition and effect

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

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

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

D. The decision is final when entered unless within fifteen days after the date on which a copy of the decision is mailed to the parties, one of the parties files a request for review pursuant to section 23-481. The decision shall contain a statement explaining the rights of the parties pursuant to section 23-481.

§ 23-481 Decision upon review

A. The request for review of an administrative law judge decision need only state that the party requests a review of the decision. 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.

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

C. 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 party requesting review.

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

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

F. The presiding administrative law judge may affirm, reverse, rescind, modify or supplement the decision 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.

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

H. The decision upon review shall be final unless within fifteen days after the date of mailing of copies of such decision to the parties, one of the parties applies to the court of appeals by a petition for special action pursuant to section 23-483. The decision shall contain a statement explaining the rights of the parties pursuant to this section and section 23-483.

§ 23-482 Time for compliance with order; extension of time; effect of orders

A. The commission shall, upon application of any employer, grant such time as reasonably necessary for compliance with an order. A person may petition the commission for an extension of time to comply with an order, which the commission shall grant if it finds the extension necessary.

B. All orders of the commission in conformity with law shall be valid and in force and prima facie reasonable and lawful until found otherwise in an action brought for such purpose pursuant to the provisions of this article or until altered or revoked by the commission.

C. A substantial compliance with the requirements of this article shall be sufficient to give effect to the orders of the commission, and they shall not be declared inoperative, illegal or void for an omission of a technical nature.

§ 23-483 Petition for special action to review lawfulness of decision, order or decision upon review; procedure

A. Any party affected by a decision of the commission or by a decision upon review pursuant to section 23-481 may apply to the court of appeals by a petition for special action to review the lawfulness of the decision, order or decision upon review.

B. The petition for special action provided by subsection A of this section and by section 23-481 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 petition for special action 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 order or decision. If necessary, the court may review the evidence.

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

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

E. The rules of civil procedure relating to special actions shall apply so far as applicable and not in conflict with this article.

§ 23-484 Nonimpairment of other agencies

Nothing contained in this article shall in any way impair the authority or responsibility of political subdivisions of this state with regard to the local enforcement of licensing, safety or police regulation authorized by local ordinance or state law if, upon determination by the commission, the enforcement program employed by such political subdivision is found to be at least equal to the state enforcement program.

§ 23-485 Special inspectors; civil liability

A. The division, on the request of any company that has received a certificate of accreditation from either the national board of boiler and pressure vessel inspectors or the American society of mechanical engineers as an authorized inspection agency or an owner-user inspection organization, may issue to any inspector of that company a certificate as a special inspector. Before receiving a certificate, the inspector must demonstrate that the inspector holds a current commission issued by the national board of boiler and pressure vessel inspectors.

B. A certificate as a special inspector for a company operating boilers, pressure vessels or lined hot water heaters in this state shall be issued only if, in addition to meeting the requirements of this section, the inspector is employed full time by such company and the inspector's duties include making inspections of boilers, pressure vessels or lined hot water heaters to be used by such company and not for resale.

C. Each company employing such special inspectors, within sixty days after each boiler, pressure vessel or lined hot water heater inspection made by the inspectors, shall file a report of the inspection with the division on appropriate forms or make entry into the division's computer database.

D. All insurance companies shall notify the division of all boilers, pressure vessels or lined hot water heaters on which insurance is written. All insurance companies shall also notify the division of all boilers, pressure vessels or hot water heaters on which insurance is cancelled, not renewed or suspended because of unsafe conditions.

E. The furnishing of a certificate inspection, as authorized by the commission pursuant to section 23-475, that is conducted incidental to the issuance or renewal of boiler and machinery insurance or a contractual certificate inspection when performed in accordance with the standards and regulations adopted by the commission shall not subject an insurer, a noninsurer, whether domestic or foreign, or a contracted inspection organization, its agents or its employees to liability for damages for any act or omission in the course of performing inspections as provided by this section. This subsection does not apply if the gross negligence of the insurer, noninsurer or contracted inspection organization, its agent or its employee created the condition that was the proximate cause of the injury, death or loss.

§ 23-486 Boiler advisory board; members; terms; meetings

A. The boiler advisory board is established to assist the commission in drafting standards and regulations for boilers, pressure vessels and lined hot water heaters. The boiler advisory board consists of the following members who are appointed by the commission:

One member who represents the boiler, pressure vessel or lined hot water heater manufacturer industry.
One member who represents a public utility.
One member who represents the insurance industry.
One member who is an owner or operator of a boiler, pressure vessel or lined hot water heater.
One member who is a licensed contractor.

B. The initial members of the boiler advisory board shall assign themselves by lot to terms of one or two years in office. All subsequent members serve three-year terms of office. The chairperson shall notify the commission of these appointments.

C. The boiler advisory board shall annually elect a chairperson from its members.

D. The boiler advisory board shall meet at least annually and on the call of the commission. The commission shall determine the time and place of boiler advisory board meetings.

§ 23-487 Political subdivision jurisdiction

This article shall apply to any political subdivisions of this state except those political subdivisions having boiler inspection regulations equal to those of this state at the time this article becomes effective.

§ 23-488 Division inspection service

A. The division may enter into agreements to provide inspection services during the manufacture, assembly, erection, or repair of boilers, pressure vessels, lined hot water heaters or any appurtenant components to such boilers, pressure vessels or heaters whenever such inspections are requested by holders of authorized symbols of American society of mechanical engineers or the national board of boiler and pressure vessel inspectors.

B. The commission, through the division, may fix and collect inspection fees that shall be determined on the basis of an hourly rate for inspection plus reimbursement for actual expenses incurred, provided that no hourly rate for inspection shall exceed thirty dollars per hour.

C. The commission shall deposit, pursuant to sections 35-146 and 35-147, all fees received in the state general fund.

Article 12 Safety Conditions for Elevators and Similar Conveyances

§ 23-491 Definitions

In this article, unless the context otherwise requires:

"Authorized representative" means the elevator chief and elevator inspector employed by the division.
"Certificate" means a certificate of inspection issued by the division.
"Commission" means the industrial commission of Arizona.
"Conveyance" means an elevator, dumbwaiter, escalator, moving walk, manlift, personnel hoist, material hoist, stage lift and special purpose personnel elevator, excluding conveyances located at mines and subject to regulation and inspection by the state mine inspector pursuant to title 27, chapter 3.
"Director" means the director of the division of occupational safety and health.
"Division" means the division of occupational safety and health of the industrial commission.
"Dumbwaiter" means a hoisting and lowering mechanism with a car of limited capacity and size that moves in guides in a substantially vertical direction and that is used exclusively for carrying material.
"Elevator" means a hoisting and lowering mechanism equipped with a car or platform that moves in guides in substantially vertical direction and that serves two or more floors of a building or structure.
"Elevator company" means a person that is engaged in the business of erecting, constructing, installing, altering, servicing, repairing or maintaining conveyances.
"Escalator" means a power driven, inclined, continuous stairway used for raising or lowering passengers.
"Interested party" means the commission and its agents and the owner or operator who has been issued a correction order.
"Manlift" means a device consisting of a power driven endless belt moving in one direction only and provided with steps or platforms and attached handholds for the transportation of personnel from floor to floor.
"Material hoist" means a hoist for raising and lowering materials only and prohibiting the hoisting of persons.
"Moving walk" means a type of passenger carrying device on which passengers stand or walk and in which the passenger carrying surface remains parallel to its direction of motion and is uninterrupted.
"Owner" or "operator" means an individual or organization including this state and all political subdivisions of this state who has title to, controls or has the duty to control the operation of one or more conveyances, but shall not include an individual or organization engaged in mining or metallurgical operations whose operation is subject to regulation and inspection by the state mine inspector pursuant to title 27, chapter 3.
"Personnel hoist" means a mechanism for use in connection with the construction, alteration, maintenance or demolition of a building, structure or other work, used for hoisting and lowering workers and materials and equipped with a car that moves on guide members during its vertical movement. The term includes a hoistway of a personnel hoist.
"Private elevator inspector" means an individual who is authorized by the commission under section 23-491.16 to conduct inspections under this article.
"Special purpose personnel elevator" means a passenger, hand powered, counterweighted device or an electric powered device that travels vertically in guides and that serves two or more landings.
"Stage lift" means a hoisting and lowering mechanism equipped with a platform that moves in guides in a substantially vertical direction and that serves one or more landings.

§ 23-491.01 Administration

The division shall administer the provisions of this article.

§ 23-491.02 Owner's and operator's duty

Every owner and operator of a conveyance shall:

Construct, furnish, maintain and provide safe and adequate devices with which to safely and properly convey or move all persons and material utilizing the services offered by the owner or operator of such device.
Comply with all standards and regulations issued pursuant to this article.
Ensure that a conveyance is inspected at all of the following times:

(a) Before placing a conveyance in operation after the initial installation of the conveyance.

(b) After modification or alteration of a conveyance.

§ 23-491.03 Existing conveyances

Existing conveyances lawfully installed prior to the effective date of this article may continue in use if the use is, in the opinion of the director, not a hazard to life, health or property.

§ 23-491.04 Commission powers and duties

A. The commission shall:

Administer this article through the division of occupational safety and health.
Promulgate standards and regulations pursuant to section 23-491.06 as required and promulgate such other rules and regulations and exercise such other powers as are necessary to carry out this article.

B. The commission, by rule and regulation, may set fees not to exceed the actual cost for inspections performed pursuant to this article.

§ 23-491.05 Division powers

The division may:

Inspect conveyances when deemed necessary or appropriate by the division.
Recommend to the commission for approval or disapproval standards and regulations and amendments to such standards and regulations.
Enforce, pursuant to section 23-491.09, all standards and regulations promulgated by the commission.

§ 23-491.06 Development of standards and regulations

A. Safety standards and regulations shall be formulated in the following manner:

The division shall either propose adoption of national consensus standards or federal standards or draft such regulations as it considers necessary after conducting sufficient investigations through the division's employees and through consultation with other persons knowledgeable in the business for which the standards or regulations are being formulated.
Proposed standards or regulations, or both, shall be submitted to the commission for approval.

B. Any person who may be adversely affected by a standard or regulation issued under this article may, at any time within sixty days after such standard or regulation is promulgated by the commission, file a complaint challenging the validity of such standard or regulation with the superior court in the county in which the person resides or has the person's principal place of business, for a judicial review of such standard or regulation. The filing of a complaint shall not, unless otherwise ordered by the court, operate as a stay of the standard or regulation. The determinations of the commission shall be conclusive if supported by substantial evidence in the record considered as a whole.

C. In case of conflict between standards and regulations, the regulations shall take precedence.

§ 23-491.07 Certificate of inspection

No conveyance shall be operated in this state without an annual certificate of inspection issued by the division. The division shall issue such certificate of inspection if, after inspection, the conveyance is found to comply with the standards and regulations adopted pursuant to this article.

§ 23-491.08 Notice requesting investigation; confidentiality; determination of grounds

A. Any person may make a request for an investigation by the division into alleged violations of section 23-491.02 by giving notice to the director or the director's authorized representative of such violation or danger. Such notice shall be in writing, shall set forth with reasonable particularity the grounds for the notice and shall be signed by the person making the request. Upon the request of the person signing the notice, such person's name shall not appear on any copy of such notice or any record published, released or made available.

B. If upon receipt of such notification the director determines that there are reasonable grounds to believe that such violation or danger exists, the director shall make an investigation in accordance with the provisions of this article as soon as practicable to determine if such violation or danger exists. If the director determines there are no reasonable grounds to believe that a violation or danger exists, the director shall notify the requesting party in writing of such a determination.

§ 23-491.09 Enforcement

A. If the division, following an inspection or investigation, determines that there is reasonable cause to believe that there is a violation of a standard or regulation, the division shall issue a correction order directing any repairs, improvements, changes or additions necessary to eliminate the hazard. Each correction order shall be in writing, delivered either by mail or in person and shall contain the following:

A particular description of the nature of the violation, including a reference to the provision of this article or of any standard or regulation alleged to have been violated.
A reasonable time for the abatement of the violation.

B. No correction order may be issued after the expiration of a period of six months from the date of the inspection or investigation which produced evidence of the violation.

C. If in the opinion of the director or the director's authorized representative the continued operation of the defective device constitutes an immediate danger to the safety of the persons operating or being conveyed by such device, the director or the director's authorized representative may condemn such device and require it to be returned to a condition allowing safe operation before its use is resumed.

D. Upon failure of an owner or operator to comply with either the requirements of a correction order issued pursuant to subsection A or condemnation pursuant to this subsection, the commission may file an action in the superior court of the county where the violation occurred to enjoin the owner or operator from engaging in further acts in violation of the requirements of the correction order or the condemnation. Any person found to be in contempt of an injunctive order of the court shall be fined not less than fifty nor more than three hundred dollars with each day of violation constituting a separate contempt.

§ 23-491.10 Hearing rights and procedures

A. Any interested party may request a hearing before the commission to contest any correction order issued pursuant to this article.

B. A request for hearing shall be made in writing, signed by or on behalf of the interested party and include such party's address.

E. 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 petition for special action pursuant to section 23-491.14. The record of the proceedings if not transcribed shall be kept for at least two years.

F. Except as otherwise provided in this section and rules or procedures 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.

G. Any party shall be entitled to issuance and service of subpoenas under the general subpoena powers of the commission. Any party or a representative may serve such subpoenas.

H. Upon the filing of a request for hearing, any interested party or his authorized agent is entitled to inspect the file of the commission provided the authorized agent has filed the authorization to inspect with the commission.

I. 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 administrative law judge of the commission hearing such matter or commencing to hear such matter, setting forth any of the grounds as provided in subsection J of this section. The administrative law judge shall immediately transfer the matter to another administrative law judge of the commission who shall preside. Not more than one change of administrative law judge shall be granted to any one party.

J. Grounds which may be alleged for change of administrative law judge are that:

The administrative law judge has been engaged as counsel in the hearing prior to appointment as administrative law judge.
The administrative law judge is otherwise interested in the hearing.
The administrative law judge is related to a party to the hearing.
The administrative law judge is a material witness in the hearing.
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.

§ 23-491.11 Decisions of administrative law judge; contents; disposition and effect

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

D. The decision is final when entered unless within fifteen days after the date on which a copy of the decision is mailed to the parties, one of the parties files a request for review pursuant to section 23-491.12. The decision shall contain a statement explaining the rights of the parties pursuant to such section.

§ 23-491.12 Decision upon review

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

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

E. The review shall be made by the presiding administrative law judge and shall be based upon the record and the memorandum submitted pursuant to subsection A of this section.

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

H. The decision upon review shall be final unless within fifteen days after the date of mailing of copies of such decision to the parties one of the parties applies to the court of appeals by a petition for special action pursuant to section 23-491.14. The decision shall contain a statement explaining the rights of the parties pursuant to this section and section 23-491.14.

§ 23-491.13 Effective date of orders; time for compliance; effect of orders

A. The commission shall, upon application of any owner or operator, grant such time as reasonably necessary for compliance with an order. A person may petition the commission for an extension of time to comply with an order which the commission shall grant if it finds the extension necessary.

§ 23-491.14 Petition for special action to review lawfulness of decision, order or decision upon review; procedure

A. Any party affected by a decision of the commission or by a decision upon review pursuant to section 23-491.12 may apply to the court of appeals by a petition for special action to review the lawfulness of the decision, order or decision upon review.

B. The petition for special action provided by subsection A of this section and by section 23-491.12 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 petition for special action 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 order or decision. If necessary, the court may review the evidence.

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

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

E. The rules of civil procedure relating to special actions shall apply so far as applicable and not in conflict with this article.

§ 23-491.15 Nonimpairment of other agencies

Nothing contained in this article shall in any way impair the authority or responsibility of political subdivisions of this state with regard to the local enforcement or licensing, safety or police regulation authorized by local ordinance or state statute if, upon determination by the commission, the standards employed by such political subdivision are found to be at least equal to those promulgated by the commission.

§ 23-491.16 Private elevator inspector; qualifications; civil penalty; prohibited conduct; exemption from rule making

A. The commission may authorize an individual to perform initial or annual inspections under this article or any other inspection under this article designated by the commission, if the individual does all of the following:

Meets the qualifications and insurance requirements prescribed by the commission.
Is certified by an organization that is accredited by a national society of mechanical engineers in accordance with a national standard for safety of elevators, dumbwaiters, escalators and moving walks as determined by the commission.
Follows the inspection procedures established by the commission for private elevator inspectors.

B. A private elevator inspector shall register with the commission annually and provide proof of all of the following with the registration:

Completion of at least eight hours of continuing education approved by the commission.
That the certification prescribed in subsection A is in good standing.
That the private elevator inspector is maintaining the insurance prescribed by the commission.

C. The commission may suspend or revoke a private elevator inspector's authorization to perform inspections for any reason related to the performance of an inspection under this article or for any other good cause as determined by the commission.

D. The commission may impose a civil penalty of one thousand dollars on a private elevator inspector or an elevator company for each instance the inspector or company does any of the following:

Makes a false statement as to a material matter in an application for authorization under this article.
Commits fraud, misrepresentation or bribery in regard to conveyances or any inspection or action taken pursuant to this article.
Commits a violation of this article or the rules or inspection procedures adopted pursuant to this article.

E. A private elevator inspector shall not do any of the following:

Inspect a conveyance owned, operated or last serviced by any of the following:

(a) The private elevator inspector.

(b) A company owned by the private elevator inspector.

(d) A company affiliated with a company owned by the private elevator inspector or for which the private elevator inspector is an employee at the time of the inspection.

Engage in the sale or service of anything related to elevators.
Conduct an inspection pursuant to this article unless the inspector has the current certification and commission authorization pursuant to subsection A.

F. This state is not liable for any act or omission of a private elevator inspector. The commission is not obligated to pay any fee charged or other consideration sought by a private elevator inspector for an inspection pursuant to this article. The fee or consideration is the sole obligation of the owner or operator that retained or contracted with the private elevator inspector.

G. The commission shall compile a list of private elevator inspectors that are currently authorized pursuant to subsection A. An owner or an operator may hire a private elevator inspector.

H. An owner or operator is not relieved of the obligations under this article by the use of a private elevator inspector.

I. The commission is exempt from the rule making requirements of title 41, chapter 6, in the adoption of private elevator inspector qualifications and inspection procedures.

J. Civil penalties and interest assessed pursuant to this section act as a judgment in the same manner and with like effect as if they were a judgment of the superior court. The commission may recover reasonable attorney fees incurred in collecting any civil penalty assessed under this section. All monies collected pursuant to this section shall be deposited in the administrative fund established by section 23-1081.

Article 14 Drug Testing of Employees

§ 23-493 Definitions

In this article, unless the context otherwise requires:

"Alcohol" means ethanol, isopropanol or methanol.
"Current use of any drug" means drug use that has occurred recently enough to justify an employer's reasonable belief that involvement with drugs is ongoing. Current use of any drug is not limited to any specific time frame and depends on the facts of each individual case.
"Drugs" means any substance considered unlawful under the schedules of the controlled substances section of the comprehensive drug abuse prevention and control act of 1970, as amended, (P.L. 91-513; 84 Stat. 1247; 21 United States Code section 812) or pursuant to title 13, chapter 34 or the metabolite of the substance.
"Employee" means any person in the service of an employer.
"Employer" means this state, a political subdivision of this state or any person, firm, company, corporation, labor organization, employment agency or joint labor-management committee, including any public utility, transit district or special taxing district organized pursuant to title 48, chapter 17 or 22, that has one or more full-time employees employed in the same business, or in or about the same establishment, under any contract of hire, express or implied, oral or written.
"Good faith" means reasonable reliance on fact, or that which is held out to be factual, without the intent to deceive or be deceived and without reckless or malicious disregard for the truth. Good faith does not include a belief formed with gross negligence. A good faith belief may be based on any of the following:

(a) Observed conduct, behavior or appearance.

(b) Information reported by a person believed to be reliable, including a report by a person who witnessed the use or possession of drugs or drug paraphernalia at work.

(d) Lawful video surveillance.

(e) Records of government agencies, law enforcement agencies or courts.

(f) Results of a test for the use of alcohol or drugs.

(g) Other information reasonably believed to be reliable or accurate.

"Impairment" means symptoms that a prospective employee or employee while working may be under the influence of drugs or alcohol that may decrease or lessen the employee's performance of the duties or tasks of the employee's job position, including symptoms of the employee's speech, walking, standing, physical dexterity, agility, coordination, actions, movement, demeanor, appearance, clothing, odor, irrational or unusual behavior, negligence or carelessness in operating equipment, machinery or production or manufacturing processes, disregard for the safety of the employee or others, involvement in an accident that results in serious damage to equipment, machinery or property, disruption of a production or manufacturing process, any injury to the employee or others or other symptoms causing a reasonable suspicion of the use of drugs or alcohol.
"Prospective employee" means any person who has made application to any employer, whether written or oral, to become an employee.
"Safety-sensitive position" means any job designated by an employer as a safety-sensitive position or any job that includes tasks or duties that the employer in good faith believes could affect the safety or health of the employee performing the task or others, including any of the following:

(a) Operating a motor vehicle, other vehicle, equipment, machinery or power tools.

(b) Repairing, maintaining or monitoring the performance or operation of any equipment, machinery or manufacturing process, the malfunction or disruption of which could result in injury or property damage.

(d) Preparing or handling food or medicine.

(e) Working in any occupation regulated pursuant to title 32.

"Sample" means urine, blood, breath, saliva, hair or other substances from the person being tested.

§ 23-493.01 Collection of samples

A. In order to test reliably for the presence of drugs, an employer may require samples from its employees and prospective employees and may require presentation of reliable individual identification from the person being tested to the person collecting the samples. Collection of the sample shall conform to the requirements of this article. The employer may designate the type of sample to be used for this testing.

B. In order to test reliably for alcohol impairment, an employer may require samples from its employees and identification from the person being tested to the person collecting the samples. Collection of the sample shall conform to the requirements of this article. The employer may designate the type of sample to be used for this testing.

§ 23-493.02 Scheduling of tests

Regarding the timing and cost of drug tests and alcohol impairment tests, and in order for an employer to qualify for the benefits of this article:

Any drug testing or alcohol impairment testing by an employer of employees normally shall occur during, or immediately before or after, a regular work period. The testing by an employer shall be deemed work time for the purposes of compensation and benefits for current employees.
An employer shall pay all actual costs for drug testing and alcohol impairment testing required of employees by the employer. An employer may, at its discretion, pay the costs for drug testing of prospective employees.
An employer shall pay reasonable transportation costs to current employees if their required tests are conducted at a location other than the employee's normal work site.

§ 23-493.03 Testing procedures

All sample collection and testing for drugs and alcohol impairment under this article shall be performed according to the following conditions:

The collection of samples shall be performed under reasonable and sanitary conditions.
Sample collections shall be documented and these documentation procedures shall include both of the following:

(a) Labeling of samples in order to reasonably preclude the possibility of misidentification of the person tested in relation to the test result provided.

(b) An opportunity for the person to be tested to provide notification of any information that may be considered relevant to the test, including identification of currently or recently used prescription or nonprescription drugs or other relevant medical information.

Sample collection, storage and transportation to the place of testing shall be performed in a manner reasonably designed to preclude the possibility of sample contamination, adulteration or misidentification.
Sample testing shall comply with scientifically accepted analytical methods and procedures. Drug testing shall be conducted at a laboratory approved or certified by the United States department of health and human services, the college of American pathologists or the department of health services.
Drug testing shall include confirmation of any positive drug test results for employees. Confirmation of positive drug test results for employees shall be by use of a different chemical process than was used in the initial drug screen. The second or confirmatory drug test shall be a chromatographic technique such as gas chromatography-mass spectrometry or another comparably reliable analytical method.

§ 23-493.04 Testing policy requirements

A. Testing or retesting for the presence of drugs or alcohol by an employer shall be carried out within the terms of a written policy that has been distributed to every employee subject to testing or that has been made available to employees in the same manner as the employer informs its employees of other personnel practices, including inclusion in a personnel handbook or manual or posting in a place accessible to employees. The employer shall inform prospective employees that they must undergo drug testing. The written policy shall include at least the following:

A statement of the employer's policy respecting drug and alcohol use by employees.
A description of those employees or prospective employees who are subject to testing.
The circumstances under which testing may be required.
The substances as to which testing may be required.
A description of the testing methods and collection procedures to be used.
The consequences of a refusal to participate in the testing.
Any adverse personnel action that may be taken based on the testing procedure or results.
The right of an employee, on request, to obtain the written test results.
The right of an employee, on request, to explain in a confidential setting, a positive test result.
A statement of the employer's policy regarding the confidentiality of the test results.

B. Within the terms of the written policy, an employer may require the collection and testing of samples for any job-related purposes consistent with business necessity including:

Investigation of possible individual employee impairment.
Investigation of accidents in the workplace. Employees may be required to undergo drug testing or alcohol impairment testing for accidents if the test is taken as soon as practicable after an accident and the test is administered to employees who the employer reasonably believes may have contributed to the accident.
Maintenance of safety for employees, customers, clients or the public at large.
Maintenance of productivity, quality of products or services or security of property or information.
Reasonable suspicion that an employee may be affected by the use of drugs or alcohol and that the use may adversely affect the job performance or the work environment.

C. In addition to the provisions of subsection B, employees or groups of employees may be required to undergo drug testing on a random or chance basis.

D. If an employer institutes a policy of drug testing or alcohol impairment testing under this article, all compensated employees including officers, directors and supervisors shall be uniformly included in the testing policy.

E. Nothing in this article shall be construed to encourage, discourage, restrict, limit, prohibit or require on-site drug testing or alcohol impairment testing.

§ 23-493.05 Disciplinary procedures

An employer may take adverse employment action based on a positive drug test or alcohol impairment test. On receipt of a positive drug test or alcohol impairment test result that indicates a violation of the employer's written policy, on the refusal of an employee or prospective employee to provide a drug testing sample or on the refusal of an employee to provide an alcohol impairment testing sample, an employer may use that test result or test refusal as a basis for disciplinary or rehabilitative actions that may include any of the following:

A requirement that the employee enroll in an employer provided or employer approved rehabilitation, treatment or counseling program, which may include additional drug testing and alcohol impairment testing, participation in which may be a condition of continued employment and the costs of which may or may not be covered by the employer's health plan or policies.
Suspension of the employee, with or without pay, for a designated period of time.
Termination of employment.
In the case of drug testing, refusal to hire a prospective employee.
Other adverse employment action.

§ 23-493.06 Employer protection from litigation

A. No cause of action is or may be established for any person against an employer who has established a policy and initiated a testing program in accordance with this article for any of the following:

Actions in good faith based on the results of a positive drug test or alcohol impairment test.
Failure to test for drugs or alcohol impairment or failure to test for a specific drug or any other controlled substance.
Failure to test or, if tested, failure to detect any specific drug or other substance, any medical condition or any mental, emotional or psychological disorder or condition.
Termination or suspension of any substance abuse prevention or testing program or policy.
Actions based on the employer's good faith belief that an employee used or possessed any drug while on the employer's premises or during the hours of employment.
Actions based on the employer's good faith belief that an employee had an impairment while working while on the employer's premises or during hours of employment.
Actions to exclude an employee from performing a safety-sensitive position, including reassigning the employee to another position or placing an employee on paid or unpaid leave, based on the employer's good faith belief that the employee is engaged in the current use of any drug, whether legal, prescribed by a physician or otherwise, if the drug could cause an impairment or otherwise decrease or lessen the employee's job performance or ability to perform the employee's job duties. The belief regarding the effects of the drug may be based on information including results of a test for the use of alcohol or drugs, warning labels or other printed materials that accompany instructions for use of the drug, statements by the employee, information from a physician or pharmacist, information from reputable reference sources in print or on the internet or other information the employer in good faith believes to be reliable.

B. The actions of an employer protected by this section include implementing, monitoring or measures to assess, supervise or control the job performance of the employee, reassignment of an employee to a different position or job duties or suspension or termination of employment.

§ 23-493.07 Causes of action based on test results

A. No cause of action is or may be established for any person against an employer who has established a program of drug testing or alcohol impairment testing in accordance with this article, unless the employer's action was based on a false positive test result and the employer knew or clearly should have known that the result was in error and ignored the true test result because of reckless or malicious disregard for the truth or the wilful intent to deceive or be deceived.

B. In any claim, including a claim under this article, if it is alleged that an employer's action was based on a false positive test result:

There is a rebuttable presumption that the test result was valid if the employer complied with the provisions of this article.
The employer is not liable for monetary damages if its reliance on a false positive test result was reasonable and in good faith.

C. There is no employer liability for any action taken related to a false negative drug test or alcohol impairment test.

§ 23-493.08 Limits to causes of action

A. No cause of action for defamation of character, libel, slander or damage to reputation is or may be established for any person against an employer who has established a program of drug testing or alcohol impairment testing in accordance with this article unless all of the following apply:

The results of that test were disclosed to a person other than the employer, an authorized employee, agent or representative of the employer, the tested employee, the tested prospective employee or any other person authorized or privileged by law to receive the information.
The information disclosed was a false positive test result.
The false positive test result was disclosed negligently.
All elements of an action for defamation of character, libel, slander or damage to reputation as established by law are satisfied.

B. No cause of action arises in favor of any person against an employer based on the failure of the employer to establish a program or policy on substance abuse prevention or to implement drug testing or alcohol impairment testing.

C. Compliance with this article by employers is voluntary and no cause of action arises as a result of having a drug testing and alcohol impairment testing policy that is not in compliance with this article.

§ 23-493.09 Confidentiality of results; access to records

A. All communications received by an employer relevant to drug test or alcohol impairment test results and received through the employer's testing program are confidential communications and may not be used or received in evidence, obtained in discovery or disclosed in any public or private proceeding, except in a proceeding related to an action taken by an employer or employee under this article or except disclosure to:

The tested employee or prospective employee or any other person designated in writing by that employee or prospective employee.
Individuals designated by the employer to receive and evaluate test results or hear the explanation of the employee or prospective employee.
An arbitrator or mediator, or a court or governmental agency as authorized by state or federal law.

B. The tested employee has a right of access to the written test results that pertain to that individual, subject to the maintenance of confidentiality for other individuals.

C. Except as otherwise permitted by law, no sample taken for testing pursuant to this article shall be tested for any substance or condition except unlawful drugs or alcohol as defined in this article.

§ 23-493.10 Construction; collective bargaining

Nothing in this article shall be construed to infringe on, contradict, preempt or otherwise conflict with the valid provisions of any collective bargaining agreement or to otherwise abridge or infringe on the rights and responsibilities of all parties in the collective bargaining process to negotiate collective bargaining agreements. These contract provisions are fully valid and enforceable, notwithstanding the provisions of this article. An employer who follows the provisions of a drug testing or alcohol impairment testing policy negotiated or bargained to impasse with the collective bargaining representative of its employees or consistent with the terms of a collective bargaining agreement, shall receive the full benefits of this article, even if that policy does not conform to all of the provisions of this article.

§ 23-493.11 Effect of mandatory testing obligations

An employer who is obligated by state or federal requirements to have a drug testing or alcohol impairment testing policy or program shall receive the full benefits of this article, even if that policy or program does not conform to all of the provisions of this article, provided the employer complies with the state or federal requirements applicable to the employer's operations.

§ 23-493.12 Severability

If a provision of this article or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this article that can be given effect without the invalid provision or application and, to this end, the provisions of this article are severable.

Article 15 Noncompete Clauses

§ 23-494 Noncompete clause prohibition; broadcast employees; definitions

A. As a condition of employment, it is unlawful for a broadcast employer to require a current or prospective employee to agree to a noncompete clause.

B. For the purposes of this section:

"Broadcast employer" means an employer that is a television station, television network, radio station or radio network.
"Noncompete clause" means a clause in an employment contract with a broadcast employer that prohibits an employee from working in a specific geographic area for a specific period of time after leaving employment with the broadcast employer.

Article 16 Voluntary Veterans' Preference Employment Policy

§ 23-495 Definitions

In this article, unless the context otherwise requires:

"DD-214" means a United States department of defense report of separation form or its predecessor or successor forms.
"Private employer" means a sole proprietor, corporation, partnership, limited liability company or other entity with one or more employees. Private employer does not include this state, a political subdivision of this state or a public institution of higher education.
"Veteran" means a person who served on active duty in the United States armed forces and who was discharged or released under honorable conditions.
"Veterans' preference employment policy" means a private employer's voluntary preference for hiring, promoting or retaining a veteran over another qualified applicant or employee.

§ 23-495.01 Voluntary veterans' performance employment policy; private employers; eligibility

A. A private employer may adopt a voluntary veterans' preference employment policy.

B. The veterans' preference employment policy shall be in writing and applied uniformly to employment decisions regarding hiring, promotion or retention during a reduction in force.

C. A private employer with a veterans' preference employment policy may require that a veteran submit a DD-214 to be eligible for the preference.

Chapter 3 Employment Services

Article 1 Vocational Rehabilitation

§ 23-501 Definitions

In this article, unless the context otherwise requires:

"Department" means the department of economic security.
"Director" means the director of the department.
"Division" means the department of economic security.
"Maintenance" means money payments not to exceed the estimated cost of subsistence during vocational rehabilitation.
"Person with a disability" means any individual who has a physical or mental disability and a substantial disadvantage to employment, which is of such a nature that vocational rehabilitation services may reasonably be expected to render the person fit to engage in a gainful occupation, including a gainful occupation which is more consistent with the person's capacities and abilities, or for whom vocational rehabilitation services are necessary for the purpose of extended evaluation to determine rehabilitation potential.
"Physical restoration" means medical, surgical or therapeutic treatment necessary to correct or reduce the employment disadvantage of a person with a disability and includes medical, psychiatric, dental and surgical treatment, nursing service, hospital care not to exceed ninety days, convalescent home care, drugs, medical and surgical supplies and prosthetic appliances and other related services as defined in the vocational rehabilitation act, as amended.
"Prosthetic appliance" means an artificial device necessary to support or take the place of a part of the body, or to increase the acuity of a sense organ.
"Vocational rehabilitation" or "vocational rehabilitation service" means a service determined by the director to be necessary to enable a person with a disability to engage in a remunerative occupation and includes medical and vocational diagnosis, vocational guidance, counsel and placement, rehabilitation, training, physical restoration, transportation, occupational licenses, customary occupational tools and equipment, maintenance and training books and materials, follow up, evaluation and work adjustment and other related services as defined in the vocational rehabilitation act, as amended.

§ 23-502 Rehabilitation services

The department shall provide vocational rehabilitation service to persons with a disability who are eligible as provided by this article.

§ 23-503 Duties and powers

The department shall cooperate in carrying out the purposes of federal statutes pertaining to vocational rehabilitation. The division may adopt methods of administration found by the federal government necessary for the proper and efficient operation of agreements relating to vocational rehabilitation, and shall comply with conditions deemed necessary to secure the full benefits of such federal statutes. The division may:

Cooperate with other departments, divisions, agencies and institutions in providing for the vocational rehabilitation of persons with a disability and studying the problems involved therein, and in establishing, developing and providing programs, facilities and services deemed necessary or desirable.
Enter into reciprocal agreements with other states to provide for vocational rehabilitation of residents of the states concerned.

§ 23-503.01 Coordination of vocational rehabilitation services

The department shall coordinate its provision of vocational rehabilitation services to persons with an intellectual disability with its provision of intellectual disability services to such persons, including the areas of evaluation of applicants for either type of services and the development of program and rehabilitation plans for persons with an intellectual disability.

§ 23-504 Merchandising businesses for the blind

A. The department of economic security shall make surveys of merchandising business opportunities for and license persons who have no vision or acuity, or have a central visual acuity of 20/200 or less in the better eye, with the best correction by single magnification, or who have a field defect in which the peripheral field has been contracted to such an extent that the widest diameter of visual field subtends an angular distance no greater than 20 degrees, to operate such businesses on state, county or municipal property where such businesses may be properly and satisfactorily operated by blind persons all in accordance with the provisions of the Randolph-Sheppard act, as amended by Public Law 93-516, title 20, United States Code, sections 107 through 107f. For the purposes of this section "merchandising business" shall include but not be limited to food service operations, including cafeterias, snack bars and vending machines for food and beverages and souvenir and gift shops.

B. The head or governing body of each department or agency and of each county or municipality or other local government entity having control of state, county or other local government property shall cooperate with the department of economic security in surveys of property under their control to find suitable locations for the operation of merchandising businesses by blind persons, and after it has been determined that there is need for a merchandising business and after the department of economic security has determined that such a business may be properly and satisfactorily operated by a blind person grant space to the department of economic security for the operation of a merchandising business by a licensed blind person and cooperate with the department of economic security in the installation of such merchandising business.

C. Notwithstanding the provisions of section 41-792.01, the head or governing body of each department or agency of the state and of each county or city having control of public property shall not charge any rent or other assessment for the use or occupancy of the space granted for the operation of merchandising businesses by licensed blind persons.

D. Any person licensed under this section to operate a merchandising business has the right of appeal under section 23-507.

E. Preference to the blind is not mandatory for those merchandising businesses operated by public educational institutions where merchandising facilities are provided as an integral part of service to students or as a training program to students, nor for major food services provided by hospitals or residential institutions of the state as a direct service to patients, inmates, trainees or otherwise institutionalized persons.

§ 23-506 Eligibility for assistance

A. Vocational rehabilitation service shall be provided to a person with a disability, resident in the state, whose vocational rehabilitation in the judgment of the director after investigation can satisfactorily be achieved, or to any such person who is eligible for rehabilitation service under the terms of an agreement with the federal government or with another state. Unless otherwise provided by law, the following vocational rehabilitation services shall be provided at public cost only to persons with a disability who are determined to require financial assistance:

Physical restoration not including curative treatment for acute or transitory conditions.
Transportation not otherwise provided to determine the eligibility of the individual and the nature and extent of the rehabilitation services necessary.
Occupational licenses.
Customary occupational tools and equipment.
Maintenance.
Training books and materials.

B. The right of a person with a disability to maintenance granted under this section may not be transferred or assigned.

§ 23-507 Hearings

A person applying for or receiving vocational rehabilitation service who is aggrieved by an action of the division may appeal to the director, subject to rules and regulations of the department.

§ 23-508 Administrative funds

A. The state treasurer shall be the custodian of monies received from the federal government for the purpose of carrying out any federal law relating to vocational rehabilitation, and shall disburse them and any state monies available for vocational rehabilitation purposes in the manner provided by law.

B. The legislature shall annually appropriate to the department from the general fund such funds as may be necessary to carry out the purposes of this article.

Article 3 Day Labor

§ 23-551 Definitions

In this article, unless the context otherwise requires:

"Day labor" means labor or employment that is under a contract between a day labor service agency and a third party employer, that is occasional or irregular and that is for a limited time period.
"Day laborer" means an individual who contracts for day labor employment with a day labor service agency.
"Day labor service agency" means an entity that provides day laborers to third party employers and that charges the third party employers for this service.
"Third party employer" means a person that contracts with a day labor service agency for the employment of day laborers.

§ 23-552 Exemptions

This article does not apply to:

Business entities registered as farm labor contractors.
Temporary help services engaged in supplying white-collar employees, secretarial employees, clerical employees or skilled laborers.
Labor union hiring halls.
Labor bureau or employment offices operated by a business entity for the sole purpose of employing an individual for its own use.

§ 23-553 Day labor service agency; third party employer; duties

A. A day labor service agency shall compensate day laborers for work performed by providing or making available commonly accepted negotiable instruments that are payable in cash, on demand, at a financial institution.

B. At the time of payment of wages, a day labor service agency shall provide each day laborer with an itemized statement showing in detail each deduction made from the wages.

C. In no event shall any deductions made by a day labor agency, other than those required by federal or state law, bring the day laborer's pay below federal minimum wage for the hours worked.

D. A day labor service agency shall not restrict the right of a day laborer to accept a permanent position with a third party employer to whom the day laborer has been referred to for work or restrict the right of a third party employer to offer employment to a day laborer.

Article 4 Professional Employer Organizations

§ 23-561 Definitions

In this article, unless the context otherwise requires:

"Administrative fee":

(a) Means the fee that is charged to a client by a professional employer organization for professional employer services.

(b) Does not include any amount of the fee that is applied to wages, salaries, benefits, workers’ compensation, payroll taxes, withholding or other assessments that the professional employer organization pays to or on behalf of covered employees under a professional employer agreement.

"Client":

(a) Means a person who contracts with a professional employer organization under a professional employer agreement.

(b) Does not include a professional employer organization.

"Co-employer" means a professional employer organization or a client.
"Co-employment relationship" means all of the following:

(a) A relationship between co-employers if the rights, duties and obligations of an employer that arise out of an employment relationship are allocated between co-employers subject to a professional employer agreement and this article, and the relationship is intended to be an ongoing relationship and not a temporary or project-specific relationship.

(b) A relationship between a professional employer organization and a covered employee that is subject to a professional employer agreement and this article, that allows the professional employer organization to enforce those rights and that requires the professional employer organization to perform those duties and obligations that are allocated to the professional employer organization by the professional employer agreement or this article.

(c) A relationship between a client and a covered employee that is subject to a professional employer agreement and this article, that allows the client to enforce those rights and that requires the client to perform those employer obligations that are allocated to the client by the professional employer agreement or this article or that are not otherwise allocated by the professional employer agreement or this article.

"Covered employee":

(a) Means an individual who has a co-employment relationship with a professional employer organization and a client, if the individual:

(i) Has executed a written notice of the co-employment relationship with a professional employer organization.

(ii) Is a party to a co-employment relationship with a professional employer organization and a client.

(iii) Is subject to a professional employer agreement under this article.

(b) Includes an individual who is an officer, director, shareholder, partner or manager of a client if the professional employer agreement includes the individual as a covered employee and the individual acts as a manager or performs services for the client.

"Person" means any individual, partnership, corporation, limited liability company or other legally recognized entity.
"Professional employer agreement" means a written contract between a professional employer organization and a client that provides for:

(a) The co-employment of covered employees.

(b) The allocation and sharing between the client and the professional employer organization of employer responsibilities with respect to a covered employee, including hiring, firing and disciplinary responsibilities.

"Professional employer organization":

(a) Means any person who is engaged in the business of providing professional employer services whether or not the person uses the term professional employer organization, staff leasing company, registered staff leasing company, employee leasing company or any other name.

(b) Does not include:

(i) Any person whose principal business activity is not entering into professional employer agreements and who does not hold itself out as a professional employer organization.

(ii) A person who shares employees with a commonly owned company as defined by sections 414(b) and 414(c) of the internal revenue code.

(iii) Arrangements by a person who assumes responsibility for the product that is produced or service that is performed by the person and who retains and exercises the primary discretion and control over the work performed by the person whose services are supplied under the arrangement.

(iv) A person who hires temporary help for the purpose of supporting or supplementing a client's employees.

"Professional employer services" means the service of entering into a co-employment relationship under this article in which all or a majority of the employees who provide services to a client or to a division or work unit of the client are covered employees.

§ 23-562 Professional employer agreements; rights; notice

A. A professional employer agreement shall:

Govern the co-employment relationship between the client and the professional employer organization and between each co-employer and each covered employee.
Reserve to the client the right to direct and control covered employees to the extent necessary to conduct the client's business and to discharge any fiduciary responsibility or to comply with any licensing requirement that applies to the client or a covered employee.
Require the professional employer organization to pay the wages of covered employees, to withhold, collect, report and remit payroll-related and unemployment taxes and to make payment for employee benefits for covered employees. For the purposes of this paragraph, wages do not include obligations between a client and a covered employee that exceed a covered employee's salary, bonuses, commissions, severance pay, deferred compensation, profit sharing or vacation, sick or other paid time off pay unless the professional employer organization expressly agrees to assume liability for the additional obligations in the professional employer agreement.
Permit both the professional employer organization and client to have a right to hire, terminate and discipline covered employees.
Specify whether the client or the professional employer organization will purchase and maintain the workers' compensation policy for covered employees from a carrier that is licensed to conduct business in this state. If the professional employer organization purchases the workers' compensation policy, the professional employer organization shall maintain and, if requested by the client on termination of the agreement, be able to provide to the client records regarding the loss experience related to the workers' compensation insurance that is provided to the covered employees.

B. A professional employer agreement shall not:

Affect, modify or amend any collective bargaining agreement or any rights or obligations of any client, professional employer organization or covered employee that are required under the federal national labor relations act, the federal railway labor act or this title.
Affect, modify or amend any state, local or federal licensing, registration or certification that is required by any client or covered employee.
With respect to a bid, contract, purchase order or agreement entered into with this state or a political subdivision of this state, affect the status of a client's company as a small, minority-owned, disadvantaged or woman-owned business enterprise or as a historically underutilized business because the client entered into a professional employment agreement with a professional employer organization.
Diminish, abolish or remove any rights of covered employees to any clients or obligations of clients to any covered employees that existed before the effective date of a professional employer agreement.
Terminate an employment relationship that existed before the effective date of a professional employer agreement.
Establish new or additional enforceable rights of a covered employee against a professional employer organization that are not specifically allocated to the professional employer organization under the professional employer agreement or this article.

C. Unless specifically provided in a professional employer agreement or this article:

The client shall perform all responsibilities that otherwise apply to an employer in an employment relationship.
The professional employer organization shall perform only the responsibilities that are specifically required under this article or a professional employer agreement. The rights, duties and obligations of a professional employer organization as a co-employer with respect to any covered employee are limited to the responsibilities that are contained in the professional employer agreement and that arise during the term of co-employment by the professional employer organization for the covered employees.

D. Every professional employer organization that enters into a professional employer agreement shall provide notice to each covered employee who is affected by the agreement. The notice may be included in the form of the employment documents that a covered employee completes for the professional employer organization.

§ 23-569 Financial capability; bonding

Every professional employer organization that is located in this state shall maintain either of the following:

A minimum net worth of at least $100,000.
A bond, an irrevocable letter of credit or securities that have a minimum market value of $100,000. The bond shall be held by an insured depository institution in order to secure the payment of all taxes, wages, benefits or other entitlements, including amounts expended by the industrial commission's special fund under section 23-907 that are due to be paid by the professional employer organization with respect to covered employees if the professional employer organization fails to make the required payments. Any bond, irrevocable letter of credit or securities that are deposited under this section shall not be included for the purposes of calculating the minimum net worth of the professional employer organization under this section.

§ 23-570 Liability

A. Unless otherwise expressly provided by a professional employer agreement or otherwise required by law, a client:

Shall be solely responsible for:

(a) The quality, adequacy and safety of the goods or services produced or sold in the client's business.

(b) Directing, supervising, training and controlling the work of covered employees with respect to the business activities of the client.

(c) The acts, errors or omissions of covered employees when directing, supervising, training and controlling the covered employees' work.

Shall not be liable for the acts, errors or omissions of a professional employer organization or any covered employee of the client and the professional employer organization if the covered employee is acting under the express direction and control of the professional employer organization.

B. This section does not limit any contractual liability or obligation required under a professional employer agreement or limit the liabilities and obligations of any professional employer organization or client required by this article.

C. For the purposes of general liability insurance, fidelity bonds, surety bonds, employer's liability that is not covered under workers' compensation and liquor liability insurance that is carried by the professional employer organization, a covered employee is not an employee of the professional employer organization unless the covered employee is specifically included by reference in the professional employer agreement and applicable prearranged employment contract, insurance contract or bond.

§ 23-571 Tax obligations and incentives

A. This article does not relieve a client from paying any tax liability that is due under title 42 or 43.

B. Any tax on professional employer services shall be limited to the administrative fees.

C. For the purposes of tax credits and any other economic incentives provided by this state that are based on employment, covered employees shall be deemed employees of either the client or the professional employer organization. Either the client or the professional employer organization, but not both, shall be entitled to the benefit of any tax credit, economic incentive or any other benefit resulting from the employment of covered employees of the client. If the amount of any credit or incentive is based on the number of employees, only the covered employees who actually work for the client shall be considered employed and the covered employees who work for other clients of the professional employer organization shall not be considered.

§ 23-572 Services not insurance

A professional employer organization under this article is not engaged in the sale of insurance by offering, marketing, selling, administering or providing professional employer organization services or employee benefit plans for covered employees.

§ 23-573 Rights; duties

A. Covered employees may enforce those rights against a professional employer organization that are allocated to the professional employer organization or that are shared between the professional employer organization and the client under a professional employer agreement or this article.

B. Any other rights, duties or obligations that are enforceable by an employee under the laws of this state shall remain enforceable against the client.

§ 23-574 Covered employees; licensing

A. A covered employee who is required to be licensed, registered or certified under the laws of this state shall be deemed an employee of the client for purposes of the license, registration or certification requirement.

B. A professional employer organization shall not be deemed to be engaged in any occupation, trade, profession or other activity that is subject to licensing, registration or certification requirements under the laws of this state solely on the basis of entering into and maintaining a co-employment relationship with a covered employee who is required to be regulated or certified.

C. Unless otherwise expressly agreed to by a client in a professional employment agreement, a client shall maintain the right to direct and control the professional or licensed activities of the covered employees and the client's business.

Chapter 4 Employment Security

Article 1 Definitions

§ 23-601 Declaration of policy

As a guide to the interpretation and application of this chapter, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals and welfare of the people of this state. Involuntary unemployment is therefore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker and his family. The achievement of social security requires protection against this greatest hazard of economic life. This can be provided by encouraging employers to provide more stable employment and by the systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment, thus maintaining purchasing power and limiting the serious social consequences of poor relief assistance. The legislature, therefore, declares that in its considered judgment the public good and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own.

§ 23-602 Definitions of words and phrases

The definitions of words and phrases set forth in this article shall apply throughout this chapter unless the context otherwise requires.

§ 23-603 Agricultural labor; definitions; exemption

A. "Agricultural labor" means and includes all service performed prior to January 1, 1972, that was agricultural labor as defined in this section prior to that date, and that remunerated service performed after December 31, 1971:

On a farm, in the employ of any person, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training and management of livestock, bees, poultry, and fur-bearing animals and wildlife.
In the employ of the owner or tenant or other operator of a farm, in connection with the operation, management, conservation, improvement or maintenance of the farm and its tools and equipment or in salvaging timber or clearing land of brush and other debris left by a hurricane, if the major part of the service is performed on a farm.
In connection with the production or harvesting of any commodity defined as an agricultural commodity in section 15(g) of the agricultural marketing act, as amended (46 Stat. 1550, sec. 3; 12 United States Code section 1141j), or in connection with the ginning of cotton or in connection with the operation or maintenance of ditches, canals, reservoirs or waterways, not owned or operated for profit, used exclusively for supplying and storing water for farming purposes.
In the employ of the operator of a farm in handling, planting, drying, packing, packaging, processing, freezing, grading, storing or delivering to storage or to market, or to a carrier for transportation to market, in its unmanufactured state, any agricultural or horticultural commodity, but only if the operator produced more than one-half of the commodity with respect to which the service is performed and only if the service is performed as an incident to ordinary farming operations or, in the case of fruits and vegetables, as an incident to the preparation of the fruits or vegetables for market.
In the employ of a group of operators of farms, or a cooperative organization of which the operators are members, in the performance of service described in paragraph 4 of this subsection, but only if the operators produced more than one-half of the commodity with respect to which the service is performed.
On a farm operated for profit if the service is not in the course of the employer's trade or business.

B. For the purposes of this section, "farm" includes stock, dairy, poultry, fruit, fur-bearing animal and truck farms and plantations, ranches, nurseries, ranges, greenhouses or other similar structures that are used primarily for raising agricultural or horticultural commodities, including orchards.

C. Notwithstanding section 23-617, paragraph 1, service as prescribed by subsection A of this section that is performed after December 31, 1977, by an individual who is an alien admitted to the United States to perform agricultural labor pursuant to sections 214(c) and 101(a)(15)(H) of the immigration and nationality act is exempt employment during any period in which it does not meet the definition of employment in section 23-615, subsection A, paragraph 10.

D. Subsection A, paragraphs 4 and 5 of this section do not apply to service performed in connection with commercial canning or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption.

§ 23-603.01 American employer

"American employer" means a person who is an individual who is a resident of the United States; a partnership, if two-thirds or more of the partners are residents of the United States; a trust if all of the trustees are residents of the United States; or a corporation organized under the laws of the United States or of any state.

§ 23-604 Annual payroll and average annual payroll

A. "Annual payroll" means the total amount of wages for employment paid by an employer during a twelve-month period ending on June 30 of any calendar year.

B. In computing an employer's contribution rate, "average annual payroll" means:

The annual payroll for the twelve-month period immediately preceding the computation date for an employer whose account has been chargeable with benefits for twelve but less than twenty-four months.
The average of the annual payrolls for the last two twelve-month periods immediately preceding the computation date for an employer whose account has been chargeable with benefits for twenty-four but less than thirty-six months.
The average of the annual payrolls for the last three twelve-month periods immediately preceding the computation date for an employer whose account has been chargeable with benefits for thirty-six or more months.

C. "Computation date" means July 1 of each calendar year with respect to rates of contribution applicable to the calendar year beginning with the following January 1.

§ 23-605 Base period

"Base period" means the first four of the last five completed calendar quarters immediately preceding the first day of an individual's benefit year, except that the base period of an individual whose new benefit year overlaps his last preceding benefit year shall consist of those four completed calendar quarters immediately following his previous base period.

§ 23-606 Base-period employers

"Base-period employers" means the employers by whom an individual was paid base-period wages.

§ 23-607 Base-period wages

"Base-period wages" means the wages paid to an individual during his base period for insured work.

§ 23-608 Benefits

"Benefits" means the money payments payable to an individual as provided in this chapter, with respect to his unemployment.

§ 23-609 Benefit year

"Benefit year" with respect to an individual means the one-year period beginning with the first day of the first week of unemployment with respect to which the individual first files a claim in accordance with section 23-772 and thereafter the one-year period beginning with the first day of the first week of unemployment with respect to which the individual next files a claim after the termination of his last preceding benefit year, provided that at the time of filing the claim the individual has been paid the wages for insured work required under section 23-771. For the purposes of this section a week with respect to which an individual files a valid claim establishing a benefit year shall be deemed to be in that benefit year which includes the greater part of such week.

§ 23-609.01 Hearing officers

"Hearing officer" means a hearing officer of the department of economic security.

§ 23-610 Calendar quarter

"Calendar quarter" means the period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31, or the equivalent thereof as the commission may by regulation prescribe.

§ 23-611 Definition

"Commission" or "employment security commission" or "department" means the department of economic security.

§ 23-612 Contributions

"Contributions" means the money payments required by this chapter to be made into the state unemployment compensation fund by an employing unit on account of having individuals in its employ.

§ 23-612.01 Crew leader

A. "Crew leader" means an individual who does all of the following:

Furnishes individuals to perform agricultural labor for any other person or employing unit.
Pays (either on his behalf or on behalf of such other person or employing unit) the individuals furnished by him for the agricultural labor performed by them.
Has not entered into a written agreement with such other person or employing unit under which such individual is designated as an employee of such other person or employing unit.

B. Any individual who is a member of a crew furnished by a crew leader to perform agricultural labor for any other person or employing unit shall be treated as an employee of such crew leader if such individual's services do not constitute employment for such other person or employing unit pursuant to any other provision of this chapter and either:

Such crew leader holds a valid certificate of registration under the migrant and seasonal agricultural worker protection act.
Substantially all the members of such crew operate or maintain tractors, mechanized harvesting or crop-dusting equipment, or any other mechanized equipment, which is provided by such crew leader.

C. In the case of any individual who is furnished by a crew leader to perform agricultural labor for any other person or employing unit and who is not treated as an employee of such crew leader under subsection B both of the following apply:

Such other person or employing unit and not the crew leader shall be treated as the employer of such individual.
Such other person or employing unit shall be treated as having paid cash remuneration to such individual in an amount equal to the amount of cash remuneration paid to such individual by the crew leader (either on his behalf or on behalf of such other person or employing unit) for the agricultural labor performed for such other person or employing unit.

§ 23-613 Employer

A. "Employer" means:

Any employing unit which, within the calendar year 1941 or within any succeeding calendar year through 1971, for some portion of a day, but not necessarily simultaneously, in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, has or had in employment three or more individuals irrespective of whether the same individuals are or were employed in each day.
Any employing unit:

(a) That after December 31, 1971 for some portion of a day in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, in either the current or the preceding calendar year, has or had in employment at least one individual irrespective of whether the same individual was in employment in each day.

(b) That after December 31, 1971 in any calendar quarter in either the current or preceding calendar year, paid for service in employment wages of one thousand five hundred dollars or more.

(c) For which service in employment, as defined in section 23-615, subsection A, paragraph 6, 7 or 8 or section 23-615.01 is performed after December 31, 1977.

For purposes of this paragraph, there shall not be taken into account any wages paid to, or employment of, an employee performing domestic services referred to in subsection C of this section. If an employing unit is determined an employer under subsection B of this section, the employing unit shall be determined an employer for the purposes of this paragraph.

Any individual or employing unit that acquired the organization, trade or business or substantially all the assets thereof, of another employing unit that at the time of acquisition was an employer subject to this chapter, or that acquired a part of the organization, trade or business of another employing unit that at the time of acquisition was an employer subject to this chapter provided the employing unit would have been an employer under this subsection if that part had constituted its entire organization, trade or business.
Any individual or employing unit that acquired the organization, trade or business, or substantially all the assets of the individual or employing unit, of another employing unit if either:

(a) The employment record of the individual or employing unit subsequent to the acquisition, together with the employment record of the acquired unit before the acquisition, both within the same calendar year, would be sufficient to constitute an employing unit an employer subject to this chapter under this section.

(b) The wages paid by the individual or employing unit subsequent to the acquisition, together with the wages paid by the acquired unit before the acquisition, both within the same calendar quarter, would be sufficient to constitute an employing unit an employer subject to this chapter under this section.

Any employing unit which, together with one or more other employing units, is owned or controlled by legally enforceable means or otherwise, directly or indirectly by the same interests, or that owns or controls by legally enforceable means or otherwise one or more other employing units, and that if treated as a single unit with the other employing units or interests, or both, would be an employer under this section.
Any employing unit that is not an employer by reason of any other paragraph of this subsection for which, within either the current or preceding calendar year, services in employment are or were performed with respect to which the employing unit is liable for any federal tax against which credit may be taken for contributions required to be paid into a state unemployment compensation fund, or which, as a condition for approval of this chapter for full tax credit against the tax imposed by the federal unemployment tax act, is required, pursuant to the act, to be an employer under this chapter.
Any employing unit which, having become an employer under this section has not, under section 23-725, ceased to be an employer subject to this chapter.
For the effective period of its election pursuant to section 23-725, any other employing unit that has elected to become subject to this chapter.

B. In the case of agricultural labor, the term "employer" means any employing unit that after December 31, 1977:

For some portion of a day, but not necessarily simultaneously, in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, in either the current or the preceding calendar year, employed in agricultural labor at least ten individuals irrespective of whether the same individuals were employed in each day.
In any calendar quarter in either the current or preceding calendar year paid cash wages of twenty thousand dollars or more for agricultural labor.

C. In the case of domestic service in a private home, local college club, or local chapter of a college fraternity or sorority, the term "employer" means any employing unit, which after December 31, 1977, in any calendar quarter in either the current or preceding calendar year paid cash wages of one thousand dollars or more to individuals employed in that service. An employing unit, treated as an employer under this subsection shall not be treated as an employer with respect to wages paid for any other service unless the employing unit is treated as an employer under subsection A or B of this section with respect to the other service.

D. For purposes of this section, if any week includes both December 31 and January 1, the days up to January 1 shall be deemed one calendar week and the days beginning January 1 another week.

§ 23-613.01 Employee; definition; exempt employment

A. "Employee" means any individual who performs services for an employing unit and who is subject to the direction, rule or control of the employing unit as to both the method of performing or executing the services and the result to be effected or accomplished. Indications of control by the employing unit include controlling the individual's hours of work, location of work, right to perform services for others, tools, equipment, materials, expenses and use of other workers and other indicia of employment, except employee does not include:

An individual who performs services as an independent contractor, business person, agent or consultant, or in a capacity characteristic of an independent profession, trade, skill or occupation.
An individual subject to the direction, rule or control or subject to the right of direction, rule or control of an employing unit solely because of a law regulating the organization, trade or business of the employing unit.
An individual or class of individuals that the federal government has decided not to and does not treat as an employee or employees for federal unemployment tax purposes, as established by the outcome of an audit or other affirmative treatment by the internal revenue service of any taxpayer whose tax returns include income from the independent contractor relationship.
An individual if the employing unit demonstrates the individual performs services in the same manner as a similarly situated class of individuals that the federal government has decided not to and does not treat as an employee or employees for federal unemployment tax purposes.
An individual to whom all of the following apply:

(a) Performs officiating services in recreational, interscholastic or intercollegiate sporting events or contests on a contest-by-contest basis.

(b) Has the ability to accept or reject assignments to officiate a sporting event or contest.

(d) Is not otherwise employed by the sponsoring school, association of schools or the organization, this state, or a political subdivision of this state sponsoring the sporting event or contest.

A medical or health care professional who contracts with a medical practice group or hospital, whether directly or through an agent, and who is characterized by all of the following:

(a) Observes the practices commonly associated with operating as a medical or professional entity, such as a professional corporation, a limited liability company or a contractor, and uses the practices of those entities for compensation, billing for services and filing tax returns.

(b) Is not paid wages and does not have wage withholdings from the contracted medical practice group or hospital.

A home care services provider that contracts with a person other than as an employee, whether directly or through an agent, to furnish nonmedical therapeutic and restorative health-related or life assistance services, except behavioral health services, such as general supervision, protective, preventative and personal care, activities and living skills training, meals, housekeeping, companionship and health monitoring at the location where the recipient resides.

B. For the purposes of subsection A, paragraph 5 of this section, "officiating services" means overseeing the play of a sporting event or contest, judging whether the rules are being followed and penalizing participants for infringing the rules.

C. Notwithstanding this section, an individual or class of individuals shall not be treated as an employee by the department for purposes of this chapter if, before the department's determination that the individual or class of individuals at issue is an employee:

The individual or class of individuals had been performing services for the employing unit.
The department had inspected work records of the employing unit for time periods that the individual or class of individuals had been performing these services.
The individual or class of individuals at issue was not included on the contribution and wage reports of the employing unit.
After its inspection the department concluded in writing provided to the employing unit that either:

(a) No change or changes in the inspected reports were necessary.

(b) The individual or class of individuals in question did not constitute an employee for purposes of this chapter.

At no time between the date of the written determination prescribed in paragraph 4 of this subsection, and the department's subsequent conclusion that the individual or class of individuals at issue constitutes an employee, did the department notify the employing unit in writing that the individual or class of individuals at issue now constitutes an employee for purposes of this chapter.

D. Subsection C of this section does not apply if either:

There has been a substantial and material change in the facts on which the writing required by subsection C, paragraph 4 of this section was based.
The conclusion reached by the department pursuant to subsection C, paragraph 4 of this section was the result of false statements, misrepresentation, fraud or intimidation on the part of the employing unit.

E. The following services are exempt employment under this chapter, unless there is evidence of direction, rule or control sufficient to satisfy the definition of an employee under subsection A of this section, which is distinct from any evidence of direction, rule or control related to or associated with establishing the nature or circumstances of the services considered pursuant to this subsection:

Services that are not a part or process of the organization, trade or business of an employing unit and that are performed by an individual who is not treated by the employing unit in a manner generally characteristic of the treatment of employees.
Services performed by an individual for an employing unit or its clients through isolated or occasional transactions, regardless of whether the services are a part or process of the organization, trade or business of the employing unit.

F. Notwithstanding this section, an individual or class of individuals determined to be an employee or employees for purposes of the federal unemployment tax act, as amended (26 United States Code sections 3301 through 3311), are employees under this chapter.

G. Notwithstanding any other provision of this chapter, this section applies to an employing unit to which the provisions of section 23-750 apply only to the extent not inconsistent with the requirements of 26 United States Code sections 3304 (a)(6) and 3309.

H. For the purposes of determining employee status, the department shall consider all of the employment-related facts and may not base a determination on the facts that:

The individual performs services as a sole proprietorship.
The individual has executed a restrictive covenant, trade secret agreement or other confidentiality agreement with the employing unit.
The services of the individual are subject to standards for quality, time or location required by a client or customer of the putative employing unit.

§ 23-614 Employing unit; temporary services employer; professional employer organization; definitions

A. "Employing unit" means an individual or type of organization, including a partnership, association, trust, estate, joint-stock company, insurance company or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee or successor of any of the foregoing, or the legal representative of a deceased person, which has, or after January 1, 1936 had, one or more individuals performing services for it within this state. Employing unit includes any federal instrumentality that is not wholly or partially owned by the United States and that has one or more individuals performing services for it within this state.

B. Each individual who performs services in this state for an employing unit that maintains two or more separate establishments in this state is performing services for a single employing unit for all the purposes of this chapter.

C. Each individual employed to perform or to assist in performing the work of any person in the service of an employing unit is engaged by the employing unit for all the purposes of this chapter, whether the individual was hired or paid directly by the employing unit or by the person, if the employing unit had actual or constructive knowledge of the work. Notwithstanding any other provision of this chapter except for section 23-612.01, an individual who performs services in or for a particular employing unit is not in the employment of that employing unit if the individual's wages for services in or for the particular employing unit are paid by another employing unit, and if the contributions required by this chapter on the wages are paid by the other employing unit.

D. Notwithstanding any other provision of this chapter, whether an individual or entity is the employer of specific employees shall be determined by section 23-613.01, except as provided in subsections E and G of this section with respect to a professional employer organization or a temporary services employer. The exceptions to the definition of employee prescribed in section 23-613.01, subsection A apply to determinations made pursuant to subsections E, F, G and H of this section.

E. A professional employer organization or a temporary services employer that contracts to supply a worker to perform services for a customer or client is the employer of the worker who performs the services. A customer or client who contracts with an individual or entity that is not a professional employer organization or a temporary services employer to engage a worker to perform services is the employer of the worker who performs the services. Except as provided in subsection F of this section, an individual or entity that is not a professional employer organization or a temporary services employer, that contracts to supply a worker to perform services to a customer or client and that pays remuneration to the worker acts as the agent of the employer for purposes of payment of remuneration.

F. In circumstances that are in essence a loan of an employee to another employer and the direction and control of the manner and means of performing the services changes to the employer to whom the employee is loaned, the loaning employer continues to be the employer of the employee if the loaning employer continues to pay remuneration to the employee, whether or not the loaning employer is reimbursed by the other employer. If the employer to whom the employee is loaned pays remuneration to the employee for the services performed, that employer is considered the employer for the purposes of any remuneration paid to the employee by the employer, regardless of whether the loaning employer also pays remuneration to the employee.

G. A professional employer organization shall report and pay all required contributions to the unemployment compensation fund using the state employer account number and the contribution rate of the professional employer organization.

H. On termination of a contract between a professional employer organization and a client or the failure by a professional employer organization to submit reports or make tax payments as required by this chapter, the client shall be treated as a new employer without a previous experience record if the client has been subject to a professional employer agreement for at least two years or if the client is not otherwise eligible for an experience rating.

I. For the purposes of this section:

"Professional employer organization" has the same meaning prescribed in section 23-561.
"Temporary services employer" means an employing unit that contracts with clients or customers to supply workers to perform services in more than one industry for the client or customer and that performs all of the following:

(a) Negotiates with clients or customers for such matters as the time of work, the place of work, the type of work, the working conditions, the quality of services and the price of services.

(b) Determines assignments or reassignments of workers, even though workers retain the right to refuse specific assignments.

(c) Retains the authority to assign or reassign a worker to other clients or customers if a worker is determined unacceptable by a specific client or customer.

(d) Assigns or reassigns the worker to perform services for a client or customer.

(e) Sets the rate of pay of the worker, whether or not through negotiation.

(f) Pays the worker from its own account or accounts.

(g) Retains the right to hire and terminate workers.

§ 23-615 Employment; definition

A. "Employment" means any service of whatever nature performed by an employee for the person employing the employee, including service in interstate commerce, and includes:

An individual's entire service performed within or both within and outside this state if:

(a) The service is localized in this state.

(b) The service is not localized in any state but some of the service is performed in this state and either:

(i) The individual's base of operations, or, if there is no base of operations, then the place from which the service is directed or controlled is located in this state.

(ii) The individual's base of operations or place from which the service is directed or controlled is not located in any state in which some part of the service is performed but the individual's residence is in this state. Service is deemed localized within a state if the service is performed entirely within that state, or the service is performed both within and without that state but the service performed without the state is temporary or transitory in nature or consists of isolated transactions, and is incidental to the individual's service within the state.

Services covered by an election pursuant to section 23-725.
Services covered by an arrangement pursuant to section 23-644, between the department and the agency charged with the administration of any other state or federal unemployment compensation law pursuant to which all services performed by an individual for an employing unit are deemed to be performed entirely within this state shall be deemed to be employment if the department has approved an election of the employing unit for which the services are performed, pursuant to which the entire service of the individual during the period covered by the election is deemed to be insured work.
Service performed by any officer of a corporation.
Service performed after December 31, 1971, outside the United States, except in Canada, by an individual who is a citizen of the United States in the employ of an American employer, other than service that is deemed employment under paragraph 1 of this subsection or the parallel provisions of another state's law if either:

(a) The employer's principal place of business in the United States is located in this state.

(b) The employer has no place of business in the United States, but:

(i) The employer is an individual who is a resident of this state.

(ii) The employer is a corporation that is organized under the laws of this state.

(iii) The employer is a partnership or a trust and the number of the partners or trustees who are residents of this state is greater than the number who are residents of any one other state.

(c) None of the criteria of subdivision (a) or (b) of this paragraph is met but the employer has elected coverage in this state or, the employer having failed to elect coverage in any state, the individual has filed a claim for benefits under the laws of this state.

Service performed after December 31, 1971, in the employ of this state or any of its instrumentalities, or in the employ of this state and one or more other states or their instrumentalities, for a hospital or institution of higher education located in this state. For purposes of this chapter, "service performed in the employ of this state for an institution of higher education" includes service performed for a community college located in this state that is or becomes integrated into the state community college system, as provided in title 15.
Service performed after December 31, 1971, by an individual in the employ of a religious, charitable, educational or other organization, but only if both of the following conditions are met:

(a) The service is excluded from "employment" as defined in the federal unemployment tax act solely by reason of section 3306(c)(8) of that act.

(b) The organization had at least four individuals in employment for some portion of a day in each of twenty different weeks, whether or not the weeks were consecutive, within either the current or preceding calendar year, regardless of whether the individuals were employed simultaneously.

Service performed after December 31, 1977, in the employ of this state, or any instrumentality, agency or board of this state, or any one or more of the foregoing and one or more other states.
An individual's service wherever performed within the United States or Canada if both of the following are true:

(a) The service is not covered under the unemployment compensation law of any other state or Canada.

(b) The place from which the service is directed or controlled is in this state.

Notwithstanding any other provisions of this chapter, service with respect to which a tax is required to be paid under any federal law imposing a tax against which credit may be taken for contributions required to be paid into a state unemployment fund or that as a condition for full tax credit against the tax imposed by the federal unemployment tax act is required to be covered under this chapter.

B. For purposes of subsection A, paragraphs 6, 7 and 8, the term "employment" does not apply to service performed for any of the following:

In the employ of a church or convention or association of churches, or an organization that is operated primarily for religious purposes, including educational and child care services that include religious instruction, and that is operated, supervised, controlled, or principally supported by a church or convention or association of churches.
By a duly ordained, commissioned or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by the order.
In the employ of a governmental entity referred to in section 23-750, subsection A, paragraph 2, if the service is performed by an individual in the exercise of the individual's duties in any of the following:

(a) As an elected official.

(b) As a member of a legislative body or the judiciary, of this state or a political subdivision of this state.

(d) As an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency.

(e) In a position that pursuant to the laws of this state is designated as a major nontenured policymaking or advisory position, or a policymaking or advisory position the performance of the duties of which ordinarily does not require more than eight hours per week.

In a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning capacity is impaired by age or physical or mental deficiency or injury, or providing remunerative work for individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the competitive labor market, by an individual receiving such rehabilitation or remunerative work.
As part of an unemployment work-relief or work-training program assisted or financed in whole or in part by any federal agency or an agency of a state or political subdivision of a state, by an individual receiving such work-relief or work-training.
By an inmate of a custodial or penal institution.

§ 23-615.01 Political subdivision or instrumentality employment

A. Notwithstanding any law to the contrary, except for subsection B of this section, for the purposes of this chapter, employment, as defined in section 23-615, subsection A, paragraph 6, 7 or 8 includes service performed after December 31, 1977 in the employ of either of the following:

Any political subdivision of this state or any instrumentality of such political subdivisions.
Any combination of political subdivisions and this or another state, their instrumentalities, agencies or boards whether wholly within this state or partly within this state and one or more other states.

B. This section shall not be applicable if Public Law 94-566 or the federal act it amends is adjudged unconstitutional or invalid in its application to the governmental entities described in subsection A of this section. If the application of Public Law 94-566 or the federal act it amends is stayed as to employees of the governmental entities described in subsection A of this section or its employees by any court of competent jurisdiction before or after the provisions of subsection A become effective, the provisions of subsection A shall not be effective from the time that the stay order became effective and continue for the duration of the stay order.

C. If Public Law 94-566 is finally determined to be constitutional and the court further determines that the governmental entities described in subsection A of this section were liable for claims for benefits during a stay of enforcement then any liability shall be borne by the affected governmental entities.

§ 23-616 Employment office

"Employment office" means a free public employment office or branch thereof operated by this or any other state as a part of a state-controlled system of public employment offices, or by a federal agency charged with the administration of free public employment offices.

§ 23-617 Exempt employment; definition

"Exempt employment" means employment not considered in determining whether an employing unit constitutes an "employer" under this chapter and includes:

Agricultural labor as defined in section 23-603 unless the labor is performed for an employing unit that after December 31, 1977 either:

(a) For some portion of a day, but not necessarily simultaneously, in each of twenty different calendar weeks, whether or not the weeks are or were consecutive, in either the current or the preceding calendar year, employed in agricultural labor at least ten individuals irrespective of whether the same individuals were employed in each day.

(b) In any calendar quarter in either the current or preceding calendar year paid cash wages of twenty thousand dollars or more for agricultural labor.

Domestic service in a private home, local college club, or local chapter of a college fraternity or sorority unless performed after December 31, 1977, for an employing unit that in any calendar quarter in either the current or preceding calendar year paid cash wages of one thousand dollars or more to individuals employed in that service.
Service performed on or in connection with a vessel or aircraft that is not an American vessel or American aircraft, if the employee is employed on and in connection with the vessel or aircraft when outside the United States.
Service performed by an individual in the employ of the individual's son, daughter, or spouse, and service performed by an individual under twenty-one years of age in the employ of the individual's father or mother.
Service performed in the employ of the United States government or an instrumentality of the United States that is wholly or partially owned by the United States or that is exempt from the tax imposed by section 3301 of the federal internal revenue code, except that to the extent Congress shall permit states to require instrumentalities of the United States to make payments into an unemployment fund under a state unemployment compensation law, all of the provisions of this chapter shall be applicable to the instrumentalities, in the same manner, to the same extent and on the same terms as to all other employers, employing units, individuals and services, but if this state is not certified for any year by the secretary of labor of the United States under section 3304 of the federal internal revenue code, the payments required of the instrumentalities with respect to the year shall be refunded by the department from the fund in the same manner and within the same period as is provided in section 23-742 with respect to contributions erroneously collected.
Service performed in the employ of another state, or any political subdivision of another state, or an instrumentality of another state or another state's political subdivision that is wholly owned by one or more other states or political subdivisions and that exercises only governmental as distinguished from proprietary functions, and service performed in the employ of any political subdivisions of this or any other state to the extent the instrumentality, with respect to the service, is exempt under the Constitution of the United States from the tax imposed by section 3301 of the federal internal revenue code, except that part of the service performed in the employ of any of the foregoing that is "employment" under section 23-615, subsection A, paragraph 6, 7 or 8. But any state, or a political subdivision of a state, or instrumentality of any one or more of the foregoing that is wholly owned by one or more states or political subdivisions may elect coverage whether or not the service performed is governmental or proprietary for any state or political subdivision thereof or any instrumentality thereof or any department thereof in the manner prescribed and subject to the terms of section 23-725, and election may exclude any services described in section 23-615, subsection B. This state or any instrumentality or political subdivision of this state may appropriate funds to pay contributions or payments in lieu of contributions as required by this chapter.
Service with respect to which unemployment compensation is payable under an unemployment compensation system established by an act of Congress.
Service performed in any calendar quarter in the employ of an organization exempt from income tax under section 501(a) (other than an organization described in section 401(a)) or under section 521 of the federal internal revenue code, if the remuneration for such service is less than fifty dollars.
Service performed in the employ of a school, college or university, if the service is performed either:

(a) By a student enrolled and regularly attending classes at the school, college or university.

(b) By the spouse of a student if the spouse is advised at the time the spouse commences to perform the service that the employment is provided under a program to provide financial assistance to the student by the school, college or university and the employment will not be covered by any program of unemployment compensation.

Service performed in the employ of a corporation, community chest fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of a private shareholder or individual, no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation, and that does not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of any candidate for public office; provided that services performed in the employ of an organization operated for the primary purpose of carrying on a trade or business for profit shall not be exempt on the ground that all of its profits are payable to one or more organizations exempt under this paragraph, and further provided that services exempt under this paragraph shall not include services performed for an employing unit with respect to which the employing unit is liable for any federal tax against which credit may be taken for contributions required to be paid into a state unemployment compensation fund, and further provided that services exempt under this paragraph shall not include services that are "employment" under section 23-615, subsection B, paragraph 6, 7 or 8.
Services performed as a student nurse in the employ of a hospital or a nurses' training school by an individual enrolled and regularly attending classes in a nurses' training school chartered or approved pursuant to state law, and service performed as an interne in the employ of a hospital by an individual who has completed a four years' course in a medical school chartered or approved pursuant to state law.
Service performed by an individual for an employing unit as an insurance producer, if all service performed by the individual for the employing unit is performed for remuneration solely by way of commission.
Service performed by an individual under the age of eighteen in the delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution, and service performed by an individual in, and at the time of, the sale of newspapers or magazines to ultimate consumers under an arrangement by which the newspapers or magazines are to be sold by the individual at a fixed price, the individual's compensation being based on the retention of the excess of such price over the amount at which the newspapers or magazines are charged to the individual, whether or not the individual is guaranteed a minimum amount of compensation for such service, or is entitled to be credited with the unsold newspapers or magazines turned back.
Service performed by an individual for an employing unit as a licensed real estate broker or a licensed cemetery broker or a licensed real estate salesman or licensed cemetery salesman, if all service performed by the individual for the employing unit is performed for remuneration solely by way of commission, except that any service performed as a real estate broker, a cemetery broker, a real estate salesman or a cemetery salesman for an employing unit to which the provisions of section 23-750 apply is not exempt employment.
Service performed in the employ of a foreign government including service as a consular or other officer or employee or a nondiplomatic representative.
Service performed in the employ of an instrumentality wholly owned by a foreign government if both:

(a) The service is of a character similar to that performed in foreign countries by employees of the United States government or of an instrumentality of the United States government.

(b) The department finds that the United States secretary of state has certified to the United States secretary of the treasury that the foreign government with respect to whose instrumentality exemption is claimed grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States government and of instrumentalities of the United States government.

Service covered by an arrangement between the department and the agency charged with the administration of any other state or federal unemployment compensation law pursuant to which all services performed by an individual for an employing unit during the period covered by the employing unit's duly approved election are deemed to be performed entirely within the agency's state.
Casual labor not in the course of the employer's trade or business.
Service performed by an individual for an employing unit as a securities salesman, if all such service performed by the individual for the employing unit is performed for remuneration solely by way of commission, except that any service performed as a securities salesman for an employing unit to which the provisions of section 23-750 apply is not exempt employment.
During any period in which it does not meet the definition of employment in section 23-615, subsection A, paragraph 10, service performed by an individual who is enrolled at a nonprofit or public educational institution that normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where the institution's educational activities are carried on as a student in a full-time program, and taken for credit at the institution, which combines academic instruction with work experience, if the service is an integral part of the program, and the institution has so certified to the employer, except that this paragraph shall not apply to service performed in a program established for or on behalf of an employer or group of employers.
Service performed in the employ of a hospital if the service is performed by a patient of the hospital.
Service performed by individuals solely to the extent that the compensation includes commissions, overrides or profits realized on sales primarily resulting from the in-person solicitation of orders for or making sales of consumer goods in the home, except that any service performed by an individual for an employing unit to which the provisions of section 23-750 apply is not exempt employment.
Services performed by an individual for an employing unit in the preparation of tax returns and related schedules and documents, if all services are performed for remuneration solely by way of commissions, independent of the control of the employing unit, other than that required by the internal revenue service for correct preparation of the returns, except that any service performed by an individual for an employing unit to which the provisions of section 23-750 apply is not exempt employment.

§ 23-618 Fund

"Fund" means the unemployment compensation fund established by section 23-701.

§ 23-618.01 Hospital

"Hospital" means an institution which has been licensed, certified, or approved by the Arizona state department of health as a hospital.

§ 23-618.02 Institution of higher education

A. "Institution of higher education" means an educational institution which:

Admits as regular students only individuals having a certificate of graduation from a high school or the recognized equivalent of such a certificate;
Is legally authorized within this state to provide a program of education beyond high school;
Provides an educational program for which it awards a bachelor's or higher degree, or provides a program which is acceptable for full credit toward such a degree, a program of post-graduate or post-doctoral studies, or a program of training to prepare students for gainful employment in a recognized occupation; and
Is a public or other nonprofit institution.

B. Notwithstanding any of the foregoing provisions of this section, all colleges and universities in this state are institutions of higher education for purposes of this section.

§ 23-619 Insured work

"Insured work" means employment for employers.

§ 23-619.01 Misconduct connected with the employment; wilful misconduct; evaluation

A. "Misconduct connected with the employment" means any act or omission by an employee which constitutes a material or substantial breach of the employee's duties or obligations pursuant to the employment or contract of employment or which adversely affects a material or substantial interest of the employer.

B. "Wilful or negligent misconduct connected with the employment" includes, but under no circumstances is limited to, the following:

Absence from work without either notice to the employer or good cause for failing to give notice, repeated absence from work without good cause where warnings regarding repeated absence have been received from the employer, frequent absences from work without good cause, failure to return to work following an authorized leave, vacation, sick leave or other leave of absence when such failure is without permission from the employer, or repeated failure without good cause to exercise due care for punctuality or attendance in regard to the scheduled hours of work set by the employer.
Repeated intoxication, whether from the use of intoxicating liquor or the use of illegal drugs, on the employer's premises or when reporting to work, frequent absences caused by intoxication or the aftereffects of intoxication, or sleeping on the employer's premises during scheduled work hours or inefficiency or inability to perform the employment, due to intoxication or the aftereffects of intoxication.
Failure to pass, or the refusal to take, a drug test or alcohol impairment test administered by, or at the request of, the employer pursuant to title 23, chapter 2, article 14.
Refusal or knowing failure to perform reasonable and proper duties assigned by the employer.
Insubordination, disobedience, repeated and inappropriate use of abusive language, assault on another employee or repeated fighting, refusal to accept an assignment to work at certain times or to perform certain duties without good cause, refusal to follow reasonable and proper instructions given by the employer, or intentional or negligent destruction of the employer's property.
Dishonesty, material falsification of employment applications or of other written documents relating to obtaining or retaining employment, falsification of time records or work records, theft or conversion of property of the employer, or untruthfulness related to the job which could substantially injure or jeopardize the employer's interest.
Admission of or conviction for any felony or crime related to the employer's business or to the employment or which could have a substantial adverse effect on the employer's interest, public relations or trust, unless the employer had actual knowledge of such admission or conviction at the commencement of the employment.
Violation without good cause of any rule of conduct, safety rule or other rule in any way related to the employment which is reasonably imposed and communicated by the employer or which can be reasonably implied from the type of employment.
Violence or unlawful conduct committed during a labor dispute, strike or lockout or during picketing activities on, proximate to or directed at the employer's premises, property or operations.

C. Upon notification from an interested party, if a claimant has been subsequently convicted or acquitted of a felony with respect to the act for which he was separated, his claim shall be reconsidered after a tribunal hearing based on the newly available evidence.

D. In evaluating misconduct, a claimant's prior history of employment with the same employer shall be considered.

§ 23-620 State

"State" includes, in addition to the states of the United States, the District of Columbia, and the Commonwealth of Puerto Rico and the Virgin Islands.

§ 23-621 Unemployed; definition

A. An individual shall be deemed "unemployed" with respect to any week during which the individual performs no services and with respect to which no wages are payable to the individual, or with respect to any week of less than full-time work without any fault on the individual's part if the wages payable to the individual with respect to the week are less than the individual's weekly benefit amount.

B. An individual shall not be deemed "unemployed" with respect to any week of less than full-time work if the loss of full-time work is directly attributable to the fault of the individual.

C. An individual shall not be deemed "unemployed" if the individual is receiving wages in lieu of notice or severance pay. The period of time for which wages in lieu of notice or severance pay are allocable shall be determined by either of the following:

If there was a written contract between the employer and the claimant in effect at the time of separation, allocate to the appropriate period in accordance with the contract, continuing for the number of work days that the pay would cover at the regular wage or salary rate.
If no written contract was in effect at the time of separation, allocate to the appropriate period following the last day of performance of services, continuing for the number of work days that the pay would cover at the regular wage or salary rate.

D. For the purposes of this section, "severance pay" includes all amounts that an employer pays to an employee due to the employee's resignation, termination or participation in an exit incentive program or inclusion in a reduction in force or in consideration for the employee's release of actual or potential claims for the termination of employment. Severance pay does not include any amounts that the employer pays for health benefits or pursuant to any employee benefit plan.

§ 23-621.01 United States

"United States" includes, in addition to the states of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the Virgin Islands.

§ 23-622 Wages

A. "Wages" means all remuneration for services from whatever source, including commissions, bonuses and fringe benefits and the cash value of all remuneration in any medium other than cash. The reasonable cash value of remuneration in any medium other than cash shall be estimated and determined in accordance with rules prescribed by the department.

B. Wages do not include:

For the purpose of sections 23-604, 23-726 and 23-728, that part of the remuneration, other than remuneration referred to in paragraphs 3 through 16 of this subsection, in excess of:

(a) $7,000 paid in 1983 or in a calendar year thereafter through December 31, 2022 to an individual by an employer or the employer's predecessor with respect to employment during the calendar year, unless that part of the excess remuneration is subject to a tax, under federal law, against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law.

(b) $8,000 paid in the 2023 calendar year or in a calendar year thereafter to an individual by an employer or the employer's predecessor with respect to employment during the calendar year, unless that part of the excess remuneration is subject to a tax, under federal law, against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law.

For the purposes of paragraph 1 of this subsection, the remuneration paid to an individual by an employer with respect to employment in another state or states, on which contributions were required of and paid by such employer under an unemployment compensation law of such other state or states, shall be included as part of remuneration equal to the amounts prescribed in paragraph 1 of this subsection.
The amount of any payment, including monies paid by an employer for insurance or annuities or into a fund to provide payments for insurance or annuities, made to or on behalf of an employee or any of the employee's dependents under a plan or system established by an employer that makes provision for the employer's employees generally, for the employer's employees generally and their dependents, for a class of the employer's employees or for a class of the employer's employees and their dependents, on account of any of the following:

(a) Sickness or accident disability, except that in the case of payments made to an employee or any of the employee's dependents, this subdivision excludes from wages only payments that are received under a workers' compensation law.

(b) Medical or hospitalization expenses in connection with sickness or accident disability.

The payment by an employer, without deduction from the remuneration of the employee, of the tax imposed on an employee under section 3101 of the internal revenue code relating to federal insurance contributions with respect to remuneration paid to an employee for domestic service in a private home or for agricultural labor.
Any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employing unit to, or on behalf of, an employee after the expiration of six calendar months following the last calendar month in which the employee worked for such employing unit.
Any payment made to, or on behalf of, an employee or the employee's beneficiary:

(a) From or to a trust described in section 401(a) of the internal revenue code relating to qualified pension, profit sharing and stock bonus plans that is exempt from tax under section 501(a) of the internal revenue code at the time of the payment unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust.

(b) Under or to an annuity plan that, at the time of such payment, is a plan described in section 403(a) of the internal revenue code relating to taxability of beneficiaries under qualified annuity plans.

(c) Under a simplified employee pension as defined in section 408(k)(1) of the internal revenue code other than contributions described in section 408(k)(6) of the internal revenue code relating to employee salary reduction arrangements.

(d) Under or to an annuity contract described in section 403(b) of the internal revenue code relating to taxation of beneficiaries under annuities purchased by certain tax exempt organizations, other than a payment for the purchase of the contract that is made by reason of a salary reduction agreement whether evidenced by a written instrument or otherwise.

(e) Under or to an exempt governmental deferred compensation plan as defined in section 3121(v)(3) of the internal revenue code.

(f) To supplement pension benefits under a plan or trust described in this paragraph to take into account some portion or all of the increase in the cost of living since retirement as determined by the United States secretary of labor, but only if the supplemental payments are under a plan that is treated as a welfare plan under section 3(2)(b)(ii) of the employee retirement income security act of 1974.

(g) Under a cafeteria plan within the meaning of section 125 of the internal revenue code if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that, if section 125 of the internal revenue code applied for purposes of this section, section 125 of the internal revenue code would not treat any wages as constructively received.

Remuneration paid in any medium other than cash to an employee for service not in the course of the employing unit's trade or business.
Remuneration paid for agricultural labor performed in any medium other than cash.
Any tip, gratuity or service charge received by an employee except:

(a) Before January 1, 1986, if either of the following applies:

(i) It is specified and collected by the employing unit.

(ii) It is used by the employing unit in order to conform to the minimum wage requirements of federal or state law.

(b) From and after December 31, 1985, if it is reported by the employee in writing to the employer on or before the tenth day of the month following the month in which it was received.

Remuneration that the individual receives for drill, training or other national guard or reserve activity that occurs on not more than one weekend per month or in lieu of a weekend drill or the equivalent.
Remuneration paid to or on behalf of an employee if and to the extent that at the time of the payment of the remuneration it is reasonable to believe that a corresponding deduction is allowable under section 217 of the internal revenue code relating to moving expenses determined without regard to section 274(n) of the internal revenue code relating to the disallowance of certain meal and entertainment expenses.
Any contribution, payment or service provided by an employer that may be excluded from the gross income of any employee, the employee's spouse or the employee's dependents under the provisions of section 120 of the internal revenue code relating to amounts received under qualified group legal services plans.
Any payment made or benefit furnished to or for the benefit of an employee if at the time of the payment or furnishing it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under section 127, relating to educational assistance, or section 129, relating to dependent care assistance, of the internal revenue code.
The value of any meals or lodging furnished by or on behalf of the employer if at the time of the furnishing it is reasonable to believe that the employee will be able to exclude these items from income under section 119 of the internal revenue code.
Any payment made by an employer to a survivor or the estate of a former employee after the calendar year in which the employee died.
Any benefit provided to or on behalf of an employee if at the time the benefit is provided it is reasonable to believe that the employee will be able to exclude the benefit from income under section 74(c) relating to employee achievement awards, section 117 relating to qualified scholarships or section 132 relating to certain fringe benefits of the internal revenue code.

C. Subsection B, paragraphs 3 through 16 of this section do not exclude from wages any of the following:

An employer contribution under a qualified cash or deferred arrangement as defined in section 401(k) of the internal revenue code to the extent the contribution is not included in gross income pursuant to section 402(a)(8) of the internal revenue code relating to cash or deferred arrangements.
An amount treated as an employer contribution under section 414(h)(2) of the internal revenue code, relating to tax treatment of contributions by government units, if the employer picks up the contribution pursuant to a written or unwritten salary reduction agreement.
An amount deferred under any plan or other arrangement for deferral of compensation other than a plan described in subsection B, paragraph 6 of this section. An amount considered as wages pursuant to this paragraph shall be taxed only once and after being taxed shall not be considered wages for the purposes of this chapter.

D. In applying subsection B of this section, any remuneration excluded from the definition of wages under 26 United States Code section 3306(b) shall not be wages.

§ 23-623 Week

"Week" means such period of seven consecutive days as the commission may by regulation prescribe.

§ 23-624 Plan maintained by an employer

"Plan maintained by an employer" shall not include any plan to which the employer does not contribute funds.

§ 23-625 Definition of levy

"Levy" includes the power of distraint and seizure by any means.

§ 23-625.01 Definition of debtor

"Debtor" means a person whose property is subject to levy pursuant to article 5 of this chapter.

§ 23-625.02 Definition of internal revenue code

"Internal revenue code" means the United States internal revenue code of 1986, as amended.

Article 1.1 Extended Benefits

§ 23-626 Eligibility period

"Eligibility period" of an individual means the period consisting of the weeks in his benefit year under this chapter which begin in an extended benefit period; and if his benefit year ends within such extended benefit period, any weeks thereafter which begin in such period.

§ 23-627 Exhaustee

A. "Exhaustee" means an individual who, with respect to any week of unemployment in his eligibility period:

Has received prior to such week, all of the regular benefits that were available to him in his current benefit year that includes such week; or his benefit year having expired prior to such week, has no, or insufficient wages on the basis of which he could establish a new benefit year that would include such week; and
Has no right to unemployment benefits or allowances, as the case may be, under the railroad unemployment insurance act, the trade expansion act of 1962, the automotive products trade act of 1965, and such other federal laws as are specified in regulations issued by the United States secretary of labor; and has not received and is not seeking unemployment benefits under the unemployment compensation law of Canada, but if he is seeking such benefits and the appropriate agency finally determines that he is not entitled to benefits under such law he is considered an exhaustee.

B. For the purposes of paragraph 1 of subsection A, an individual shall be deemed to have received all of the regular benefits that were available to him although as a result of a pending protest or appeal with respect to wages that were not included in the original monetary determination in his benefit year, he may subsequently be determined to be entitled to added regular benefits.

§ 23-628 Extended benefit period

A. "Extended benefit period" means a period which:

Begins with the third week after a week for which there is an Arizona on indicator; and
Ends with either of the following weeks, whichever occurs later:

(a) The third week after the first week for which there is an Arizona off indicator; or

(b) The thirteenth consecutive week of such period.

B. No extended benefit period may begin by reason of an Arizona on indicator before the fourteenth week following the end of a prior extended benefit period which was in effect with respect to this state.

§ 23-629 Extended benefits

"Extended benefits" means benefits, including benefits payable to federal civilian employees and to ex-servicemen pursuant to 5 U.S.C. chapter 85, payable to an individual under the provisions of this article for weeks of unemployment in his eligibility period.

§ 23-630 On and off indicators

A. There is an Arizona on indicator for a week if the department determines, in accordance with the regulations of the United States secretary of labor, that for the period consisting of such week and the immediately preceding twelve weeks:

The rate of insured unemployment in this state, not seasonally adjusted:

(a) Equaled or exceeded one hundred twenty per cent of the average of such rates for the corresponding thirteen-week period ending in each of the preceding two calendar years, and

(b) Equaled or exceeded five per cent; or

The rate of insured unemployment in this state, not seasonally adjusted, equaled or exceeded six per cent; or
With respect to benefits for weeks of unemployment beginning after January 31, 2009:

(a) The average rate of total unemployment, seasonally adjusted, according to the United States secretary of labor, for the period consisting of the most recent three months for which data for all states are published before the close of such week equals or exceeds six and one-half per cent; and

(b) The average rate of total unemployment in this state, seasonally adjusted, according to the United States secretary of labor, for the three month period described in subdivision (a) of this paragraph, equals or exceeds one hundred ten per cent of such average for either or both the corresponding three month periods ending in the two preceding calendar years.

B. There is an Arizona off indicator for a week unless the department determines in accordance with the regulations of the United States secretary of labor that for the period consisting of such week and the immediately preceding twelve weeks the conditions of subsection A, paragraph 1, 2 or 3 are satisfied.

C. Subsection A, paragraph 3 only applies from and after January 31, 2009 until the week ending three weeks before the last week the federal sharing is authorized by Public Law 111-5, section 2005(a) or the week ending December 12, 2009, whichever is later.

D. Notwithstanding any other provision of this chapter, the governor shall suspend the payment of extended benefits under this chapter to the extent necessary to ensure that otherwise eligible individuals are not denied, in whole or in part, the receipt of emergency unemployment compensation benefits authorized by the federal supplemental appropriations act of 2008 (P.L. 110-252), the unemployment compensation extension act of 2008 (P.L. 110-449) and the American recovery and reinvestment act of 2009 (P.L. 111-5) and that this state receives the maximum reimbursement from the federal government for the payment of those emergency benefits.

§ 23-631 Rate of insured unemployment; definition

"Rate of insured unemployment" for purposes of section 23-630 means the percentage derived by dividing:

The average weekly number of individuals filing claims for regular benefits in this state for weeks of unemployment with respect to the most recent thirteen-consecutive-week period determined on the basis of reports submitted by the department to the United States secretary of labor, by
The average monthly employment covered under this chapter for the first four of the most recent six completed calendar quarters ending before the end of such thirteen-week period.

§ 23-632 Definition of regular benefits

"Regular benefits" means benefits payable to an individual under this chapter or under any other state or federal unemployment compensation law other than extended benefits and shared work benefits.

§ 23-633 Definition of state law

"State law" means the unemployment insurance law of any state, approved by the United States secretary of labor under section 3304 of the internal revenue code.

§ 23-634 Eligibility requirements for extended benefits

A. An individual shall be eligible to receive extended benefits with respect to any week of unemployment in his eligibility period only if the department finds that with respect to such week:

He is an exhaustee as defined in section 23-627, and
He has satisfied the requirements of this chapter for the receipt of regular benefits that are applicable to individuals claiming extended benefits, including not being subject to a disqualification for the receipt of benefits.
He has, in the base period of his claim for regular benefits, total wages of at least one and one-half times the wages in his highest quarter, or total wages that exceed forty times his most recent weekly benefit amount established pursuant to this chapter.

B. Extended benefits are not payable pursuant to an interstate claim filed under the interstate benefit payment plan unless an extended benefit period is in effect in the state of filing for the week for which the claim is filed, except that an individual who is otherwise eligible may receive extended benefits for not more than two weeks of unemployment during his eligibility period pursuant to interstate claims filed in an area where an extended benefit period is not in effect.

§ 23-634.01 Denial of benefits for failure to accept suitable work or actively seek work; definition

A. Notwithstanding section 23-776, an individual who is found by the department, with respect to any week in an eligibility period which begins from and after April 4, 1981, to have failed to apply for or accept available suitable work to which he was referred by the department or to have failed to actively engage in seeking work is disqualified from receiving extended benefits. The disqualification shall begin with the week in which the failure occurred and continue until the individual has been employed in each of four subsequent weeks, whether or not consecutive, and has earned remuneration equal to not less than four times his weekly benefit amount.

B. An individual shall not be denied extended benefits for failure to accept an offer of or apply for available suitable work as defined in subsection G of this section, if:

The position was not offered to the individual in writing or was not listed with the department.
The failure would not result in a denial of benefits under section 23-776 to the extent that the criteria of suitability in section 23-776 are not inconsistent with this section.

C. If an individual furnishes evidence satisfactory to the department that prospects for obtaining work in his customary occupation within a reasonably short period are good, the determination of whether any work is suitable with respect to the individual shall be made in accordance with the provisions of section 23-776 without reference to the definition contained in this section.

D. Work shall not be considered suitable work under this section if it would not be considered suitable under section 23-776, subsection C.

E. For the purposes of this section, an individual shall be treated as actively engaged in seeking work during any week if the department finds from tangible evidence provided by the individual that he has engaged in a systematic and sustained effort to obtain work during such week.

F. The department shall refer an individual entitled to extended benefits under this chapter to any work which is suitable work.

G. For the purposes of this section, "suitable work" with respect to any individual means work within the individual's capabilities in which:

The gross average weekly wages payable for the work exceed the sum of the individual's weekly benefit amount plus the amount of any supplemental unemployment benefits payable to the individual for such week.
The wages for the work are at least equal to the higher of:

(a) The minimum wages provided by section 6(a)(1) of the fair labor standards act of 1938, without regard to any exemption.

(b) The state or local minimum wage.

§ 23-635 Weekly extended benefit amount

The weekly extended benefit amount payable to an individual for a week of total unemployment in his eligibility period is an amount equal to the weekly benefit amount payable to him during his applicable benefit year.

§ 23-636 Total extended benefit amount; certain adjustments

A. Except as provided in subsection D of this section, the total extended benefit amount payable to an eligible individual with respect to his applicable benefit year shall be the least of the following amounts:

Fifty per cent of the total amount of regular benefits which were payable to him under this chapter in his applicable benefit year; or
Thirteen times his weekly benefit amount which was payable to him under this chapter for a week of total unemployment in the applicable benefit year.

B. If the amount computed in accordance with subsection A or D of this section is not a multiple of one dollar, it shall be computed to the next lower multiple of one dollar.

C. Notwithstanding any other provision of this chapter, if the benefit year of an individual ends within an extended benefit period, the remaining balance of extended benefits that such individual would be entitled to receive in that extended benefit period, with respect to weeks of unemployment beginning after the end of the benefit year, shall be reduced by the product of the number of weeks for which the individual received any trade readjustment allowances within that benefit year, multiplied by the individual's weekly extended benefit amount.

D. With respect to a high unemployment period, the amounts in subsection A of this section shall be applied by substituting the following:

In subsection A, paragraph 1 of this section, eighty for fifty.
In subsection A, paragraph 2 of this section, twenty for thirteen.

E. Subsection D of this section only applies from and after January 31, 2009 until the week ending three weeks before the last week the federal sharing is authorized by Public Law 111-5, section 2005(a) or the week ending December 12, 2009, whichever is later.

F. For the purposes of subsection D of this section, "high unemployment period" means any period during which an extended benefit period applies if eight per cent is substituted for six and one-half per cent in section 23-630, subsection A, paragraph 3, subdivision (a).

§ 23-637 Beginning and termination of extended benefit period

A. Whenever an extended benefit period is to become effective in this state as a result of an Arizona on indicator, or an extended benefit period is to be terminated in this state as a result of an Arizona off indicator, the department shall make an appropriate public announcement.

B. Computations required by the provisions of section 23-631 shall be made in accordance with regulations prescribed by the department and the United States secretary of labor.

§ 23-638 Credits and charges to employer accounts

Extended benefits paid to an individual shall be charged against the accounts of his base-period employers in the same manner and under the same conditions as regular benefits except that:

One-half of the total charges to a base-period employer other than a government entity referred to in section 23-750, subsection A, paragraph 2, for extended benefits paid to an individual shall not be used as a factor in determining the future contribution rate of such employer. If the base-period employer is a governmental entity, the total charges against such governmental base-period employer for extended benefits paid for weeks of unemployment beginning on or after January 1, 1979, shall be used as a factor in determining the future contribution rate of such governmental employer.
One-half of the extended benefits paid to an individual which are based on base-period wages paid by an employing unit other than a governmental entity referred to in section 23-750, subsection A, paragraph 2, which is making payments in lieu of contributions shall not be reimbursable to the department by such employing unit. A governmental entity which is making payments in lieu of contributions shall reimburse the department for the total amount of extended benefits paid for weeks of unemployment beginning on or after January 1, 1979, to an individual which are based on base-period wages paid by such governmental entity.

§ 23-639 Applicability of other articles

Except where inconsistent with the provisions of this article, as provided in the regulations of the commission, the terms and conditions of all other articles of this chapter shall apply to this article.

Article 2 Administration and Enforcement

§ 23-642 Compromise of claims for contributions

The department may compromise a claim for contributions or payments in lieu of contributions more than two years in arrears, or an action in relation thereto. When a compromise is made, there shall be placed in the files thereof a statement of the amount of contributions or payments in lieu of contributions due, the amount assessed, the amount of additional contributions, penalty and interest imposed by law in consequence of the neglect or delinquency of the employer in question and the amount actually paid in accordance with the terms of the compromise.

§ 23-643 Extensions of time; regulations

A. Whenever in this chapter a period of time is specified for submitting any payment, appeal, application, request, notice, objection, petition, report or other information or document, the department may extend such period of time if the party establishes to the satisfaction of the department that the failure to make a timely submission was due to the delay or other action of the United States postal service or its successor.

B. The department shall adopt and may amend, modify or repeal regulations governing the extension of time authorized by this section.

§ 23-644 Reciprocal arrangements

A. The department may enter into reciprocal arrangements with appropriate and duly authorized agencies of other states or of the federal government, or both, whereby:

Services performed by an individual for a single employing unit for which services are customarily performed in more than one state shall be deemed services performed entirely within any one of the states in which any part of the individual's service is performed, or in which the individual has his residence, or in which the employing unit maintains a place of business, provided there is in effect, as to such services, an election, approved by the agency charged with the administration of the state's unemployment compensation law, pursuant to which all services performed by the individual for such employing unit are deemed to be performed entirely within such state.
Potential rights to benefits accumulated under the unemployment compensation laws of one or more states or under one or more such laws of the federal government, or both, may constitute the basis for the payment of benefits through a single appropriate agency upon terms which the department finds will be fair and reasonable as to all affected interests and will not result in any substantial loss to the fund.
The department shall participate in any arrangements for the payment of benefits on the basis of combining an individual's wages and employment covered under this chapter with his wages and employment covered under the unemployment compensation laws of other states which are approved by the United States secretary of labor in consultation with the state unemployment compensation agencies as reasonably calculated to assure the prompt and full payment of benefits in such situations and which include provisions for applying the base period of a single state law to a claim involving the combining of an individual's wages and employment covered under two or more state unemployment compensation laws, and avoiding the duplicate use of wages and employment by reason of such combining.
Contributions due under this chapter with respect to wages for insured work shall for the purposes of collection of contributions be deemed to have been paid to the fund as of the date payment was made as contributions therefor under another state or federal unemployment compensation law, but no such arrangement shall be entered into unless it contains provisions for reimbursement to the fund of such contributions and the actual earnings thereon as the department finds will be fair and reasonable as to all affected interests.

B. Reimbursements paid from the fund pursuant to paragraph 3 of subsection A of this section shall be deemed benefits for the purpose of sections 23-701 through 23-704 and sections 23-779, 23-780 and 23-782. The department may make to other state or federal agencies and receive from other state or federal agencies, reimbursements from or to the fund in accordance with arrangements entered into pursuant to subsection A of this section.

C. Since the administration of this chapter and of other state and federal unemployment compensation and public employment service laws will be promoted by cooperation between this state and such other states and the appropriate federal agencies in exchanging services, and making available facilities and information, the department may make such investigations, secure and transmit such information, make available such services and facilities and exercise such of the other powers provided in this chapter with respect to the administration of this chapter as it deems necessary or appropriate to facilitate the administration of any such unemployment compensation or public employment service law, and in like manner, may accept and utilize information, services and facilities made available to this state by the agency charged with the administration of any such other unemployment compensation or public employment service law.

D. To the extent permissible under the laws and constitution of the United States, the department may enter into or cooperate in arrangements whereby facilities and services provided under this chapter and facilities and services provided under the unemployment compensation law of a foreign government may be utilized for the taking of claims and the payment of benefits under the employment security law of this state or under a similar law of such government.

§ 23-645 State-federal cooperation

In the administration of this chapter, the department shall:

Cooperate with the United States department of labor to the fullest extent consistent with the provisions of this chapter;
Take such action as may be necessary to secure to this state and its citizens all advantages available under the provisions of the social security act that relate to unemployment compensation, the federal unemployment tax act, the Wagner-Peyser act and the federal-state extended unemployment compensation act of 1970;
Comply with the regulations prescribed by the United States department of labor relating to the receipt or expenditure by this state of money granted under any of such acts; and
Make such reports, in such form and containing such information as the secretary of labor may from time to time require and comply with such provisions as the secretary of labor may find from time to time necessary to assure the correctness and verification of such reports.

§ 23-648 Manpower services

A. There shall be established and maintained by the department free public employment offices in such number and in such places as may be necessary for the proper administration of this chapter and for the purpose of performing such duties as are within the purview of the act of Congress entitled "an act to provide for the establishment of a national employment system and for cooperation with the states in the promotion of such system, and for other purposes" approved June 6, 1933.

B. The provisions of the act of Congress, as amended, referred to in subsection A, are accepted by this state in conformity with section 4 of such act, and this state will observe and comply with the requirements thereof.

C. The department is designated and constituted the agency of this state for the purpose of the act of Congress, as amended, referred to in subsection A. The department shall cooperate with any official or agency of the United States having powers or duties under the provisions of the act of Congress, as amended, and shall do and perform all things necessary to secure to this state the benefits of that act, as amended, in the promotion and maintenance of a system of public employment offices.

D. The department shall not engage in any activity under this section not prescribed by federal or state law or federal regulation.

E. The department shall not participate or engage in radio, television or newspaper advertising of specific job openings unless prescribed pursuant to federal law.

§ 23-649 Acquisition of lands and buildings

A. The department may acquire for and in the name of the state by lease purchase agreement, or otherwise, lands or buildings for the purpose of providing office space for units of the department performing functions provided by this chapter at such places as the department finds necessary and suitable.

B. An agreement made for the purchase of the premises mentioned in subsection A of this section shall be subject to the approval of the attorney general as to form and as to title thereto and shall not subject the state to liability for payment of the purchase price or any part or portion thereof except from monies allocated to the state by the United States department of labor for the administration of this chapter.

C. All monies received from the United States for the payments authorized by this section for lands and buildings shall be deposited, pursuant to sections 35-146 and 35-147, in the employment security administration fund and are appropriated therefrom for purposes of this chapter. Notwithstanding any provision of this chapter, monies received from the unemployment trust fund pursuant to section 903 of the social security act, as amended, are not liable or subject to appropriation, except in accordance with the provisions of subsection E of section 23-704.

D. If the premises are purchased pursuant to this chapter, the employment security commission or such other department of the state performing its functions, shall be housed therein, or if it is desirable to move the employment security commission, other substantially similar space will be furnished by the state to the commission without further payment therefor by the United States.

§ 23-652 Publications by commission

The commission shall print for distribution to the public the text of this chapter, its regulations and general rules, its annual reports to the governor and other material it deems relevant and suitable and shall furnish them to any person upon application therefor.

§ 23-654 Availability of records to foreign agency

Records and necessary authentication thereof required in the prosecution of a criminal action brought by another state or foreign government for misrepresentation to obtain benefits under the law of this state, or for collecting amounts that the claimant is liable to repay under the law of this state, shall be made available to the agency administering the employment security law of any such state or foreign government for the purpose of prosecution and collection.

§ 23-656 Enforcement of chapter

A. In a civil action to enforce the provisions of this chapter, the commission and the state may be represented by any qualified attorney who is a regular salaried employee of the commission and is designated by it for this purpose or, at the commission's request, by the attorney general.

B. All criminal actions for violation of any provision of this chapter, or of any rules or regulations issued pursuant thereto, shall be prosecuted by the attorney general, or, at his request and under his direction, by the county attorney of the county in which the employer has a place of business or the violator resides.

§ 23-657 Violations; classification

Any person who knowingly violates any provision of this chapter, or any rule or regulation thereunder, the violation of which is made unlawful or the observance of which is required under the terms of this chapter, and for which a penalty is neither prescribed in this chapter nor provided by any other applicable statute, is guilty of a class 3 misdemeanor. Each day such violation continues shall be a separate offense.

Article 3 Decisions, Hearings and Orders

§ 23-671 Appeal tribunals

A. The department shall establish one or more impartial appeal tribunals to hear and decide disputed claims. Such appeal tribunals shall consist in each case of one member who shall be a salaried examiner selected on a nonpartisan merit basis. A person shall not participate on behalf of the department in any case in which he is an interested party.

B. Within a reasonable time before the date set for a hearing, any interested party to a hearing before the appeal tribunal may file an affidavit for change of appeal tribunal and the department shall immediately transfer the matter to another appeal tribunal. An interested party may electronically file the affidavit for change of appeal tribunal under this subsection. Reasonable time shall be established by regulation. Except for cause not more than one change of appeal tribunal shall be granted to any one party.

C. An appeal tribunal may refer any case before it or any question involved therein to the appeals board established pursuant to section 23-672.

D. Unless an appeal is withdrawn or the proceedings are removed or referred to the appeals board, an appeal tribunal, after giving reasonable notice and affording all interested parties reasonable opportunity for a fair hearing, shall make a decision. The parties to the appeal shall be promptly notified of the decision and the reasons for the decision. The decision shall become final unless within thirty days after mailing or electronic transmission of the decision any interested party files a written or electronically transmitted petition for review with the appeals board or the appeals board assumes jurisdiction in accordance with subsection E of this section.

E. Before the date on which an appeal tribunal decision becomes final, the appeals board on its own motion may, by notice mailed to all interested parties, either:

Set aside the decision of the appeal tribunal and remand the proceedings to another appeal tribunal for review and decision.
Order the taking of additional evidence.
Remove the proceedings to itself for review and decision.

F. If the appeals board removes a case to itself pursuant to this section, the appeals board may order the taking of additional evidence and may affirm, reverse, modify or set aside the decision of the appeal tribunal. The appeals board shall promptly notify the parties to the proceedings of its decision.

§ 23-672 Appeals board

A. Within the department, an appeals board is established consisting of three members. The director shall appoint the members of the appeals board and shall designate one member to serve as chairman.

B. Hearings conducted by or at the direction of the appeals board shall be conducted as provided by section 23-674 and other provisions of this chapter. The department shall prescribe by rule the procedures for petitioning for review, removal of cases to the board and appeals under section 23-673. An interested party may file either a written or electronic petition for review. On the filing of a petition for review, the department shall prepare a complete record unless the parties stipulate otherwise.

C. In any case in which a petition for review of an appeal tribunal or hearing officer decision has been filed by an interested party, the appeals board may remand the case to any appeal tribunal or hearing officer for further proceedings or may review the matter on the basis of the record in the case, take additional evidence or rehear the matter and affirm, reverse, modify or set aside the decision of the appeal tribunal or hearing officer. On notice to the interested parties, a petition for review may be reviewed by one member of the appeals board designated by the chairman. If an interested party objects to review by one board member, the matter shall be heard by three members of the appeals board.

D. Unless a petition for hearing or review of a department determination made under article 5 of this chapter is withdrawn, the appeals board after affording the parties reasonable opportunity for a fair hearing shall issue its decision.

E. Every decision of the appeals board shall be in writing. If the decision is issued by at least two concurring members of the appeals board, and the appeals board is not unanimous, the decision of the majority shall control. The minority may file a dissent from the decision, setting forth the reasons for the dissent. All interested parties shall be promptly notified of the decision and the reasons for the decision. Notice to the parties of the decision shall be accompanied by instructions explaining the procedure for review pursuant to section 41-1993.

§ 23-672.01 Effect of finding, judgment, conclusion or order in separate or subsequent action or proceeding; use as evidence

Any finding of fact or law, judgment, conclusion or final order made by a hearing officer, an administrative law judge or any person with the authority to make findings of fact or law in any action or proceeding before the department or the appeals board pursuant to this chapter is not conclusive or binding in any separate or subsequent action or proceeding and shall not be used as evidence in any separate or subsequent action or proceeding between an individual and the individual's present or former employer brought before an arbitrator, court or judge of this state or the United States, regardless of whether the prior action or proceeding was between the same or related parties or involved the same facts.

§ 23-673 Determination of claim on unemployment due to labor dispute

A. In any case in which the payment or denial of benefits will be determined by section 23-777, the deputy shall proceed as provided in section 23-773. His examination of the case may be by investigation or by affording the parties reasonable opportunity for a fair hearing.

B. The determination of the deputy thereupon shall be treated for all purposes as any other determination of a deputy made pursuant to section 23-773, except that a timely appeal therefrom is removed to the appeals board.

C. If the determination appealed from was based on a fair hearing, the hearing officer may make his recommendation and the appeals board may make its decision on the basis of the evidence previously submitted.

§ 23-674 Procedure in rendering decisions and orders; rights of parties; representation

A. All interested parties to a hearing before the appeal tribunal or the appeals board shall be given reasonable notice of the hearing and afforded an opportunity for hearing. The notice shall state the time, place and issues involved but if by reason of the nature of the proceeding the issues cannot be fully stated in advance of the hearing, or if subsequent amendment of the issues is necessary, they shall be fully stated as soon as practicable, and opportunity shall be afforded all parties to present evidence and argument with respect thereto. If a party's legal or factual basis of contention is substantially changed at the hearing, causing surprise to the opposing party, the hearing shall be rescheduled with timely notice of the nature of the new contention unless a waiver on the record is obtained from the party claiming surprise or the surprise could have been avoided with due diligence. All hearings shall be recorded. The appeal tribunal shall secure either a court reporter or an electronic means of producing a clear and accurate record of the proceeding at the department's expense. If a party files an application for appeal to the court of appeals pursuant to section 41-1993 and the hearing has not yet been transcribed, the hearing shall be transcribed at the department's expense. Informal disposition may be made of any case by stipulation, agreed settlement, consent order or default.

B. In a hearing conducted pursuant to this section, parties may be represented in the following manner:

An individual, either an employee or an employer, may represent himself or may be represented by a duly authorized agent who is not charging a fee for the representation.
An employer, including a corporate employer, may represent itself through an officer or employee.
Any party may be represented by a person who is charging a fee for the representation and who is either a duly authorized agent who was previously or is currently retained by a party for purposes other than representation in an unemployment compensation hearing or an attorney who is authorized to practice law in this state. An attorney or agent representing a party before an appeal tribunal or the appeals board may charge a fee not in excess of seven hundred fifty dollars but may request the department to approve an additional amount which is reasonable for the services rendered. This is limited only to an unemployment compensation appeal.

C. Notwithstanding any other law, representation of a party at a hearing conducted pursuant to this section is not deemed to be the practice of law.

D. The tribunal and the appeals board may admit and give probative effect to evidence which possesses probative value commonly accepted by reasonably prudent persons in the conduct of their affairs. It shall give effect to the rules of privilege recognized by law. It may exclude incompetent, irrelevant, immaterial and unduly repetitious evidence. All evidence, including records and documents in the possession of the department of which it desires to avail itself, shall be offered and made a part of the record in the case, and no other factual information or evidence shall be considered in the determination of the case. Documentary evidence may be received in the form of copies or excerpts, or by incorporation by reference. The tribunal and the appeals board may take notice of judicially cognizable facts and in addition may take notice of general, technical or scientific facts within its specialized knowledge. Parties shall be notified either before or during the hearing, or by reference in preliminary reports or otherwise, of the material so noticed, and they shall be afforded an opportunity to contest the facts so noticed. The tribunal and the appeals board may utilize their experience, technical competence and specialized knowledge in the evaluation of the evidence presented to them. Each party shall have the right of cross-examination of the witnesses who testify and shall have the right to submit rebuttal evidence.

E. Every decision and order adverse to a party to the proceedings shall be in writing or stated in the record and shall be accompanied by findings of fact and conclusions of law. The findings of fact shall consist of a concise statement of the conclusions upon each contested issue of fact. Parties to the proceeding shall be notified of the decision and order in person or by mail.

§ 23-675 Depositions; oaths; attendance of witnesses; production of papers

In the discharge of the duties imposed by this chapter, the appeal tribunal, appeals board or any duly authorized representative of the department may administer oaths and affirmations, take depositions, certify to official acts and issue subpoenas to compel the attendance of witnesses and the production of books, papers, correspondence, memoranda and other records deemed necessary as evidence in connection with a disputed claim or the administration of this chapter. Duly authorized employees or representatives of the department or peace officers may serve subpoenas issued pursuant to this section.

§ 23-676 Failure to obey commission subpoena; classification

Any person who without just cause knowingly fails or refuses to attend and testify or to answer any lawful inquiry or to produce books, papers, correspondence, memoranda and other records, if it is in his power so to do, in obedience to a subpoena of the commission is guilty of a class 3 misdemeanor. Each day such violation continues shall be a separate offense.

§ 23-677 Contempt by contumacy or refusal to obey subpoena of commission

In case of contumacy or refusal of a person to obey a subpoena issued under this chapter, any court of this state within the jurisdiction of which the inquiry is carried on or within the jurisdiction of which the person guilty of contumacy or refusal to obey is found, resides or transacts business, upon application by the commission or its duly authorized representative, shall issue to such person an order requiring him to appear before a commissioner, the commission or its duly authorized representative, and to produce evidence if so ordered or give testimony touching upon the matter under investigation or in question. Failure to obey such order of the court may be punished by the court as a contempt thereof.

§ 23-679 Fees of witnesses

Witnesses subpoenaed pursuant to this chapter shall be allowed fees, not less than those paid in the superior court, at a rate fixed by the department, except that an employing unit or a representative or agent of an employing unit subpoenaed to testify or produce books and records under the authority of section 23-675 in connection with that employing unit's liability under article 5 of this chapter shall not be allowed witness fees or mileage. The fees are deemed a part of the expense of administering this chapter.

§ 23-680 Notices of hearings

Notwithstanding section 41-1002, subsection B and section 41-1061, all notices of hearing required by this chapter shall be given at least ten working days prior to the date set for the hearing, except that any interested party may waive his right to notice.

§ 23-681 Changing hearing date; good cause

A. The scheduled hearing date may be advanced or postponed if the parties agree or on a showing of good cause.

B. Good cause exists if the request is reasonable or the circumstance causing the request is beyond the control of the requesting party and failure to grant the postponement would cause undue hardship to the requesting party.

C. The department of economic security shall adopt rules:

To set standards under which a party may be excused for failure to attend a hearing for good cause.
To allow a party who failed to attend a hearing to file a written or electronic request to reopen the hearing.

§ 23-682 Service of documents by electronic means

Notwithstanding section 41-1002, subsection B and section 41-1063, the appeal tribunal or appeals board, as an alternative to any other means of service permitted or required by any law, may serve or deliver any notice, decision or order or any other document by electronic means if the party being served consents in writing or on the record to service by electronic means. Service by electronic means is deemed complete on transmission.

§ 23-683 Exemption of claimant from fees; approval required for counsel or agent fee; violation; classification

A. No individual claiming benefits shall be charged fees of any kind in a proceeding under this chapter by the department or its representatives or by a court or officer thereof.

B. An individual claiming benefits or an employer in a proceeding before the department or a court may be represented by counsel or other duly authorized agent. No such counsel or agent for an individual shall either charge or receive for his services more than an amount approved by the department.

C. Any person who violates any provision of this section is guilty of a class 2 misdemeanor.

Article 4 Funds

§ 23-701 Unemployment compensation fund; administration; composition

A. There shall be a special fund known as the unemployment compensation fund which shall be kept separate and apart from all other public monies or funds of this state, and shall be administered by the commission exclusively for the purposes of this chapter.

B. The unemployment compensation fund shall consist of:

Contributions and payments in lieu of contributions collected pursuant to this chapter.
Interest earned upon monies in the fund.
Property or securities acquired through the use of monies belonging to the fund and all earnings of such property and securities.
All monies credited to this state's account in the unemployment trust fund pursuant to section 903 of the social security act, as amended.
Other monies received for the fund from any other source.

C. All monies in the unemployment compensation fund shall be commingled and undivided.

§ 23-702 Custody of unemployment compensation fund

The state treasurer shall be ex officio the treasurer and custodian of the unemployment compensation fund. He shall administer the fund in accordance with the provisions of this chapter and the direction of the commission, and shall pay all warrants drawn thereon in accordance with such regulations as the commission prescribes. Monies in the fund shall be secured by the depository to the same extent and in the same manner as required by the general depository law of the state.

§ 23-703 Accounts comprising unemployment compensation fund; deposits; refunds; commingling funds prohibited

A. Within the unemployment compensation fund, there are three separate accounts known as a clearing account, an unemployment trust fund account and a benefit account. All monies payable to the unemployment compensation fund, upon receipt thereof by the department or its agent, shall be immediately deposited in the clearing account. Refunds payable pursuant to the provisions of this chapter may be paid from the clearing account or the benefit account upon warrants under the direction of the department. After clearance thereof all other monies in the clearing account shall be immediately deposited with the secretary of the treasury of the United States to the credit of the account of this state in the unemployment trust fund, established and maintained pursuant to section 1104 of the social security act, any provisions of law in this state relating to deposit, administration, release or disbursement of monies in the possession or custody of this state to the contrary notwithstanding.

B. Except as otherwise provided in this chapter, monies in the clearing and benefit accounts may be deposited by the treasurer, under the direction of the department, in any bank or public depository in which general funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid from the fund. Monies in the clearing and benefit accounts shall not be commingled with other state funds, but shall be maintained in separate accounts on the books of the depository.

§ 23-704 Requisitions and withdrawals from accounts in unemployment compensation fund; conditions of expenditure for benefits, refunds and administration

A. Monies requisitioned from this state's account in the unemployment trust fund shall be used exclusively for the payment of benefits and for refunds pursuant to this chapter in accordance with authorized regulations except that monies credited to this state's account in the unemployment trust fund pursuant to section 903 of the social security act, as amended, shall be used exclusively as provided in subsection E of this section. The department from time to time shall requisition from the unemployment trust fund such amounts, not exceeding the amounts standing to the state's account therein, as it deems necessary for the payment of benefits and refunds for a reasonable future period. Upon receipt thereof the treasurer shall deposit the monies in the benefit account and shall pay warrants for payment of benefits and refunds solely from the benefit account. If the department believes more efficient administration will result from such practice, it, in turn, may withdraw from the benefit account amounts it deems necessary for payment of benefits for a reasonable future period and deposit such amounts to the account of the department in a bank or public depository of its choosing and issue checks against it in payment of benefits to claimants entitled thereto under law. The monies shall be secured by the depository to the same extent and in the same manner as required by the general depository law of the state.

B. Expenditures of monies in the benefit account and refunds from the clearing account shall not be subject to any provisions of law requiring specific appropriations or other formal release by state officers of monies in their custody.

C. All claims, warrants or other instruments utilized by the department for the payment of benefits and refunds shall bear the signature of an employee designated for that purpose by the director.

D. Any balance of monies requisitioned from the unemployment trust fund which remains unclaimed or unpaid in the benefit account after expiration of the period for which the sums were requisitioned either shall be deducted from estimates for, and may be utilized for the payment of, benefits and refunds during succeeding periods, or, in the discretion of the director, shall be redeposited with the secretary of the treasury of the United States to the credit of this state's account in the unemployment trust fund established and maintained pursuant to section 904 of the social security act, as amended.

E. Monies credited to the account of this state in the unemployment trust fund by the secretary of the treasury of the United States pursuant to section 903 of the social security act, as amended, may be requisitioned and used only in accordance with the following requirements:

Except as provided in paragraph 2, such monies shall be used only in the payment of benefits exclusive of administrative expense.
Such monies may be requisitioned and used for the payment of expenses incurred for the administration of this chapter if and only if the monies are requisitioned and expenses are incurred pursuant to and after the enactment of a state appropriation law which:

(a) Specifies the purposes for which such monies are appropriated and the amounts appropriated therefor,

(b) Limits the period within which such monies may be obligated to a period ending not more than two years after the date of the enactment of the appropriation law, and

(c) Limits the amount which may be obligated during a fiscal year to an amount which does not exceed the limitations on amount as prescribed by section 903 of the social security act, as amended. For the purposes of this subsection, amounts obligated during any such fiscal year shall be charged against equivalent amounts which were first credited and which are not already so charged, in accordance with the requirements for and limitations on charging prescribed by section 903 of the social security act, as amended.

Monies appropriated for the payment of the expenses of administration pursuant to this subsection shall be requisitioned as needed for the payment of obligations incurred under such appropriation and, upon requisition, shall be deposited in the employment security administration fund from which such payments shall be made. The department shall maintain a separate record of the deposit, obligation, expenditure and return of funds so deposited. Monies so deposited shall, until expended, remain a part of the unemployment compensation fund and, if they will not be expended they shall be returned promptly to the secretary of the treasury for credit to this state's account in the unemployment trust fund.

§ 23-705 Special administration fund

A. A special fund known as the special administration fund is established.

B. No expenditure or transfer may be made from the special administration fund unless the expenditure or transfer is authorized by legislative appropriation and approved by the director of the department of administration.

C. Interest and penalties collected under the provisions of this chapter shall be paid into the special administration fund. Such monies shall not be expended or available for expenditure in any manner which would permit their substitution for, or a corresponding reduction in, federal funds which would in the absence of the monies be available to finance expenditures for the administration of this chapter, but nothing in this section shall prevent the monies from being used to cover expenditures necessary and proper under the law for which federal funds have been duly requested but not yet received, subject to charging the expenditures against such funds when received.

D. The monies in the special administration fund are subject to legislative appropriation and shall be used by the commission for payment of costs of administration found not to have been properly and validly chargeable against federal grants or other funds received for or in the employment security administration fund created by section 23-707. The appropriated monies shall be available either for satisfying the obligations incurred by the commission directly or by requesting the state treasurer to transfer the required amount from the special administration fund to the employment security administration fund. No expenditure of this fund or transfer shall be made unless and until authorized by legislative appropriation and the commission finds that no other funds are available or can properly be used to finance the expenditures.

E. The monies in this fund are subject to legislative appropriation to the commission for expenditure in accordance with the provisions of this section and section 23-706 and shall not be transferred to any other fund.

§ 23-706 Use of special administration fund; transfer of monies

A. The department may use all or any part of the monies in the special administration fund:

To acquire suitable office space for the units of the department performing functions provided by this chapter by purchase, lease, contract or in any other manner, including the right to use the monies or any part of the monies to purchase land and erect on the land such buildings as it deems necessary, or to assist in financing the construction of any building erected by this state or any of its agencies in which available space will be provided for the units of the department performing functions provided by this chapter under lease or contract between the department and this state or the state agency.
In case of an administrative error by the department, to reimburse employers that have elected to make payments in lieu of contributions pursuant to section 23-750.
To pay for domestic violence prevention and cost-effectiveness study client services.

B. The department may transfer from the employment security administration fund to the special administration fund amounts not exceeding the amount of monies specifically available to the department for that purpose, equivalent to the fair, reasonable rental value of land and buildings acquired for the use of units of the department performing functions provided by this chapter until the full amount of the purchase price of the land and buildings and the cost of repair and maintenance of the land and buildings that was expended from the special administration fund has been returned to the special administration fund. The department may also transfer from the employment security administration fund to the special administration fund amounts not exceeding the amount of monies specifically available to the department for that purpose, equivalent to the fair, reasonable rental value of space used by the units of the department performing functions provided by this chapter in a building erected by this state or any of its agencies until the department's proportionate amount of the purchase price of the building and the department's proportionate amount of the costs of repair and maintenance of the building that was expended from the special administration fund has been returned to the special administration fund.

C. If the department deems the amount in the special administration fund to exceed future needs, the department may transfer all or a portion of the monies in the special administration fund to the unemployment compensation fund.

D. Expenditures or transfers from the special administration fund are subject to section 23-705.

§ 23-707 Employment security administration fund

A. A special fund known as the employment security administration fund is established.

B. All monies deposited or paid into the employment security administration fund are appropriated and made available to the commission. All monies in the fund except monies withdrawn from the unemployment trust fund under section 903 of the social security act, as amended, for payment of administrative expenses shall be expended solely for the purposes and in the amounts found necessary by the secretary of labor of the United States and the employment security commission for the proper and efficient administration of this chapter.

C. The employment security administration fund shall consist of all monies appropriated by this state and all monies received from the United States or any agency thereof, including the United States department of labor or from any other source for such purpose. Monies received from the railroad retirement board as compensation for services or facilities supplied to the board shall be paid into the fund.

D. All monies in the employment security administration fund shall be deposited, administered and disbursed in the same manner and under the same conditions and requirements as provided by law for other special funds, except that monies in the employment security administration fund shall not be commingled with other state funds but shall be maintained in a separate account on the books of the depository. The monies shall be secured by the depository in which they are held to the same extent and in the same manner as required by the general depository law of the state. Any balance in the fund shall not lapse at any time, but shall be continuously available to the commission for expenditure consistent with this chapter. Notwithstanding any provision of this chapter, all monies requisitioned from the unemployment trust fund for the payment of administrative expenses and deposited in this fund pursuant to paragraph 3 of subsection E of section 23-704 shall remain part of the unemployment compensation fund and shall be used only in accordance with the conditions specified in subsection E of section 23-704.

E. The state treasurer shall be liable on his official bond for the faithful performance of his duties in connection with the employment security administration fund provided for under this chapter. Liability on the official bond shall exist in addition to liability upon any separate bond. All sums recovered on a surety bond for losses sustained by the employment security administration fund shall be deposited in the fund.

§ 23-708 Reimbursement of employment security administration fund

A. This state recognizes its obligation to replace, and pledges its faith that funds will be provided in the future and applied to the replacement of, any monies received from the United States department of labor under title III of the social security act, any monies granted to this state pursuant to the provisions of the Wagner-Peyser act, and any monies made available by this state or its political subdivisions and matched by monies granted to this state pursuant to the provisions of the Wagner-Peyser act, which the secretary of labor of the United States finds, because of any action or contingency, have been lost or have been expended for purposes other than, or in amounts in excess of, those found necessary by the secretary of labor of the United States and the employment security commission for the proper administration of this chapter.

B. Such monies shall be replaced within a reasonable time by monies appropriated by the legislature from the general funds of this state to the employment security administration fund for expenditure as provided in section 23-707. The commission shall report to the state budget officer in the same manner as is provided generally for the submission of financial requirements, and the governor shall include in his budget report to the next regular session of the legislature the amount required for replacement.

C. The monies in the special administration fund are specifically made available to replace, within a reasonable time, monies received by this state under title III of the social security act which are required to be paid under this section.

§ 23-709 Employment service account

A special "employment service account" shall be maintained as a part of the employment security administration fund for the purpose of maintaining the public employment offices established pursuant to section 23-648, and for the purpose of cooperating with the United States employment service. The employment service account shall consist of funds received from the United States government for the purpose of establishing free employment offices and, in addition, there shall be paid into such account monies received from the act of Congress entitled "an act to provide for the establishment of a national employment system and for cooperation with the states of such system, and for other purposes" approved June 6, 1933, and such monies as are apportioned for the purposes of this account from monies received under title III of the social security act.

Article 5 Contributions

§ 23-721 Work records kept by employing unit; inspection by commission

Each employing unit shall keep true and accurate work records for such periods of time and containing such information as the commission prescribes. Such records shall be open to inspection and may be copied by the commission or its authorized representatives at any reasonable time and as often as necessary.

§ 23-722 Reports of employing unit; information confidential; report of banking institution; disclosure of information; violation; classification

A. The department, the appeals board or an appeal tribunal may require from an employing unit sworn or unsworn reports with respect to persons employed by it which it deems necessary for the effective administration of this chapter. Information thus obtained shall not be published or open to public inspection, other than to public employees in the performance of their duties or to an agent of the department designated as such in writing for the purpose of accomplishing certain of the department's functions, in any manner revealing the employing unit's identity, except that a claimant at a hearing before an appeal tribunal, the appeals board or the department shall be supplied with the information from the records to the extent necessary for the proper presentation of his claim and the employer shall be furnished a complete copy of the case record on request.

B. The department may request the comptroller of the currency of the United States to make an examination of the correctness of any return or report of a national banking association rendered pursuant to this chapter and may in connection with such request transmit the report or return to the comptroller of the currency of the United States as provided in section 3305 of the federal internal revenue code.

C. An employee or an agent of the department who violates any provision of this section is guilty of a class 3 misdemeanor.

§ 23-722.01 Employer reporting; exceptions; retention of records; unauthorized disclosure; civil penalty; new hire directory; definitions

A. Subject to the requirements of subsection E, the department of economic security shall implement a program to require all employers doing business in this state to report the following to the department of economic security:

The hiring of any employee who resides or works in this state.
The rehiring or returning to work of any employee who was laid off, furloughed, separated, granted a leave without pay or terminated from employment.

B. The department of economic security shall eliminate all unnecessary reporting in the information requested to reduce the burden of employers.

C. Employers shall report by submitting a W-4 form or an equivalent form at the option of the employer. The information may be submitted magnetically, electronically or by first class mail, telefacsimile or any other means that are authorized by the department of economic security.

D. Employers shall submit the reports within twenty days after the employee is hired or rehired or returns to work. Employers who submit reports magnetically or electronically shall submit the reports in two monthly transmissions not more than sixteen days apart. The report shall contain all of the following:

The employee's name, address and social security number.
The employer's name, address and federal tax identification number.
The date the employee first performed services for pay.

E. An employer who has employees who are employed in two or more states and who transmits new hire reports magnetically or electronically may comply with the new hire reporting requirements by designating one state in which the employer has employees to transmit the report. An employer who has employees in two or more states shall notify the United States secretary of health and human services of the state to which the employer shall send reports.

F. Except as provided in subsection L, the department of economic security or its agent may use the information collected pursuant to this section only for the following purposes:

The administration and enforcement of child support pursuant to title IV-D of the social security act. Except as provided by federal law, the information collected shall only be used to locate a person to establish paternity and to establish, modify and enforce support obligations. The information may be disclosed to an agent under contract with the department of economic security to carry out this purpose. The information may also be disclosed to agencies of this state, political subdivisions of this state, federal agencies involved with support and other states and their political subdivisions seeking to locate persons to enforce support pursuant to title IV-D of the social security act.
The identification and prevention of benefit fraud in assistance programs under title 46, chapter 2, article 5.
The administration of employment security services pursuant to this chapter and workers' compensation programs pursuant to chapter 6 of this title.

G. The information collected pursuant to this section shall not be disclosed pursuant to title 39, chapter 1. An employee or agent of this state who discloses any information collected pursuant to this section without authorization is subject to a civil penalty of one thousand dollars for each offense. The department of economic security may impose and collect the penalty and shall deposit any collections in the state general fund. Any unauthorized release of information is cause for the administrative discipline of the employee or agent.

H. The department shall operate a state directory of new hires comprised of information received from employers. The department shall enter information received from employers into the state directory of new hires within five business days after receipt. The information shall be forwarded to the national directory of new hires within three business days after entry into the state directory of new hires. For the purposes of this section, a business day is a day when state offices are open for regular business.

I. The department of economic security shall conduct, directly or by contract, an automated comparison of social security numbers reported by employers pursuant to this section and the social security numbers on record in the state case registry of child support orders.

J. If a comparison conducted pursuant to subsection I reveals a match of the social security number of an obligor required to pay support in a title IV-D case, the department, within two business days, shall issue an income withholding order to the employer of the person obligated to pay support directing the employer to withhold the ordered amount from the income of the employee.

K. This section does not allow the department to impose penalties on employers for failing to comply with this section's reporting requirements.

L. The department of economic security and the Arizona health care cost containment system administration may use the information collected pursuant to this section to verify eligibility under title XIX of the social security act.

M. For the purposes of this section:

"Employee" means a person who is employed within the meaning of chapter 24 of the internal revenue code of 1986. Employee does not include an employee of a federal or state agency performing intelligence or counterintelligence functions if the head of the agency has determined that reporting with respect to the employee could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission.
"Employer" has the same meaning prescribed in section 3401(d) of the internal revenue code of 1986 and includes any governmental entity and any labor organization.

§ 23-722.02 Employer request; employee disclosure; violation; classification; requirements

A. After an employee is hired, is rehired or returns from an unpaid leave of absence, the employer shall request that the employee disclose whether the employee is subject to a wage assignment order to provide child support.

B. The employer shall not discriminate against, refuse to hire, discharge or otherwise discipline an employee who discloses an obligation to pay child support.

C. The obligor or person ordered to pay child support shall provide a copy of the order of assignment to the obligor's or person's present or future employer. An obligor or person who is ordered to pay child support and who fails to comply with this subsection is guilty of a class 3 misdemeanor.

D. If an obligor has multiple orders, the obligor shall provide the employer with a copy of each order.

E. On the disclosure of an obligation to pay child support along with a copy of the order, the employer shall begin withholding the support payments according to the terms of the order. If the disclosure is to a secondary employer, that employer shall not begin withholding support payments.

F. The director may adopt rules to implement and administer this section.

G. Nothing in this section shall be construed to allow the department to impose penalties for failing to comply with this section's requirements.

§ 23-722.03 Memorandum of understanding; retention; use; definition

A. The department shall enter into a memorandum of understanding with the office of economic opportunity to establish workforce data stewardship pursuant to section 41-5403 to support the evaluation of workforce and education programs and the development of labor market information.

B. The department of economic security, the department of education and the office of economic opportunity shall notify all applicants of and participants in workforce innovation and opportunity act (P.L. 113-128; 128 Stat. 1425) programs for which this state has reporting, monitoring or evaluation responsibilities that information obtained on application and during participation may be used to evaluate program effectiveness and to conduct research of the labor market.

C. All workforce evaluation system research products produced with the use of unemployment insurance information must be submitted to the office of economic opportunity for archival purposes. Research products that do not contain personally identifiable information must be made available to the public, and the secretary of state shall hold this information for long-term retention.

D. For the purposes of this section, "research products" means the statistical analyses and reports that are produced by state entities with the use of unemployment insurance information pursuant to section 23-722.04

§ 23-722.04 Unemployment insurance information; disclosure; violation; classification

A. The department or the office of economic opportunity may disclose unemployment insurance information to the following entities:

Any federal, state or local governmental agency in the investigation of fraud relating to public programs or the misuse of public monies.
Divisions of the department, including the employment and rehabilitation services administrations, for program and research purposes.
The workforce Arizona council for program performance, regional planning and other program and research purposes.
The department of education to evaluate adult education program performance and for other primary and adult education program and research purposes.
The Arizona board of regents, universities under the jurisdiction of the Arizona board of regents and community college districts to evaluate program performance and for other program and research purposes.
The United States department of labor, or its agents, or the United States census bureau, or its agents, as required by law or in connection with the requirements imposed as a result of receiving federal funding.
Department contractors or subcontractors, or their agents, for the sole purpose of providing for the processing, storage and transmission of information. This disclosure must be consistent with this section.
The industrial commission of Arizona, department of insurance and financial institutions or attorney general for use by those agencies, or their agents or contractors, in the prevention, investigation and prosecution of workers' compensation fraud.

B. On the request of one of the entities specified in subsection A of this section to the department or the office of economic opportunity, the department or the office of economic opportunity shall disclose unemployment insurance information to the entity pursuant to guidelines established by the workforce data task force established by section 41-5404 and pursuant to a written data sharing agreement with the requesting entity in a form determined by the workforce data task force pursuant to the laws of this state and applicable federal regulations. The department or the office of economic opportunity may disclose the unemployment insurance information only after the requesting entity has demonstrated that the information will be kept confidential, except for those purposes for which the information was provided to the requesting entity, and that the requesting entity has security safeguards in place to prevent the unauthorized disclosure of the information.

C. Except as otherwise allowed by law or as otherwise authorized by agreement between the department of economic security and the United States department of labor, the department of economic security or the office of economic opportunity may not use federal unemployment insurance grant monies to pay for any costs incurred in processing and handling requests for disclosure of unemployment insurance information. The department of economic security and the office of economic opportunity, in consultation with the workforce data task force, shall establish a rate structure that complies with 20 Code of Federal Regulations section 603.8 for costs incurred in processing requests for disclosure of unemployment insurance information.

D. The requesting entity may not make public any unemployment insurance information that identifies an individual or the individual's employer. Any unauthorized disclosure, including security breaches, shall be reported to the department and the office of economic opportunity immediately. Any person who knowingly discloses confidential unemployment insurance information in violation of this section without prior written authorization from the department or the office of economic opportunity or authorization as otherwise provided by law is guilty of a class 3 misdemeanor.

E. The office of economic opportunity may use unemployment insurance information to perform economic analyses, for the development of labor market information and a state workforce evaluation data system and for other program and research purposes.

F. This section does not prohibit disclosure that is required or allowed by federal law.

§ 23-723 Penalties for failure to file timely or complete contribution and wage reports

A. An employing unit which fails to file on or before the due date prescribed by department regulation a quarterly contribution and wage report required by the department in the administration of this chapter, shall pay to the department for each such delinquent report, subject to waiver for good cause shown, a penalty of one-tenth of one per cent of the total wages paid during the quarter, but not less than thirty-five dollars, nor more than two hundred dollars.

B. Amounts collected as penalties under the provisions of this section shall be deposited by the department in the special administration fund.

§ 23-724 Liability determinations; review; finality

A. If the department makes a determination, which determination shall be made either on the motion of the department or on application of an employing unit, that an employing unit constitutes an employer as defined in section 23-613 or that services performed for or in connection with the business of an employing unit constitute employment as defined in section 23-615 that is not exempt under section 23-617 or that remuneration for services constitutes wages as defined in section 23-622, the determination becomes final with respect to the employing unit thirty days after written notice is served personally, by electronic transmission or by certified mail if the determination was made on the basis of section 23-613.01, or by first class mail if the determination was made by any other basis, addressed to the last known address of the employing unit, unless within such time the employing unit files a written request for reconsideration.

B. If a request for reconsideration is filed as prescribed in subsection A of this section, a reconsidered determination shall be made. The reconsidered determination becomes final with respect to the employing unit thirty days after written notice of the reconsidered determination is served personally, by electronic transmission or by mail addressed to the last known address of the employing unit, unless within such time the employing unit files with the appeals board a written petition for hearing or review. The department may for good cause extend the period within which the written petition is to be submitted. If the reconsidered determination is appealed to the appeals board and the decision by the appeals board is that the employing unit is liable, the employing unit shall submit all required contribution and wage reports to the department within forty-five days after the decision by the appeals board.

C. On an employer's written request and the submission of pertinent information to the department, the department shall, or on its own motion may, consider whether a determination, reconsidered determination or decision that has become final should be revised. Revision shall be granted if either:

There has been a substantial and material change in the facts on which the determination, reconsidered determination or decision relied.
There has been a change in the law or interpretation of the law that warrants a revised determination, reconsidered determination or decision.

D. The effective date of a revision under subsection C of this section is either:

The date on which the change occurred if the employer's request with the pertinent information is filed not later than the last day of the month immediately subsequent to the calendar quarter in which the change occurred.
The first day of the calendar quarter in which the employer files the request and submits the pertinent information unless the employer demonstrates to the satisfaction of the department that good cause exists for the failure to notify the department within the period prescribed by paragraph 1 of this subsection of the occurrence of the change warranting the revision. In the event that good cause is demonstrated, the effective date is the date of the change.

E. A refusal to grant relief under subsection C of this section may not be appealed unless within thirty days the employer appeals the refusal to the appeals board. The employer's appeal shall be filed either electronically or in writing. Notwithstanding any other provision of law and pursuant to the appeal, the appeals board may initiate hearings to obtain information and issue a decision as to whether the relief requested in subsection C of this section should be granted. Thereafter, the appeals board shall issue a decision in the matter. The decision of the appeals board may not be appealed with respect to the employing unit unless a request for judicial review is filed within the time and in the manner provided in section 41-1993.

F. The determination of the department or decision of the appeals board, together with the record, shall be admissible in any subsequent judicial proceeding involving liability for contributions. A determination or decision that an employing unit is liable that has become final shall be conclusive and binding on the employing unit and shall not be reconsidered in proceedings brought before the department or a hearing officer.

G. Any determination issued on the basis of section 23-613.01 pursuant to subsection A of this section and any reconsidered determination issued pursuant to subsection B of this section and any contribution rate redetermination or denial issued pursuant to section 23-732, subsection A shall contain the following:

The facts considered and the facts relied on in making the determination.
The specific statutes, regulations or other authority relied on in making the determination.
The reasoning applied in making the determination.
The appeal rights related to the determination and the time period after which the determination becomes final.

H. If any determination covered by subsection G of this section is defective because the determination fails to meet the requirements of subsection G of this section, the defect may be cured by issuance of a corrected, amended or new determination. If a defect is alleged and specified in writing within the period for appeal, all time periods applicable to the determination are suspended pending the curative action.

I. This section does not preclude the department from at any time correcting clerical errors that have occurred in the administration of this chapter.

J. A determination, reconsidered determination, revision or refusal to grant relief under this section may be served by electronic means if the party being served consents in writing to service by electronic means. Service by electronic means is deemed complete on transmission.

§ 23-725 Employer coverage; termination; election of coverage

A. Except as provided in subsections D and E of this section, an employing unit that is or becomes an employer subject to the provisions of this chapter within any calendar year shall be deemed an employer during the whole of the calendar year.

B. Except as otherwise provided in subsections D, E, F, G and H of this section, an employing unit shall cease to be an employer subject to this chapter:

As of the first day of January of any calendar year:

(a) If the department finds that during the preceding calendar year the employing unit ceased all operations for a period of thirty-five weeks and did not in any calendar quarter in the preceding calendar year pay wages for employment amounting to one thousand five hundred dollars or more, or

(b) If the employing unit files with the department within the period from January 1 through March 31 of the year a written application for termination of coverage and the department finds that during the preceding calendar year the employing unit did not have one or more individuals in employment in twenty separate weeks and did not pay wages for employment amounting to at least one thousand five hundred dollars during any calendar quarter in the preceding calendar year.

On the transfer date of an employer experience rating account resulting from transfer by an employing unit of its organization, trade or business, or substantially all the assets an employing unit, to a successor.

C. For the purposes of subsection B of this section, the two or more employing units mentioned in section 23-613, subsection A, paragraph 3, 4 or 5 shall be treated as a single employing unit.

D. An employing unit, not otherwise subject to this chapter, that files with the department its written election to become an employer subject to this chapter for not less than two calendar years, shall with the written approval of the election by the department, become an employer subject to this chapter to the same extent as all other employers, as of the date stated in the approval, and shall cease to be subject to this chapter as of January 1 of any calendar year subsequent to the two calendar years, only if within the period from January 1 through March 31 of that year it has filed with the department a written notice to that effect.

E. Any employing unit for which services that do not constitute employment as defined in this chapter are performed, may file with the department a written election that all such services, with respect to which payments are not required under an employment security law of any other state or of the federal government, and that are performed by individuals in its employ in one or more distinct establishments or places of business, shall be deemed to constitute employment by an employer for all the purposes of this chapter for at least two calendar years. On the written approval of the election by the department, the services shall be deemed to constitute employment subject to this chapter from and after the date stated in the approval. The services shall cease to be deemed employment subject to this chapter as of January 1 of any calendar year subsequent to the two calendar years, only if within the period from January 1 through March 31 of that year the employing unit has filed with the department a written notice to that effect.

F. Any employing unit that became an employer by reason of section 23-613, subsection A, paragraph 2, subdivision (c) because of services defined as employment under section 23-615, subsection A, paragraph 7, shall cease to be an employer subject to this chapter as of the first day of January of any calendar year if either of the following:

The department finds that the employing unit ceased all operations for a period of thirty-five weeks in the preceding calendar year.
The employing unit files with the department within the period from January 1 through March 31 of the year a written application for termination of coverage and the department finds that there were not twenty separate days, each day being in a separate calendar week within the preceding calendar year, within which the employing unit employed four or more individuals in employment subject to this chapter.

G. Any employing unit that is an employer solely by reason of section 23-613, subsection B, shall cease to be an employer subject to this chapter as of the first day of January of any calendar year if either of the following are true:

The department finds that during the preceding calendar year the employing unit ceased all operations for a period of thirty-five weeks and did not in any calendar quarter in the preceding calendar year pay wages for agricultural labor amounting to at least twenty thousand dollars.
The employing unit files with the department within the period from January 1 through March 31 of the year a written application for termination of coverage and the department finds that during the preceding calendar year the employing unit did not have at least ten individuals employed in agricultural labor in twenty separate weeks and did not pay wages for agricultural labor amounting to at least twenty thousand dollars during any calendar quarter in the preceding calendar year.

H. Any employing unit that is an employer solely by reason of section 23-613, subsection C, shall cease to be an employer subject to this chapter as of January 1 of any calendar year if the employing unit files with the department within the period from January 1 through March 31 of that year a written application for termination of coverage and the department finds that the employing unit did not pay wages for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority amounting to at least one thousand dollars during any calendar quarter in the preceding calendar year.

I. The time limitation for filing of written application for termination of coverage prescribed in subsections B, F, G and H of this section may be waived by the department if the time limitation has expired prior to the date on which a determination of liability that the employing unit is subject to this chapter has been made as provided in section 23-724.

§ 23-726 Contributions; voluntary payment

A. Contributions shall accrue and become payable by each employer for each calendar year in which the employer is subject to this chapter with respect to wages for employment. The contributions shall become due and be paid by each employer to the commission for the fund in accordance with such regulations as the commission prescribes, and shall not be deducted, in whole or in part, from the wages of individuals in the employer's employ.

B. In the payment of contributions, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more in which case it shall be increased to one cent. From and after December 31, 2004, the payment of contributions or job training employer taxes is not required if the quarterly amount of the contributions and taxes is less than ten dollars.

C. An employer may make voluntary payments in addition to the contributions required under this chapter that shall be credited to the employer's account in accordance with commission regulation. The voluntary payments shall be included in the employer's account as of the employer's most recent computation date if they are made on or before the following February 28. Voluntary payments when accepted from an employer will not be refunded in whole or in part.

D. The payment of contributions is not required if the quarterly amount of the contribution or taxes is less than ten dollars.

§ 23-727 Credits and charges to employer accounts

A. The commission shall maintain a separate account for each employer and shall credit the account with all contributions and payments in lieu of contributions paid by the employer and shall charge the account with all benefits chargeable to it.

B. Nothing in this chapter shall be construed to grant any employer or individuals in its service prior claims or rights to the amounts paid by the employer into the fund.

C. Except as otherwise provided in subsections D, E, F, G, I and J of this section and sections 23-773 and 23-777, benefits paid to an individual shall be charged against the accounts of the individual's base-period employers. The amount of benefits so chargeable against each base-period employer's account shall bear the same ratio to the total benefits paid to an individual as the base-period wages paid to the individual by the employer bear to the total amount of base-period wages paid to the individual by all the individual's base-period employers.

D. Benefits paid to an individual whose separation from work with any employer occurs under conditions found by the commission to be within those prescribed by section 23-775, paragraph 1 or 2 or for compelling personal reasons not attributable to the employer and not warranting disqualification for benefits shall not be used as a factor in determining the future contribution rate of the employer from whose employment the individual so separated, but the employer shall establish the condition of such separation to the satisfaction of the commission by submitting information the commission requires within ten days after the date of notification or mailing of notice by the commission that the individual has first filed a claim for benefits.

E. Benefits paid to an individual who, during the individual's base period, earned wages for part-time employment with an employer shall not be used as a factor in determining the future contribution rate of that employer if the employer continues to give employment opportunities to the individual to the same extent while the individual is receiving benefits as during the base period and the employer submits information the commission may require within ten working days after the date of notification or mailing of notice by the commission that the individual has first filed a claim for benefits. The commission has the burden of proof to establish that the employer failed to give employment opportunities to the individual to the same extent as during the base period.

F. Benefits paid to an individual whose employment was terminated by retirement pursuant to a nongovernmental retirement or lump sum retirement pay plan under which the age of mandatory retirement has been agreed on between the employer and its employees or by the bargaining agent representing such employees shall not be used as a factor in determining the future contribution rate of that employer but the employer shall establish that fact by submitting information the commission may require within ten days after the date of notification or mailing of notice by the commission that the individual has first filed a claim for benefits.

G. Benefits paid pursuant to section 23-771, subsections B and D shall not be used as a factor in determining the future contribution rate of the affected base-period employers.

H. A determination that benefits paid shall be used in determining future contribution rates of the employer may be appealed by the employer in the same manner provided for appeals of benefit determinations.

I. Benefits paid to an individual whose employment was terminated because the individual's employer was called to active duty in the military shall not be used as a factor in determining the future contribution rate of the employer from whose employment the individual was terminated.

J. Benefits paid to an individual whose employment was terminated because a former employee of the employer returned to work for the employer after being called to active duty in the military shall not be used as a factor in determining the future contribution rate of the employer from whose employment the individual was terminated.

K. The commission shall not relieve an employer's account of charges relating to an erroneous benefit payment if the commission determines both of the following:

The erroneous benefit payment was made because the employer or an agent of the employer failed to timely or adequately respond to a written request from the commission for information relating to a claim for unemployment compensation.
The employer or the employer's agent has established a pattern of failing to timely or adequately respond to requests.

L. For the purposes of subsection K of this section:

"Erroneous benefit payment" means a payment that would not have been made but for the failure of the employer or the employer's agent to make a timely or adequate response as described in subsection K, paragraph 1 of this section in regard to the claim for unemployment compensation.
"Pattern of failing" means the repeated documented failure of an employer or employer's agent to make timely and adequate responses as described in subsection K, paragraph 1 of this section with consideration of the number of instances of failure in relation to the total number of requests. Pattern of failing shall be determined by reviewing the most immediate twelve month prior period. A pattern shall be established if the employer or the agent representing the employer has five or more failures or failures in more than five per cent of the number of requests, whichever is greater. When an agent is representing the employer, the five or more failures or failures in more than five per cent of the number of requests shall be specific to the individual employer's account.

§ 23-728 Standard rate of contribution

The standard rate of contributions payable by each employer for calendar year 1985 and each year thereafter shall be five and four-tenths per cent of the wages paid by the employer during each calendar year.

§ 23-729 Change from the standard contribution rate

If an employer's account has been chargeable with benefits throughout the twelve consecutive calendar month period ending on June 30 of the preceding calendar year, the employer shall have a rate computed in accordance with section 23-730. If the employer's account has not been chargeable with benefits for that twelve month period, the employer shall pay contributions at the reduced rate of two per cent.

§ 23-730 Variation and adjustment of contribution rates

For calendar year 1985 and each calendar year thereafter, variations from the standard rate of contribution shall be determined in accordance with the following requirements:

If the total of all an employer's contributions, paid on or before July 31 of the preceding calendar year with respect to wages paid by the employer prior to July 1 of the preceding calendar year, equals or exceeds the total benefits that were chargeable to the employer's account and were paid prior to July 1 of the preceding calendar year, with respect to weeks of unemployment beginning prior to July 1, the employer's contribution rate for the ensuing calendar year subject to the adjustments provided by this section shall be determined from the employer's positive reserve ratio in accordance with the table provided in this paragraph. An employer's positive reserve ratio is the percentage resulting from dividing the employer's reserve surplus, which is the excess of contributions paid over benefits charged by the employer's average annual taxable payroll. If an employer's reserve equals zero, the employer's contribution rate for the ensuing calendar year shall be two and seven-tenths per cent, subject to the adjustments provided by this section.

Positive Reserve Ratio Contribution Rate

Less than 3% 2.60%

At least 3% but less than 4% 2.40%

At least 4% but less than 5% 2.15%

At least 5% but less than 6% 1.90%

At least 6% but less than 7% 1.65%

At least 7% but less than 8% 1.40%

At least 8% but less than 9% 1.15%

At least 9% but less than 10% 0.90%

At least 10% but less than 11% 0.65%

At least 11% but less than 12% 0.40%

At least 12% but less than 13% 0.15%

13% or more 0.02%

If the total of all an employer's contributions, paid on or before July 31 of the preceding calendar year with respect to wages paid by the employer prior to July 1 of the preceding calendar year, is less than the total benefits that were chargeable to the employer's account and were paid prior to July 1 of the preceding calendar year, with respect to weeks of unemployment beginning prior to July 1, the employer's contribution rate for the ensuing calendar year shall be determined from the employer's negative reserve ratio in accordance with the table provided in this paragraph, subject to the rate adjustment provided in paragraph 3, except that the rate is subject to increases but not to reduction. An employer's negative reserve ratio is the percentage resulting from dividing the employer's reserve deficit, which is the excess of benefits charged over contributions paid, by the employer's average annual taxable payroll. The table applicable to rate computation for calendar year 1987 and each calendar year thereafter is:

Negative Reserve Ratio Contribution Rate

Less than 3% 2.85%

At least 3% but less than 4% 3.05%

At least 4% but less than 5% 3.30%

At least 5% but less than 6% 3.55%

At least 6% but less than 7% 3.80%

At least 7% but less than 8% 4.05%

At least 8% but less than 9% 4.30%

At least 9% but less than 10% 4.55%

At least 10% but less than 11% 4.80%

At least 11% but less than 12% 5.05%

At least 12% but less than 13% 5.30%

13% or more 5.40%

The ratio of the total assets of the fund on July 31 as defined by department regulation to the total taxable payrolls for the twelve month period immediately preceding the computation date shall determine the required income rate for the ensuing calendar year in accordance with the following fund control schedule:

Fund Ratio Required Income Rate

12.0% or more 0.40%

At least 10.0% but less than 12.0% 0.50%

At least 9.5% but less than l0.0% 0.60%

At least 9.0% but less than 9.5% 0.70%

At least 8.5% but less than 9.0% 0.80%

At least 8.0% but less than 8.5% 0.90%

At least 7.5% but less than 8.0% 1.00%

At least 7.0% but less than 7.5% 1.10%

At least 6.5% but less than 7.0% 1.20%

At least 6.0% but less than 6.5% 1.30%

At least 5.5% but less than 6.0% 1.40%

At least 5.0% but less than 5.5% 1.50%

At least 4.5% but less than 5.0% 1.70%

At least 4.0% but less than 4.5% 1.80%

At least 3.5% but less than 4.0% 2.00%

At least 3.0% but less than 3.5% 2.20%

Less than 3.0% 2.40%

For each calendar year the department shall compute the estimated required tax yield from employers that is the product of the total taxable payrolls for the twelve month period immediately preceding the computation date and the applicable required income rate from the fund control schedule less the interest earned on monies in the fund during the twelve month period immediately preceding the computation date and credited to the fund by the United States treasury on or before October 31 following the computation date. Except as otherwise provided by statute, the rates in paragraphs 1 and 2 shall be adjusted proportionately if the estimated required tax yield from employers exceeds or is less than the estimated yield from the rates without adjustment.

In computing an employer's adjusted rate as provided by paragraph 3, the adjusted rate shall be calculated to the nearest one-hundredth per cent. An employer's adjusted rate shall not be less than two one hundredths per cent.

§ 23-731 Classification of employers by benefit experience to determine contribution rates; rate when report unavailable

The commission, for each calendar year, shall classify employers in accordance with their actual experience in the payment of contributions and with respect to benefits charged against their accounts, with a view to fixing such contribution rates as will reflect the benefit experience. Each employer's rate for a calendar year shall be determined on the basis of the employer's record as of July 1 of the preceding calendar year. If as of the date the classification of employers is made the commission finds an employing unit has failed to file any report required in connection therewith or has filed a report which the commission finds incorrect or insufficient, the commission shall make an estimate of the information required from the employing unit on the basis of the best evidence reasonably available to it at the time and shall notify the employing unit by mail addressed to its last known address. Unless the employing unit files the report or a corrected or sufficient report as the case may be within fifteen days after mailing the notice, the commission shall compute such employing unit's rate of contributions on the basis of such estimates, and the rate as so determined shall be subject to increase but not to reduction on the basis of subsequently ascertained information.

§ 23-732 Annual notice to employer of contribution rate; procedure for review and redetermination; quarterly notification; notification by electronic means

A. The department shall promptly notify each employer of the employer's rate of contributions as determined for any calendar year. The determination shall become conclusive and binding on the employer unless, within fifteen days after the mailing of notice of the determination to the employer's last known address or in the absence of mailing, within fifteen days after delivery of the notice, the employer files an application for review and redetermination, setting forth the employer's reasons for application for review and redetermination. The department shall reconsider the rate, but no employer shall in any proceeding involving the employer's rate of contributions or contribution liability contest the chargeability to the employer's account of any benefits paid in accordance with a determination, redetermination or decision pursuant to section 23-773, and determined to be chargeable to the employer's account pursuant to section 23-727, except on the ground that the services on the basis of which the benefits were found to be chargeable did not constitute services performed in employment for the employer and only in the event that the employer was not a party to the determination, redetermination or decision or to any other proceedings under this chapter in which the character of the services was determined. The employer shall be promptly notified of the department's denial of the employer's application, or of the department's redetermination, both of which shall become final unless within fifteen days after mailing or delivery of notification an appeal is filed with the appeals board.

B. The department may give quarterly notification to employers of benefits paid and chargeable to their accounts or of the status of such accounts, and such notification, in the absence of an application for redetermination filed within fifteen days after mailing, shall become conclusive and binding on the employer for all purposes. A redetermination or denial of an application by the department shall become final unless within fifteen days after mailing or delivery of the redetermination or denial an appeal is filed with the appeals board. The redeterminations may be introduced in any subsequent administrative or judicial proceedings involving the determination of the rate of contributions of any employer for any calendar year.

C. A notice under this section may be delivered by electronic means if the party being notified consents in writing to notification by electronic means. Notification by electronic means is deemed complete on transmission.

§ 23-733 Transfer of employer experience rating accounts to successor employer; liability of successor

A. When any employing unit in any manner succeeds to or acquires the organization, trade or business, or substantially all of the assets thereof, excepting any assets retained by such employer incident to the liquidation of his obligations, whether or not such acquiring employing unit was an employer within the meaning of section 23-613, prior to such acquisition, and continues such organization, trade or business, the account of the predecessor employer shall be transferred as of the date of acquisition to the successor employer for the purpose of rate determination.

B. An employing unit which succeeds to or acquires a distinct and severable portion of an organization, trade or business may apply for transfer of the account of the portion by filing with the department not later than one hundred eighty days after the date of acquisition a written application for transfer, approved in writing by the predecessor, except that for good cause shown the department may extend the time for filing the application. The account of the acquired portion shall be transferred to the successor as of the date of acquisition only if the successor continues to operate the acquired portion and submits necessary information establishing the separate identity of the account within thirty days after the request for the necessary supporting payroll information is mailed to the successor by the department, except that for good cause shown the department may extend the time for submitting such supporting information. The predecessor and successor employers shall be promptly notified of the determination made upon the application which shall become final fifteen days after written notice thereof is served personally or by certified mail addressed to the last known address of each employing unit involved, unless within such time one of the parties files with the department a written request for reconsideration. When timely request for reconsideration is filed, a reconsidered determination shall be made. The reconsidered determination shall become final fifteen days after written notice thereof is served personally or by certified mail addressed to the last known address of each employing unit involved, unless within such time one of the employing units involved files with the department a written petition for hearing. When timely petition for hearing is filed, the parties shall be afforded an opportunity for hearing and thereafter furnished with a decision. The decision shall become final unless a petition for review is filed as provided in section 23-672.

C. If the successor employer was an employer subject to this chapter prior to the date of acquisition of an organization, trade or business, or substantially all of the assets thereof, his rate of contributions for the remainder of the calendar year in which the acquisition occurred shall be his rate as previously assigned for the calendar year in which the acquisition occurred. If the successor was not an employer prior to the date of acquisition, his rate for the remainder of the calendar year beginning on the date of acquisition shall be the rate applicable to the predecessor employer or employers for the calendar year in which the acquisition occurred, if there was only one predecessor or there were only predecessors with identical rates. If the predecessor rates were not identical, the successor's rate for the remainder of the calendar year beginning on the date of acquisition shall be recomputed on the basis of the combined accounts of the predecessors as of the computation date applicable to the calendar year in which the acquisition occurred. When the account for a distinct and severable portion has been transferred to a successor who was not an employer prior to the date of acquisition, the rate of the successor for the remainder of the calendar year beginning on the date of acquisition shall be computed as of the computation date applicable to such calendar year, on the basis of the experience attributable to the acquired portion. If the successor was an employer prior to the date of acquisition, his rate for the remainder of the calendar year beginning on the date of acquisition shall be the rate previously assigned to him for the calendar year in which the acquisition occurred. The rate of the predecessor for the remainder of the calendar year beginning on the date of acquisition shall be the rate previously assigned to him with respect to the calendar year in which the acquisition occurred.

D. Any individual or organization, including the types of organizations described in section 23-614, whether or not an employing unit, which in any manner acquires the organization, trade or business, or substantially all of the assets thereof, shall be liable, in an amount not to exceed the reasonable value, as determined by the department, of the organization, trade, business or assets acquired, for any contributions, interest and penalties due or accrued and unpaid by such predecessor employer, except that the department may waive the successor's liability for such unpaid amounts if a determination that the predecessor was subject to this chapter had not been made as provided in section 23-724 prior to the date of acquisition, and such liability on the part of the successor would be against equity and good conscience.

E. The amount of liability of a successor employer for any contribution, interest and penalties due or accrued and unpaid by his predecessor employer shall be a lien against the property or assets so acquired which shall be prior to all other liens except prior recorded realty mortgages, but the lien shall not be valid as against one who acquires from the successor any interest in the property or assets in good faith, for value, and without notice of the lien. On written request, the department shall furnish the successor with a written statement of the amount of contributions, interest and penalties due or accrued and unpaid by the predecessor employer as of the date of such acquisition, and the amount of the liability of the successor or the amount of the lien shall in no event exceed the liability disclosed in such statement. The remedy provided by this section shall be in addition to all other existing remedies against the predecessor employer or his successor, and the lien against the successor may be foreclosed as in other civil actions.

§ 23-733.01 Assignments of rates; transfers of experience; violation; civil penalty; definitions

A. If an employer transfers the employer's trade or business or a portion of the trade or business to another employer and at the time of the transfer there is substantially common ownership, management or control between the two employers, the unemployment experience that is attributable to the initial employer shall be transferred to the successor employer. The rate of both employers shall be recalculated and made effective to the beginning of the calendar year that follows the date of the transfer of trade or business.

B. If a person is not an employer that is subject to this chapter when the employer acquires a trade or business of an employing unit, the unemployment experience of the acquired business shall not be transferred to the successor employer if the department determines that the successor employer acquired the trade or business for the purpose of obtaining a lower rate of contributions. Instead, the department shall assign the standard contribution rate under section 23-729 to the successor employer. When making a determination under this section, the department shall consider the cost of acquiring the business, whether the person continues the business enterprise of the acquired business, the length of time that the enterprise is continued and whether a substantial number of new employees were hired to perform duties that were unrelated to the business activity before the acquisition.

C. If an employer or a person knowingly violates or attempts to violate this section for the purpose of obtaining a lower rate of contribution or if a person knowingly advises an employer or a person on evading or defeating a contribution or its payment, the person or employer shall be subject to the following penalties:

If the person is an employer, the person shall be assigned the highest rate assignable under this chapter for the rate year in which the transfer or the attempted transfer occurred and for the following three rate years. If the person's business is already at the highest rate for any year, or if the amount of increase in rate would be less than two per cent for any year, the contribution penalty rate of two per cent of taxable wages shall be imposed for any such year.
If the person is not an employer, the department shall assess against the person a civil penalty of five thousand dollars. The department shall deposit penalties collected pursuant to this paragraph in the penalty and interest account pursuant to section 23-705.
Any person or employer in violation of this section may also be prosecuted pursuant to section 13-2310 or 13-2311. This does not preclude prosecution pursuant to section 23-786.

D. Notwithstanding any other law, this section applies to the assignments of rates and transfers of experience under this chapter.

E. This department shall apply this section in order to meet the minimum requirements of any guidance or regulation that is issued by the United States department of labor.

F. The department shall adopt rules to identify the transfer or acquisition of a business under this section.

G. For the purposes of this section:

"Knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard of a requirement.
"Person" means person as defined in section 7701(a)(1) of the internal revenue code.
"Trade or business" includes an employer's workforce.
"Violates or attempts to violate" includes an action to evade, conceal, misrepresent or engage in wilful nondisclosure.

§ 23-734 Agreement by employee to pay employer contribution void

No agreement by an individual in the employ of any person or concern to pay all or a portion of an employer's contributions or payments in lieu of contributions required under this chapter from the employer shall be valid.

§ 23-735 Requiring or accepting payments from wages to finance employer's contribution; waiver of rights of employee; violation; classification

A. No employer shall directly or indirectly make, require or accept a deduction from wages to finance the employer's contributions or payments in lieu of contributions required from him, or require or accept a waiver of any right under this chapter by any individual in his employ.

B. An employer or officer or agent of an employer who violates any provision of this section is guilty of a class 2 misdemeanor.

§ 23-736 Interest on past due contributions; deposit of interest

A. If contributions are not paid on the date due and payable as prescribed by the commission, the whole or part thereafter remaining unpaid shall bear interest at the rate of one per cent per month, or fraction thereof, from and after the due date until payment is received by the commission, subject to waiver for good cause shown. The date as of which payment of contributions, if mailed, is deemed to have been received may be determined by such regulations as the commission may prescribe.

B. Interest collected pursuant to this section and section 23-723 shall be deposited in the special administration fund.

§ 23-737 Collection of contributions or interest; precedence of action

A. If a contribution, payment in lieu of a contribution, penalty or interest imposed under this chapter is not paid when due, these amounts may be collected by levy pursuant to section 23-752 or by civil action in the name of the department, and the employer adjudged in default shall pay the court costs.

B. Actions brought under this section shall be heard by the court at the earliest possible date and shall have precedence over other civil actions, except petitions for judicial review under this chapter, and cases arising under chapter 6 of this title.

C. After judgment is entered pursuant to this article against the state, a city, town, county, school district or other political subdivision or an instrumentality, agency, board or commission thereof, or any combination of the foregoing, the department shall notify the employer that judgment has been entered. Within thirty days of the date of notice the treasurer or other appropriate officer of the employer charged with the receipt, custody, and disbursements of its monies or funds shall, without issuance of execution or garnishment or other legal action, remit to the department all contributions, payments in lieu of contributions, interest and penalties in judgment. If within the thirty-day period satisfaction of judgment is not obtained, the department shall petition for and the superior court may grant an order compelling payment of the amounts in judgment by the governing body of the employer against which judgment has been entered.

§ 23-737.01 Collection of amounts due by certificate for judgment

A. If a contribution or payment in lieu of a contribution imposed under this chapter is not paid when due, the department may, instead of pursuing civil action authorized in section 23-737, obtain judgment against the employer as prescribed by this section.

B. No earlier than fifteen days after the date on which contributions or payments in lieu of contributions are due, the department shall issue a determination stating the amounts of contributions, payments in lieu of contributions, penalties and interest due. Unless the employer files a written petition for hearing within fifteen days after the determination is served personally or sent by certified mail to the last known address of the employer, the determination becomes final. The determination shall state that a certificate for judgment will be filed unless, within the fifteen days, the employer files with the department a written petition for hearing stating the reasons why the amount of the indebtedness is considered to be incorrect.

C. If a timely petition for hearing is filed as prescribed in subsection B of this section, the employer shall be afforded an opportunity for hearing on the issue of the amount of indebtedness and thereafter furnished with a decision. The hearing shall be conducted by the department and a decision issued by the hearing officer. The decision becomes final unless within the time and in the manner provided in title 12, chapter 7, article 6 a petition for judicial review and a bond approved by the court in the amount of the total indebtedness as determined by the decision is filed with the superior court by the employer.

D. Notwithstanding section 22-201 with regard to jurisdiction, after a decision under this section and any decision on the issue of liability arising under section 23-724 affecting the amounts due have become final, the department may file with the clerk of the superior court in any county a certificate for judgment, without regard to the amount involved. The certificate shall:

Specify the amounts due and unpaid under the provisions of this chapter and the name and last known address of the employer liable for the indebtedness.
Include a statement attesting to the fact that a decision meeting all the requirements of this section has been issued and become final in that either:

(a) A petition for hearing was not received or was filed untimely and the determination became the final decision.

(b) A hearing was held after receipt of a timely petition and a decision was properly served and became final.

E. Immediately upon the filing of a certificate for judgment, a judge or commissioner of the superior court shall enter judgment for the department against the employer in the amount specified in the certificate. The department shall notify the employer that judgment has been entered.

F. A judgment entered pursuant to this section has the effect of any other judgment, and execution shall issue in the same manner as upon other judgments.

G. The provisions of this section may not be applied against a successor employer under section 23-733.

§ 23-737.02 Recovery of collection costs; fee for bad checks

A. A debtor who fails to pay any contributions, payments in lieu of contributions, penalties, interest or fees imposed under this chapter is liable for all costs and expenses incurred by the department to collect these amounts. The department may collect these costs and expenses at the time of collecting the delinquent contributions, payments in lieu of contributions, penalties, interest and fees.

B. The department may charge and collect a fee of twenty-five dollars from any person who offers a check, draft, negotiable order of withdrawal or similar instrument drawn on a bank or other depository institution in full or partial payment of an amount due under this chapter if the instrument is not paid or is dishonored by the institution. The department may waive the fee if the person shows good cause for the nonpayment or dishonor of the instrument.

§ 23-738 Delinquency assessments; interest and penalties; petition for reassessment

A. If an employer neglects or refuses to make a return as required by this chapter, the department shall make an estimate based on information in the department's possession of the amount of contributions due from the employer for the period for which the employer failed to make a return, and shall assess the estimated amount against the delinquent employer. The department shall add to the delinquency assessment made under this section the penalty provided in section 23-723 and interest as prescribed by section 23-736. If the neglect or refusal to file a return is due to fraud or an intent to evade payment of contributions, there shall be added to the amount due a penalty equal to twenty-five percent thereof. The department shall promptly notify the delinquent employer of any estimate.

B. An employer against whom any delinquency assessment is made may petition for reassessment within thirty days after written notice of the assessment is served personally or sent by certified mail to the employer's last known address. If the petition for reassessment is not filed within thirty days the amount of the assessment shall become final and the lien imposed by section 23-745 attaches.

§ 23-738.01 Deficiency assessment; petition for reassessment

A. If the department finds through its audit or claims-taking procedures that the return filed by an employer is deficient, the department may compute the amount required to be paid on the basis of any information in the department's possession and make an assessment of the amount of the deficiency. The department shall add to the deficiency assessment made under this section, subject to waiver for good cause shown, a penalty of one-tenth of one percent of the difference between the wages paid during the quarter and the wages reported during the quarter, but not more than two hundred dollars and interest as prescribed by section 23-736. If the deficiency is due to fraud or an intent to evade payment of contributions, the department shall add to the amount due a penalty equal to twenty-five percent of the amount due. The department shall promptly notify the employer of any deficiency.

B. An employer against whom a deficiency assessment is made may petition for reassessment within thirty days after written notice of the assessment is served personally or sent by certified mail to the employer's last known address. If the petition for reassessment is not filed within thirty days, the amount of the assessment becomes final and the lien imposed by section 23-745 attaches.

§ 23-739 Jeopardy assessment; petition for reassessment

A. Notwithstanding sections 23-738 and 23-738.01, if the department believes the collection of a contribution, payment in lieu of contributions, interest or penalties will be jeopardized by delay, it may, whether or not the time prescribed for making reports and paying the amounts has expired, make a jeopardy assessment of such amount, noting that fact upon the assessment, and the amount thereof shall be immediately due and payable. The department shall add to the assessment made under this section any applicable penalty provided in section 23-723 and interest as prescribed by section 23-736.

B. An employer against whom a jeopardy assessment is made may petition for reassessment by filing a petition with the department not more than ten days after written notice of the assessment is served personally or sent by certified mail to the employer's last known address, together with payment of the amount assessed, or by depositing at the same time such security as the department deems necessary to insure compliance with the provisions of this chapter. The security may be sold by the department in accordance with rules and regulations adopted by it. If the petition for reassessment is not filed within ten days, the amount of the assessment is final and the lien imposed by section 23-745 attaches.

§ 23-740 Procedure on petition for reassessment

If a timely petition for reassessment is filed and after any decision on the issue of liability arising under section 23-724 affecting the assessment has become final, the department shall reconsider the assessment and render a decision. The department may increase or decrease the amount of any assessment under review. The decision of the department becomes final with respect to the employer and the lien imposed by section 23-745 attaches unless within fifteen days after written notice is served personally or sent by certified mail to the employer's last known address the employer files with the department a written request for review by the appeals board with payment of the amount assessed.

§ 23-741 Payment of amounts in dispute

Notwithstanding section 23-742, the department shall refund any payment of contributions, payment in lieu of contributions, interest or penalties subsequently determined not due as a result of an appeal to the notice issued by the department pursuant to section 23-724, 23-732, 23-733, 23-738, 23-738.01, 23-739, 23-740 or 23-750.

§ 23-742 Adjustment or refund of contribution; limitation

A. Not later than three years after the date on which any contribution or interest on a contribution becomes due, an employer who has paid the contribution or interest may apply for an adjustment of the contribution or interest in connection with subsequent contribution payments, or for a refund of the contribution or interest in the event the adjustment cannot be made. If the department finds the contribution or interest, or any part of the contribution or interest, was erroneously collected, it shall allow the employer to make an adjustment, without interest, in connection with subsequent contribution payments, or if the adjustment cannot be made the department shall refund the amount, without interest, from the fund into which payments were made. For like cause and within the same period, the adjustment or refund may be made on the initiative of the department.

B. Any refund or adjustment of contributions erroneously paid shall be reduced by the sum of any benefit overpayments which are attributable to the wages on which contributions are to be refunded or adjusted, except that a reduction shall not be made if it is shown to the satisfaction of the department that such contributions were required to be paid due to the fault, mistake or omission of the department.

§ 23-743 Limitations

A. Except as provided in subsections D and E of this section, additional contributions, payments in lieu of contributions, interest or penalties shall not be determined by the department to be due after three years from the date the contributions, payments in lieu of contributions, interest or penalties became delinquent.

B. An employer's obligation for any contributions, payments in lieu of contributions, interest or penalties that are required to be collected by the department for any period are extinguished, if not previously satisfied, six years after the amounts were determined due unless one of the following circumstances applies:

The department has commenced civil action to collect the debt pursuant to section 23-737 or 23-737.01.
The taxpayer has agreed in writing to extend the time period before the time period expires.
An enforced collection has been stayed by the operation of federal or state law during the period. The period of limitations prescribed by this subsection is extended by the period of time that the department was stayed from engaging in enforced collections.

C. If a tax obligation is extinguished pursuant to subsection B of this section, any related liens for those obligations are also extinguished.

D. In case of failure without good cause to file a return, fraud or intent to evade any provision of this chapter, additional contributions, payments in lieu of contributions, interest or penalties shall not be determined by the department to be due after six years from the date the contributions, interest or penalties became delinquent.

E. Any amount of contributions, interest or penalties for wages and periods that are assessed by the internal revenue service as subject to the federal unemployment tax act against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law shall be determined by the department to be due regardless of the date the contributions, payments in lieu of contributions, interest or penalties became delinquent.

§ 23-744 Priority of claim for contributions due upon insolvency proceedings

A. In event of a distribution of an employer's assets pursuant to court order, including receivership, assignment for benefit of creditors, adjudicated insolvency, composition or similar proceeding, contributions then or thereafter due shall be paid in full prior to all other claims except taxes and claims for wages of not more than two hundred fifty dollars to each claimant earned within six months prior to commencement of the proceeding. The existence of a condition of insolvency, or the institution of a judicial proceeding for dissolution or distribution of assets, shall cause the priority to attach without action on behalf of the commission.

B. In event of an employer's adjudication in bankruptcy, judicially confirmed extension proposal or composition under the national bankruptcy act, contributions then or thereafter due shall be entitled to such priority as is provided in that act for taxes due a state or the United States.

§ 23-745 Lien for unpaid contributions, interest and penalties

If any contributions, payments in lieu of contributions, interest or penalties which the department is required to collect are not paid, the unpaid amounts are a lien from the date the amounts became due as determined by the department on all property and rights to property, whether real or personal, belonging to the employer or thereafter acquired by the employer.

§ 23-746 Superiority of lien; notice

A. The department may perfect a lien no earlier than fifteen days after the date on which contributions, payments in lieu of contributions, interest or penalties are due.

B. The lien imposed by section 23-745 may be perfected by the department against the employer's real property located in any county by recording a notice of lien, in the form prescribed by subsection E of this section, in the office of the county recorder.

C. The lien imposed by section 23-745 may be perfected by the department against the employer's personal property or rights to personal property located within this state by recording a notice of lien, in the form prescribed by subsection E of this section, in the office of the secretary of state.

D. The lien imposed by section 23-745 with accruing interest, created or perfected in the manner provided by this section, is superior to all other liens and encumbrances perfected after the date the lien arose under the provisions of section 23-745.

E. A notice of lien recorded under this section shall specify all of the following:

The amount of contributions, payments in lieu of contributions, interest and penalties due.
The periods for which such amounts are due.
The name and last known address of the employer liable for such amounts.

A copy of the notice shall be mailed to the employer's last known address.

F. On request, the department shall provide a disclaimer of lien within three working days after the receipt of information which establishes to the satisfaction of the department that the person identified is not the debtor against whom such lien has been filed.

G. If the department fails to comply with the provisions of subsection F of this section the person incorrectly identified as the debtor may bring a civil action to compel the department to provide the disclaimer of lien. The department shall be liable for all fees and other expenses of the person bringing the action against the department pursuant to section 12-348.

§ 23-746.01 Release or subordination of lien

A. If a lien established by section 23-745 has been satisfied and a notice of the lien was recorded by the department pursuant to section 23-746, the department shall issue a release of the lien to the person against whom the lien was claimed. The department shall record the lien release in any county where the original lien was recorded and in the office of the secretary of state, if applicable.

B. At any time, the department may release all or any portion of the property subject to the lien from the lien or subordinate the lien to other liens if the department determines that either:

The taxes are sufficiently secured by a lien on other property of the taxpayer.
The release or subordination of the lien will not endanger or jeopardize the collection of the taxes.

C. At the department's discretion and at any time, the department may withdraw a notice of lien that was recorded pursuant to this article if the department determines that any of the following conditions applies:

The department's interests are best served by withdrawing the notice.
Filing the lien was premature or otherwise in violation of the department's administrative procedures.
Withdrawing the notice will facilitate collecting the outstanding amount of taxes, interest and penalties.
The taxpayer has entered into an installment payment agreement unless the agreement provides otherwise.

D. If a claim for contributions or payments in lieu of contributions has been compromised pursuant to section 23-642, the department is not required to record a release of the lien under this section but on the taxpayer's written request the department shall provide a certificate of release to the taxpayer.

E. If a tax obligation has been extinguished pursuant to section 23-743, the lien for the extinguished tax is also extinguished. The department is not required to record a release of the lien under this section but on the taxpayer's written request the department shall provide a certificate of release to the taxpayer.

F. A certificate by the department to the effect that any property has been released from the lien or that the lien has been subordinated to other liens is conclusive evidence that the property has been released or that the lien has been subordinated as provided in the certificate.

§ 23-747 Release of lien; bond; foreclosure and judgment against surety

A. The employer may cause his property to be released from the lien provided by sections 23-745 and 23-746, by filing with the commission a bond in double the amount claimed in the lien, executed by a surety licensed to do business in the state, running to the commission and conditioned for the payment of all contributions, interest, penalties, damages, costs, charges and disbursements that may be recovered by the commission against the employer or that may be found to be a lien upon his property. Upon filing the bond the commission shall execute and deliver to the employer a release of the lien, but the release shall not operate in any manner to satisfy the indebtedness secured by the lien.

B. If the commission establishes the validity of its lien by foreclosure action it shall be entitled to judgment against the surety on the bond.

§ 23-748 Effect upon lien of transfer of assets by delinquent

The transfer, through sale, exchange or otherwise, of a major portion of the assets of a delinquent employer shall not defeat or impair the lien in favor of the commission, and the person acquiring the assets shall be liable for payment of all delinquent contributions, interest or penalties owed by his predecessor in interest. In an action involving title to real or personal property against which the commission has or may claim a lien, the commission shall be made a party.

§ 23-749 Failure to make contributions or payments, furnish reports or produce or permit inspection of records; classification

Any employing unit or any officer or agent of an employing unit or any other person who knowingly fails or refuses to make any contribution or other payment as required by this chapter or to furnish any reports required by this chapter or to produce or permit the inspection or copying of records as required by this chapter is guilty of a class 3 misdemeanor unless another classification is specifically prescribed in this chapter, and each day of such failure or refusal shall constitute a separate offense.

§ 23-750 Special provisions for nonprofit organizations and state and local governments

A. This section applies to:

Any nonprofit organization described in section 23-617, paragraph 10 that but for section 23-613, subsection A, paragraph 2, subdivision (c) would not be subject to this chapter, or that is not mandatorily subject to this chapter because of insufficient employees but that has voluntarily elected to become subject to this chapter.
This state, or a political subdivision of this state, or any instrumentality, agency or board of any one or more of the foregoing or any instrumentality of any of the foregoing and one or more other states or political subdivisions.

B. Benefits paid to employees of employing units to which this section applies shall be financed pursuant to this subsection as follows:

Any employing unit to which this section applies:

(a) That is or becomes subject to this chapter on January 1, 1972, may elect to become liable for payments in lieu of contributions for a period of at least three consecutive taxable years beginning with January 1, 1972, provided it files with the department a written notice of its election not later than sixty days after written notice that the election may be made is first given to the employing unit by the department.

(b) That becomes subject to this chapter after January 1, 1972, may elect to become liable for payments in lieu of contributions for a period of at least three consecutive taxable years by filing a written notice of its election with the department not later than thirty days immediately following the date of the determination that the employing unit is subject to this chapter.

(c) That makes an election in accordance with subdivision (a) or (b) of this paragraph shall continue to be liable for payments in lieu of contributions until it files with the department a written notice terminating its election not later than thirty days before the beginning of the taxable year for which such termination shall first be effective.

(d) That has been paying contributions under this chapter after January 1, 1972, for a period of at least three consecutive taxable years may elect to become liable for payments in lieu of contributions for a period of at least three consecutive taxable years by filing a written notice of its election with the department not later than thirty days before the beginning of the taxable year for which the election shall first be effective.

The department may for good cause extend the period within which a notice of election or a notice of termination must be filed.
The department shall notify the employing unit of any determination made of its status as an employer and of the effective date of any election or termination of an election made in accordance with this subsection. The determination shall be subject to reconsideration, petition for hearing and judicial review in accordance with section 23-724.
An employing unit shall pay to the department for the fund an amount equal to the amount of regular benefits and of one-half of the extended benefits paid that were based on wages paid during the employing unit's period of election to make payments in lieu of contributions, except that a governmental entity shall pay to the department for the fund an amount equal to the total amount of extended benefits paid for weeks of unemployment that are based on wages paid by the governmental entity during its election to make payments in lieu of contributions. Sections 23-727, 23-773 and 23-777, insofar as they apply to noncharging an employer's account for benefit payments, do not apply to benefits paid that were based on wages paid during the employing unit's period of election to make payments in lieu of contributions.

C. As soon as practicable after the end of each calendar quarter the department shall determine the amount of payments in lieu of contributions due from each employing unit and shall bill each employing unit for the amount due. If payment is not made on or before the date due and payable as prescribed by the department, the whole or part thereafter remaining unpaid shall bear interest at the rate of one percent per month or fraction thereof, from and after the due date until payment is received by the department. The amount of payments due hereunder but not paid may be collected by the department, together with interest and penalties, if any, in the same manner and subject to the same conditions as contributions due from other employers. The amount due specified in any bill from the department shall be conclusive and binding on the employing unit unless not later than fifteen days after the bill was mailed to its last known address, the employing unit files an application for redetermination. A redetermination made under this subsection shall be subject to petition for hearing and judicial review in accordance with section 23-724.

D. Two or more employing units that have become liable for payments in lieu of contributions may file a joint application to the department for the establishment of a group account for the purpose of sharing the cost of benefits paid that are attributable to service in the employ of the employing units. Each application shall identify and authorize a group representative to act as the group's agent for the purposes of this subsection. On approval of the application, the department shall establish a group account for the employing units effective as of the beginning of the calendar quarter in which the application is received and shall notify the group's representative of the effective date of the account. The account shall remain in effect for at least three years and thereafter until terminated at the discretion of the department or on application by the group. On establishment of the account, each member of the group shall be liable for payments in lieu of contributions with respect to each calendar quarter in the amount that bears the same ratio to the total benefits paid in that quarter that are attributable to service performed in the employ of all members of the group as the total wages paid for service in employment by the member in that quarter bear to the total wages paid during such quarter for service performed in the employ of all members of the group. The department shall prescribe regulations as it deems necessary with respect to applications for establishment, maintenance, and termination of group accounts that are authorized by this subsection, for addition of new members to, and withdrawal of active members from, such accounts, and for the determination of the amounts that are payable under this subsection by members of the group and the time and manner of such payments.

E. Benefits are payable on the basis of employment to which this section applies, in the same amount, on the same terms and subject to the same conditions as benefits payable on the basis of other employment subject to this chapter, except that notwithstanding sections 23-779 and 23-780:

Benefits based on service in an instructional, research or principal administrative capacity for an educational institution shall not be paid to an individual for any week of unemployment that begins during the period between two successive academic years, or during a similar period between two regular terms, whether or not successive, or during a period of paid sabbatical leave provided for in the individual's contract, if the individual performs the services in the first of the academic years or terms and if there is a contract or a reasonable assurance that the individual will perform services in any such capacity for any educational institution in the second of the academic years or terms.
Benefits based on service in any other capacity for an educational institution shall not be paid to an individual for any week of unemployment that begins during a period between two successive academic years or terms if the individual performs the services in the first of such academic years or terms and if there is a reasonable assurance that the individual will perform the services in the second of the academic years or terms, except that if benefits are denied to any individual under this paragraph and that individual was not offered an opportunity to perform the services for the educational institution for the second of the academic years or terms, the individual is entitled to a retroactive payment of benefits for each week for which the individual filed a timely claim for benefits and for which benefits were denied solely by reason of this paragraph.
Benefits based on services described in paragraph 1 or 2 of this subsection shall not be paid to an individual for any week of unemployment that begins during an established and customary vacation period or holiday recess if the individual performs services in the period immediately before the vacation period or holiday recess and if there is a reasonable assurance that the individual will perform the services in the period immediately following such vacation period or holiday recess.
With respect to any services described in paragraph 1 or 2 of this subsection, benefits are not payable on the basis of services in any capacity specified in paragraph 1, 2 or 3 of this subsection to any individual who performed these services in an educational institution while in the employ of an educational service agency. For the purposes of this paragraph, "educational service agency" means a governmental agency or governmental entity that is established and operated exclusively for the purpose of providing these services to one or more educational institutions.
With respect to services described in paragraph 1, 2 or 3 of this subsection, benefits are not payable on the basis of services specified in paragraph 1, 2 or 3 of this subsection to any individual who performed these services while in the employ of an entity that provides these services to or on behalf of an educational institution.
If an individual provides services to more than one educational employer described in paragraph 1, 2 or 3 of this subsection, benefits are not payable on the basis of services provided to an educational employer for which there is a contract or reasonable assurance for determining eligibility for benefits between or within terms, but benefits are payable on the basis of services provided to an employer for which there is no contract or reasonable assurance.

F. In determining contribution rates assigned to employers under this chapter, the payrolls of employing units liable for payments in lieu of contributions shall not be included in computing the contribution rates to be assigned to employers under this chapter. The payments in lieu of contributions made by these employing units shall be included in the total assets of the fund in the same manner as contributions paid by other employers.

G. Except as inconsistent with this section, this chapter and regulations of the department shall apply to any matter arising pursuant to this section.

§ 23-751 Authorizing certain state agencies and institutions of higher learning to elect to make payments in lieu of contributions

Effective January 1, 1974, this state or any of its agencies or boards may elect to become liable for payments in lieu of contributions for a period of not less than three consecutive taxable years by filing a written notice of its election with the department not later than thirty days after written notice that such election may be made is first given to the employing unit by the department. This election is extended to the state hospitals and institutions of higher education that were subject to this chapter prior to January 1, 1974, without regard to the length of time their present method of financing has been in force.

§ 23-751.01 Employment by an Indian tribe; benefits; payments in lieu of contributions; definitions

A. Any Indian tribe for which service in employment is performed is an employer for the purposes of this chapter. Benefits that are based on service in the employment by an Indian tribe are payable in the same amount and on the same terms and are subject to the same conditions as benefits payable on the basis of other service subject to this chapter.

B. An Indian tribe that is subject to this chapter shall pay contributions under the same terms and conditions as prescribed for other employers that are subject to this chapter, unless the tribe elects to make payments in lieu of contributions.

C. An Indian tribe that elects to make payments in lieu of contributions:

Shall make the election in the same manner and under the same conditions as prescribed in section 23-750.
May elect to make payments in lieu of contributions by the tribe as a whole, by individual tribal units or by combinations of tribal units.
Is subject to all other provisions in section 23-750 relating to employers who elect to make payments in lieu of contributions.

D. An Indian tribe that fails to make the payments prescribed in section 23-750, including assessments of interest and penalties, within ninety days after receiving a bill for the payments loses the option to make payments in lieu of contributions for the following tax year unless the tribe makes full payment before the contributions for the next tax year are computed.

E. A tribe that has lost the option to make payments in lieu of contributions shall have the option restored after one year if the tribe timely paid all contributions during the prior year and all contributions, payments in lieu of contributions, penalties and interest have been paid.

F. The department shall notify the United States internal revenue service and the United States department of labor if an Indian tribe fails to make required payments, including assessments of penalties and interest.

G. The department shall include in a notice of payment or delinquency to an Indian tribe a statement that failure to make full payment within the prescribed time will cause the Indian tribe to:

Be liable for taxes under the federal unemployment tax act, as amended (26 United States Code sections 3301 through 3311).
Lose the option to make payments in lieu of contributions.

H. An Indian tribe shall pay for all extended benefits that are attributable to service in the employment of the tribe if the extended benefits are not reimbursed by the federal government.

I. For the purposes of this section:

"Employment by an Indian tribe" means employment by an Indian tribe as defined in 26 United States Code section 3306(u) or by a tribal unit except that employment by an Indian tribe does not include the exclusions from employment prescribed in section 23-615, subsection B, paragraph 3, subdivisions (b) and (e) and paragraph 5.
"Tribal unit" means a subdivision or subsidiary of an Indian tribe or a business enterprise that is wholly owned by an Indian tribe.

§ 23-752 Levy assessment and distraint

A. If a debtor who is liable to pay any contributions, payments in lieu of contributions, interest or penalties neglects or refuses to pay the amounts, the department may collect the amounts, and other monies sufficient to cover the expenses of the levy, by levy on all property and rights to property, except property which is exempt under section 23-755, belonging to the debtor or on which there is a lien as provided in section 23-745 for the payment of the amounts. Levy may be made on the accrued salary or wages of any officer, employee or elected official of this state or its political subdivisions, or any agency or instrumentality of this state or its political subdivisions, by serving a notice of levy on the department of administration in the case of state wages or salaries and on the chief disbursing officer of a political subdivision of this state in the case of wages or salaries paid by a political subdivision.

B. In lieu of seizure and sale under the provisions of this section and section 23-756, the department may direct the sheriff of any county in this state to execute the levy in the same manner and with the same effect as a levy of and a sale pursuant to a writ of execution.

C. If any property or right to property on which a levy has been made under subsection A of this section is not sufficient to satisfy the claim of the department for which the levy is made, the department, as often as necessary, may proceed to levy in a like manner on any other property liable to levy of the debtor against whom the claim exists, until the amount due, together with all expenses, is fully paid.

D. The effect of a levy on salary or wages payable to or received by a debtor is continuous from the date the levy is first made until the liability out of which the levy arose is satisfied or becomes unenforceable.

E. With respect to a levy described in subsection D of this section, the department shall promptly release the levy when the liability out of which the levy arose is satisfied or becomes unenforceable and shall promptly notify the person on whom the levy was made that the levy has been released.

F. Except as provided in subsection D or E of this section, a levy extends only to property possessed and obligations existing at the time of the levy. If the department levies on property or rights to property, it may seize and sell the property or rights to property, whether it is real or personal or tangible or intangible property.

G. A levy may be made under subsection A of this section on the salary or wages or other property of a debtor with respect to any unpaid amounts only after the department has notified the debtor in writing of its intention to levy. The notice of intent to levy shall be given in person, left at the dwelling or usual place of business of the debtor or sent by certified mail to the debtor's last known address no less than ten days before the day of the levy.

H. The department shall include with each levy information as to the property exempt from levy provided in section 23-755.

§ 23-753 Surrender of property subject to levy; definition

A. Except as provided in subsection B of this section, a person in possession of, or obligated with respect to, property or rights to property subject to levy on which a levy has been made, on demand of the department, shall surrender the property or rights to property or discharge the obligation to the department, except any part of the property or rights to property that is, at the time of the demand, subject to an attachment or execution under any judicial process.

B. A levy on an organization with respect to a life insurance or endowment contract issued by the organization, without necessity for the surrender of the contract document, constitutes a demand by the department for payment of the amount described in this subsection and the exercise of the right of the debtor to the advance of this amount. The organization shall pay the amount within ninety days after service of the notice of the levy. The notice shall include a certification by the department that a copy of the notice has been mailed to the debtor at the last known address. The levy is deemed to be satisfied if the organization pays to the department the amount which the debtor could have had advanced to the debtor by the organization on the date prescribed in this subsection for the satisfaction of the levy, increased by the amount of any advance, including contractual interest, made to the debtor on or after the date the organization had actual notice or knowledge of the lien with respect to which the levy is made, other than an advance, including contractual interest, made automatically to maintain the contract in force under an agreement entered into before the organization has notice or knowledge. The satisfaction of a levy under this subsection is without prejudice to any civil action for the enforcement of any lien imposed by this chapter with respect to the contract.

C. A person who fails or refuses to surrender any property or rights to property subject to levy, on demand by the department, is liable to the department in an amount equal to the value of the property or rights to property not surrendered, but not exceeding the amount for which the levy has been made, with costs and interest on this amount at a rate determined pursuant to section 23-736 from the date of the levy or, in the case of a levy described in section 23-752, subsection D, from the date the person would otherwise have been obligated to pay the amounts to the debtor. Any amount, other than costs, recovered under this subsection shall be credited against the liability for which the levy was made.

D. A person in possession of or obligated with respect to property or rights to property subject to levy on which a levy has been made who, on demand by the department, surrenders the property or rights to property or discharges the obligation to the department, or who pays a liability under subsection C of this section, is discharged from any obligation or liability to the debtor with respect to the property or rights to property arising from the surrender or payment. In the case of a levy which is satisfied pursuant to subsection B of this section, the organization is also discharged from any obligation or liability to any beneficiary arising from the surrender or payment.

E. As used in this section "person" includes an officer or employee of a corporation, an officer, employee or elected official of this state or its political subdivisions, any agency or instrumentality of this state or a member or employee of a partnership, who as an officer, employee, elected official or member is under a duty to surrender the property or rights to property or to discharge an obligation pursuant to this section.

§ 23-754 Production of books

If a levy has been made or is about to be made on property, or a right to property, any person having custody or control of books or records containing evidence or statements relating to the property or a right to the property subject to levy, on demand of the department, shall exhibit the books or records to the department.

§ 23-755 Property exempt from levy

A. The following property is exempt from levy under this article:

Wearing apparel and school books necessary for the debtor or members of the debtor's family.
Fuel, provisions, furniture, personal effects, arms for personal use, livestock and poultry of the debtor not in excess of a fair market value of five hundred dollars.
Books and tools necessary for the trade, business or profession of the debtor not in excess of a fair market value of two hundred fifty dollars.
Mail, addressed to any person, which has not been delivered to the addressee.
The amount of salary, wages or other income as is necessary to comply with a judgment order, if the debtor is required by judgment of a court of competent jurisdiction, entered before the date of levy, to contribute to the support of minor children.
An amount payable to or received by an individual as wages or salary for personal services or as income derived from other sources during any period, to the extent that the total of the amounts payable to or received during the period does not exceed the applicable exempt amount determined under subsection D of this section.
A homestead exempt from attachment, execution and forced sale to the extent exempted by title 33, chapter 8.

B. The officer seizing property of the type described in subsection A of this section shall appraise and set aside to the owner the amount of the property declared to be exempt. If the debtor objects at the time of the seizure to the valuation fixed by the officer making the seizure, the department shall summon three disinterested individuals who shall make the valuation.

C. Notwithstanding any other statute, property or rights to property are not exempt from the levy provided in this article except the property specifically made exempt by subsection A of this section.

D. The following wages, salary and other income payable to or received by an individual are exempt from levy under subsection A, paragraph 6 of this section:

In the case of an individual who is paid or receives all of his wages, salary and other income on a weekly basis, the amount of wages, salary and other income received during the week which is exempt from levy is fifty dollars and fifteen dollars for each individual who is specified in a written statement submitted to the person on whom notice of levy is served and which is verified in such manner as the department prescribes and:

(a) Over one-half of whose support for the payroll period was received from the debtor.

(b) Who is the spouse of the debtor, or who bears a relationship to the debtor specified in section 43-1001, paragraph 3.

(c) Who is a minor child of the debtor but not with respect to whom amounts are exempt from levy under subsection A, paragraph 5 of this section for the payroll period.

In the case of an individual not described in paragraph 1 of this subsection, the amount of the wages, salary and other income payable to or received during any applicable pay period or other fiscal period, as determined by the department, which is exempt from levy under subsection A, paragraph 6 of this section is an amount, determined by the department, which as nearly as possible will result in the same total exemption from levy for the individual over a period of time as allowed under paragraph 1 of this subsection if, during the period of time, the wages, salary and other income were paid or received on a regular weekly basis.

§ 23-756 Notice and sale of seized property

A. Except as otherwise provided in this section, the notice of sale and sale of property seized by the department under this article shall be conducted in the manner and the time provided in title 12, chapter 9, article 7, relating to the sale of property under execution.

B. Real property may be redeemed in the manner provided by title 12, chapter 8, article 11.

C. The department shall notify the debtor of the date, time and location of the sale of his property or right to property with a description of the property or right to property to be sold. The notice shall be given in person, left at the dwelling or usual place of business of the debtor or sent by first class mail to the debtor's last known address, not less than ten days before the day of the sale. If the property or right to property is perishable, the department shall give notice of the sale to the debtor in the manner and within the time limits which are reasonable considering the character and condition of the property.

§ 23-757 Authority to release levy and return property

A. The department may release the levy on all or a part of the property or rights to property levied on if the department determines that this action will facilitate the collection of the liability. The release shall not operate to prevent any subsequent levy.

B. If the department determines that property has been wrongfully levied on, the department may return:

The specific property levied on.
An amount of money equal to the amount of money levied on.
An amount of money equal to the amount of money received by the department from a sale of the property.

C. Property may be returned at any time. An amount equal to the amount of money levied on or received from the sale may be returned at any time before the expiration of nine months after the date of the levy.

Article 5.1 Shared Work Unemployment Compensation

§ 23-761 Definitions

In this article, unless the context otherwise requires:

"Affected group" means two or more employees designated by the employer to participate in a shared work plan.
"Approved shared work plan" or "approved plan" means an employer's shared work plan which meets the requirements of section 23-762 and which the department approves in writing.
"Normal weekly hours of work" means the number of hours in a week that the employee normally would work for the shared work employer or forty hours, whichever is less.
"Shared work benefits" means benefits, including benefits payable to federal civilian employees and to ex-servicemen pursuant to 5 United States Code, chapter 85, payable to an individual under this article for weeks of reduced work under an approved shared work plan.
"Shared work employer" means an employer with a shared work plan in effect. An individual who or an employing unit which succeeds to or acquires, pursuant to section 23-733, an organization, trade or business with a shared work plan in effect automatically becomes a shared work employer and adopts such plan, if such individual or employing unit certifies to shared work benefits under the previously approved plan.
"Shared work plan" or "plan" means an employer's voluntary written plan for reducing unemployment under which a specified group of employees shares the work remaining after their normal weekly hours of work are reduced.

§ 23-762 Requirements of shared work plan; approval

A. An employer wishing to participate in the shared work unemployment compensation program shall submit a signed, written shared work plan to the department for approval. The department shall approve a shared work plan only if the plan:

Specifies the employees in the affected group.
Applies to only one affected group.
If feasible, includes a description of the employer's plan for notifying an employee whose work week is to be reduced.
Includes a certified statement by the employer that, for the six-month period immediately preceding the date the plan is submitted, compensation was payable from the shared work employer, or its predecessors whether or not they were shared work employers, to each employee in the affected group in an amount equal to or greater than the wages for insured work in one calendar quarter as provided in section 23-771, subsection A, paragraph 6. An employee who joins an affected group after the approval of the shared work plan is automatically covered under the previously approved plan, effective the week that the department receives written notice from the shared work employer that the employee has joined and certification from the employer that the employee meets the provisions of section 23-771, subsection A, paragraph 6.
Includes a certified statement by the employer that for the duration of the plan the reduction in the total normal weekly hours of work of the employees in the affected group is instead of layoffs which otherwise would result in at least as large a reduction in the total normal weekly hours of work. The employer shall include an estimate of the number of layoffs that would have occurred without an approved shared work plan.
Specifies the manner in which the employer will treat fringe benefits of the employees in the affected group if the employees' hours are reduced to less than their normal weekly hours of work. The employer must certify, if the employer provides health benefits and retirement benefits under a defined benefit plan to any employee whose workweek is reduced under the plan, that these benefits will continue to be provided to an employee participating in the shared work plan under the same terms and conditions as though the workweek of the employee had not been reduced or to the same extent as other employees not participating in the shared work program.
Specifies an expiration date that is no more than one year from the date the employer submits the plan for approval, except that on written request by the employer, the department may approve an extension of the plan for a period of not more than one year from the date of the request.
Is approved in writing by the collective bargaining agent for each collective bargaining agreement that covers any employee in the affected group.

B. The plan prescribed in subsection A of this section and the implementation of the plan must be consistent with the employer's obligations under all other federal and state laws.

C. The department shall approve or disapprove the plan within fifteen days after receipt of the plan by the department. The department shall notify the employer of the reasons for denial of a shared work plan within ten days of the determination.

§ 23-763 Shared work benefits; eligibility; requirements

A. An individual is eligible to receive shared work benefits with respect to any week only if, in addition to meeting the requirements of article 6 of this chapter as modified by subsection E of this section, the department finds that during the week:

The individual is employed as a member of an affected group in an approved plan that was approved before the week and is in effect for the week.
The individual's normal weekly hours of work were reduced at least ten per cent but not more than forty per cent.
The individual met the requirements of section 23-771, subsection A, paragraphs 3 and 4.

B. Eligible individuals may participate in training to enhance job skills, including employer sponsored training or worker training funded under the workforce investment act of 1998, if the training is approved by the department.

C. The department shall not pay an individual shared work benefits for more than twenty-six weeks in a benefit year, except that this limitation does not apply to a week if for the period consisting of the week and the immediately preceding twelve weeks the rate, not seasonally adjusted, of insured unemployment in this state is equal to or greater than four per cent.

D. The total amount of regular benefits and shared work benefits that the department pays to an individual for weeks in the individual's benefit year shall not exceed the total for the benefit year as provided in section 23-780.

E. Notwithstanding section 23-621 or any other provision of this chapter, for purposes of this article an individual is unemployed in any week for which compensation is payable to the individual, as an employee in an affected group, for less than the individual's normal weekly hours of work in accordance with an approved plan in effect for the week.

§ 23-764 Amount of benefits

The department shall pay an individual eligible for shared work benefits with respect to any week a shared work benefit that is a proportionate amount as provided in this section of the employee's weekly benefit amount as provided in section 23-780. The department shall pay a shared work weekly benefit that is an amount directly proportionate to the ratio of the number of normal weekly hours of work for which the employer would not compensate the employee to the employee's normal weekly hours of work unless the employer compensates the employee on a piecework basis, in which case the department shall pay an amount directly proportionate to the ratio of the normal number of weekly pieces worked for which the employer would not compensate the employee to the employee's normal number of weekly pieces worked. If the amount is not an even multiple of one dollar, the department shall round it to the nearest dollar, and the department shall round an even one-half dollar to the next higher multiple of one dollar. Except as provided in section 23-791, the department shall not reduce the amount for compensation payable for the week. The provisions of section 23-789 which require the department to deduct and withhold certain amounts payable to an individual who is liable for child support obligations apply to this article.

§ 23-766 Other provisions of this chapter; department regulations; applicability

Except as otherwise provided by or inconsistent with this article, this chapter and department regulations apply to benefits under this article.

Article 6 Benefits

§ 23-771 Eligibility for benefits

A. An unemployed individual is eligible to receive benefits with respect to any week only if the department finds that the individual:

Has registered for work at and thereafter has continued to report at an employment office in accordance with the regulations prescribed by the department.
Has made a claim for benefits in accordance with section 23-772.
Is able to work.
Except for an individual who is applying for shared work benefits pursuant to article 5.1 of this chapter, is available for work and both of the following apply:

(a) The individual has engaged in a systematic and sustained effort to obtain work during at least four days of the week.

(b) The individual has made at least one job contact per day on four different days of the week.

Has been unemployed for a waiting period of one week. A week is not counted as a week of unemployment for the purpose of this paragraph:

(a) Unless it occurs within the benefit year that includes the week with respect to which the individual claims payment of benefits.

(b) Unless the individual was eligible for benefits with respect to the week as provided in this section and sections 23-775, 23-776 and 23-777.

Has met one of the following requirements:

(a) Has been paid wages for insured work during the individual's base period equal to at least one and one-half times the wages paid to the individual in the calendar quarter of the individual's base period in which the wages were highest, and the individual has been paid wages for insured work in one calendar quarter of the individual's base period equal to an amount that is equal to at least three hundred ninety times the minimum wage prescribed by section 23-363 that is in effect when the individual files a claim for benefits.

(b) For a benefit year beginning on or after September 2, 1984, has been paid wages for insured work during at least two quarters of the individual's base period and the amount of the wages paid in one quarter would be sufficient to qualify the individual for the maximum weekly benefit amount payable under this chapter and the total of the individual's base-period wages is equal to or greater than the taxable limit as specified in section 23-622, subsection B, paragraphs 1 and 2.

Following the beginning date of a benefit year established under this chapter or the unemployment compensation law of any other state and before the effective date of a subsequent benefit year under this chapter, has performed services whether or not in employment as defined in section 23-615 for which wages were payable in an amount equal to or in excess of eight times the weekly benefit amount for which the individual is otherwise qualified under section 23-779. In making a determination under this paragraph, the department shall use information available in its records or require the individual to furnish necessary information within thirty days after the date notice is given that the information is required.

B. If an unemployed individual cannot establish a benefit year as defined in section 23-609 due to receipt during the base period of compensation for a temporary total disability pursuant to chapter 6 of this title, or any similar federal law, the individual's base period shall be the first four of the last five completed calendar quarters immediately preceding the first day of the calendar week in which the disability began. Wages previously used to establish a benefit year may not be reused. This subsection does not apply unless all of the following occur:

The individual has filed a claim for benefits not later than the fourth calendar week of unemployment after the end of the period of disability.
The claim is filed within two years after the period of disability begins.
The individual meets the requirements of subsection A of this section.
The individual has attempted to return to the employment where the temporary total disability occurred.

C. If an unemployed individual is a member of the national guard or other reserve component of the United States armed forces, the individual is not considered to be either employed or unavailable for work by reason of the individual's participation in drill, training or other national guard or reserve activity that occurs on not more than one weekend per month or in lieu of a weekend drill or the equivalent.

D. The department shall not disqualify an individual from receiving benefits under this chapter on the basis of the individual's separation from employment if the individual is a victim of domestic violence and leaves employment due to a documented case involving domestic violence pursuant to section 13-3601 or 13-3601.02. Benefits paid to an individual pursuant to this subsection shall not be charged against an employer's account pursuant to section 23-727, subsection G.

E. The department shall not disqualify an individual from receiving benefits under this chapter on the basis of the individual's separation from employment if the individual was terminated from employment for not receiving a COVID-19 vaccine or COVID-19 booster shot required by the employer. Benefits paid to an individual pursuant to this subsection shall not be charged against an employer's account pursuant to section 23-727 if the employer's requirement that employees receive the COVID-19 vaccine or COVID-19 booster shot is required by law.

F. For the purposes of subsection A, paragraph 6 of this section, wages shall be counted as wages for insured work for benefit purposes with respect to any benefit year only if that benefit year begins subsequent to the date on which the employing unit by which those wages were paid has become an employer subject to this chapter.

§ 23-771.01 Approved training; definitions

A. Notwithstanding any other provision of this chapter, no otherwise eligible individual shall be denied benefits for any week:

Because he is in training approved by the secretary of labor under section 236 of the trade act of 1974, as amended, or because of leaving work which is not suitable employment to enter such training.
Because he is in training with the approval of the department, nor
Because of the application to any such week of such training of any provision of this chapter relating to availability for work, active search for work, or refusal to apply for or accept work.

B. No payment of benefits under this chapter made possible under this section shall be made to any individual for any week, or part of any week, with respect to which he is entitled to receive any training allowance under any public training or retraining program if such training allowance equals or exceeds the benefits to which the individual would otherwise be entitled. If the training allowance is less than the benefits to which the individual would otherwise be entitled, his benefits shall be computed in accordance with section 23-779, subsection C, treating the training allowance in the same manner as wages, and benefits shall be paid accordingly.

C. In this section, unless the context otherwise requires, "suitable employment" means, with respect to an individual, work which is of a substantially equal or higher skill level than the individual's past adversely affected employment and for which the wages equal or exceed eighty per cent of the individual's average weekly wage. "Adversely affected employment" and "average weekly wage" have the meanings prescribed by section 247 of the trade act of 1974, as amended.

§ 23-771.02 Training program

A. The department shall establish a training program to provide a structured, supervised training opportunity to individuals through employers that volunteer to participate in the program. The training program may be a department-approved or a United States department of labor-approved apprenticeship program. The program may offer compensated and noncompensated training opportunities to individuals participating in the program. An individual in the program shall be at least eighteen years of age and shall register with the department.

B. Individuals may participate in the program on a voluntary basis. Individuals who participate in the program and who are not receiving compensation may continue to receive unemployment compensation benefits, if eligible, pursuant to section 23-771.01, subsection A, paragraph 2.

C. An employer that participates in the program must:

Have employees in this state.
Have at least one full-time employment position available in this state.
Provide training opportunities that benefit an individual who participates in the program and notify the department when the employer offers an individual a training opportunity under the program.
Sign a written agreement with each individual who participates in the program that sets forth the terms of the training.
Agree that the employer's current employees will not be displaced or lose any promotion rights due to an individual's participation in the program.
Provide any additional information that relates to the job training that the department requests.

D. An individual who participates in the program must:

Be currently receiving or be eligible to receive unemployment compensation benefits, pursuant to section 23-771.01, subsection A, paragraph 2.
Be willing to develop new skills or work experience.
Continue to seek work unless otherwise exempt, pursuant to section 23-771.01, subsection A, paragraph 2.
Certify to the department that the individual understands that participating in the program does not guarantee the individual any future employment or expectations of being hired by the employer.
Attend a mandatory program orientation that the department conducts.
Provide any information that the department requests.

§ 23-772 Claims for benefits; initial claim filing notice to employer; contents of notice; continued claim notice to employer; posting printed statements dealing with claims

A. Claims for benefits shall be made in accordance with such regulations as the department prescribes. The department shall require an individual claiming benefits to provide information and documents on which the claim is based at the time of filing the claim.

B. When an initial claim for benefits is filed, the department shall promptly notify the claimant's most recent employing unit or employer of the claim filing. The notice shall:

Contain the claimant's stated reason for the claimant's separation from employment.
State that the employer may protest payment to the claimant based on any available statutory grounds by returning the protest not later than ten business days after the date of the notice.

C. Unless previously notified, all base-period employers will be sent a notice at the time the claimant files a payable continued claim for benefits during a period of unemployment.

D. Each employer shall post and maintain printed statements dealing with claims for benefits in places readily accessible to individuals in the employer's service, and shall make available to each individual at the time the individual becomes unemployed a printed statement dealing with claims for benefits. Printed statements shall be supplied by the department to each employer without cost.

§ 23-773 Examination and determination of claims

A. A representative designated by the department as a deputy shall promptly examine any claim for benefits and, on the basis of the facts found by the deputy, shall determine whether or not the claim is valid. If the claim is valid, the deputy shall also determine the week with respect to which the benefit year shall commence, the weekly benefit amount payable and the maximum duration of the benefit.

B. The deputy shall promptly notify the claimant and any other interested parties of the determination and the reasons for the determination. Except as provided in subsection D of this section, unless the claimant or an interested party, within seven calendar days after the delivery of notification, or within fifteen calendar days after notification was mailed to the claimant's or interested party's last known address, files an appeal from the determination, it shall become final, and benefits shall be paid or denied in accordance with the determination. The department shall adopt rules to allow an appeal to be filed in writing, electronically or by telephone. If an appeal tribunal affirms a determination of the deputy allowing benefits, or the appeals board affirms a determination or decision allowing benefits, the benefits shall be paid regardless of any appeal that may thereafter be taken, but if that decision is finally reversed, no employer's account shall be charged with benefits so paid.

C. On receipt of a request from an interested party for information about a deputy's determination made pursuant to this section or section 23-673, the department shall make available by memorandum or other written document within five days after receipt of the request the following information:

The facts considered and the facts relied on in making the determination.
The specific statutes, regulations or other authority relied on in making the determination.
The reasoning applied in making the determination.

D. Before the time for appeal as prescribed in subsection B of this section has expired, an interested party may request a reconsidered determination. The department shall examine the request and, within seven calendar days, deny the request or issue a reconsidered determination. The interested party may prove that a response was timely filed by using evidence of fax records that documents the date and time when a faxed response was transmitted and received by the department. A request for reconsideration that is denied shall be treated as an appeal, and the same procedure shall be followed as provided for in case of appeal from the original determination. If a reconsidered determination is issued, the time for appeal shall run from the date of issuance of the reconsidered determination. The employer and the claimant shall each be permitted no more than one request for reconsideration on each case.

E. Before the actual filing of an appeal under subsection B of this section, but not later than the time permitted to appeal, the department on its own motion may issue a reconsidered determination. After the time for appeal has expired, but within one year after the issuance of the original determination, the department with authorization of the unemployment insurance program administrator may issue a reconsidered determination, on the basis of newly discovered evidence that by due diligence could not have been previously discovered, if no administrative or judicial review has occurred or is pending on the original determination. If a redetermination is based on fraud, the one year limitation on the issuance of redeterminations does not apply.

F. Prompt notice in writing of any reconsidered determination under subsection E of this section and the reasons for reconsideration shall be given to all interested parties. An interested party may appeal within the time prescribed under subsection B of this section, and the same procedure shall be followed as provided for in case of an appeal from the original determination.

§ 23-774 Documentation of benefit eligibility

A. The department shall require an individual who files a claim for benefits to provide documentation or information sufficient for the department to determine the individual's eligibility for benefits. If an individual who files a claim for benefits has the ability to produce documents or information and fails to produce the documents or information, the department may find the individual's claim for unemployment benefits invalid until the documents or information are produced.

B. On request by the department, an employer shall provide relevant documentation to the department to allow the department to determine the individual's eligibility for benefits.

C. If an employer provides documentation that an individual either voluntarily resigned from employment or abandoned the individual's employment, the burden of providing documentation to determine an individual's eligibility for benefits shifts to the individual.

D. Documentation from an employer to show the individual's voluntary resignation or abandonment of employment may include written or verbal statements from the employer detailing the individual's circumstances for leaving employment. Supporting documentation of:

A voluntary resignation may include an employer's attestation of the individual's verbal resignation and that work was available for the individual, if the individual did not provide a written resignation.
Job abandonment may include an attestation from the employer that the individual failed to report for assigned work and that work was available for the individual.

E. Notwithstanding this section, the department shall make reasonable efforts to obtain the information necessary to determine the eligibility of the individual.

§ 23-775 Disqualification from benefits

An individual shall be disqualified for benefits:

For the week in which the individual has left work voluntarily without good cause in connection with the employment, and in addition to the waiting week, for the duration of the individual's unemployment and until the individual has earned wages in an amount equivalent to five times the individual's weekly benefit amount otherwise payable. If a person leaves because of transportation difficulties, the individual shall be disqualified unless the individual can show the individual's travel requirements are in excess of the normal practice in the individual's occupation and past practice or that the individual has compelling personal circumstances requiring the individual's leaving. Compelling personal circumstances shall include but are not limited to a showing of any of the following:

(a) Over thirty miles distance from the individual's home to work.

(b) More than one and one-half hours to reach work.

(c) A spouse or unemancipated minor leaving work to accompany the other spouse or a parent who is a member of the armed services and who is transferred to another locality as a result of official orders.

For the week in which the individual has been discharged for wilful or negligent misconduct connected with the employment, and in addition to the waiting week, for the duration of the individual's unemployment and until the individual has earned wages in an amount equivalent to five times the individual's weekly benefit amount otherwise payable.
For any week with respect to which or a part of which the individual has received or is seeking unemployment benefits under an unemployment compensation law of another state or of the United States, but if the appropriate agency of the other state or of the United States finally determines that the individual is not entitled to unemployment benefits, the ineligibility shall not apply.
For the week in which the individual becomes unemployed and for not more than the following three weeks, if the individual's unemployment is due solely to a customary suspension of all operations, except maintenance work, at the factory, plant or other premises at which the individual was last employed, which will not occur more than once in a calendar year and will not exceed four consecutive weeks' duration, and the employment will again be available to the individual on resumption of operations. For the purposes of this paragraph:

(a) "Customary suspension" means a suspension that has occurred for the same or similar reasons in each of three consecutive years or more, including the year in question, regardless of whether the suspension in any previous year would have satisfied the requirements of this paragraph. A suspension provided for by an agreement to which the employer is a party shall be considered customary unless the agreement specifies the exact time, duration, type and circumstances of the suspension. Any suspension whose details are determined by the employer shall be considered customary, regardless of the employer's ultimate reason for imposing it, as long as the employer's reason or reasons are the same or similar over the necessary period.

(b) "Factory, plant or other premises" means any location or premises or portion of locations or premises of the employer where the work or operations are separate and distinct from those at other locations or premises or portions of locations or premises, regardless of geographic proximity or functional, geographic or administrative integration of the work or operations.

(c) "Maintenance work" has its usual meaning and includes any administrative, executive, clerical or supervisory work or any other work necessary to keep the factory, plant or other premises in a position to resume full operations promptly at the end of the suspension or necessary to pay, supervise or otherwise support individuals performing such work.

For any week in which the individual is incarcerated.

§ 23-776 Disqualification from benefits for failure to accept suitable work or actively seek work; exceptions

A. An individual shall be disqualified for benefits if the department finds the individual has failed without cause either to apply for available, suitable work, when so directed by the employment office or the department, to actively engage in seeking work, to accept suitable work when offered or to return to the individual's customary self-employment when so directed by the department. The disqualification shall begin with the week in which the failure occurred and shall continue for the duration of the individual's unemployment and until the individual has earned wages in an amount equivalent to eight times the individual's weekly benefit amount otherwise payable.

B. In determining whether or not work is suitable for an individual:

During the first four weeks of a benefit period, the department shall consider the degree of risk involved to the individual's health, safety and morals, the individual's physical fitness and prior training, the individual's experience and prior earnings, the individual's length of unemployment and prospects for securing local work in the individual's customary occupation and the distance of the available work from the individual's residence.
After the first four weeks of a benefit period, the department shall consider any employment offer that pays one hundred twenty percent of the individual's weekly benefit amount to be suitable work.

C. Notwithstanding any other provisions of this chapter, work shall not be deemed suitable and benefits shall not be denied under this chapter to an otherwise eligible individual for refusing to accept new work under any of the following conditions:

The position offered is vacant due directly to a strike, lockout or other labor dispute.
The wages, hours or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.
As a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining a bona fide labor organization.

D. An individual is considered to have refused an offer of suitable work under subsection A of this section if an offer of work is withdrawn by an employer after an individual either:

Tests positive for drugs after a drug test given pursuant to chapter 2, article 14 of this title by or on behalf of a prospective employer as a condition of an offer of employment.
Refuses, without good cause, to submit to a drug test that is required by a prospective employer as a condition of an offer of employment.

§ 23-777 Disqualification from benefits for unemployment resulting from labor dispute; exceptions; effect on contribution rate

A. An individual shall be disqualified for benefits for any week with respect to which the commission finds that his total or partial unemployment is due to a labor dispute, strike or lockout which exists at the factory, establishment or other premises at which he is or was last employed. This provision shall not apply if it is shown to the satisfaction of the commission that the individual is not participating in, financing or directly interested in the labor dispute, strike or lockout or that he does not belong to a grade or class of workers of which, immediately before the commencement of the labor dispute, strike or lockout, there were members employed at the premises at which the labor dispute, strike or lockout occurs, any of whom are participating in or financing or directly interested in the dispute, strike or lockout. In the case of separate branches of work commonly conducted as separate businesses in separate premises, each department shall, for the purposes of this section, be deemed to be a separate factory, establishment or other premises.

B. If the commission, upon investigation, finds that the dispute, strike or lockout is caused by the failure or refusal of an employer to conform to the provisions of an agreement or contract between employer and employee, or a law of this state or of the United States pertaining to hours, wages or other conditions of work, such dispute, strike or lockout shall not render the workers ineligible for benefits.

C. Benefits paid to an individual as a result of total or partial unemployment due to a labor dispute, strike or lockout shall not be used as a factor in determining the contribution rate of employers of such individual prior to the commencement of the labor dispute, strike or lockout. Where an individual's unemployment subsequent to the termination of a labor dispute, strike or lockout is a result of the labor dispute, strike or lockout, including replacement of former employees by the employer as a legitimate tactic of or response to the labor dispute, strike or lockout, benefits paid to the individual shall not be charged to the account or used as a factor in determining the contribution rate of any base-period employer.

D. "Labor dispute" as used in this section has its ordinary meaning. The existence of a labor dispute does not depend on the existence of a strike, lockout or any other stoppage of work, nor does there have to be any actual unemployment or imminent threat of unemployment or any particular number of individuals involved, before a labor dispute exists.

§ 23-778 Disqualification from benefits for fraud

Any person who, within the twenty-four calendar months immediately preceding a week in which he files a valid claim for benefits, has made a false statement or representation of a material fact knowing it to be false, or knowingly failed to disclose a material fact with intent to obtain benefits under this chapter, shall be disqualified for the week for which the claim was filed and for not more than the fifty-one weeks immediately following such week as determined by the commission according to the circumstances in each case.

§ 23-779 Amount of benefits

A. The weekly benefit amount of an individual shall be an amount equal to 1/25 of the person's total wages for insured work paid during that quarter of the person's base period in which such total wages were highest, but if:

From and after June 30, 2004 and before July 1, 2022, this amount is more than $240, the weekly benefit amount shall be $240.
From and after June 30, 2022, this amount is more than $320, the weekly benefit amount shall be $320.

B. If the weekly benefit amount is less than the maximum weekly benefit prescribed in subsection A of this section and is not a multiple of $1, the amount shall be rounded to the nearest dollar, with an even one-half dollar being rounded to the next higher multiple of $1. An individual's benefit amount shall not be redetermined during the person's benefit year because of a new maximum or minimum weekly benefit amount becoming effective during the person's benefit year.

C. Each eligible individual who is unemployed with respect to any week shall be paid with respect to that week a benefit in an amount equal to the individual's weekly benefit amount less that part of the wages, if any, payable to the individual with respect to that week that is in excess of $30 through June 30, 2022 and from and after June 30, 2022 that is in excess of $160. The benefit, if not a multiple of $1, shall be rounded to the nearest dollar, with an even one-half dollar being rounded to the next higher multiple of $1.

§ 23-780 Duration and amount of benefits; definition

A. An otherwise eligible individual is entitled during a benefit year to a total amount of benefits equal to:

Twenty-six times the individual's weekly benefit amount if the unemployment rate in the prior calendar quarter is five percent or more.
Twenty-four times the individual's weekly benefit amount if the unemployment rate in the prior calendar quarter is less than five percent.

B. Notwithstanding subsection A of this section, an individual may not receive more than one-third of the individual's base period earnings in a benefit year.

C. For the purposes of this section, "unemployment rate in the prior calendar quarter" means the average of the seasonally adjusted unemployment rates for the three months of the most recently published calendar year quarter as published by the office of economic opportunity.

§ 23-781 Denial of benefits to certain athletes and aliens

A. Benefits based on services, substantially all of which consist of participating in sports or athletic events or training or preparing to so participate, shall not be paid to an individual for any week of unemployment which begins during the period between two successive sport seasons, or similar periods, if the individual performed such services in the first of such seasons or similar periods and there is a reasonable assurance that such individual will perform such services in the later of such seasons or similar periods.

B. Benefits shall not be payable for weeks of unemployment beginning on and after January 1, 1978, on the basis of services performed by an alien unless such alien is an individual who was lawfully admitted for permanent residence at the time such services were performed, was lawfully present for purposes of performing such services, or was permanently residing in the United States under color of law at the time such services were performed (including an alien who was lawfully present in the United States as a result of the application of the provisions of section 203(a)(7) or section 212(d)(5) of the immigration and nationality act). Any data or information required of individuals applying for benefits to determine whether benefits are not payable to them because of their alien status shall be uniformly required from all applicants for benefits. In the case of an individual whose application for benefits would otherwise be approved, no determination that benefits to such individual are not payable because of his alien status shall be made except upon a preponderance of the evidence.

§ 23-782 Payment of benefits

All benefits provided by this chapter shall be payable from the unemployment compensation fund. All benefits shall be paid through offices of the department of economic security.

§ 23-783 Assignment or pledge of benefits void; exemption from attachment or execution; waiver of exemption void

A. No assignment, pledge or encumbrance of the right to benefits which are or may become due or payable under this chapter shall be valid, and the rights to benefits shall be exempt from levy, execution, attachment or any other remedy provided for the collection of debts. Benefits received by an individual, as long as they are not commingled with other funds of the recipient, shall be exempt from any remedy for the collection of all debts except debts incurred for necessaries furnished to the individual or his or her spouse or dependents during the time when the individual was unemployed. No waiver of an exemption provided for in this section shall be valid.

B. This section does not apply to actions to recover child support obligations which are being enforced by the department pursuant to a plan under the child support enforcement act, as amended, which has been approved by the United States secretary of health and human services under part D of title IV of the social security act, as amended.

C. This section does not apply to actions to recover overissuances of food stamp coupons pursuant to section 13(c)(3)(A) or (B) of the food stamp act of 1977.

§ 23-784 Agreement for waiver of rights void

No agreement by an individual to waive, release or commute his rights to benefits or any other rights under this chapter shall be valid, except an agreement to satisfy child support obligations which is being enforced by the department pursuant to a plan under the child support enforcement act, as amended, which has been approved by the secretary of health and human services under part D of title IV of the social security act, as amended, or an agreement between the individual and the department specifying an amount to be withheld as repayment towards an uncollected overissuance of food stamp coupons.

§ 23-785 False statement, misrepresentation or nondisclosure of material fact to obtain benefits; classification

Any person who knowingly makes a false statement or representation believing it to be false or who knowingly fails to disclose a material fact in order to obtain or increase a benefit or other payment under this chapter either for himself or for another person, or under an employment security law of another state, the federal government or a foreign government, is guilty of a class 6 felony. Each such false statement or representation or failure to disclose a material fact shall constitute a separate offense.

§ 23-786 False statement, misrepresentation or nondisclosure of material fact to defraud claimant; classification

Any employing unit or any officer or agent of an employing unit or any other person who knowingly makes a false statement or representation believing it to be false, or who knowingly fails to disclose a material fact, in order to defraud an individual by preventing or reducing the payment of benefits to the individual entitled thereto, or in order to avoid becoming or remaining subject to this chapter or to avoid or reduce a contribution or other payment required from an employing unit under this chapter, or under the employment security law of another state, the federal government or a foreign government, is guilty of a class 3 misdemeanor. Each such false statement or representation or failure to disclose a material fact shall constitute a separate offense.

§ 23-787 Repayment of and deductions for benefits obtained by claimants not entitled to benefits; collection; interest

A. A person who receives any amount as benefits under this chapter to which the person is not entitled is liable to repay the overpaid amount to the department. The department may deduct all or a portion of the overpayment from future benefits payable to the person under this chapter.

B. If benefits to which a person is not entitled are received by reason of fraud committed by the person as determined by the department, the department shall assess a penalty on the person equal to fifteen percent of the amount of the erroneous payment and the person is not eligible to receive any benefits under this chapter until the total amount of the overpayment and all penalties and interest have been recovered or otherwise satisfied in compliance with a civil judgment. For the purposes of this section only, any interest on a fraud overpayment that has been waived under subsection G of this section shall be treated as though it was recovered. Fraud overpayments and penalties may not be waived. The department shall immediately deposit all assessments paid pursuant to this subsection in the unemployment compensation fund established by section 23-701.

C. If benefits to which a person is not entitled are received without any fault on the person's part and if repayment or deduction from future benefits would be against equity and good conscience, the department may waive all or a portion of the amount overpaid.

D. If benefits to which a person is not entitled are received without any fault on the person's part, deductions made by the department pursuant to subsection A of this section from benefits payable to an individual for any week shall not exceed twenty-five percent of the individual's weekly benefit amount unless required by federal law, except that the amount recouped from benefits payable may be fifty percent of the weekly benefit amount if the individual has previously received benefits but has not received benefits for at least twelve consecutive months before the most recent receipt of benefits and there has been no reasonable attempt to repay the indebtedness during that period. The fifty percent recoupment rate may not be put in effect before one year after the establishment of the overpayment.

E. The department shall adopt rules to implement subsection D of this section.

F. The attorney general or the appropriate county attorney may institute appropriate court proceedings to recover in the name of the department any amount for which a person is liable to the department.

G. Interest on all benefit overpayment debts, including those reduced to judgment, shall accrue at ten percent a year. The department may waive a portion of any accrued interest on a benefit overpayment debt for good cause shown. For benefit overpayment debts classified as fraud, the amount of interest waived may not exceed twenty-five percent.

H. The department may not collect an overpayment amount or interest amount that has been waived pursuant to subsection C or G of this section, respectively.

I. This section does not prohibit the department from accepting voluntary payments.

§ 23-788 Recovery of trade act overpayments

The department shall recover any overpayment made to an individual under the trade act of 1974, as amended, by deduction of the overpayment amount from any benefits payable to such individual under this chapter if required to do so by the secretary of labor, except that no single deduction under this section shall exceed fifty per cent of the benefit amount otherwise payable.

§ 23-789 Recovery of child support obligations; definitions

A. When an individual files an initial claim for unemployment compensation, he shall disclose whether he is liable for child support obligations. Upon a disclosure of liability for child support obligations, and a determination of eligibility for unemployment compensation, the department shall notify the state child support enforcement agency enforcing such obligation that the individual has been determined to be eligible for unemployment compensation.

B. The department shall deduct and withhold from any unemployment compensation payable to an individual who is liable for child support obligations:

The amount, if any, determined pursuant to an agreement submitted to the unemployment compensation component of the department under section 454(20)(B)(i) of the social security act, as amended, by the state child support enforcement agency.
Any amount otherwise required to be so deducted and withheld from such unemployment compensation pursuant to legal process as defined in section 462(e) of the social security act, as amended, properly served upon the department.
The amount specified by the individual to the unemployment compensation component of the department to be deducted and withheld under this subsection, if neither paragraph 1 nor 2 of this subsection is applicable.
The amount specified by the child support enforcement agency pursuant to court order, as the amount the individual is liable for child support obligations.

C. Any amount deducted and withheld under this section shall:

Be paid to the appropriate entity as directed by the state child support enforcement agency.
For all purposes be treated as if it were paid to the individual as unemployment compensation and paid by such individual to the state child support enforcement agency and credited to the individual's child support obligations.

D. The state child support enforcement agency shall reimburse the unemployment compensation component of the department for administrative costs incurred by the unemployment insurance component which are attributable to this section.

E. In this section, unless the context otherwise requires:

"Child support obligations" means obligations which are being enforced pursuant to a plan described in section 454 of the social security act, as amended, which has been approved by the secretary of health and human services under part D of title IV of the social security act, as amended.
"State child support enforcement agency" means any agency or component of any agency of this state operating pursuant to a plan as described in paragraph 1 of this subsection.
"Unemployment compensation payable" means any compensation which, but for this section, would be payable directly to an individual under this chapter, including amounts payable by the department pursuant to an agreement under any federal law providing for compensation, assistance or allowances with respect to unemployment, but not including amounts deducted to repay overpayments in accordance with the provisions of sections 23-787, 23-788 and 23-790.

§ 23-789.01 Recovery of uncollected overissuance of food stamp coupons; definitions

A. At the time an individual files a new claim for unemployment compensation, the department may require disclosure of whether or not the individual owes an uncollected overissuance of food stamp coupons and shall notify the state food stamp agency enforcing the obligation of any individual who discloses that the individual owes an uncollected overissuance of food stamp coupons and who is determined to be eligible for unemployment compensation.

B. The department may deduct and withhold from any unemployment compensation payable to an individual who owes an uncollected overissuance of food stamp coupons either:

The amount specified by the individual to the department to be deducted and withheld under this section.
The amount, if any, determined pursuant to an agreement submitted to the state food stamp agency under section 13(c)(3)(A) of the food stamp act of 1977.
Any amount otherwise required to be deducted and withheld from unemployment compensation pursuant to section 13(c)(3)(B) of the food stamp act of 1977.

C. Any amount deducted and withheld under this section shall be paid by the department to the appropriate state food stamp agency.

D. Any amount deducted and withheld under subsection B shall be treated for all purposes as if it were paid to the individual as unemployment compensation and paid by that individual to the state food stamp agency as repayment of the individual's uncollected overissuance.

E. This section applies only if arrangements have been made for reimbursement by the state food stamp agency for the administrative costs that are incurred by the department under this section and that are attributable to the repayment of uncollected overissuances to the state food stamp agency.

F. For purposes of this section:

"Uncollected overissuance of food stamp coupons" has the same meaning prescribed in section 13(c)(1) of the food stamp act of 1977.
"Unemployment compensation" means any compensation payable under this chapter including amounts payable by the department pursuant to an agreement under any federal law providing for compensation, assistance or allowances with respect to unemployment.

§ 23-790 Recovery on behalf of foreign agency of benefits paid through nondisclosure or misrepresentation of material fact

On request of an agency which administers an employment security law of another state or foreign government and which has found in accordance with the provisions of that law that a claimant is liable to repay benefits received under such law by reason of having knowingly made a false statement or misrepresentation of a material fact with respect to a claim taken in this state as an agent for such agency, the commission may collect the amount of such benefits from the claimant to be refunded to the agency. In any case in which under this section a claimant is liable to repay any amount to the agency of another state or foreign government, the amounts may be collected without interest by civil action in the name of the commission acting as agent for such agency, but court costs shall be paid by the liable state.

§ 23-791 Benefits reduced by pension payment; definition

A. Except as provided in subsections B and C, the amount of benefits payable to an individual for any week that begins in a period with respect to which the individual is receiving or will receive a pension under a plan maintained or contributed to by a base-period employer of the individual shall be reduced by either:

The amount of the pension that is reasonably attributable to the week if the individual contributed less than forty-five per cent of the amount for the pension.
Forty-five per cent of the amount of the pension that is reasonably attributable to the week if the individual contributed at least forty-five per cent but less than one hundred per cent of the amount for the pension.

B. The amount of benefits payable to an individual for any week shall not be reduced by reason of the receipt of a pension if the services performed during the base period by the individual for the base-period employer or remuneration received for those services did not affect the individual's eligibility for nor increase the amount of the pension. The conditions specified by this subsection do not apply to pensions paid under the social security act or the railroad retirement act of 1974 or the corresponding provisions of prior law. Pensions paid under those acts shall be treated in the manner specified by subsection A.

C. Benefits shall not be reduced by the receipt of social security retirement in order to take into account contributions made by the individual for the pension.

D. For the purposes of this section, "pension" means a governmental or other pension, retirement or retired pay, annuity or other similar periodic payment that is based on the previous work of the individual.

§ 23-792 Voluntary withholding; income tax

A. An individual filing a new claim for unemployment compensation shall, at the time of filing the claim, be advised:

That unemployment compensation is subject to federal and state tax.
Of the existence of requirements pertaining to estimated tax payments.
That the individual may elect to have federal income tax deducted and withheld from the individual’s payment of unemployment compensation at the amount specified in the United States internal revenue code.
That the individual may elect to have state income tax deducted and withheld from the individual’s payment of unemployment compensation at the rate of ten per cent of the amount withheld for federal income tax. The election shall be in writing.
That the individual shall be permitted to change a previously elected withholding status.

B. Amounts deducted and withheld from the payment of unemployment compensation shall be held in the unemployment compensation fund until transferred to the taxing authorities.

C. The department shall follow all procedures specified by the United States department of labor, the United States internal revenue service and the Arizona department of revenue pertaining to the deducting and withholding of income tax.

D. Amounts shall be deducted and withheld under this section only after amounts are deducted and withheld for any overpayments of unemployment compensation, child support obligations or any other amounts required to be deducted and withheld under this chapter.

§ 23-793 Qualified transient lodging employment; definition

A. From and after January 1, 1997, employment with a single employer who qualifies for the transient lodging classification prescribed in section 42-5070 shall be deemed seasonal employment if the department finds all of the following:

The employer experiences a substantial slowdown in operations due to the seasonal nature of the employment.
The substantial slowdown of operations occurred for the same or similar reasons during the previous year.
The employer notifies a seasonal employee in writing prior to employment of the employee's seasonal status and the possibility of denial of unemployment benefits.
The employer has an experience rating account chargeable with benefits throughout the twelve consecutive calendar month period ending on June 30 of the preceding year.
The employer is not delinquent in the payment of the unemployment insurance tax.

B. The employer shall file an annual application with the department at least ninety days prior to the beginning of the substantial slowdown period. The department shall, within sixty days after the filing of the application, issue a determination granting or denying seasonal employment status. An employer adversely affected may appeal the determination in accordance with section 23-724.

C. All wages paid to a worker in seasonal employment during the worker's base period shall be used in determining the weekly benefit amount, except that a seasonal worker shall not be eligible to receive benefits based on seasonal wages during the period the employer experiences a substantial slowdown in operations when the worker's unemployment is due solely to the substantial slowdown.

D. The department shall adopt rules deemed necessary for the administration of this section.

E. Nothing in this section shall be construed as relieving any employer from paying the taxes required by law on all wages paid for employment nor from making reports required by law or rule connected with a worker's right to claim benefits provided under this chapter.

F. For the purposes of this section, "substantial slowdown" means a reduction of the employer's work force based on the number of full-time equivalent employees equal to at least two-thirds of the average of the highest twelve weeks of employment during the one year period prior to such slowdown.

§ 23-794 School bus contractors with educational institutions; definition

A. Notwithstanding any other law, benefits based on service by a school bus contractor for an educational institution shall not be paid to an individual for any week of unemployment that begins during a period between two successive academic years or terms if the individual performs these services in the first of the successive academic years or terms and if there is a reasonable assurance that the individual will perform the same services in the second of the successive academic years or terms, except that if benefits are denied to any individual under this subsection and that individual was not offered an opportunity to perform these services for the educational institution for the second successive academic year or term, the individual is entitled to a retroactive payment of benefits for each week for which the individual filed a timely claim for benefits and the benefits were denied solely by reason of this subsection.

B. Benefits based on service by a school bus contractor for an educational institution shall not be paid to an individual for any week of unemployment that begins during an established and customary vacation period or holiday recess if the individual performs these services in the period immediately before the vacation period or holiday recess and if there is a reasonable assurance that the individual will perform the services in the period immediately following the vacation period or holiday recess.

C. For the purposes of this section, "school bus" has the same meaning as prescribed in section 28-101.

§ 23-795 Contract educational providers; definition

A. Notwithstanding sections 23-779 and 23-780, benefits based on service for a contract educational provider shall not be paid to an individual for any week of unemployment that begins during a period between two successive academic years or terms if both of the following are true:

The individual performs these services in the first of the successive academic years or terms.
There is a reasonable assurance that the individual will perform the same services in the second of the academic years or terms.

B. If benefits are denied to an individual under subsection A of this section and the individual was not offered an opportunity to perform these services for the employer for the second successive academic year or term, the individual is entitled to a retroactive payment of benefits for each week to which both of the following apply:

The individual filed a timely claim for benefits.
The benefits were denied solely by reason of subsection A of this section.

C. Benefits based on service for a contract educational provider shall not be paid to an individual for any week of unemployment that begins during an established and customary vacation period or holiday recess if both of the following are true:

The individual performs these services in the period immediately before the vacation period or holiday recess.
There is a reasonable assurance that the individual will perform the services in the period immediately following the vacation period or holiday recess.

D. For the purposes of this section, "contract educational provider" means a private, for-profit entity that is approved by the department of education to provide and does provide special education services to pupils from schools that offer instruction in kindergarten programs and grades one through twelve.

§ 23-796 Services for a charter school; benefits

A. Notwithstanding any other law, benefits based on service for a charter school, as described in section 15-181, shall not be paid to an individual for any week of unemployment that begins during a period between two successive academic years or terms if the individual performs these services in the first of the successive academic years or terms and there is a reasonable assurance that the individual will perform the same services in the second of the academic years or terms, except that if benefits are denied to any individual under this subsection and that individual was not offered an opportunity to perform these services for the employer for the second successive academic year or term, the individual is entitled to a retroactive payment of benefits for each week the individual filed a timely claim for benefits and the benefits were denied solely by reason of this subsection.

B. Benefits based on service for a charter school, as described in section 15-181, shall not be paid to an individual for any week of unemployment that begins during an established and customary vacation period or holiday recess if the individual performs these services in the period immediately before the vacation period or holiday recess and if there is a reasonable assurance that the individual will perform the services in the period immediately following the vacation period or holiday recess.

Article 7 General Provisions

§ 23-798 Reservation of legislative authority; no vested rights

The legislature reserves the right to amend or repeal all or any part of this chapter at any time, and there shall be no vested private right of any kind against such amendment or repeal. All the rights, privileges or immunities conferred by this chapter or by acts done pursuant thereto shall exist subject to the power of the legislature to amend or repeal this chapter at any time.

§ 23-799 Severability

If any provision of this chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of this chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

§ 23-799.01 Fraud prevention; report

A. To ensure program integrity, the department shall:

Obtain current and actual employment and earned income information in real time via verification services from external data sources, including third-party vendors, as part of the department's employment and earned income verification process to accurately determine an individual's eligibility for unemployment benefits.
Verify the identity of an individual by incorporating an identity verification process that may include digital or physical identity authentication factors, or both, using external data sources, including third-party vendors.
Minimize erroneous communications to employers generated from fraudulent claim applications.

B. On or before December 31 of each year, the department shall submit to the governor, the president of the senate and the speaker of the house of representatives, and shall provide a copy to the secretary of state, a report that contains details on unemployment insurance fraud for the previous fiscal year, including all of the following:

The number of fraudulent claims.
The total amount of monies paid in fraudulent claims.
The impact of fraud on employer contribution rates and experience ratings.

Chapter 5 Employers' Liability Law

Article 1 In General

§ 23-801 Liability of employer

To protect the safety of employees in all hazardous occupations in mining, smelting, manufacturing, railroad or street railway transportation, or any other industry, as provided in section 7, article 18 of the constitution, any employer, whether individual, association or corporation, is liable for the death or injury, caused by an accident due to a condition or conditions of such occupation, of an employee in the service of such employer, in a hazardous occupation, in all cases in which the death or injury of the employee is not caused by the negligence of the employee killed or injured.

§ 23-802 Declaration of policy

Labor and services of workmen at manual and mechanical labor in the employment of a person in an occupation declared by section 23-803 to be hazardous is service in a hazardous occupation within the meaning of the terms of section 23-801. By reason of the nature and conditions of and the means used and provided for doing the work in a hazardous occupation, such service is especially dangerous and hazardous to the workmen because of risks and hazards inherent in such occupations and which are unavoidable by the workmen therein.

§ 23-803 Hazardous occupations

The following occupations are hazardous within the meaning of this article:

The operation of steam railroads, electrical railroads, street railroads by locomotives, engines, trains, motors or cars of any kind propelled by steam, electricity, cable or other mechanical power, including construction, use or repair of machinery, plants, tracks, switches, bridges or roadbeds, upon, over and by which the railroad is operated.
All work when making, using or necessitating dangerous proximity to gunpowder, blasting powder, dynamite, compressed air or other explosive.
The erection or demolition of a bridge, building or structure in which there is, or in which the plans and specifications require, iron or steel frame work.
The operation of elevators, elevating machines, derricks or hoisting apparatus used within or on the outside of a bridge, building or other structure for conveying materials in connection with the erection or demolition of the bridge, building or structure.
All work on ladders or scaffolds of any kind elevated twenty feet or more above the ground or floor beneath used in the erection, construction, repair, painting or alteration of a building, bridge, structure or other work in which a ladder or scaffold is used.
All work of construction, operation, alteration or repair where wires, cables, switchboards or other apparatus or machinery are in use which are charged with electrical current.
All work in the construction, alteration or repair of pole lines for telegraph, telephone or other purposes.
All work in or about quarries, open pits, open cuts, mines, ore reduction works and smelters.
All work in the construction and repair of tunnels, subways and viaducts.
All work in mills, shops, works, yards, plants and factories where steam, electricity or any other mechanical power is used to operate machinery and appliances in and about the premises.

§ 23-804 Posting of notices by employer

Every employer employing workmen in a hazardous occupation shall, by rules, regulations or instructions, inform all employees in such occupations as to the duties and restrictions of their employment for the purpose of protecting the safety of employees in their employment.

§ 23-805 Right of action for damages; two-year limitation

A. When in the course of work in any of the employments or occupations enumerated in section 23-803, personal injury or death by an accident arising out of and in the course of such labor, service and employment, and due to a condition or conditions of such occupation or employment, is caused to or suffered by a workman engaged therein, in all cases in which the injury or death of the employee is not caused by the negligence of the employee killed or injured, the employer is liable in damages to the employee injured or, in case death ensues, to the personal representative of the deceased for the benefit of the surviving widow or husband and children of the employee or, if none, then to the employee's parents or, if none, then to the next of kin dependent upon the employee or, if none, then to his personal representative for the benefit of the estate of the deceased.

B. The action shall not be maintained unless commenced within two years from the day the claim or cause of action accrued.

§ 23-806 Contributory negligence or assumption of risk as question of fact; effect of comparative negligence on damages

In actions brought under this article, the question of whether the employee was guilty of contributory negligence or assumed the risk is a question of fact and at all times, regardless of the state of the evidence relating thereto, shall be left to the jury. The fact that the employee was guilty of contributory negligence shall not bar a recovery, but the damages shall be diminished by the jury in proportion to the amount of negligence attributable to the employee.

§ 23-807 Agreement exempting employer from liability void; setoffs by employer

A. Any contract, rule, regulation or device whatever, the purpose or intent of which is to enable an employer to exempt himself from any liability created by this article, is to that extent void.

B. In an action brought under this article the employer may set off any amount he has contributed or paid for any insurance, relief, benefit or indemnity, or has paid to the injured employee or his personal representative on account of the injury or death for which the action is brought.

§ 23-808 Limitation on attorney's fee; violation; classification

A. In an action to recover damages for death or injury of an employee under any law of the state when the death or injury was sustained by the employee in the course of one of the occupations declared hazardous by this article, it is unlawful for an attorney to knowingly receive or agree to receive a fee or compensation for services as attorney exceeding twenty-five per cent of the amount recovered and collected exclusive of costs. Any contract, agreement or device in violation of this section is void.

B. An attorney at law violating the provisions of this section forfeits all right to any fee or compensation in the action, is guilty of a class 2 misdemeanor and is subject to disbarment.

Chapter 6 Workers' Compensation

Article 1 Scope of Workers' Compensation

§ 23-901 Definitions

In this chapter, unless the context otherwise requires:

"Award" means the finding or decision of an administrative law judge or the commission as to the amount of compensation or benefit due an injured employee or the dependents of a deceased employee.
"Client" means an individual, association, company, firm, partnership, corporation or any other legally recognized entity that is subject to this chapter and that enters into a professional employer agreement with a professional employer organization.
"Co-employee" means every person employed by an injured employee's employer.
"Commission" means the industrial commission of Arizona.
"Compensation" means the compensation and benefits provided by this chapter.
"Employee", "workman", "worker" and "operative" means:

(a) Every person in the service of this 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.

(b) Every person in the service of any employer subject to this chapter, including aliens and minors legally or illegally allowed 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.

(c) Lessees of mining property and the lessees' 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.

(d) Regular members of volunteer fire departments organized pursuant to title 48, chapter 5, article 1, regular firefighters of any volunteer fire department, including private fire protection service organizations, organized pursuant to title 10, chapters 24 through 40, volunteer firefighters 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 firefighters 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 firefighters 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.

(e) 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 the officers' 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 $400 a month.

(f) 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 $200 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.

(g) 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 of supervisors. 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 on 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 does not 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.

(h) A working member of a partnership 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 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 $600 or 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 is 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.

(i) 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 is an assumed average monthly wage of not less than $600 or 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.

(j) 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 this state under competent military orders or on order of the governor. Compensation benefits shall be based on the monthly military pay rate to which the member is entitled at the time of injury, but not less than a salary of $400 per month or more than the maximum provided by the workers' compensation law. Arizona compensation benefits shall not inure to a member compensable under federal law.

(k) 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 $400 per month.

(l) Volunteer workers of a licensed health care institution may be deemed to be employees and entitled to the benefits provided by this chapter on 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 $400 per month.

(m) 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.

(n) 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.

(o) 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 the game rangers' and wildlife managers' first month of regular duty.

(p) Every person employed pursuant to a professional employer agreement.

(q) A working member of a limited liability company who owns less than fifty percent of the membership interest in the limited liability company.

(r) A working member of a limited liability company who owns fifty percent or more of the membership interest in the limited liability company may be deemed to be an employee entitled to the benefits provided by this chapter on the written acceptance, by endorsement, of an application for coverage by the working member at the discretion of the insurance carrier for the limited liability company. The basis for computing wages for premium payments and compensation benefits for the working member is an assumed average monthly wage of $600 or more but not 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 working member is 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 working member at the time of injury.

(s) A working shareholder of a corporation who owns less than fifty percent of the beneficial interest in the corporation.

(t) A working shareholder of a corporation who owns fifty percent or more of the beneficial interest in the corporation may be deemed to be an employee entitled to the benefits provided by this chapter on the written acceptance, by endorsement, of an application for coverage by the working shareholder at the discretion of the insurance carrier for the corporation. The basis for computing wages for premium payments and compensation benefits for the working shareholder is an assumed average monthly wage of $600 or more but not 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 working shareholder is 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 working shareholder at the time of injury.

"General order" means an order applied generally throughout this state to all persons under jurisdiction of the commission.
"Heart-related or perivascular injury, illness or death" means myocardial infarction, coronary thrombosis or any other similar sudden, violent or acute process involving the heart or perivascular system, or any death resulting therefrom, and any weakness, disease or other condition of the heart or perivascular system, or any death resulting therefrom.
"Insurance carrier" means every insurance carrier duly authorized by the director of the department of insurance and financial institutions to write workers' compensation or occupational disease compensation insurance in this state.
"Interested party" means the employer, the employee, or if the employee is deceased, the employee's estate, the surviving spouse or dependents, the commission, the insurance carrier, the third-party administrator or an authorized representative.
"Mental injury, illness or condition" means any mental, emotional, psychotic or neurotic injury, illness or condition.
"Order" means and includes any rule, direction, requirement, standard, determination or decision other than an award or a directive by the commission or an administrative law judge relative to any entitlement to compensation benefits, or to the amount of compensation benefits, and any procedural ruling relative to the processing or adjudicating of a compensation matter.
"Personal injury by accident arising out of and in the course of employment" means any of the following:

(a) Personal injury by accident arising out of and in the course of employment.

(b) An injury caused by the wilful act of a third person directed against an employee because of the employee's employment, but does not include a disease unless resulting from the injury.

(c) An occupational disease that is due to causes and conditions characteristic of and peculiar to a particular trade, occupation, process or employment, and not the ordinary diseases to which the general public is exposed, and subject to section 23-901.01 or 23-901.09 or, for heart-related, perivascular or pulmonary cases, section 23-1105.

"Professional employer agreement" means a written contract between a client and a professional employer organization:

(a) In which the professional employer organization expressly agrees to co-employ all or a majority of the employees providing services for the client. In determining whether the professional employer organization employs all or a majority of the employees of a client, any person employed pursuant to the terms of the professional employer agreement after the initial placement of client employees on the payroll of the professional employer organization shall be included.

(b) That is intended to be ongoing rather than temporary in nature.

(c) In which employer responsibilities for worksite employees, including hiring, firing and disciplining, are expressly allocated between the professional employer organization and the client in the agreement.

"Professional employer organization" means any person engaged in the business of providing professional employer services. Professional employer organization does not include a temporary help firm or an employment agency.
"Professional employer services" means the service of entering into co-employment relationships under this chapter to which all or a majority of the employees providing services to a client or to a division or work unit of a client are covered employees.
"Serve" or "service" means either:

(a) Mailing to the last known address of the receiving party.

(b) Transmitting by electronic transmission in a manner reasonably calculated to achieve effective notice unless the receiving party opts out by providing written notice to the other party.

"Special order" means an order other than a general order.
"Weakness, disease or other condition of the heart or perivascular system" means arteriosclerotic heart disease, cerebral vascular disease, peripheral vascular disease, cardiovascular disease, angina pectoris, congestive heart trouble, coronary insufficiency, ischemia and all other similar weaknesses, diseases and conditions, and also previous episodes or instances of myocardial infarction, coronary thrombosis or any similar sudden, violent or acute process involving the heart or perivascular system.
"Workers' compensation" means workmen's compensation as used in article XVIII, section 8, Constitution of Arizona.

§ 23-901.01 Occupational disease; proximate causation; definition

A. 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:

There is a direct causal connection between the conditions under which the work is performed and the occupational disease.
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.
The disease can be fairly traced to the employment as the proximate cause.
The disease does not come from a hazard to which workers would have been equally exposed outside of the employment.
The disease is incidental to the character of the business and not independent of the relation of employer and employee.
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.

B. Notwithstanding subsection A of this section and section 23-1043.01, any disease, infirmity or impairment of a peace officer's health that is caused by brain, bladder, rectal or colon cancer, lymphoma, leukemia or adenocarcinoma 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.

C. The presumption provided in subsection B of this section is granted if all of the following apply:

The peace officer passed a physical examination before employment and the examination did not indicate evidence of cancer.
The peace officer was assigned to hazardous duty for at least five years.

D. Subsection B of this section applies to both of the following:

Peace officers currently in service.
Former peace officers who are sixty-five years of age or younger and who are diagnosed with a cancer that is listed in subsection B of this section not more than fifteen years after the peace officer's last date of employment as a peace officer.

E. Subsection B of this section does not apply to cancers of the respiratory tract if there is evidence that the peace officer's exposure to cigarettes or tobacco products outside of the scope of the peace officer's official duties is a substantial contributing cause in the development of the cancer.

F. The presumption provided in subsection B of this section may be rebutted by clear and convincing evidence that there is a specific cause of the cancer other than an occupational exposure to a carcinogen as defined by the international agency for research on cancer.

G. For the purposes of this section, "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.

§ 23-901.02 Liability of last employer; exception

Where compensation is payable for an occupational disease the only employer liable shall be the employer in whose employment the employee was last injuriously exposed to the hazards of such disease but in the case of silicosis or asbestosis the only employer liable shall be the employer in whose employment the employee was last exposed to harmful quantities of silicon dioxide (SiO2) dust during a period of two years or more.

§ 23-901.03 Appointment of committee of medical consultants for claims; qualifications, powers, duties and compensation

A. For each case submitted by a claimant for compensation the commission may, or if requested by an interested party shall, appoint a committee of expert consultants on occupational diseases, three licensed physicians in good professional standing, each of whom shall have had at the time of appointment, and immediately prior thereto, at least five years' practice in the diagnosis, care and treatment of the particular disease or diseases for which the claim is submitted and the interpretation of x-ray films thereof.

B. The Arizona state medical association may, at least annually, certify to the commission the names of all licensed physicians within the state who have the qualifications specified in this section, and if such certification is made, then the appointment shall be made from the list so certified by the medical association.

C. There also shall be appointed by the commission an industrial hygienist to serve as an advisor to the committee. Such industrial hygienist shall render reports to the committee when asked to do so by the committee or the commission.

D. After filing a claim for compensation under this chapter for an occupational disease, the commission may, or if requested by an interested party shall, direct an examination of and report upon the claimant by the committee of expert consultants, or one of them, including such x-ray and other pathological examinations and tests as in their opinion may be necessary for the purpose of determining diagnosis, disablement, causal relation to the employment and the nature and type of medical treatment, hospitalization and other care required. If the claim is not controverted as to any medical fact, the examination and report of one member of the committee shall be deemed the examination and report of the committee. If the claim is controverted as to any medical fact, the report shall be made by the full committee after a physical examination by at least one member thereof. The findings and opinions of a majority of the committee shall constitute the findings and opinion of the committee. The contents of the report of the committee when placed in the record shall constitute prima facie evidence of fact as to the matter contained therein. The committee or any member thereof making the report shall be subject to examination upon demand of any interested party. Copies of the report shall be sent to all parties interested.

E. The committee, or any member thereof, in order to assist in reaching a conclusion may require the attending physician or director of a hospital or sanitarium or other place in which treatment or care is being given, or has been given, to attend at a convenient time and place to consult with the committee or any member thereof, and describe the nature and type of care and treatment and furnish any other evidence which the committee, or any member thereof, desires.

F. When a claim for death benefits is filed, the committee may examine all available evidence pertaining to the claim and may make findings and report thereon. The report shall constitute prima facie evidence of fact as to the matters contained therein.

G. The commission upon the application of an interested party shall direct the committee or a member thereof, to make examinations of claimants, review the findings of special medical examiners, read and review the files of compensation cases when necessary and render to the commission an opinion as to the findings in such cases.

H. The commission shall fix the compensation of the members of the committees and advisors for services rendered which shall be paid from the administrative fund.

§ 23-901.04 Compensation precluded by misconduct, self-exposure or disobedience of orders of commission; definition

A. Notwithstanding any other provision of this chapter, no employee or dependent of an employee shall be entitled to receive compensation for disability from an occupational disease, as defined by section 23-901, paragraph 13, subdivision (c), when such disability was caused either wholly or partly by the wilful misconduct, wilful self-exposure or disobedience to such reasonable rules and regulations adopted by the employer and which have been and are kept posted in conspicuous places in and about the premises of the employer, or otherwise brought to the attention of the employee.

B. As used in this section the term "wilful self-exposure" includes:

Failure or omission on the part of an employee or applicant for employment truthfully to state in writing to the best of his knowledge in answer to an inquiry made by the employer, the place, duration and nature of previous employment.
Failure or omission on the part of an applicant for employment truthfully to state in writing to the best of his knowledge in answer to an inquiry made by the employer, whether or not he had previously been a person with a disability, laid off or compensated in damages or otherwise because of any physical disability.
Failure or omission on the part of an employee or applicant for employment truthfully to give in writing to the best of his knowledge in answer to an inquiry made by the employer, full information about the previous status of his health, previous medical and hospital attention and direct and continuous exposure to active pulmonary tuberculosis.

§ 23-901.05 Occupational disease aggravated by other disease or other disease aggravated by occupational disease; effect on compensation

Where an occupational disease, as defined by section 23-901, paragraph 13, subdivision (c), is aggravated by any other disease or infirmity not itself compensable, or where disability or death from any other cause not itself compensable is aggravated, prolonged, accelerated or in anywise contributed to by an occupational disease, the compensation payable under this chapter shall be reduced and limited to such proportion only of the compensation that would be payable if the occupational disease were the sole cause of the disability or death, as such occupational disease as a causative factor bears to all the causes of such disability or death.

§ 23-901.06 Volunteer workers

In addition to persons defined as employees under section 23-901, volunteer workers of a county, city, town, or other political subdivision of the state may be deemed to be employees and entitled to the benefits provided by this chapter upon the passage of a resolution or ordinance by the political subdivision defining the nature and type of volunteer work and workers to be entitled to such benefits. The basis for computing compensation benefits and premium payments shall be four hundred dollars per month.

§ 23-901.07 Persons with disabilities in vocational training; definition

A. Notwithstanding section 23-901, a qualified client of a nonprofit organization which provides vocational training to persons with disabilities is an employee of the nonprofit organization for the purposes of this chapter if the nonprofit organization elects to have the qualified client treated as an employee.

B. For the purposes of this section, "qualified client" means a person with a disability who is enrolled in a vocational training program with a nonprofit organization, who works as part of this program for the nonprofit organization or for another person under a contract with the nonprofit corporation and who receives compensation for the work from the nonprofit organization.

§ 23-901.08 Professional employer organizations

A. 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.

B. 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.

C. 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.

D. 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:

The name and business address of the client employer.
Whether all or a majority of the client employer's workforce is covered by the professional employer agreement.
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.

E. 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.

§ 23-901.09 Presumption; cancers; firefighters and fire investigators; applicability; definitions

A. Notwithstanding section 23-901.01, subsection A and section 23-1043.01:

Any disease, infirmity or impairment of a firefighter's or fire investigator's health that is caused by brain, bladder, rectal or colon cancer, lymphoma, leukemia or adenocarcinoma 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.
Any disease, infirmity or impairment of a firefighter's or fire investigator's health that is caused by buccal cavity, pharynx, esophagus, large intestine, lung, kidney, prostate, skin, stomach, ovarian, breast or testicular cancer or non-Hodgkin's lymphoma, multiple myeloma or malignant melanoma 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.

B. The presumptions provided in subsection A of this section are granted if all of the following apply:

The firefighter or fire investigator passed a physical examination before employment and the examination did not indicate evidence of cancer.
The firefighter or fire investigator was assigned to hazardous duty for at least five years.
For the presumption provided in subsection A, paragraph 2 of this section and for firefighters only, the firefighter received a physical examination that is reasonably aligned with the national fire protection association standard on comprehensive occupational medical program for fire departments (NFPA 1582).

C. Subsection A of this section applies to both of the following:

Firefighters or fire investigators currently in service.
Former firefighters or fire investigators who are sixty-five years of age or younger and who are diagnosed with a cancer that is listed in subsection A of this section not more than fifteen years after the firefighter's or fire investigator's last date of employment as a firefighter or fire investigator.

D. Subsection A of this section does not apply to cancers of the respiratory tract if there is evidence that the firefighter's or fire investigator's exposure to cigarettes or tobacco products outside of the scope of the firefighter's or fire investigator's official duties is a substantial contributing cause in the development of the cancer.

E. The presumption provided in subsection A of this section may be rebutted by clear and convincing evidence that there is a specific cause of the cancer other than an occupational exposure to a carcinogen as defined by the international agency for research on cancer.

F. For the purposes of this section:

"Firefighter" means a full-time firefighter who was regularly assigned to hazardous duty.
"Fire investigator" means a person who is employed full time by a municipality or fire district and who is trained in the process of and responsible for determining the origin, cause and development of a fire or explosion.

§ 23-902 Employers subject to chapter; exceptions

A. 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.

B. 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.

C. 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.

D. 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:

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.
Does not provide the independent contractor with any business registrations or licenses required to perform the specific services set forth in the contract.
Does not pay the independent contractor a salary or hourly rate instead of an amount fixed by contract.
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.
Does not provide tools to the independent contractor.
Does not dictate the time of performance.
Pays the independent contractor in the name appearing on the written agreement.
Will not combine business operations with the person performing the services rather than maintaining these operations separately.

E. 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 N is not liable for workers' compensation coverage or the payment of premiums for the sole proprietor.

F. The written agreement executed in compliance with subsection D of this section shall be null and void and create no presumption of an independent contractor relationship if the consent of either party is either:

Obtained through misrepresentation, false statements, fraud or intimidation.
Obtained through coercion or duress.

G. If any agreement is found to be null and void under subsection F of this section the insurance carrier is entitled to collect a premium.

§ 23-903 Application of chapter to persons engaged in interstate commerce; limitation

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.

§ 23-904 Arizona worker injuries in other state; injury to foreign worker in this state; evidence of insurance; judicial notice of other state's laws

A. 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.

B. 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.

C. 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:

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.
The extraterritorial provisions of this chapter are recognized in that other state.
Employers and workers who are covered in this state are likewise exempt from the application of the workers' compensation insurance act or similar laws of the other state.
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.

D. A certificate from a duly authorized officer of the commission, the department of insurance and financial institutions 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.

E. 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.

F. For the 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.

G. 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.

H. Claims made after September 13, 2013 are subject to this section regardless of the date of injury.

§ 23-905 Minor employees; limitation on payment of lump sum award; additional compensation

A. A minor working at an age and at an occupation legally permitted shall be deemed of the age of majority for the purposes of this chapter, and no other person shall have any claim or right to compensation for an injury to such minor employee, but an award of a lump sum of compensation to the minor employee shall be paid only to his legally appointed guardian.

B. An injured minor who is working at an age and at an occupation which is not legally permitted is entitled to additional compensation in an amount equal to fifty per cent of the compensation the injured minor would otherwise receive pursuant to this chapter. If an insurance carrier is required to pay additional compensation pursuant to this subsection, the insurance carrier shall be subrogated and entitled to recover any such amounts paid from the employer.

§ 23-906 Liability under chapter or under common law of employer securing compensation; carriers; service representatives; right of employee to make election; procedure for making election

A. Employers who comply with the provisions of section 23-961 or 23-962 as to securing compensation, and the employers' workers' compensation insurance carriers or administrative service representatives, shall not be liable for damages at common law or by statute, except as provided in this section, for injury or death of an employee wherever occurring, but it shall be optional with employees to accept compensation as provided by this chapter or to reject the provisions of this chapter and retain the right to sue the employer as provided by law.

B. The employee's election to reject the provisions of this chapter shall be made by a notice in writing, signed and dated by him and given to his employer, in duplicate in substantially the following form:

To (name of employer):

You are hereby notified that the undersigned elects to reject the terms, conditions and provisions of the law for the payment of compensation, as provided by the compulsory compensation law of the state of Arizona, and acts amendatory thereto.

C. The notice shall be filed with the employer prior to injuries sustained by the employee, and within five days the employer shall file with his insurance carrier the notice so served by the employee. All employees shall be conclusively presumed to have elected to take compensation in accordance with the terms, conditions and provisions of this chapter unless the notice in writing has been served by the employee upon his employer prior to injury.

D. Every employer engaged in the occupations designated in this chapter shall post and keep posted in a conspicuous place upon his premises, in English and Spanish and available for inspection by all workmen, a notice in substantially the following form:

All employees are hereby notified that in the event they do not specifically reject the provisions of the compulsory compensation law they are deemed by the laws of Arizona to have accepted the provisions of such law, and to have elected to accept compensation under the terms of such law, and that under the terms thereof employees have the right to reject the same by written notice thereof prior to any injury sustained, and that blanks and forms for such notice are available to all employees at the office of this company.

E. If an employer fails to post and keep posted the notice as required by this section, or fails to keep available at the place where the employees are hired the blank forms of notice to be signed by the employee, no employee who thereafter engages in employment for such employer, during the time that the notices are not posted or during the time that the blanks are not available, shall be deemed to have accepted the provisions of this chapter, and it shall be optional for such employee, if injured during the period when blanks were not available or the notice was not posted, to accept compensation under the provisions of this chapter or maintain other action against the employer.

§ 23-907 Liability of employer failing to secure compensation; defenses; presumption; right of employee to compensation under chapter; information exchange; civil penalties; settlement of disputed claim

A. 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.

B. 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 23-961, subsection A, paragraph 2. The compensation so determined shall be paid from the special fund to the person entitled as provided in this section.

C. 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.

D. 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.

E. 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.

F. 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.

G. 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.

H. 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:

At the time of the accident for which the claim was made the employer was subject to this chapter.
The employer was not insured pursuant to this chapter.

I. 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.

J. 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:

Does not exceed five thousand dollars for the second failure to secure the payment of compensation.
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.

K. 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:

The history of the employer's noncompliance with section 23-961 or 23-962.
The history of no insurance claims filed against the employer.
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.
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.

L. Civil penalties assessed pursuant to 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.

M. 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 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.

§ 23-908 Injury reports by employer and physician; schedule of fees; notification; public meeting; violation; classification

A. Every employer that is affected by this chapter, and every physician who attends an injured employee of that 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 employment and resulting in loss of life or injury requiring medical treatment. The report shall be furnished to the commission and the 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. For the purposes of this subsection, medical treatment does not include any onetime, short-term treatment by nonmedical staff that requires little technology or training to administer, including treatment of minor scratches, cuts, burns and splinters and other issues that ordinarily do not require medical care.

B. The commission shall fix a schedule of fees to be charged by physicians, physical therapists or occupational therapists or by providers of health care, dental care and supplies for injured employees and, subject to subsection C of this section, for prescription medicines required to treat an injured employee under this chapter. Contracts that are necessary to develop and publish a fee schedule related to dental care are exempt from the requirements of title 41, chapter 23. Notwithstanding subsection C of this section, the schedule of fees may include other reimbursement guidelines for medications dispensed in settings that are not accessible to the general public. The commission shall annually review the schedule of fees. For the purposes of this subsection, settings that are not accessible to the general public do not include mail order pharmacies delivering pharmaceutical services to workers' compensation claimants, if both of the following apply:

The pharmacy does not limit or restrict access to claimants with an affiliation to a medical provider or other entity.
Any medical provider or other entity referring a claimant to the pharmacy does not receive or accept any rebate, refund, commission, preference or other consideration as compensation for the referral.

C. 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 or interchangeable biological products, those provisions shall comply with section 32-1963.01, subsections A, B and D through L. 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. Before the commission takes final action on the schedule of fees pursuant to this subsection and subsection B of this section, except during a public health emergency, the commission shall:

Prominently post on its publicly accessible website the proposed schedule of fees at least thirty days before conducting a public hearing on that proposed schedule of fees.
Hold at least one meeting that all interested parties may jointly attend and interactively participate in after posting the proposed schedule of fees but before conducting the hearing on the proposed schedule of fees.
At least seven business days in advance, prominently post on its publicly accessible website the final proposed schedule of fees to be acted on for adoption.

D. 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 that 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.

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

F. If an accident occurs to an employee, the employer may designate in writing a physician chosen by the employer, who shall be allowed 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 the physician ascertains. If the accident is not reported by the employee or the employee's physician forthwith, as required, or if the injured employee or those in charge of the employee refuse to allow 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 that person's dependents from the loss or forfeiture of compensation if the commission believes after investigation that the circumstances attending the failure on the part of the employee or physician to report the accident and injury are such as to have excused them.

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

H. Immediately on 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.

I. The commission shall publish on the commission's publicly accessible website the schedule of fees as prescribed in subsections B and C of this section. The commission is not required to publish the schedule of fees in the Arizona administrative register.

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

K. Subsection B of this section does not prohibit:

A health care provider or pharmacy from entering into a separate contract or network that governs fees, in which case reimbursement shall be made according to the applicable contracted charge or negotiated rate.
An employer from directing medical, surgical or hospital care pursuant to section 23-1070.

§ 23-909 Motion picture exemption

A. The provisions of this chapter shall not apply to employers and their employees engaged in any phase of the motion picture business that meet all of the following requirements:

The motion picture company engaging in such work is temporarily within the state for a period not to exceed eight months.
Such motion picture company is otherwise insured by a recognized insurance company where the premiums and benefits under such other insurance are at least equal to those provided in the workers' compensation laws in the state in which such company is incorporated, or if not incorporated, has its principal offices.

B. All Arizona residents employed by any company fulfilling the exemption requirements of this section shall execute a form rejecting the provisions of the compulsory compensation law of the state of Arizona and accepting the insurance coverage provided in this section. The form shall be in writing, signed and dated by the employee and given to his employer in duplicate in substantially the following form: "TO (name of employer): You are hereby notified that the undersigned elects to reject the terms, conditions and provisions of the law for the payment of compensation, as provided by the compulsory compensation law of the state of Arizona, and acts amendatory thereto. The undersigned elects to come under the policy of insurance in __________________ insurance company secured by you and which carries similar premiums and benefits as provided under the compensation laws of the state of ________________________."

C. The provisions of section 23-906 shall apply to the insurance provided by the employer in this section, and shall be construed so that any reference to compulsory compensation of Arizona in such section is interpreted to include the insurance provided under this section. An election to come under the provisions of the insurance in this section shall not render the employer liable for damages of common law.

§ 23-910 Exemption for licensees

The provisions of this chapter do not apply to a person who performs the services of a licensee as defined in section 32-2101 under the following conditions:

Substantially all of the remunerations whether or not paid in cash for services performed by an individual as a real estate licensee are directly related to sales or other output including the performance of services rather than the number of hours worked.
The services performed by the licensee are performed pursuant to a written contract between the licensee and the person for whom the services are performed and such contract provides that the licensee will not be treated as an employee with respect to such services for federal tax purposes and for the purposes of this chapter.

Article 2 Administration and Enforcement

§ 23-921 Administration of chapter

A. 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:

Hold hearings at any place within the state or without the state by agreement of the parties.
Administer oaths.
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.
Generally provide for the taking of testimony and for the recording of proceedings held in accordance with this chapter.

B. 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.

C. 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.

D. 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.

§ 23-926 Inspection of employer records; noncompliance by employer; penalty

A. All books, records and payrolls of the employer, including nonconfidential employer records on file with other state or local governmental agencies, showing or reflecting in any way the wage expenditure of the employer shall always be open for inspection by the commission or its assistants to ascertain information necessary for its administration of the law.

B. An employer who refuses to submit his books, records and payrolls for inspection as provided by this section is liable for a penalty of five hundred dollars for each offense which shall be collected by a civil action in the name of the state, and the recovery shall be paid to the state general fund. The commission may recover reasonable attorney fees incurred pursuant to this section.

§ 23-927 Power to enter places of employment

A commissioner may enter any place of employment to collect facts and statistics, and may bring to the attention of any employer any law or order of the commission and the failure of such employer to comply therewith. No employer shall refuse to admit a commissioner to his place of employment.

§ 23-928 Investigation by agents

A. 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.

B. 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.

§ 23-929 Enforcement of chapter

Upon request of the commission the attorney general, or under his direction the county attorney of the proper county, shall institute and prosecute the necessary actions or proceedings for the enforcement of the provisions of this chapter, or for any penalty provided for in this chapter, and shall prosecute or defend all actions or proceedings brought by or against the commission, or the members thereof in their official capacity. The commission may compromise any action.

§ 23-930 Unfair claim processing practices; bad faith; civil penalties

A. The commission has exclusive jurisdiction as prescribed in this section over complaints involving alleged unfair claim processing practices or bad faith by an employer, self-insured employer, insurance carrier or claims processing representative relating to any aspect of this chapter. The commission shall investigate allegations of unfair claim processing or bad faith either on receiving a complaint or on its own motion.

B. If the commission finds that unfair claim processing or bad faith has occurred in the handling of a particular claim, it shall award the claimant, in addition to any benefits it finds are due and owing, a benefit penalty of twenty-five percent of the benefit amount ordered to be paid or $500, whichever is more.

C. If the commission finds that an employer, self-insured employer, insurance carrier or claim processing representative has a history or pattern of repeated unfair claim processing practices or bad faith, it may impose a civil penalty of up to $1,000 for each violation found. The civil penalty shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

D. Any party aggrieved by an order of the commission under this section may request a hearing pursuant to section 23-947. The hearing and decision shall be conducted pursuant to section 23-941.

E. The commission shall adopt by rule a definition of unfair claim processing practices and bad faith. In adopting a rule under this subsection, the commission shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the commission's own experience in processing workers' compensation claims and the workers' compensation and insurance laws of this state.

F. This section does not limit or interfere with the authority of the department of insurance and financial institutions as provided by law to regulate any insurance carriers, including the jurisdiction of the department of insurance and financial institutions over unfair claim settlement practices as provided in section 20-461.

§ 23-932 Violations; classification

A person who violates any provision of this chapter, commits any act therein prohibited, knowingly fails or refuses to perform any duty thereby imposed within the time prescribed by law or by the commission, or knowingly fails or refuses to obey an order of the commission or a judgment of a court made and entered under the provisions of this chapter, for which no penalty or punishment is otherwise specifically provided, is guilty of a class 6 felony.

§ 23-933 Priority of judgment against assets of employer

Judgments obtained in any action prosecuted by the commission or by the state under the authority of this chapter shall have the same priority against the assets of the employer as claims for taxes.

§ 23-934 Fraud; investigations; rules

A. The commission shall establish a fraud unit for the purpose of investigating fraudulent activities, statements or representations made in connection with workers' compensation claims. The fraud unit may investigate allegations of fraud either on receiving a complaint or on the fraud unit's own motion. Any allegation involving unfair claim processing practices or bad faith by an employer, self-insured employer, insurance carrier or claims processing representative shall be addressed pursuant to section 23-930.

B. The commission shall adopt rules to establish a process for receiving fraud complaints and conducting fraud investigations pursuant to this section. The rules shall establish:

A process by which the fraud unit verifies claimant annual earnings reported pursuant to section 23-1047 with the department of economic security unemployment insurance information for the purpose of investigating workers' compensation fraud.
A process of timeliness for receiving and processing fraud complaints.
Criteria for determining which allegations of fraud warrant investigation.
Duties and authorities of fraud investigators, including issuing and serving subpoenas for witnesses and documentary evidence, taking depositions, administering oaths and examining witnesses under oath relevant to the fraud investigation.

C. If, on investigation, the fraud unit is satisfied that fraudulent activities, statements or representations were made in connection with a workers' compensation benefits or payments claim for the purpose of obtaining compensation benefits or payments, the fraud unit may report violations of law to the claimant or claimant's representative, to the reporting employer, self-insured employer or insurance carrier, to the appropriate licensing agency as defined in section 20-466.04, and to the appropriate county attorney or the attorney general for prosecution.

D. This section does not limit any of the following:

The authority of the commission, the department of insurance and financial institutions or any other entity to pursue any remedy pursuant to section 23-970 or 23-1028.
The obligation of an insurer to report a fraud claim pursuant to section 20-466, subsection G.

Article 3 Orders and Hearings

§ 23-941 Hearing rights and procedure

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

B. A request for a hearing shall be made in writing, be signed by or on behalf of the interested party and include the interested party's address, state that a hearing is desired and be filed with the commission.

C. 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 a hearing if it appears to the presiding administrative law judge's satisfaction that the disputed issue or issues have been resolved by the parties. Any interested party who objects to such a dismissal may request a review pursuant to section 23-943.

D. At least twenty days' prior notice of the time and place of the hearing shall be served on all parties in interest. 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 is required. Hearings shall be held in the county where the workman resided at the time of the injury or another place selected by the administrative law judge.

E. 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 that time if a transcription is not requested.

F. Except as otherwise provided in this section and rules of 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.

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

H. Any interested party or the interested party's authorized agent shall be entitled to inspect any claims file of the commission, if such authorization is filed in writing with the commission.

I. Any interested party is entitled to one change of administrative law judge as a matter of right. To exercise the right to a change of administrative law judge, the interested party shall file a notice of change of administrative law judge. The notice of change of administrative law judge shall:

Be signed by the interested party or the interested party's authorized agent.
State the name of the administrative law judge to be changed.
Certify that the interested party or the interested party's authorized agent has timely filed the notice of change of administrative law judge. A notice of change of administrative law judge as a matter of right is timely if filed not more than thirty days after the date of the notice of hearing or not more than thirty days after a new administrative law judge is assigned to the claim if another interested party or the interested party's authorized agent has filed a notice of change of administrative law judge as a matter of right.
Certify that the interested party or the interested party's authorized agent has not previously been granted a change of administrative law judge as a matter of right for the claim.

J. Any interested party to a hearing before the commission or the interested party's authorized agent may file an affidavit for change of administrative law judge for cause against a presiding administrative law judge that sets forth any of the grounds as provided in subsection K of this section. The chief administrative law judge shall immediately transfer the matter to another administrative law judge. An affidavit for change of administrative law judge for cause shall be filed within the time frames provided in subsection I of this section.

K. Grounds that may be alleged as provided in subsection J of this section for change of administrative law judge for cause are:

That the administrative law judge has been engaged as counsel in the hearing before appointment as administrative law judge.
That the administrative law judge is otherwise interested in the hearing.
That the administrative law judge is of kin or otherwise related to a party to the hearing.
That the administrative law judge is a material witness in the hearing.
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 the party cannot obtain a fair and impartial hearing.

L. For the purposes of subsections I and J of this section, the employer and the employer's insurance carrier are considered a single party unless the employer's and the employer's insurance company's interests are in conflict.

M. After final disposition of the proceedings in which they are used, exhibits marked for identification or introduced as evidence at hearings or proceedings that 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:

By written notice, the attorneys of record, or if none, the parties, shall be notified that the counsel or the party introducing the exhibit may claim it at the commission within sixty days.
Sixty days after notification, any exhibit remaining in the custody of the commission shall be disposed of as state surplus property pursuant to the direction of the department of administration. A written description of the exhibit shall be included in the record to preserve the exhibit's identity.

§ 23-941.01 Settlement of claims; full and final; exception; definitions

A. The interested parties to a claim may:

Settle and release all or any part of an accepted claim for compensation, benefits, penalties or interest.
If the period of temporary disability is terminated by a final notice of claim status, award of the commission or stipulation of the interested parties, negotiate a full and final settlement of an accepted claim.

B. Any full and final settlement shall:

Be in writing.
Be signed by the carrier, special fund or self-insured employer or an authorized representative of the carrier, special fund or self-insured employer and the employee or the employee's authorized representative.
Acknowledge that the employee had the opportunity to seek legal advice and be represented by counsel.
Include a description of the employee's medical conditions that have been identified and contemplated at the time of the settlement agreement.
Have attached the information provided by the carrier, special fund or self-insured employer pursuant to subsection C, paragraphs 2 and 3 of this section.

C. A full and final settlement shall include the following signed attestations:

The employee understands the rights settled and released by the agreement.
The employee has been provided information from the carrier, special fund or self-insured employer that outlines any reasonable anticipated future medical, surgical and hospital benefits relating to the claim, the projected cost of those benefits, an explanation of how those projected costs were determined and a disclosure of the amount of the settlement that represents the settlement of future medical, surgical and hospital benefits.
The employee has been provided information from the carrier, special fund or self-insured employer that discloses the total amount of future indemnity benefits, the employee's rated age, if applicable, the employee's life expectancy, the source of the employee's life expectancy, the present value of future indemnity benefits, the discount rate used to calculate present value and the amount of the settlement that represents the settlement of future indemnity benefits.
The employee understands that monies received for future medical treatment associated with the industrial injury should be set aside to ensure that the costs of the treatment will be paid.
The parties have considered and taken reasonable steps to protect any interests of medicare, medicaid, the Indian health service and the United States department of veterans affairs, including establishing a medicare savings account if necessary.
The parties have conducted a search for and taken reasonable steps to satisfy any identified medical liens and unpaid medical charges.
Coercion, duress, fraud, misrepresentation or undisclosed additional agreements have not been used to achieve the full and final settlement.

D. If an administrative law judge of the commission determines that the requirements of subsection B of this section are satisfied, the attestations of subsection C of this section are present and the employee is represented by counsel, the administrative law judge shall approve the settlement.

E. If the employee is not represented by counsel, the employee shall appear before an administrative law judge of the commission and the administrative law judge shall make specific factual findings regarding whether the requirements of subsections B and C of this section are satisfied. The administrative law judge shall conduct a hearing and perform a detailed inquiry into the attestations provided by the unrepresented employee pursuant to subsection C of this section. The inquiry shall include whether the unrepresented employee understands the specific rights being settled and released, the information, computation and methodology provided by the carrier, special fund or self-insured employer, and the employee's responsibility to protect the interests of other payors and ensure the payment of future treatment costs.

F. The commission may not approve a full and final settlement if the requirements of subsections B and C of this section are not met.

G. A full and final settlement payment shall be made to the employee within fifteen days after the award approving the settlement becomes final.

H. The carrier, special fund or self-insured employer shall notify the attending physician of the approval of a full and final settlement if the full and final settlement terminates the employee's entitlement to medical benefits. Unless medical benefits rendered before the approval date of the full and final settlement are subject to a dispute or payment for the treatment was included in the full and final settlement agreement, the carrier, special fund or self-insured employer remains responsible for payment for the treatment not covered by the full and final settlement agreement as provided by this chapter.

I. Notwithstanding subsection A of this section, a full and final settlement may not be negotiated to settle issues resulting in total and permanent disability pursuant to section 23-1045, subsections C and D.

J. A full and final settlement agreement may not include the settlement of claims unrelated to the claim for compensation, benefits, penalties and interest.

K. This section does not apply to the settlement of claims that have been denied.

L. For the purposes of this section:

"Full and final settlement" means a settlement in which the injured employee or, if the injured employee is deceased, the employee's estate, surviving spouse or dependent waives any future entitlement to benefits on the claim and any future right to change the claim pursuant to section 23-1044, subsection F or reopen the claim pursuant to section 23-1061, subsection H.
"Special fund" means the special fund established by section 23-1065.

§ 23-941.02 Vexatious litigants; designation; definitions

A. In a workers' compensation case before the commission, on the motion of a party, the chief administrative law judge or an administrative law judge designated by the chief administrative law judge may designate a pro se litigant a vexatious litigant. The pro se litigant shall respond within thirty days after the motion. The chief administrative law judge, or administrative law judge if designated by the chief administrative law judge, shall issue an order within thirty days after the pro se litigant's response is received or the time for response has elapsed. The vexatious litigant designation applies only to the claim at issue before the administrative law judge.

B. A pro se litigant who is designated a vexatious litigant may not file a new request for hearing, pleading, motion or other document without prior leave of the administrative law judge.

C. A pro se litigant is a vexatious litigant if the commission finds the pro se litigant engaged in vexatious conduct. A designation of vexatious litigant is suspended during the period in which the litigant is represented by legal counsel.

D. For the purposes of this section:

"Vexatious conduct" includes any of the following:

(a) Repeated filing of requests for hearing, pleadings, motions or other documents solely or primarily for the purpose of harassment.

(b) Unreasonably expanding or delaying commission proceedings.

(d) Engaging in abuse of discovery or conduct in discovery that has resulted in the imposition of sanctions against the pro se litigant.

(e) A pattern of making unreasonable, repetitive and excessive requests for information.

(f) Repeated filing of documents or requests for relief that have been the subject of previous rulings by the commission in the same claim.

"Without substantial justification" has the same meaning prescribed in section 12-349.

§ 23-941.03 Settlement of claims; supportive medical maintenance benefits; definition

A. Any final settlement agreement involving undisputed entitlement to supportive medical maintenance benefits is not valid and enforceable until the final settlement agreement is approved by the commission.

B. The commission may approve a final settlement agreement involving undisputed entitlement to supportive medical maintenance benefits if the requirements of this section are satisfied.

C. Subject to the following requirements, the interested parties to a claim may enter into a final settlement and release of a claim for undisputed entitlement to supportive medical maintenance benefits after the period of temporary disability is terminated by a final notice of claim status or award of the commission. The carrier, special fund or self-insured employer shall submit a summary of all reasonably anticipated future supportive medical maintenance benefits and the projected cost of the benefits for review by the employee. The summary shall also be included with the final settlement agreement filed with the commission. All medical conditions subject to the final settlement agreement must be described in the final settlement agreement. The final settlement provisions defined in this subsection shall apply only to future supportive medical maintenance benefits for the described condition.

D. The carrier, special fund or self-insured employer shall inform the attending physician of the approval of a final settlement agreement. Unless supportive medical maintenance benefits rendered before the date of the final settlement are subject to a dispute or payment for the treatment was included in the final settlement agreement, the carrier, special fund or self-insured employer shall remain responsible for payment for the treatment not covered by the final settlement agreement as provided by this chapter.

E. This section does not prohibit a settlement that does not constitute a final settlement.

F. For the purposes of this section, "final settlement" means a settlement in which the injured worker waives any future entitlement to supportive medical maintenance benefits for known conditions described in the agreement.

§ 23-942 Awards of administrative law judge; contents; disposition and effect

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

B. 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 the chief administrative law judge's appointee.

C. The award shall become a part of the commission file. A copy of the award shall be served on all parties in interest.

D. The award is final when entered unless within thirty days after the date on which a copy of the award is served 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.

§ 23-943 Decision on review

A. 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 after the date of filing in which to respond. Failure to respond will not be deemed an admission against interest.

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

C. If 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.

D. Notice of the review shall be served on the parties.

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

F. 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 on review shall be made within sixty days after the review has been requested, with preference being given to those cases not receiving compensation.

G. The decision on review shall become a part of the commission file and a copy thereof shall be served on the parties.

H. The decision on review shall be final unless within thirty days after the date of service 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.

§ 23-944 Effective date of orders; time for compliance; effect of orders

A. General orders of the commission shall take effect within thirty days after publication. Special orders shall take effect as therein directed.

B. The commission shall, upon application of any employer, grant such time as reasonably necessary for compliance with an order. A person may petition the commission for an extension of time to comply with an order, which the commission shall grant if it finds the extension necessary.

C. All orders of the commission in conformity with law shall be valid and in force and prima facie reasonable and lawful until found otherwise in an action brought for that purpose pursuant to the provisions of this chapter or until altered or revoked by the commission.

D. A substantial compliance with the requirements of this chapter shall be sufficient to give effect to the orders of the commission, and they shall not be declared inoperative, illegal or void for an omission of a technical nature.

§ 23-945 Petition for hearing on validity of order; procedure; substitution of order

A. Any employer or other person interested in or affected by an order of the commission may petition for a hearing on the reasonableness and lawfulness of such order by a verified petition filed with the commission. The petition shall set forth specifically and in detail the order upon which a hearing is desired, the reasons why the order is unreasonable or unlawful and the issue to be considered by the commission on the hearing. Objections other than those set forth in the petition are deemed finally waived.

B. Upon receipt of the petition, if the issue raised in the petition has theretofore been adequately considered, the commission shall confirm, without hearing, its previous determination. If a hearing is necessary to determine the issue raised, the commission shall order a hearing thereon at such time as it prescribes. Notice of the time and place of hearing shall be given the petitioner and such other persons as the commission finds directly interested in the decision.

C. Upon the hearing, if it is found that the order complained of is unlawful or unreasonable, the commission shall substitute therefor a reasonable and lawful order, and may grant further time reasonably necessary for compliance with its order.

§ 23-946 Action asserting invalidity of order; limitation; venue and procedure

A. Any person in interest dissatisfied with an order of the commission may within thirty days commence an action in the superior court of the county where the property, plant or place of employment affected by the order is located against the commission as defendant to set aside, vacate or amend the order, on the ground that the order is unreasonable or unlawful, and the superior court shall have exclusive jurisdiction thereof. The commission shall be served with summons as in civil actions.

B. The answer of the commission shall be filed within twenty days after service of summons upon it. The commission shall file with the answer a certified transcript of its record in the matter, whereupon the action shall be at issue and shall be advanced for trial by the court upon application of either party to the earliest possible date.

C. No action or proceeding to set aside, amend or enjoin enforcement of an order of the commission shall be brought unless the petitioner has applied to the commission for a hearing thereon as provided by section 23-945 and in such petition has raised every issue in the action.

§ 23-946.01 Stay of court proceedings pending determination of issues by commission

A. If upon the trial provided for in section 23-946, it appears that all issues arising in the action have not theretofore been presented to the commission in the petition for a hearing as to the reasonableness and lawfulness of the order, or that the commission has not had ample opportunity to hear and determine the issues raised in the action, or has not in fact heard and determined the issues raised, the court shall before rendering judgment, unless the parties stipulate to the contrary, transmit to the commission a full statement of such issues not adequately considered, shall stay further proceedings in the action for fifteen days from the date of the transmission and may thereafter grant such further stay as is necessary.

B. Upon receipt of the statement from the court as provided in subsection A, the commission shall consider the issues not theretofore considered, and may alter, modify, amend or rescind its order complained of, and shall, within ten days from the receipt of the statement, report its order thereon to the court. The court shall thereupon order the pleading to be amended to raise the issues resulting from the alteration, modification, amendment or rescission of the commission's order, and thereafter proceed as in other civil actions.

§ 23-947 Time within which hearing must be requested; definition

A. 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 23-1061 and the request for a hearing is filed within ninety days after the notice sent under 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.

B. 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:

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.
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.
The person to whom the notice is sent shows by clear and convincing evidence that the notice was not received.

C. The late filing shall not be excused under subsection B of this section 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.

§ 23-948 Jurisdiction of actions concerning orders or petitions for writ of mandamus; right of appeal

No court of this state, except the superior court, the court of appeals and the supreme court on appeal shall have jurisdiction to review, vacate, set aside, reverse, revise, correct, amend or annul any order of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain or interfere with the commission in the performance of its duties, but a writ of mandamus may issue from the supreme court to the commission in proper cases, and an appeal may be taken from the superior court to the supreme court in all cases.

§ 23-949 Effect of action concerning order; procedure to stay order

The pendency of an action to set aside, vacate or amend an order of the commission shall not stay or suspend the order of the commission. During pendency of the action, the superior court may stay or suspend, in whole or in part, operation of the commission's order only upon three days notice and after hearing, and the order of the court shall not become effective until a bond has been executed and filed in the action, approved by the court or the clerk thereof, payable to the state, in an amount sufficient to insure the prompt payment by the petitioning party of all damages caused by delay in the enforcement of the order of the commission.

§ 23-950 Priority of actions

Actions and proceedings under this chapter and actions or proceedings to which the commission, the department of insurance and financial institutions or the state is a party in which any question arises under this chapter or concerning an award of the commission, or an order of the commission or the department of insurance and financial institutions shall be advanced for trial or hearing over civil actions, except election contests and actions affecting the corporation commission.

§ 23-951 Writ of certiorari to review lawfulness of award, order or decision upon review; procedure

A. 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.

B. 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.

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

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

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

§ 23-952 Continuation of order or award pending hearing or appeal

When an order or award is issued by the industrial commission awarding permanent compensation benefits, compensation shall be paid as provided in such order or award and shall not be interrupted when there is a petition for hearing or appeal to a higher court. Any overpayment of permanent compensation resulting therefrom shall be credited against any future liability involving permanent compensation benefits in the same claim.

§ 23-953 Notice of award; effect of petition for hearing or appeal; overpayment

When a notice is issued by an insurance carrier or a self-insured employer of an award for permanent compensation benefits pursuant to section 23-1044, subsection B, these benefits shall be paid as provided in the notice of award and shall not be interrupted if there is a petition for a hearing or an appeal to a higher court. Any resulting overpayment of these benefits shall be credited against any future liability for compensation benefits that may arise out of the same claim.

§ 23-954 Payment of interest on awards

Interest on the payment of benefits shall be paid at a rate of interest at the lesser of ten percent per annum or a rate per annum that is equal to one percent plus the prime rate as published by the board of governors of the federal reserve system in statistical release H.15 or any publication that may supersede it on the date benefits are paid. Interest shall be paid only in the following instances:

On an award entered by the commission or by notice of claim status awarding permanent partial disability benefits pursuant to section 23-1044, subsection B or C or permanent total disability benefits pursuant to section 23-1045, subsection B or C, if benefits are not paid within ten days after the date the award or notice becomes final.
On a claim for dependent benefits, if the claim is denied and subsequently accepted or found compensable by award of the commission, from the date the claim for benefits was filed.

Article 4 Providing for Compensation

§ 23-961 Methods of securing compensation by employers; deficit premium; civil penalty

A. Employers shall secure workers' compensation to their employees in one of the following ways:

By insuring and keeping insured the payment of such compensation with an insurance carrier authorized by the director of the department of insurance and financial institutions to write workers' compensation insurance in this state.
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 $100,000 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.

B. 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.

C. Insurance carriers that transact the business of workers' compensation insurance in this state are subject to the rules of the director of the department of insurance and financial institutions.

D. On application of an insurance carrier, the director of the department of insurance and financial institutions may order the release to the insurance carrier of all or part of the cash or securities that the insurance carrier deposited before July 1, 2015 with the state treasurer pursuant to this section. In determining whether to order the release of all or part of the deposit, the director of the department of insurance and financial institutions shall consider all of the following:

The financial condition of the insurance carrier.
The insurance carrier's liabilities for workers' compensation loss and loss expenses in this state.
Whether the insurance carrier is subject to a finding of hazardous condition, an order of supervision, a delinquency proceeding or any other regulatory action in this state, the insurance carrier's state of domicile or any other state in which the insurance carrier transacted the business of insurance.
Any other factors the director of the department of insurance and financial institutions determines are relevant to the application for release of the deposit.

E. 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 on by the insurance carrier and the employer.

F. 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.

G. 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 percent 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 percent 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 $250 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 percent to be fixed annually by the industrial commission of Arizona. The rate shall be no more than is necessary to cover the actual expenses of the industrial commission of Arizona in carrying out its powers and duties under this title. Any quarterly payments of tax pursuant to subsection J of this section shall be deducted from the tax payable pursuant to this subsection.

H. An insurance carrier may reduce the amount of premiums paid by an employer by up to five percent if all of the following apply:

The insured employer complies with the drug testing policy requirements prescribed in section 23-493.04.
The insured employer conducts drug testing of prospective employees.
The insured employer conducts drug testing of an employee after the employee has been injured.
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.

I. An insurance carrier may reduce the amount of premiums paid by an employer by up to five percent if both of the following apply:

The insured employer is part of a membership organization whose membership is all of the following:

(a) Comprised of persons that are in a similar or related line of commerce.

(b) Organized to promote and improve business conditions in that line of commerce.

(c) Not engaged in a regular business of a kind that is ordinarily carried on for profit and whose net earnings do not inure to the benefit of any member.

The insurance carrier has a program agreement with the membership organization of which the insured employer is a member.

J. Any insurer that, pursuant to this section, paid or is required to pay a tax of $2,000 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 G of this section for premiums determined pursuant to subsection G of this section or an amount equal to twenty-five percent of the tax paid or required to be paid pursuant to subsection G 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.

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

L. An insurer who fails to pay the tax prescribed by subsection G or J of this section or the amount prescribed by section 23-1065, subsection A is subject to a civil penalty equal to the greater of $25 or five percent of the tax or amount due plus interest at the rate of one percent per month from the date the tax or amount was due.

M. 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:

Prepared written audit or field investigation findings establishing that all applicable factors for determining employment status under section 23-902 have been met.
Provided a copy of such findings to the employer in advance of assessing a premium.

N. 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

§ 23-961.01 Self-insurance pools

A. Two or more employers, each of whom are engaged in similar industries, may enter into contracts to establish a workers' compensation pool to provide for the payment and administration of workers' compensation claims pursuant to this chapter. The members of each workers' compensation pool shall elect a board of trustees to manage the workers' compensation pool established pursuant to this section. Each member employer shall have been in business for at least five consecutive years before entering into a contract to establish a workers' compensation pool. The total amount of gross workers' compensation insurance premiums paid by the members of the pool in the year preceding the execution of the contract must equal at least seven hundred fifty thousand dollars. The group of employers that makes up a workers' compensation pool shall have been formed for a specific purpose, other than to engage in self-insurance, before the formation of a workers' compensation pool. Employers may establish workers' compensation pools pursuant to this section by one of the following means:

On a cooperative or contract basis.
Through the joint formation of a nonprofit corporation.
By the execution of a trust agreement to carry out the provisions of this chapter directly by the employers or by contracting with a third party.

B. A workers' compensation pool established pursuant to this section is subject to approval as a self-insurer by the industrial commission pursuant to section 23-961, subsection A, paragraph 2. The commission shall adopt rules as necessary to carry out the purposes of this section.

C. Workers' compensation pools established pursuant to this section are exempt from taxation under title 43.

D. Each agreement or contract shall provide that the members of a workers' compensation pool are jointly and severally liable for the liabilities of the pool. If a member of a pool discontinues its membership in the pool, that party shall be liable only for liabilities accruing prior to the discontinuation of its membership in the pool.

E. As to self-insurance pools established under this section, no pool, employer within a pool, or agent of any pool or employer within a pool may require an employee to be treated by or directed to any specific medical provider subsequent to the employee's initial visit to treat an industrial injury or illness, except as may be required as part of an independent medical examination for an employee making a workers' compensation claim.

F. The industrial commission shall adopt rules necessary for safeguarding the solvency of pools and guaranteeing that injured workers receive benefits as required under this chapter. These rules shall include, at a minimum, matters pertaining to classification and rating, loss reserves, investments, financial security including minimum and combined premiums, combined net worth and other indicia necessary for protection from insolvency, specific and aggregate excess insurance, group homogeneity and assessments necessary for participation in and administration of the workers' compensation system.

§ 23-962 Insurance by governmental units; payment of premiums

A. Any county, city, town, municipal corporation or school district shall insure in any manner prescribed by the terms of section 23-961. Effective July 1, 1983, this state through the department of administration shall self-insure its liability, if any, under chapter 5 of this title and this chapter without the necessity of complying with section 23-961, subsection A, paragraph 2. On or before June 30, 1983, the state compensation fund and the department of administration shall enter into an interagency contract pursuant to title 11, chapter 7, article 3 for the return to this state of the reserves established and held by the state compensation fund for all claims against this state that were incurred on or before that date. These reserves shall be credited to the state general fund. The department of administration shall direct the continuing payment and processing of all claims against this state for injuries to state employees that were incurred both before and after July 1, 1983. All claims payments shall be made or reimbursed by the department on behalf of this state and for expenses incurred in connection with the payment and processing of such claims. The department of administration may procure excess loss coverage from an insurance carrier for individual or aggregate claims, or both, in such amounts and at such primary retention levels as the department of administration deems in the best interest of the state.

B. The clerk of the board of supervisors of each county, the clerk of each political subdivision and the superintendent of each school district that insures its workers' compensation liability with an insurance carrier shall furnish quarterly to the insurance carrier a true payroll showing the total amount paid to employees subject to the provisions of this chapter during each month of the quarter, segregated in accordance with the requirements of the insurance carrier.

C. Each clerk and school superintendent shall thereupon prepare and submit to his respective governing body for approval a claim for the amount of premiums due the insurance carrier. Such premiums shall be at once paid to the insurance carrier by the proper officer. The department of administration shall draw a warrant for such premiums as are due until June 30, 1983 from the state in favor of the treasurer for the benefit of the insurance carrier and the treasurer shall at once pay the warrant from the general fund and the appropriation made therefor in the general appropriation bill for the insurance carrier.

§ 23-963 Provisions of compensation insurance policy

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:

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.
That jurisdiction of the employer shall be jurisdiction of the insurance carrier.
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.
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.

§ 23-963.01 Policies with deductible coverage; medical-only loss

A. Notwithstanding 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 applying 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.

B. 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.

C. 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 paying 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.

D. 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.

E. Notwithstanding any other law, for any claim involving medical-only loss, any experience rating adjustment as determined by a national nonprofit insurance rating organization shall be applied to reduce the impact of the loss in the employer's experience modification calculation. For the purposes of this subsection, "medical-only loss" means loss that has no indemnity value reflecting lost wages.

§ 23-964 Posting notice of compliance with compensation law

A. Each employer providing insurance or electing to pay compensation directly as provided in this chapter, shall post in conspicuous places about his place of business typewritten or printed notices stating that he has complied with the provisions of this chapter and all rules and regulations of the commission made in pursuance thereof and, if such is the fact, has been authorized by the commission directly to compensate his employees or their dependents.

B. The notices when posted shall constitute sufficient notice to the employees of the fact that the employer has complied with the law for securing compensation to his employees and their dependents.

§ 23-966 Failure of employer to pay claim or comply with commission order; reimbursement of funds

A. If a self-insured employer or other employer authorized by the commission to process or pay claims directly pursuant to this chapter does not fully comply with the provisions of the workers' compensation law relating to the processing or payment of compensation, medical benefits or the final orders of the commission, the workers' compensation claims shall be assigned by the commission to the special fund established by section 23-1065. The special fund shall ensure that these claims are processed and that compensation, benefits or amounts due are paid. The special fund may use third-party processors or other legal, medical, claims or labor market personnel to assist in the processing and payment of claims assigned under this section.

B. In addition to expenditures authorized under subsection A of this section, the special fund may use monies for any expense or service that is necessary to ensure that claims assigned under subsection A of this section are processed and paid, necessary to assist in the determination of liability of a claim that is assigned under this section or necessary to assist in the collection of monies owed to the special fund under this section, including collection against the cash, securities, bond and other assets of the employer. These expenses may include travel, discovery procedures and employing any third-party processor, expert, consultant or professional, including an attorney, auditor, examiner or actuary. The special fund shall reimburse the administrative fund for all expenses incurred by the administrative fund related to the processing and payment of claims assigned under this section.

C. The special fund is the successor in interest to all excess insurance policies in effect at the time of an assignment under subsection A of this section that insure any part of the self-insured employer's financial obligations under the workers' compensation laws. The special fund's recovery rights under this subsection are subject to applicable coverage terms and policy limits in the excess policy. The excess insurer shall make payment directly to the special fund for all covered amounts spent under this section, including administrative costs, necessary expenses and attorney fees to the extent covered by the excess policy. Unless recovered from an excess insurer, the special fund shall have a claim against the employer for all monies that are spent or anticipated to be spent under this section, including administrative costs, necessary expenses and attorney fees. Any claim by the special fund shall be made on the cash, securities or bond filed under section 23-961 or applicable rules or on any other asset of the employer.

§ 23-967 Deduction of premium from employee wage or salary; violation; classification

Any employer who intentionally deducts any portion of the premium, except for accident benefits, which he is by law required to pay from the wage or salary of an employee is guilty of a class 6 felony.

§ 23-968 Notification to employer by carrier

At the request of an employer the insurance carrier shall notify such employer of monies paid relating to a workman of the employer during the preceding month.

§ 23-969 Satisfaction of lien; release

When any lien established by this article has been satisfied, the commission shall issue a release to the person against whom the lien is claimed. Such release shall be a document in a form as specified in section 11-480.

§ 23-970 Misrepresentation of payroll, job description, job function or loss history affecting premium payment; violation; classification; penalty; statute of limitations; civil action

A. It is unlawful for an employer to wilfully misrepresent to an insurance carrier the amount of payroll, the job description or job function of an employee, or the employer's loss history, on which the premium for workers' compensation insurance to be paid to the insurance carrier is based.

B. An employer that violates subsection A is guilty of a class 6 felony.

C. In addition to the punishment that may be imposed pursuant to subsection B, an employer that violates subsection A is liable for a penalty of up to three times the amount of the difference in premium paid and the amount the employer should have paid. The penalty shall be collected in a civil action by the insurance carrier, in addition to any other damages that are incurred by the insurance carrier due to the misrepresentation, including costs and attorney fees. The insurance carrier shall initiate the civil action within four years after the date the insurance carrier knew or with the exercise of reasonable diligence should have known of the misrepresentation. The insurance carrier may initiate the civil action regardless of whether a criminal action is brought against the employer.

§ 23-971 Firefighter and fire investigator cancer claim information; data sharing; definitions

A. All insurance carriers, self-insuring employers and workers' compensation pools securing workers' compensation for firefighters and fire investigators pursuant to this chapter shall compile and report to the commission claim and claim reserve information for all cancer-related claims filed by or on behalf of firefighters and fire investigators.

B. The information required by subsection A of this section shall include all of the following:

The type of cancer.
The total claim costs.
The claim reserved by the insurance carrier, self-insuring employer or workers' compensation pool.
Any other information requested by the commission.

C. Notwithstanding subsections A and B of this section, the commission may not require or obtain any personally identifiable information for any claimant.

D. The commission shall compile and make available to insurance carriers, rating organizations, employers, public safety workers and workers' compensation pools the claim-related information collected pursuant to this section to assist with the setting of workers' compensation insurance rates and to ensure the adequate reserving for cancer claims for the class codes associated with firefighters and fire investigators.

E. For the purposes of this section, "firefighter" and "fire investigator" have the same meanings prescribed in section 23-901.09.

Article 6 Insurance Under Compensation Fund

§ 23-1001 Delivery of insurance contract or policy to employer

Every employer insuring with an insurance carrier shall receive from such insurance carrier a contract or policy of insurance.

Article 7 Right to Compensation

§ 23-1021 Right of employee to compensation

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.

§ 23-1021.01 Peace officers; fire fighters; employment status

A. A peace officer or fire fighter as defined in section 1-215 who is injured or killed while traveling directly to or from work as a peace officer shall be considered in the course and scope of employment solely for the purposes of eligibility for workers' compensation benefits, provided that the peace officer or fire fighter is not engaged in criminal activity.

B. Nothing in this section shall create any liability on the part of the peace officer's or fire fighter's employer for any civil damages occurring through the peace officer's or fire fighter's negligent or intentional conduct while traveling to or from work as a peace officer.

§ 23-1022 Compensation as exclusive remedy for employees; definition; exceptions; public agency employees

A. 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 wilful misconduct, or in the case of a co-employee by the co-employee's wilful 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 wilful 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 wilful misconduct.

B. "Wilful misconduct" as used in this section means an act done knowingly and purposely with the direct object of injuring another.

C. 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.

D. 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.

E. 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."

§ 23-1023 Liability of third person to injured employee; election of remedies

A. If an employee who is entitled to compensation under this chapter is injured or killed or further aggravates a previously accepted industrial injury by the negligence or wrong of another person not in the same employ, the injured employee, or in event of death the injured employee's dependents, may pursue the injured person's remedy against the other person.

B. If the employee who is entitled to compensation under this chapter or the employee's dependents do not pursue a remedy pursuant to this section against the other person by instituting an action within one year after the cause of action accrues, or if after instituting the action, the employee or the employee's dependents fail to fully prosecute the claim and the action is dismissed, the claim against the other person is deemed assigned to the insurance carrier or self-insured employer and all of the following apply:

The insurance carrier or self-insured employer may institute an action against the other person.
Any dismissal that is entered for lack of prosecution of an action instituted by the employee or the employee's dependents shall not prejudice the right of the insurance carrier or self-insured employer to recover the amount of benefits paid.
If the statute of limitations of the claim is one year after the cause of action accrues, the insurance carrier or self-insured employer may file the action prior to one year after the cause of action accrues.
The claim may be prosecuted or compromised by the insurance carrier or the person liable for the self-insured employer or may be reassigned in its entirety to the employee or the employee's dependents. After the reassignment, the employee who is entitled to compensation, or the employee's dependents, shall have the same rights to pursue the claim as if it had been filed within the first year.

C. The employee or the employee's dependents shall provide the insurance carrier or the self-insured employer written notice of the intention to bring an action against a third party and shall provide to the insurance carrier or self-insured employer timely and periodic notice of all pleadings and rulings concerning the status of the pending action. In any action instituted by the employee or the employee's dependents, the insurance carrier or the self-insured employer shall have the right to intervene at any time to protect the insurance carrier's or the self-insured employer's interests.

D. 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.

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

§ 23-1024 Choice of remedy as waiver of alternate remedy

A. An employee, or his legal representative in event death results, who accepts compensation waives the right to exercise any option to institute proceedings in court against his employer or any co-employee acting within the scope of his employment, or against the employer's workers' compensation insurance carrier or administrative service representative.

B. 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.

§ 23-1025 Agreement by employee to waive compensation or to pay premium void; unlawful collection of premium; classification

A. An agreement by an employee to waive the employee's rights to compensation, except as provided in this chapter, or an agreement by an employee to pay any portion of the premium paid by the employee's employer is void.

B. It is unlawful for an employer to intentionally collect or receive any premiums from an employee for workers' compensation insurance, except as provided in this chapter. A violation of this subsection is a class 6 felony.

§ 23-1026 Periodic medical examination of employee; effect of refusal or obstruction of examination or treatment

A. An employee who may be entitled to compensation under this chapter shall submit the employee for medical examination from time to time at a place reasonably convenient for the employee, if and when requested by the commission, the employee's employer or the insurance carrier. A place is reasonably convenient even if it is not where the employee resides if it is the place where the employee was injured and the employer or the insurance carrier pays in advance the employee's reasonable travel expenses, including the cost of transportation, food, lodging and loss of pay, if applicable.

B. The request for the medical examination shall fix a time and place having regard to the convenience of the employee, the employee's physical condition and the employee's ability to attend. A medical examination may be conducted via telehealth as defined in section 36-3601 with the consent of both the employee and the requesting party. The employee may have a physician present at the examination if procured and paid for by the employee.

C. If the employee refuses to submit to the medical examination or obstructs the examination, the employee's right to compensation shall be suspended until the examination has been made, and no compensation shall be payable during or for such period.

D. A physician who makes or is present at the medical examination provided by this section may be required to testify as to the result of the examination. The physician is not subject to a complaint for unprofessional conduct to the physician's licensing board if the complaint is based on a disagreement with the findings and opinions expressed by the physician as a result of the examination.

E. On appropriate application and hearing, the commission may reduce or suspend the compensation of an employee who persists in unsanitary or injurious practices tending to imperil or retard the employee's recovery or who refuses to submit to medical or surgical treatment reasonably necessary to promote the employee's recovery.

F. An employee shall be excused from attending a scheduled medical examination if the employee requests a protective order and the administrative law judge finds that the scheduled examination is unnecessary, would be cumulative or could reasonably be timely scheduled with an appropriate physician where the employee resides. If a protective order is requested, the burden is on the employer or insurance carrier to establish that a medical examination should be scheduled at a place other than where the employee resides. If an employee has left this state and the employer or insurance carrier pays in advance the employee's reasonable travel expenses, including the cost of transportation, food, lodging and loss of pay, if applicable, the employer or insurance carrier is entitled to have the employee return to this state one time a year for examination or one time following the filing of a petition to reopen.

G. If a physician performs an examination under this section and is provided data from the Arizona state board of pharmacy pursuant to title 36, chapter 28, the physician may disclose that data to the employee, employer, insurance carrier and commission.

§ 23-1027 Compensation precluded by neglect or refusal of employee to submit to 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.

§ 23-1028 False statements or representations to obtain compensation; forfeiture; violation; classification; sworn statement; definition

A. If in order to obtain any compensation, benefit or payment under this chapter, either for himself or for another, any person knowingly makes a false statement or representation, the person is guilty of a class 6 felony, and, if the person is a claimant for compensation, the claimant shall also forfeit all right to any future temporary or permanent disability compensation for the claim on which the false statement or representation was made after conviction of the offense. Forfeiture pursuant to this section does not terminate on any subsequent designation of the offense as a misdemeanor.

B. Notwithstanding section 13-801, a sentence to pay a fine for a violation of this section by a claimant or co-employee shall be a sentence to pay an amount fixed by the court of not more than fifty thousand dollars.

C. Any person who commits a violation under this section is also subject to the penalties prescribed in sections 20-466.02 and 20-466.04.

D. A claimant for compensation shall personally sign any monthly or annual income status report that requests the claimant to report employment status or earnings to the insurance carrier or self-insured employer, including the annual report of earnings pursuant to section 23-1047. The reporting document shall contain the following statement:

Any person who knowingly makes a false statement or representation to obtain any compensation, benefit or payment is guilty of a class 6 felony and is subject to up to one and one-half years in prison, a fifty thousand dollar fine and forfeiture of benefits. By my signature below, I am applying for all benefits to which I may be entitled and I swear that the statements made on this application are true, correct and complete to the best of my knowledge.

E. For the purposes of this section, "statement" includes any notice, proof of injury, bill for services, payment for services, hospital or doctor records, x-rays, test reports, medical or legal expenses, or other evidence of loss or injury, or other expense or payment.

§ 23-1029 Repeal of chapter; effect on rights of parties

If the provisions of this chapter relative to compensation for injuries to or death of workmen are repealed, and the injury or death has not previously been compensated by lump payment or completed monthly payments, the period intervening between the injury or death and the repeal shall not be computed as a part of the time limited by law for the commencement of any action relating to such injury or death. The action shall be commenced within one year after the repeal and any amount paid as compensation shall be deducted from the right of recovery.

§ 23-1030 Effect on employers' liability law

This chapter shall not be construed as having repealed the sections of the statutes commonly known as the employers' liability law.

§ 23-1031 Persons incarcerated; suspension of benefits

A. Except as provided in subsection B of this section, beginning on December 1, 1997, payment of compensation under this chapter shall be suspended during the period of time that the employee has either:

Been convicted of a crime and is incarcerated in any state, federal, county or city jail or correctional facility.
Been adjudicated delinquent and is incarcerated in any state, federal, county or city jail or correctional facility.

B. If any portion of an employee's payment of compensation under this chapter has been garnished to satisfy support obligations pursuant to title 25, chapter 5, article 1, the portion of the compensation that has been garnished shall be paid as provided in the court order.

Article 8 Amount of Compensation

§ 23-1041 Basis for computing compensation; definition

A. 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.

B. 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.

C. 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.

D. 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:

One thousand three hundred twenty-five dollars per month for employees injured before January 1, 1988.
One thousand six hundred fifty dollars per month for employees injured from and after December 31, 1987 but before July 1, 1989.
One thousand eight hundred dollars per month for employees injured from and after June 30, 1989 but before July 1, 1991.
Two thousand one hundred dollars per month for employees injured from and after June 30, 1991 but before August 6, 1999.
Two thousand four hundred dollars per month for employees injured on or after August 6, 1999 but before January 1, 2008.
Three thousand dollars per month for employees injured from and after December 31, 2007 but before January 1, 2009.
Three thousand six hundred dollars per month for employees injured from and after December 31, 2008 but before January 1, 2010.
The amount adopted by the commission under subsection E for employees injured on or after January 1, 2010.

E. For purposes of subsection D, 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.

F. 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.

G. 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.

§ 23-1042 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.

§ 23-1043 Hernias classified for compensation purposes

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:

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.
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.

(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.

§ 23-1043.01 Heart-related and mental cases

A. 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.

B. 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.

C. If compensation is payable for a heart-related or perivascular injury, illness or death, or for a mental injury, illness or condition, the only employer liable is the employee's last employer in whose employment the requirements of subsection A or B are met.

§ 23-1043.02 Human immunodeficiency virus; establishing exposure; definition

A. 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.

B. 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:

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.
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.
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.
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.

C. 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.

D. 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.

E. 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.

F. 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.

G. 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.

§ 23-1043.03 Hepatitis C; establishing exposure; definition

A. 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.

B. 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:

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.
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.
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.
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.

D. 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.

E. 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.

F. 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.

G. 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.

§ 23-1043.04 Methicillin-resistant staphylococcus aureus; spinal meningitis; tuberculosis; establishing exposure; definitions

A. A claim for a condition, infection, disease or disability involving or related to methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis 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.

B. Notwithstanding any other law, an employee who satisfies the following criteria presents a prima facie claim for a condition, infection, disease or disability involving or related to methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis 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:

The employee's regular course of employment involves handling of or exposure to methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis.
Within thirty calendar days after a possible significant exposure that arises out of and in the course of 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.
For a claim involving methicillin-resistant staphylococcus aureus, the employee must be diagnosed with methicillin-resistant staphylococcus aureus within fifteen days after the employee reports pursuant to paragraph 2 of this subsection.
For a claim involving spinal meningitis, the employee is diagnosed with spinal meningitis within two to eighteen days of the possible significant exposure.
For a claim involving tuberculosis, the employee is diagnosed with tuberculosis within twelve weeks of the possible significant exposure.

C. 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 methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis.

D. A person alleged to be a source of a significant exposure shall not be compelled by subpoena or other court order to release confidential information relating to methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis either by document or by oral testimony. Evidence of the alleged source's methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis status may be introduced by either party if the alleged source knowingly and willingly consents to the release of that information.

E. 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.

F. 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.

G. Notwithstanding any other law, expenses for postexposure evaluation and follow-up, including reasonably required prophylactic treatment, for spinal meningitis or tuberculosis, shall be a medical benefit under section 23-1061 or 23-1062 for any significant exposure that arises out of and in the course of employment if the employee files a claim under this article for the significant exposure or the employee reports in writing to the employer the details of the exposure. Providing postexposure evaluation and follow-up, including prophylactic treatment, does not constitute acceptance of a claim for a condition, infection, disease or disability involving or related to the significant exposure.

H. For the purposes of this section:

"Employee" means firefighters, law enforcement officers, corrections officers, probation officers, emergency medical technicians and paramedics who are not employed by a health care institution as defined in section 36-401.
"Significant exposure" means exposure in the course of employment to aerosolized bacteria for claims under this section relating to methicillin-resistant staphylococcus aureus, spinal meningitis or tuberculosis. Significant exposure includes exposure in the course of employment to bodily fluids or skin for claims under this section relating to methicillin-resistant staphylococcus aureus.

§ 23-1044 Compensation for partial disability; computation

A. For temporary partial disability there shall be paid during the period thereof sixty-six and two-thirds percent of the difference between the wages earned before the injury and the wages that the injured person is able to earn thereafter. Unemployment benefits received during the period of temporary partial disability shall be considered wages able to be earned.

B. Disability shall be deemed permanent partial disability if caused by any of the following specified injuries, and compensation of fifty-five percent 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:

For the loss of a thumb, fifteen months.
For the loss of a first finger, commonly called the index finger, nine months.
For the loss of a second finger, seven months.
For the loss of a third finger, five months.
For the loss of the fourth finger, commonly called the little finger, four months.
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.
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.
For the loss of a great toe, seven months.
For the loss of a toe other than the great toe, two and one-half months.
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.
The loss of more than one phalange shall be considered as the loss of the entire toe.
For the loss of a major hand, fifty months, or of a minor hand, forty months.
For the loss of a major arm, sixty months, or of a minor arm, fifty months.
For the loss of a foot, forty months.
For the loss of a leg, fifty months.
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.
For permanent and complete loss of hearing in one ear, twenty months.
For permanent and complete loss of hearing in both ears, sixty months.
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.
For the partial loss of use of a finger, toe, arm, hand, foot or leg, or partial loss of sight or hearing, fifty percent 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. For the purposes of 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 percent of the average monthly wage.
For permanent disfigurement about the head or face, including injury to or loss of teeth, the commission, pursuant to section 23-1047, may allow such sum for compensation thereof as it deems just, in accordance with the proof submitted, for a period of not more than eighteen months.

C. In cases not enumerated in subsection B of this section, if the injury causes permanent partial disability for work, the employee shall receive during such disability compensation equal to fifty-five percent of the difference between the employee's average monthly wages before the accident and the amount that 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.

D. In determining the amount that represents the reduced monthly earning capacity for the purposes of subsections A and C of this section, 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 after the injury, any wages received for work performed after 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 under subsection F of this section 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.

E. In case there is a previous disability, as the loss of one eye, one hand, one foot or otherwise, the percentage of disability for a subsequent injury shall be determined by computing the percentage of the entire disability and deducting therefrom the percentage of the previous disability as it existed at the time of the subsequent injury.

F. For the purposes of subsection C of this section, the commission, in accordance with the provisions of section 23-1047 when the physical condition of the injured employee becomes stationary, shall determine the amount that represents the reduced monthly earning capacity and on such determination make an award of compensation that is subject to change in any of the following events:

On a showing of a change in the physical condition of the employee after such findings and award arising out of the injury resulting in the reduction or increase of the employee's earning capacity.
On 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, after the findings and award.
On a showing that the employee's earning capacity has increased after such findings and award.

G. The commission may adopt a schedule for rating loss of earning capacity and reasonable and proper rules to carry out 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:

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.
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.

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

§ 23-1045 Compensation for total disability; permanent total disability defined

A. For temporary total disability the following compensation shall be paid:

Compensation of sixty-six and two-thirds percent of the average monthly wage shall be paid during the period of disability.
If there are persons dependent for support on the employee, compensation shall be paid as provided in this section, with an additional allowance of $100 per month for such dependents during the period of disability. The additional allowance shall not be based on a per capita number of dependents but shall reflect a total monthly benefit increase of exactly $100.

B. For permanent total disability, compensation of sixty-six and two-thirds percent of the average monthly wage shall be paid during the life of the injured person.

C. In the absence of proof to the contrary, disability shall be deemed total and permanent if caused by:

The total and permanent loss of sight of both eyes.
The loss by separation of both feet.
The loss by separation of both hands.
An injury to the spine resulting in permanent and complete paralysis of both legs or both arms, or one leg and one arm.
An injury to the skull resulting in incurable imbecility or insanity.
The loss by separation of one hand and one foot.

D. 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 section 23-1047.

§ 23-1046 Death benefits

A. 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.
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, and 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. When all surviving children are no longer eligible for benefits, the surviving spouse's benefits shall be paid as if there were no children. 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.
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.
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 per cent 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:

(a) 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.

(b) 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.

(c) 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.

B. 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.

C. 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.

§ 23-1047 Procedure for determining compensation for partial disability and permanent total disability in cases not enumerated; procedure for determining nonscheduled dependency and duration of compensation to partial dependents in death cases

A. In cases of permanent partial disability under section 23-1044, subsection B, paragraph 22 and subsections C and F, 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.

B. 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, shall be 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.

C. The commission shall serve 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 served.

D. 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. If 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.

E. 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 commission all of the person's earnings for the prior twelve-month period. If the person fails to make such report, the 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 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.

§ 23-1048 Reasonable accommodations; earning capacity determination; definitions

A. If an employer has made reasonable accommodations pursuant to the Americans with disabilities act or other applicable federal or state law, wages payable for the modified job position shall be included in the determination of any temporary partial or permanent partial earning capacity, notwithstanding that the modified job is not available in the open competitive labor market.

B. For the purposes of this section:

"Americans with disabilities act" means 42 United States Code sections 12101 through 12213 and 47 United States Code sections 225 and 611 and the ADA amendments act of 2008 (P.L. 110-325; 122 Stat. 3553).
"Reasonable accommodations" means accommodations made by the date of injury employer to allow an employee to return to work by modifying job duties consistent with the employee's limitations.

Article 9 Payment of Compensation

§ 23-1061 Notice of accident; form of notice; claim for compensation; reopening; payment of compensation; notification of injury

A. 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 or N of this section, neither the commission nor any court shall have jurisdiction to consider a claim that 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 on the termination of insanity or legal incompetence or incapacity. The commission on receiving a claim shall give notice to the insurance carrier.

B. 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.

C. If the commission receives a notification of the injury, the commission shall send a claim form to the employee.

D. The issue of failure to file a claim must be raised at the first hearing on a claim for compensation in respect to the injury or death.

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

F. Each insurance carrier and self-insuring employer shall report to the commission a notice of the first payment of compensation and shall serve on the commission and the employee any denial of a claim, any change in the amount of compensation and the termination of compensation, except that claims for medical, surgical and hospital benefits that are not denied shall be reported to the commission in the form and manner determined by the commission. In all cases where compensation is payable, the insurance carrier or self-insuring employer shall promptly determine the average monthly wage pursuant to section 23-1041. Within thirty days after the payment of the first installment of compensation, the insurance carrier or self-insuring employer shall notify the employee and commission of the average monthly wage of the claimant as calculated, and the basis for such determination. The commission shall then make its own independent determination of the average monthly wage pursuant to section 23-1041. The commission, within thirty days after receipt of such notice, shall notify the employee, employer and insurance carrier of such determination. The amount determined by the commission shall be payable retroactive to the first date of entitlement. The first payment of compensation shall be accompanied by a notice on a form prescribed by the commission stating the manner in which the amount of compensation was determined.

G. Except as otherwise provided by law, the insurance carrier or self-insuring employer shall process and pay compensation and provide medical, surgical and hospital benefits, without the necessity for the making of an award or determination by the commission.

H. On a claim that has been previously accepted, an employee may reopen the claim to secure an increase or rearrangement of compensation or additional benefits by filing with the commission a petition requesting the reopening of the employee's claim on the basis of a new, additional or previously undiscovered temporary or permanent condition, which petition shall be accompanied by a statement from a physician setting forth the physical condition of the employee relating to the claim. A claim shall not be reopened if the initial claim for compensation was previously denied by a notice of claim status or determination by the commission and the notice or determination was allowed to become final and no exception applies under section 23-947 excusing a late filing to request a hearing. A claim shall not be reopened because of increased subjective pain if the pain is not accompanied by a change in objective physical findings. A claim shall not be reopened solely for additional diagnostic or investigative medical tests, but expenses for any reasonable and necessary diagnostic or investigative tests that are causally related to the injury shall be paid by the employer or the employer's insurance carrier. Expenses for reasonable and necessary medical and hospital care and laboratory work shall be paid by the employer or the employer's insurance carrier if the claim is reopened as provided by law and if these expenses are incurred within fifteen days before the date that the petition to reopen is filed. The payment for such reasonable and necessary medical, hospital and laboratory work expense shall be paid for by the employer or the employer's insurance carrier if the claim is reopened as provided by law and if such expenses are incurred within fifteen days before the filing of the petition to reopen. Surgical benefits are not payable for any period before the date of filing a petition to reopen, except that surgical benefits are payable for a period before the date of filing the petition to reopen not to exceed seven days if a bona fide medical emergency precludes the employee from filing a petition to reopen before the surgery. No monetary compensation is payable for any period before the date of filing the petition to reopen.

I. On the filing of a petition to reopen a claim, the commission shall in writing notify the employer's insurance carrier or the self-insuring employer, which shall in writing notify the commission and the employee within twenty-one days after the date of such notice of its acceptance or denial of the petition. The reopened claim shall be processed thereafter in like manner as a new claim.

J. The commission shall investigate and review any claim in which it appears to the commission that the claimant has not been granted the benefits to which such claimant is entitled. If the commission determines that payment or denial of compensation is improper in any way, it shall hold a hearing pursuant to section 23-941 within sixty days after receiving notice of such impropriety. Any claim for temporary partial disability benefits under this subsection must be filed with the commission within two years after the date the claimed entitlement to compensation accrued or within two years after the date on which an award for benefits encompassing the entitlement period becomes final. A claim for temporary partial disability compensation shall be deemed to accrue when the employee knew or with the exercise of reasonable diligence should have known that the insurance carrier, self-insured employer or special fund denied or improperly paid compensation. A claim for temporary partial disability benefits shall not be deemed to have accrued any earlier than September 26, 2008.

K. When there is a dispute as to which employer or insurance carrier is liable for the payment of a compensable claim, the commission, by order, may designate the employer or insurance carrier that shall pay the claim. Payment shall begin within fourteen days after the employer or insurance carrier has been ordered by the commission to commence payment. When a final determination has been made as to which employer or insurance carrier is actually liable, the commission shall direct any necessary monetary adjustment or reimbursement among the parties or insurance carriers involved.

L. On application to the commission and for good cause shown, the commission may direct that a document filed as a claim for compensation benefits be designated as a petition to reopen, effective as of the original date of filing. In like manner on application and good cause shown, the commission may direct that a document filed as a petition to reopen be designated as a claim for compensation benefits, effective as of the original date of filing.

M. If the insurance carrier or self-insurer does not issue a notice of claim status denying the claim within twenty-one days after the date the insurance carrier is notified by the commission of a claim or of a petition to reopen, the insurance carrier shall pay immediately compensation as if the claim were accepted, from the date the insurance carrier is notified by the commission of a claim or petition to reopen until the date on which the insurance carrier issues a notice of claim status denying such claim. Compensation includes medical, surgical and hospital benefits. This section shall not apply to cases involving seven days or less of time lost from work.

N. If an insurance carrier or self-insured employer receives written notification of an injury from an employee who was injured and intends to file a claim for compensation, the insurance carrier or self-insured employer must forward the written notification of the injury and intended claim for compensation to the commission within seven business days and inform the employee of the employee's requirement to file a claim with the commission. The one-year period as prescribed in subsection A of this section is suspended from the date the insurance carrier or self-insured employer received written notification of the injury and intended claim for compensation until the date that the insurance carrier or self-insured employer forwards the written notification to the commission. When the commission receives such notification, the commission must notify the employee of the employee's responsibility to file a claim with the commission pursuant to this section.

§ 23-1061.01 Treatment by prayer or spiritual means

Nothing in this chapter shall be construed to prevent a workman, whose injury or disability has been established to the satisfaction of the commission, from relying in good faith on treatment by prayer through spiritual means in accordance with the tenets and practice of a recognized church or religious denomination by a duly accredited practitioner thereof without suffering reduction or suspension of his compensation benefits under this chapter, provided that nothing in this chapter shall be construed to prevent a workman who desires it from being furnished with such treatment by prayer through spiritual means if the commission does not object thereto.

§ 23-1062 Medical, surgical, hospital benefits; translation services; travel expenses; commencement of compensation; method of compensation

A. 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".

B. Medical, surgical and hospital benefits include translation services, if needed. A carrier, self-insurance pool or employer that does not direct care pursuant to section 23-1070 may choose the translator if the translator is certified by an outside agency and is not an employee of the carrier, self-insurance pool or employer. If the carrier, self-insurance pool or employer is unable to locate a certified translator for the particular language or dialect needed, the parties may agree on a translator who is not a certified translator.

C. Compensation for medical, surgical and hospital benefits shall include reimbursement for reasonable travel expenses if the employee must travel more than twenty-five miles from the employee's place of residence to obtain medical care for the injury.

D. The first installment of compensation is to be paid no later than the twenty-first day after written notification by the commission to the carrier of the filing of a claim unless the right to compensation is denied. Thereafter, compensation shall be paid at least once each two weeks during the period of temporary total disability and at least monthly thereafter. Compensation shall not be paid for the first seven days after the injury. If the incapacity extends beyond the period of seven days, compensation shall begin on the eighth day after the injury, but if the disability continues for one week beyond such seven days, compensation shall be computed from the date of the injury.

E. Compensation shall be made by negotiable instrument, payable immediately on demand or, at the election of the employee and if offered by the employer or carrier, by another commonly accepted method for transferring money by banking institutions, including electronic fund transfers to the employee's account or a prepaid debit card account that is established for the purpose of making direct electronic payment to the employee.

§ 23-1062.01 Timely payment of medical, surgical and hospital benefit billing; content of bills; contracts between providers and carriers; exceptions; definitions

A. An insurance carrier, self-insured employer or claims processing representative shall make a determination whether to deny or pay a medical bill on an accepted claim, in whole or in part, including the decision as to the amount to pay, within thirty days from the date the claim is accepted, if the billing is received before the date of acceptance, or within thirty days from the date of receipt of the billing if the billing is received after the date of acceptance. All billing denials shall be based on reasonable justification. The insurance carrier, self-insured employer or claims processing representative shall pay the approved portion of the billing within thirty days after the determination for payment is made. If the billing is not paid within the applicable time period, the insurance carrier, self-insured employer or claims processing representative shall pay interest to the health provider on the billing at a rate that is equal to the legal rate. Interest shall be calculated beginning on the date that the payment to the health care provider is due.

B. Any billing by a health care provider shall include all of the following:

The correct demographic patient information and claim number, if known.
The correct health care provider information, including name, address, telephone number and federal taxpayer identification number.
The appropriate medical coding with dollar amounts and units clearly stated with all descriptions.
Clearly printed date or dates of service.
Legible medical reports required for each date of service if the billing is for direct treatment of the injured worker.

C. An insurance carrier, self-insured employer or claims processing representative is not responsible for payment of any billings for medical, surgical or hospital benefits provided under this chapter unless the billings are received by the insurance carrier, self-insured employer or claims processing representative and any court action for the payment of the billings is commenced within twenty-four months from the date on which the medical service was rendered or from the date on which the health care provider knew or should have known that service was rendered on an industrial claim, whichever occurs later. A subsequent billing or corrective billing does not restart the limitations period.

D. An injured worker is not responsible for payment of any portion of a medical bill for services rendered on an accepted claim and is not responsible for payment of any disputed amount between a health care provider and the insurance carrier, self-insured employer or claims processing representative.

E. An insurance carrier, self-insured employer or claims processing representative that is subject to this chapter may establish an internal system for resolving payment disputes and other contractual grievances with health care providers.

F. This section does not apply to health care providers that enter into an express written contract with the insurance carrier, the self-insured employer or a claims processing representative that specifies the period in which approved bills shall be paid and that includes contractual remedies for untimely bill payment. If the contract does not include remedies for untimely payment, payment must be made according to the provisions of the contract but the interest penalty prescribed by subsection A of this section shall apply to any late payment. The commission does not have jurisdiction over disputes involving timely payment of billings under contracts between the insurance carrier, self-insured employer or claims processing representative and the health care provider.

G. For the purposes of this section:

"Accepted claim" means a claim for benefits under this chapter that has been accepted by a final notice of claim status or final order or award of the commission.
"Date of receipt" means the electronic acknowledgement date or, if a bill does not contain an electronic acknowledgment date, the date of receipt is presumed to occur five days after the bill was mailed to the recipient's address.

§ 23-1062.02 Use of controlled substances; prescription of schedule II controlled substances; reports; treatment plans; monitoring program inquiries; preauthorizations; definitions

A. A physician who prescribes a schedule II controlled substance to an employee shall comply with title 32, chapter 32, article 4, including the provisions in that article relating to patients with traumatic injuries.

B. A physician shall include in the report required under commission rule the following information pertaining to the use of a narcotic or opium-based controlled substance that is listed in schedule II or the prescription of any opioid medication:

Justification for the use of the controlled substance, including documentation of the following:

(a) That a physical examination of the employee was conducted.

(b) That a substance use risk assessment of the employee was conducted.

A treatment plan describing the measures that the physician will implement to monitor and prevent the development of abuse, dependence, addiction or diversion by the employee. The physician shall include in the treatment plan all of the following:

(a) A medication agreement.

(b) The frequency of face-to-face follow-up visits to reevaluate the employee's continued use of opioids.

(d) Documentation that the medication regime is providing relief that is demonstrated by clinically meaningful improvement in function.

(e) Criteria and procedures for tapering and discontinuing opioid prescription or administration as part of the treatment.

(f) Criteria and procedures for offering or referring the employee for treatment for dependence on or addiction to opioids.

C. If the drug test of the employee reveals inconsistent results, the physician within five business days shall provide a written report to the carrier, self-insured employer or commission setting forth a treatment plan to address the inconsistent drug test results.

D. Before prescribing an opioid analgesic or benzodiazepine controlled substance that is listed in schedule II, III or IV for an employee and at least quarterly while that prescription remains a part of the treatment, the physician shall obtain a patient utilization report regarding the employee from the controlled substances prescription monitoring program's central database tracking system as required by section 36-2606. The physician shall report the results to the carrier, self-insured employer or commission as soon as reasonably practicable but not later than thirty days after the date of the inquiry. Thereafter, the carrier, self-insured employer or commission may request not more than once every two months that the physician obtain a patient utilization report regarding the employee from the controlled substances prescription monitoring program's central database tracking system.

E. If the patient utilization report from the controlled substances prescription monitoring program's central database tracking system reveals that the employee is receiving opioids from another undisclosed health care provider, the physician shall within five business days report the results to the carrier, self-insured employer or commission.

F. If the physician does not comply with this section:

The carrier, self-insured employer or commission is not responsible for payment for the physician's services until the physician complies with this section.
Except for a self-insured employer that provides medical care pursuant to section 23-1070, the employer, carrier or commission may request a change of physician after making a written request to the physician to comply with this section and the request identifies the area of noncompliance. If a change of physician is ordered and the order becomes final, the employee shall select a physician who agrees to comply with this section. If other medical providers are not available in the employee's area of residence, the employer, carrier or commission shall pay in advance for the employee's reasonable travel expenses, including the cost of transportation, food, lodging and loss of pay, if applicable.

G. If medically necessary, the carrier, self-insured employer or commission shall provide drug rehabilitation and detoxification treatment for an employee who becomes dependent on or addicted to opioids that are prescribed for a work-related injury. In the event of a medical conflict regarding the necessity for drug rehabilitation and detoxification, the carrier, self-insured employer or commission shall continue to provide the opioids until a determination is made after a hearing by an administrative law judge.

H. If the employee resides out of state, the carrier, self-insured employer or commission is not responsible for providing medications that are subject to this section if the out-of-state physician fails to comply with this section. If the other state has a controlled substances monitoring program, the physician shall submit an inquiry to the database as prescribed by subsection D of this section.

I. A carrier, a self-insured employer or the commission may require physician compliance with this section notwithstanding the existence of a prior award addressing medical maintenance benefits for medications. A carrier or self-insured employer is not liable for bad faith or unfair claims processing for any act taken in compliance of and consistent with this section or any act reasonably necessary to monitor or assess the appropriateness and effectiveness of an employee's opioid use.

J. For the purposes of this section:

"Clinically meaningful improvement in function" means both of the following:

(a) A significant improvement in the performance of activities of daily living or a reduction in work restrictions.

(b) A reduction in dependency on continued medical treatment.

"Inconsistent results" means:

(a) The employee's reported medications, including the parent drugs or metabolites, are not detected.

(b) Controlled substances are detected that are not reported by the employee.

"Substance use risk assessment" means an evaluation of an employee's unique likelihood for addiction, misuse, diversion or another adverse consequence resulting from the employee being prescribed or receiving treatment with opioids.
"Traumatic injury" as used in title 32, chapter 32, article 4 means physical injury that creates a reasonable risk of death or that causes serious or permanent disfigurement, serious impairment of health or loss or protracted impairment of the function of any bodily organ or limb.

§ 23-1062.03 Evidence-based medical treatment guidelines

The commission shall develop and implement a process for the use of evidence-based medical treatment guidelines, where appropriate, to treat injured workers no later than December 31, 2014. The commission shall provide a progress report to the governor, the president of the senate and the speaker of the house of representatives describing the status of the development and implementation of this process no later than the end of each calendar year beginning on December 31, 2012, and ending on December 31, 2014. If the commission requires additional time beyond December 31, 2014, to develop and implement this process, then the commission shall include in its 2014 report a projected timetable to complete the process.

§ 23-1063 Apportionment of compensation

Compensation to a dependent widow or widower shall be for the use and benefit of the widow or widower and the dependent children, and the commission may, upon proper application at any time during the duration of such payments, apportion the compensation between them in such way as it deems best for the interest of all beneficiaries.

§ 23-1064 Presumptions of dependency; determination

A. The following persons are conclusively presumed to be totally dependent for support upon a deceased employee:

A wife upon a husband whom she has not voluntarily abandoned at the time of the injury.
A husband upon a wife whom he has not voluntarily abandoned at the time of the injury.
A natural, posthumous or adopted child under the age of eighteen years or under the age of twenty-two years if enrolled as a full-time student in any accredited educational institution, or over that age if physically or mentally incapacitated from wage earning, upon the injured parent. Stepparents may be regarded as parents, if dependent, and a stepchild as a natural child if dependent.

B. Questions of dependency and the extent thereof shall be determined as of the date of the injury to the employee and the dependent's right to any death benefit shall become fixed as of such time irrespective of any subsequent change in conditions, and the death benefits shall be directly recoverable by and payable to the dependent entitled thereto.

§ 23-1065 Special fund; purposes; investment committee

A. The industrial commission may direct the payment into the state treasury of not to exceed one percent of all premiums received by private insurance carriers during the immediately preceding calendar year. The same percentage shall be assessed against self-insurers based on the total cost to the self-insured employer as provided in section 23-961, subsection G. Such assessments shall be computed on the same premium basis as provided for in section 23-961, subsections G, H, J, K and L and shall be no more than is necessary to keep the special fund actuarially sound. Such payments shall be placed in a special fund within the administrative fund to provide, at the discretion of the commission, such additional awards as may be necessary to enable injured employees to accept the benefits of any law of this state or of the United States, or both jointly, for promotion of vocational rehabilitation of persons with disabilities in industry.

B. In claims involving an employee who has a preexisting industrially-related permanent physical impairment of the type specified in section 23-1044, subsection B and who thereafter suffers an additional permanent physical impairment of the type specified in such subsection, the claim involving the subsequent impairment is eligible for reimbursement, as provided by subsection D of this section, according to the following:

The employer in whose employ the subsequent impairment occurred or its insurance carrier is solely responsible for all temporary disability compensation to which the employee is entitled and for an amount equal to the permanent disability compensation provided by section 23-1044, subsection B for the subsequent impairment. If the employee is determined to have sustained no loss of earning capacity after the medically stationary date, the employer or carrier shall pay him as a vocational rehabilitation bonus the amount calculated under this paragraph as a lump sum, which shall be a credit against any permanent compensation benefits awarded in any subsequent proceeding. The amount of the vocational rehabilitation bonus for which the employer or carrier is responsible under this paragraph shall be calculated solely on physical, medically rated permanent impairment and not on occupational or other factors.
If the commission determines that the employee is entitled to compensation for loss of earning capacity under section 23-1044, subsection C or permanent total disability under section 23-1045, subsection B, the total amount of permanent benefits for which the employer or carrier is solely responsible under paragraph 1 of this subsection shall be expended first, with monthly payments made according to the loss of earning capacity or permanent total disability award. The employer or carrier and the special fund are equally responsible for the remaining amount of compensation for loss of earning capacity under section 23-1044, subsection C or permanent total disability under section 23-1045, subsection B. This paragraph shall not be construed as requiring payment of any benefits under section 23-1044, subsection B in any case in which an employee is entitled to benefits for loss of earning capacity under section 23-1044, subsection C or permanent total disability benefits under section 23-1045, subsection B.

C. In claims involving an employee who has a preexisting physical impairment that is not industrially-related and, whether congenital or due to injury or disease, is of such seriousness as to constitute a hindrance or obstacle to employment or to obtaining reemployment if the employee becomes unemployed, and the impairment equals or exceeds a ten percent permanent impairment evaluated in accordance with the American medical association guides to the evaluation of permanent impairment, and the employee thereafter suffers an additional permanent impairment not of the type specified in section 23-1044, subsection B, the claim involving the subsequent impairment is eligible for reimbursement, as provided by subsection D of this section, under the following conditions:

The employer in whose employ the subsequent impairment occurred or its carrier is solely responsible for all temporary disability compensation to which the employee is entitled.
The employer had knowledge of the permanent impairment at the time the employee was hired, or that the employee continued in employment after the employer acquired such knowledge.
The employee's preexisting impairment is due to one or more of the following:

(a) Epilepsy.

(b) Diabetes.

(d) Arthritis.

(e) Amputated foot, leg, arm or hand.

(f) Loss of sight of one or both eyes or a partial loss of uncorrected vision of more than seventy-five percent bilaterally.

(g) Residual disability from poliomyelitis.

(h) Cerebral palsy.

(i) Multiple sclerosis.

(j) Parkinson's disease.

(k) Cerebral vascular accident.

(l) Tuberculosis.

(m) Silicosis.

(n) Psychoneurotic disability following treatment in a recognized medical or mental institution.

(o) Hemophilia.

(p) Chronic osteomyelitis.

(q) Hyperinsulinism.

(r) Muscular dystrophies.

(s) Arteriosclerosis.

(t) Thrombophlebitis.

(u) Varicose veins.

(v) Heavy metal poisoning.

(w) Ionizing radiation injury.

(x) Compressed air sequelae.

(y) Ruptured intervertebral disk.

The employer or carrier and the special fund are equally responsible for the amount of compensation for loss of earning capacity under section 23-1044, subsection C or permanent total disability under section 23-1045, subsection B.

D. The employer or insurance carrier shall notify the commission of its intent to claim reimbursement for an eligible claim under subsection B or C of this section not later than the time the employer or insurance carrier notifies the commission pursuant to section 23-1047, subsection A. Upon receiving notice the commission may expend funds from the special fund created by this section for travel and discovery procedures and for the employment of such independent legal, medical, rehabilitation, claims or labor market consultants or experts as may be deemed necessary by the commission to assist in the determination of the liability of the special fund, if any, under subsection B or C of this section. In the event there is any dispute regarding liability to the special fund pursuant to subsection B or C of this section, the commission shall not delay the issuance of a permanent award pursuant to section 23-1047, subsection B.

E. If the special fund created by this section is determined to be liable under either subsection B or C of this section, the employer or insurance carrier that is primarily liable shall pay the entire amount of the award to the injured employee and the commission shall by rule provide for the reimbursement of the employer or insurance carrier on an annual basis. In any case arising out of subsection B or C of this section, the written approval of the special fund is required for the compromise of any claim made pursuant to section 23-1023. In any such case, written approval shall not be unreasonably withheld by the special fund, carrier, self-insured employer or other person responsible for the payment of compensation. Failure to obtain the written approval of the special fund shall not cause the injured worker to lose any benefits but ends the special fund's liability for reimbursement and makes the employer or carrier solely responsible for the payment of the remaining benefits.

F. The employer or insurance carrier shall make its claim for reimbursement to the commission not later than November 1 each year, for payments made pursuant to subsection B or C of this section during the twelve months before October 1 each year. Claims shall be paid before December 31 each year. If the total annual reserved liabilities of the special fund obligated under subsections B and C of this section exceed six million dollars, as determined by the annual actuarial study performed pursuant to subsection I of this section, the commission, after notice and a hearing, may levy an additional assessment under subsection A of this section of up to one-half percent to meet such liabilities. Any insurance carrier or employer who may be adversely affected by the additional assessment may at any time before the sixtieth day after such additional assessment is ordered file a complaint challenging the validity of the additional assessment in the superior court in Maricopa county for a judicial review of the additional assessment. On judicial review the determination of the commission shall be upheld if supported by substantial evidence in the record considered as a whole.

G. In the event the injured employee is awarded additional compensation, under subsection A of this section, the commission retains jurisdiction to amend, alter or change the award upon a change in the physical condition of the injured employee resulting from the injury.

H. On receiving notice that the special fund may be liable under this chapter, the commission may spend monies from the special fund established by this section for expenses that are necessary to assist in the processing, payment or determination of liability of the fund. These expenses may include travel, discovery procedures and employing any legal, medical, rehabilitation, claims or labor market consultant, examiner or expert.

I. The commission shall cause an annual actuarial study of the special award fund to be made by a qualified actuary who is a member of the society of actuaries. The actuary shall make specific recommendations for maintaining the fund on a sound actuarial basis. The actuarial study shall be completed on or before September 1.

J. The special fund of the commission consists of all monies from premiums and assessments, except penalties assessed pursuant to this chapter, received and paid into the fund, property and securities acquired by the use of monies in the fund, interest earned on monies in the fund and other monies derived from the sale, use or lease of properties belonging to the fund. The special fund created by this section shall be administered by the director of the industrial commission, subject to the authority of the industrial commission. The director of the commission with approval of the investment committee, in the administration of the special fund, may provide loans, subject to repayment, budgetary review and legislative appropriation, to the administrative fund for the purposes and subject to section 23-1081, acquire real property and acquire or construct a building or other improvements on the real property as may be necessary to house, contain, furnish, equip and maintain offices and space for departmental and operational facilities of the commission. The commission when using space constructed pursuant to this section shall make equal payments of rent on a semiannual basis, which shall be deposited in the special fund. The investment committee shall determine the amount of the rent, which must be at least equal to or greater than that determined by the joint committee on capital review for buildings of similar design and construction as provided by section 41-792.01.

K. There is established an investment committee consisting of the director and the chairman of the commission and three persons knowledgeable in investments and economics appointed by the governor. Of the members appointed by the governor, one shall be a professional in the investment business, one shall represent workers' compensation insurers and one shall represent self-insurers. The term of members appointed by the governor is three years, which shall begin on July 1 and end on June 30 three years later. The committee shall prescribe by rule investment policies and supervise the investment activities of the special fund.

L. Each member of the investment committee, other than the director of the commission, is eligible to receive from the special fund:

Compensation of fifty dollars for each day while in actual attendance at meetings of the investment committee.
Reimbursement for expenses pursuant to title 38, chapter 4, article 2.

M. The investment committee shall meet at least once every month.

N. The investment committee shall periodically review and assess the investment strategy.

O. The investment committee, by resolution, may invest and reinvest the surplus or reserves in the funds established under this chapter in any legal investments authorized under section 38-718.

P. In addition to the investments authorized under section 38-718, the investment committee may approve the investment in real property and improvements on real property to house and maintain offices of the commission, including spaces for its departmental and operational facilities. Title to the real estate and improvements on the real estate vests in the special fund of the commission, and the assets become part of the fund as provided by this section.

Q. The investment committee may appoint a custodian for the safekeeping of all or any portion of the investments owned by the special fund of the commission and may register stocks, bonds and other investments in the name of a nominee. Except for investments held by a custodian or in the name of a nominee, all securities purchased pursuant to subsection O of this section shall promptly be deposited with the state treasurer as custodian thereof, who shall collect the dividends, interest and principal thereof, and pay, when collected, into the special fund. The state treasurer shall pay all vouchers drawn for the purchase of securities. The director may sell any of the securities as the director deems appropriate, if authorized by resolution of the investment committee, and the proceeds therefrom shall be payable to the state treasurer for the account of the special fund upon delivery of the securities to the purchaser or the purchaser's agent.

§ 23-1066 Minor or incapacitated claimant; appointment of guardian ad litem; procedure

A. When it appears to the commission that a claimant for compensation or death benefits is a minor or incapacitated person, the commission, on motion of any party to the proceedings or on its own motion, may appoint a guardian ad litem to represent the best interests of the minor or incapacitated person, in accordance with the terms, conditions and rules of the commission and this chapter. If required by the commission, the guardian ad litem shall give bond in the form and character required by law from a guardian ad litem appointed by the superior court, and in such amount as the commission determines. The bond shall be approved by the commission, and the guardian ad litem shall not be discharged from liability until the guardian ad litem files an account with the commission or with the superior court in the county in which the minor or incapacitated person resides, and until the account, after due notice, is approved.

B. The guardian ad litem shall receive compensation for the guardian ad litem's services as is fixed and allowed by the commission or by the superior court.

§ 23-1067 Commutation of compensation to lump sum payment

A. The commission may allow commutation of the compensation awarded pursuant to section 23-1044, subsection B to a lump sum payment of not to exceed twenty-five thousand dollars, with or without the consent of the carrier liable for the commutation, under such rules, regulations and system of computation as it devises for obtaining the present value of the compensation.

B. The commission may allow commutation of compensation pursuant to section 23-1044, subsection C, and section 23-1045, subsections B, C and D, to a lump sum of not to exceed twenty-five thousand dollars for commutation requests made before July 1, 1987, fifty thousand dollars for commutation requests made from and after June 30, 1987 but before July 1, 2007 and one hundred fifty thousand dollars for commutation requests made from and after June 30, 2007, with the consent of the carrier liable to pay the claim, under such rules, regulations and system of computation as it devises for obtaining the present value of the compensation.

§ 23-1068 Assignment of compensation; exemption from attachment or execution; payment to nonresident

A. Compensation, whether determined or not, is not, prior to the delivery of the warrant therefor, assignable.

B. Except as provided in subsection D of this section, compensation is exempt from attachment, garnishment and execution and does not pass to another person by operation of law, except that:

The amount of compensation payable to a person at the time of death, whether payable in periodic payments or converted to a lump sum, and whether or not the warrant therefor has been issued or delivered after that person's death, shall be paid to that person's personal representative.
If medical, wage loss or disability benefits are paid or otherwise provided by an employer to or for the benefit of an employee for an injury or illness for which medical or compensation benefits payable pursuant to this article have been denied or for which a claim for compensation under this article has not been filed, and the injury or illness is subsequently determined to be compensable under this article, the employer or the person authorized by the employer to provide such benefits is entitled to a direct payment out of, or a direct credit against, the medical or compensation benefits payable under this article in the amount of the benefits previously paid or provided.

C. Any dispute as to the amount of the direct payment or credit against the medical or compensation benefits payable shall be resolved pursuant to section 23-1061, subsection J.

D. Compensation is subject to an assignment for the payment of support as defined in section 25-500, spousal maintenance and the fee for handling child support and spousal maintenance payments authorized by section 25-510.

E. Payment to the consular agent, or the consular agent's representative, of the nation of which a dependent is a resident or subject, of compensation due the dependent residing outside the United States, any power of attorney to receive or receipt for such compensation to the contrary notwithstanding, is a full discharge of the benefits or compensation as if made directly to the beneficiary.

§ 23-1069 Attorney's fees; payment; time limitation

A. In proceedings before the commission in which an attorney employed by the claimant has rendered services reasonably necessary in processing the claim, the commission shall, upon application filed by the attorney or the claimant prior to a final disposition of the case, set a reasonable attorney's fee and shall provide for the payment thereof from the award, in installments or otherwise, as the commission determines proper in view of the award made, and shall further provide for the payment of the attorney's fee direct to the attorney. The commission shall charge the amount of the payment against the award to the claimant.

B. The attorney's fee provided for in subsection A shall be not more than twenty-five per cent up to ten years from the date of the award. In cases involving solely loss of earning capacity, the maximum shall be twenty-five per cent up to five years from the date of the final award. When the payment of the award to the claimant is made in installments, or in other than a lump sum manner, in no event may an amount in excess of twenty-five per cent of any one such installment payment be withheld for the attorney's fee.

C. The reasonableness of the attorney's fee set pursuant to subsection A shall be reviewable upon the application of the claimant or the attorney in the same manner as other awards of the commission.

§ 23-1070 Medical, surgical and hospital benefits provided by employer; pilot program

A. An employer, other than this state or a political subdivision of this state, who secures compensation to his employees in the manner provided in section 23-961, subsection A, paragraph 1 or 2, alone or jointly with other employers, in lieu of making premium payments for medical, surgical and hospital benefits, may provide such benefits to injured employees and may collect one-half of the cost thereof from his employees, not to exceed one dollar per month from any employee, which may be deducted from the wages of the employee.

B. An employer electing to provide such benefits shall notify his insurance carrier and the commission of the election and render a detailed statement of the arrangements made therefor to the commission.

C. An employer who maintains a hospital for his employees or who contracts with a physician for the hospital care of injured employees, on or before January 30 each year, shall make a verified written report to the commission for the preceding year showing the total amount of hospital fees collected and showing separately the amount contributed by the employees and the amount contributed by the employers. The report shall also contain an itemized account of the expenditures, investments or other disposition of the fees, and a statement showing the balance remaining.

D. An employer who fails to notify his insurance carrier and the commission of his election to provide such benefits, or who maintains a hospital or contracts for hospital service as provided in subsection C of this section, and fails to make the financial report required therein, is liable for such benefits as provided in section 23-1062.

E. If the medical, surgical or hospital aid or treatment being furnished by an employer is such that there is reasonable ground to believe that the health, life or recovery of any employee is endangered or impaired thereby, the commission, upon application of the employee or upon its own motion, may order a change of physicians or other conditions. If the employer fails to comply with the order promptly, the injured employee may elect to have medical, surgical or hospital aid or treatment provided by or through the special fund established by section 23-1065. In that event the claim of the injured employee against the employer shall be assigned to the special fund for the benefit thereof, and the special fund shall furnish to the insured employee medical, surgical or hospital aid or treatment as provided in this chapter.

F. Notwithstanding subsection A of this section, a pilot program is established to allow a city with a population of more than one hundred fifty thousand persons and a self-insured county insurance pool to provide medical, surgical and hospital benefits pursuant to this section. The purpose of the pilot program is to determine whether public sector entities that are self-insured can, through a directed care and medical management program, contain costs and improve health care and return to work results for injured employees. The industrial commission shall select the qualified city. The entities participating in the pilot program shall consult with the industrial commission on the protocol for assessment and reporting and shall submit all baseline data to the commission before the pilot program can begin. No earlier than January 1, 2012 and not later than January 1, 2013, the pilot program participants may begin providing medical, surgical and hospital benefits pursuant to this section on approval by the industrial commission. This subsection does not exempt pilot program participants from any other requirements for procurement of a medical network to direct care. The pilot program participants shall report in accordance with the protocol for assessment and reporting, with a final report two years after the start of the pilot program. The pilot program ends and pilot program participants may not provide medical, surgical and hospital benefits pursuant to this section from and after December 31, 2014.

§ 23-1070.01 Request for early hearing; stipulation; action of commission

A. If a request for hearing filed in connection with a change of physician under section 23-1070 alleges, by affidavit, that immediate and irreparable injury, loss or damage will result if the hearing is not held before the times otherwise prescribed by article 3 of this chapter or if all interested parties, in person or by counsel, stipulate in the request for hearing that the hearing should be held before the times otherwise prescribed by article 3 of this chapter, the commission shall:

Immediately issue a notice to all parties setting a hearing date not more than fifteen days later.
Require that the administrative law judge, who shall not be subject to the notice or affidavit for change prescribed by section 23-941, subsection I or J, determine the matter and make an award, if any, within five days after completion of the hearing.

B. All other procedures prescribed for subsequent actions with regard to the hearing or award shall be as otherwise prescribed by law.

§ 23-1071 Notice by employees with disabilities of absence from locality or state; failure to give notice; change of doctor

A. No employee may leave the state of Arizona for a period exceeding two weeks while the necessity of having medical treatment continues, without the written approval of the commission. Any employee leaving the state of Arizona for a period exceeding two weeks without such approval will forfeit the employee's right to compensation during such time, as well as the employee's right to reimbursement for the employee's medical expenses, and any aggravation of the employee's disability, by reason of the violation of this section, will not be compensated. If an administrative law judge approves an employee's request to leave this state after the request for written approval was initially denied by the commission, the employee is entitled to any forfeited compensation and medical benefits from the date the employee first requested the written approval.

B. No employee may change doctors without the written authorization of the insurance carrier, the commission or the attending physician.

§ 23-1072 Autopsy in death claims; effect of refusal by claimant

A. On filing a claim for compensation for death from an industrial injury or occupational disease where in the opinion of the commission it is necessary to ascertain accurately and scientifically the cause of death, an autopsy may be ordered by the commission upon request of an interested party and notice to the employer to be made by a qualified pathologist designated by the commission. Any interested person may designate a duly licensed physician to attend such autopsy, and the findings of the pathologist performing the autopsy shall be filed with the commission and shall be a public record.

B. All proceedings for compensation shall be suspended upon refusal of a claimant or claimants to permit the autopsy when so ordered.

C. Where an autopsy has been performed pursuant to an order of the commission, no action shall lie against any person, firm or corporation for participating in or requesting such autopsy.

§ 23-1073 Processing of prior claims

The commission appointed pursuant to the provisions of chapter 1 of this title shall process all claims for injuries or disabling conditions which occurred prior to January 1, 1969 to the entry of a final award in accordance with the procedure and benefit levels in effect prior to January 1, 1969. Petitions to reopen filed subsequent to January 1, 1969 shall be processed in accordance with the procedural provisions of this chapter.

Article 10 Administrative Fund

§ 23-1081 Administrative fund; purposes and administration

A. The administrative fund is established to provide for all expenses of the industrial commission in carrying out its powers and duties under this title. Except for monies from cash deposits or surety bonds in the separate account established by section 23-527, the administrative fund and expenditures therefrom shall be subject to budgetary review and legislative appropriation as expenditures from other state funds. Vouchers or claims prepared for any purpose other than for payment of benefits shall be processed as prescribed by section 35-181.01 and the rules of the director of the department of administration. The industrial commission shall annually fix the rate of the tax, not to exceed three per cent, to be paid to the state treasurer for credit to the administrative fund pursuant to section 23-961, subsection G in an amount that is no more than necessary to cover the actual expenses of the industrial commission in carrying out its powers and duties under this title. Monies for expenditure from the administrative fund shall be appropriated by the legislature. All money and securities in the fund shall be held in trust and invested by the treasurer.

B. The administrative fund shall be no less than self-supporting with respect to the expenses of the industrial commission and other expenditures from the administrative fund as provided under this chapter. Unless the special fund established by section 23-1065 is not on an actuarially sound basis as determined pursuant to section 23-1065, subsection I, any surplus or deficit in the revenue provided under section 23-961 above or below the expenses of the industrial commission and other expenditures from the administrative fund as provided under this chapter shall be included in the calculation of the rate to be fixed for the following year pursuant to section 23-961, subsection G. If the special fund is not on an actuarially sound basis as determined pursuant to section 23-1065, subsection I, notwithstanding any other provision of this section, at least once each fiscal year, the industrial commission shall determine if there is a surplus in the revenue provided under section 23-961 that is greater than the expenses of the industrial commission and other expenditures from the administrative fund as provided under this chapter. On notice from the industrial commission to the state treasurer, the surplus shall be transferred to the special fund.

Article 11 Assigned Risk Plan

§ 23-1091 Assigned risk plan

A. An insurer may decline to issue a workers' compensation or occupational disease policy to an employer. An employer who is refused coverage by two or more insurers shall be placed in the assigned risk plan established by this section unless any of the following factors exist when the employer submits an application for the assigned risk plan:

On a current or previous workers' compensation policy, the employer does either of the following:

(a) Knowingly does not meet reasonable health and safety requirements or audit or loss prevention requirements.

(b) Does not allow any insurance carrier or assigned insurance carrier reasonable access to the employer's records for audit or inspection purposes under the policy.

The employer has an outstanding premium that is due on a workers' compensation policy and that is not subject to a bona fide dispute.
The employer or the employer's representative knowingly fails to comply with the assigned risk plan's application procedures or knowingly makes a material misrepresentation on the application.

B. If an employer is placed in the assigned risk plan as established by this section, the employer may be removed from the assigned risk plan subject to section 23-961.

C. There shall be only one workers' compensation assigned risk plan in this state. The director of the department of insurance and financial institutions shall contract with a qualified party to be the assigned risk plan administrator.

D. The administrator may charge all insurers transacting workers' compensation insurance in this state a reasonable fee to administer the assigned risk plan. Each insurer shall pay a share of the fee based on the insurer's share of the preceding calendar year's total net direct workers' compensation and occupational disease compensation insurance premiums written in this state.

E. The assigned risk plan administrator shall develop a plan of operation and, on approval by the director of the department of insurance and financial institutions, shall issue a directive for the equitable apportioning of assigned risks among all the insurers. At any time, the director of the department of insurance and financial institutions may require the assigned risk plan administrator to amend the plan of operation. The plan shall include at least the following:

A method for the administrator to select one or more insurers transacting workers' compensation insurance in this state to act as servicing carriers. An administrator that is an insurer may act as its own servicing carrier. The administrator shall monitor the performance of the servicing carriers and shall measure performance against the administrator's established standards. A servicing carrier shall:

(a) Provide coverage for the risks placed in the assigned risk plan.

(b) Pay claims.

(d) Perform other activities that are related to the preliminary and subsequent effectuation of the contract and that arise out of the contract, including paying commissions to any licensed property and casualty agent or broker in this state.

A method for apportioning the workers' compensation assigned risks among all insurers.

F. Unless the director decides to use another method, the rates used to determine the premiums of risks in the assigned risk plan are the rates annually filed with the director of the department of insurance and financial institutions by the designated rating organization pursuant to section 20-357, subsection B, unless the director requires the use of rates from another rating organization, plus a uniform percentage increase that applies to all classifications, that is determined by the designated rating organization or, if the director directs, another rating organization and that is subject to approval by the director. The expected loss rates, ballast factors and other factors for use with the uniform experience rating plan as described in title 20, chapter 2, article 4 and filed with the director also apply to experience rated risks in the assigned risk plan.

G. Rating classifications used in the assigned risk plan shall conform to the uniform classification plan. Subclassifications and rating rule deviations shall not be used in the assigned risk plan.

H. All insurers participating in workers' compensation or occupational disease compensation insurance shall participate in the assigned risk plan.

I. Distribution of assignments among insurers shall be made in proportion to each insurer's share of the preceding calendar year's total net direct workers' compensation and occupational disease compensation insurance premium written in this state, as far as practicable.

J. An insurer that refuses to participate in the assigned risk plan shall not be authorized to write workers' compensation coverage in this state. If an insurer refuses to participate in the assigned risk plan after being authorized to write workers' compensation coverage in this state, the insurer's authorization shall be revoked. If an insurer withdraws from or is terminated from writing workers' compensation coverage in this state, the insurer remains responsible for all injuries sustained during the period of coverage stated in the policies of that insurer.

Article 12 Presumptions of Compensability

§ 23-1101 Definition of report

In this article, unless the context otherwise requires, "report" means the report prescribed by section 23-1102.

§ 23-1102 Workers' compensation presumptions of compensability; report

A person that advocates a legislative proposal shall submit a report to the joint legislative audit committee as prescribed in this article, if the legislative proposal if enacted would do either of the following:

Mandate that an insurer or self-insured employer deem that a disease or condition has arisen out of employment, including establishing a presumption of compensability.
Substantially modify a statute that establishes a presumption of compensability for a disease or condition.

§ 23-1103 Impact of presumptions; liability

A. The report shall include all of the following:

Scientific evidence that shows the extent to which:

(a) Peer reviewed scientific studies exist that document a causal relationship that a specific disease or condition has been demonstrated to have arisen out of employment.

(b) The centers for disease control and prevention have determined that a disease or condition is acquired or transmitted.

Financial information to indicate the extent to which:

(a) The mandate may cause an employer or insurance carrier to pay a workers' compensation claim for a nonwork related disease or condition.

(b) The mandate may increase costs to self-insured employers or premiums charged by insurance carriers.

An explanation of why existing compensability methods are inadequate to accurately determine if a disease or condition is acquired or transmitted in the course of employment.

B. The report shall address the specific language of the legislative proposal.

C. A person that does not submit a report as prescribed in this article is not subject to any civil sanction or criminal penalty.

§ 23-1104 Report procedures and deadlines

A report must be submitted to the joint legislative audit committee on or before September 1 before the start of the legislative session for which the legislation is proposed. The joint legislative audit committee shall assign the written report to the appropriate legislative committee of reference established pursuant to section 41-2954. The legislative committee of reference shall hold at least one hearing and take public testimony after receiving the report. The legislative committee of reference shall study the written report and deliver a report of its recommendations to the joint legislative audit committee, the speaker of the house of representatives, the president of the senate, the governor and the commission on or before December 1 of the year in which the report is submitted.

§ 23-1105 Heart-related, perivascular and pulmonary cases; firefighters; presumption; definition

A. A heart-related, perivascular or pulmonary injury, illness or death of a firefighter is presumed to be an occupational disease as defined in section 23-901, paragraph 13, subdivision (c), compensable pursuant to section 23-1043.01 and deemed to arise out of employment if all of the following apply:

The firefighter passed a physical examination before employment and the examination did not indicate evidence of heart-related, perivascular or pulmonary injury or illness.
The firefighter received a physical examination that is reasonably aligned with the national fire protection association standard on comprehensive occupational medical program for fire departments (NFPA 1582).
The firefighter was exposed to a known event and the heart-related, perivascular or pulmonary injury, illness or death occurred within twenty-four hours after the exposure and was reasonably related to the exposure.

B. The presumption provided in subsection A of this section may be rebutted by a preponderance of the evidence that there is a specific cause of the heart-related, perivascular or pulmonary injury, illness or death other than the employment.

C. Subsection A of this section does not apply if there is evidence that the firefighter's exposure to cigarettes or tobacco products outside the scope of the firefighter's official duties is a substantial contributing cause in the development of the heart-related, perivascular or pulmonary injury, illness or death.

D. For the purposes of this section, "firefighter" means a firefighter or volunteer firefighter as described in section 23-901, paragraph 6, subdivision (d).

Chapter 8 Labor Relations

Article 1 Right to Work

§ 23-1301 Definitions

In this article, unless the context otherwise requires:

"Labor organization" means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or other conditions of employment.
"Person" includes a natural person, a corporation, association, company, firm or labor organization.

§ 23-1302 Prohibition of agreements denying employment because of nonmembership in labor organization

No person shall be denied the opportunity to obtain or retain employment because of nonmembership in a labor organization, nor shall the state or any subdivision thereof, or any corporation, individual, or association of any kind enter into an agreement, written or oral, which excludes a person from employment or continuation of employment because of nonmembership in a labor organization.

§ 23-1303 Illegality of acts or agreements violating article; strike or picketing for illegal purpose

A. Any act or provision in an agreement which is in violation of this article is illegal and void.

B. Any strike or picketing to force or induce an employer to make an agreement orally or in writing in violation of this article is for an illegal purpose.

§ 23-1304 Prohibition of threatened or actual interference with a person, his family or property to compel him to join labor organization, strike or leave employment

It is unlawful for an employee, labor organization, or officer, agent or member thereof, by any threatened or actual interference with the person, his immediate family or his property, to compel or attempt to compel such person to join a labor organization, to strike against his will or to leave his employment.

§ 23-1305 Prohibition of conspiracy to induce persons to refuse to work with persons not members of labor organization

A combination or conspiracy by two or more persons to cause the discharge of any person or to cause him to be denied employment because he is not a member of a labor organization by inducing or attempting to induce any other person to refuse to work with such person, is illegal.

§ 23-1306 Civil liability of person violating article

A person who violates any provision of this article, or who enters into an agreement containing a provision declared illegal by this article, or who brings about the discharge of or denial of employment to any person because of nonmembership in a labor organization shall be liable to the person injured as the result of such act or provision and may be sued therefor, and in such action any labor organization, subdivision or local thereof shall be bound by the acts of its duly authorized agents acting within the scope of their authority, and may sue or be sued in its common name.

§ 23-1307 Injunctive relief from injury resulting from violation of article

A person injured or threatened with injury by an act declared illegal by this article shall, notwithstanding any other provision of law to the contrary, be entitled to injunctive relief therefrom.

Article 2 Picketing and Secondary Boycotts

§ 23-1321 Definitions

In this article, unless the context otherwise requires:

"Concerted interference with lawful exercise of business activity" means to do either of the following by the use of force, intimidation, violence, threats of unlawful activity, destruction of the employer's real or intangible property, unlawful assembly or defamatory statements:

(a) Prevent or attempt to prevent an employer from:

(i) Lawfully engaging in any proper and lawful business activity.

(ii) Properly, lawfully or peacefully using or enjoying the employer's property that is used or useful in the conduct of the employer's business.

(iii) Acquiring materials or supplies for the purposes of the employer's business.

(iv) Disposing of the goods, wares or products of the employer's business.

(b) Cause or induce a breach or termination of a known contractual relationship or known business expectancy for an improper purpose which results in damage to the employer.

"Labor organization" means an organization of any kind, or an agency or employee representation committee or plan in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or other conditions of employment. For the purpose of this article the word "employee" or "employees" does not include persons having supervisory authority, professional or confidential employees, guards or persons employed in personnel departments.
"Person" includes a natural person, a corporation, association, company, firm or labor organization.
"Secondary boycott" means:

(a) A combination or conspiracy by two or more persons, by a strike, threat to strike, picketing, threat to picket, violence, threat of violence, or by concerted refusal or threat of concerted refusal, to process, install, service, handle, transport or otherwise deal with specified articles, materials or services, to force or require a person to cease or partially to cease processing, installing, servicing, selling, handling or transporting the products of or selling to or otherwise dealing with any other person for the purpose of forcing or requiring such other person to recognize, bargain with or comply with the demands of a labor organization, or for the reason that such other person has in his employ persons who are not members of a labor organization or is not himself a member of a labor organization, or for the reason that such other person uses goods, materials or services considered objectionable by a labor organization.

(b) An act, combination or agreement which directly or indirectly causes, induces or compels another to strike, threaten to strike, picket, threaten to picket, commit violence, threaten to commit violence, refuse to or threaten to refuse to process, install, service, handle, transport or otherwise deal with specified articles, materials or services, to force or require a person to cease or partially to cease processing, installing, servicing, selling, handling or transporting the products of, or selling to or otherwise dealing with any other person for the purpose of forcing or requiring such other person to recognize, bargain with or comply with the demands of a labor organization, or for the reason that such other person has in his employ persons who are not members of a labor organization, or is not himself a member of a labor organization, or for the reason that such other person uses goods, materials or services considered objectionable by a labor organization.

"Trespassory assembly" means knowingly entering or unlawfully remaining on any property in violation of section 13-1502, 13-1503 or 13-1504.
"Unlawful mass assembly" means a violation of section 23-1327.
"Unlawful picketing" means a violation of section 23-1322.

§ 23-1322 Unlawful picketing

A. It is unlawful for a labor organization to picket any establishment unless there exists between the employer and the majority of employees of such establishment a bona fide dispute regarding wages or working conditions.

B. It is unlawful for a labor organization to engage in picketing or to induce others to engage in picketing if the purpose of the picketing is to coerce or induce an employer or self-employed person to join or contribute to a labor organization.

§ 23-1323 Injunctive relief; damages

A. Unlawful picketing, trespassory assembly, unlawful mass assembly, concerted interference with lawful exercise of business activity and engaging in a secondary boycott are illegal and a person against whom any of these activities is directed or who is injured by these activities is entitled to injunctive relief from these activities. Any person or persons calling or conducting any of these activities is liable to any person injured by these activities for damages, prejudgment interest, litigation costs and reasonable attorney fees. These damages include lost sales and business, lost profits and loss in value of the business. If a person calling or conducting these activities acted in bad faith or disobeyed a court order, including an injunction issued pursuant to this subsection, the person is liable for punitive damages.

B. Nothing in this article shall be construed to imply the legality of any act or conspiracy illegal under the laws of this state before November 24, 1952. Any labor organization, subdivision or local thereof shall be bound by and liable for the acts of its agents, and may sue or be sued in its common name.

§ 23-1324 Violations; classification

A. Except as provided in subsection B of this section, any person who violates any provision of this article is guilty of a class 2 misdemeanor and shall pay a fine of not less than two hundred dollars.

B. A person who violates section 23-1322, 23-1327 or 23-1328 at a property listed on the no trespass public notice list is guilty of a class 1 misdemeanor and shall pay a fine of not less than two hundred dollars.

C. Any fine levied pursuant to this section shall be recovered by the attorney general or under his direction in the name of the state.

§ 23-1325 Defamation; damages

A. A person commits defamation of an employer by doing all of the following:

Maliciously making a false statement about the employer to a third party without privilege.
Knowingly, recklessly or negligently disregarding the falsity of the statement.
Causing damage to the employer by the false statement.

B. An employer against whom defamation is directed or who is injured by defamation may obtain injunctive relief from the defamation. A person who commits the defamation is liable to any person injured by the defamation for damages, prejudgment interest, attorney fees, the costs of litigation and punitive damages. The damages may include lost sales and business, lost profits and loss in value of the business.

C. A labor union or a subdivision or local chapter of a labor organization is bound by and liable for the acts of its agents and may sue or be sued in its common name.

§ 23-1327 Unlawful mass assembly

A. A person shall not do any of the following:

Hinder or prevent the pursuit of any lawful work or employment by mass assembly, unlawful threats or force.
Obstruct or interfere with entrance to or egress from any place of employment, including by intentionally operating a motor vehicle so as to delay, impede or interfere with the ability of persons or vehicles to enter or leave any property.
Obstruct or interfere with the free and uninterrupted use of public roads, streets, highways, railways, airports or other means of travel or conveyance.
Use language or words threatening to do harm to a person or the person's real or intangible property or designed to incite fear in any person attempting to enter or leave any property.
Assemble other than in a reasonable and peaceful manner.

B. This section does not prohibit assembly to the extent that assembly is authorized under the Arizona or federal constitution or federal law.

§ 23-1328 Trespassory assembly

A labor organization or individual or group that acts on behalf of employees shall not engage in trespassory assembly.

§ 23-1329 Publicizing enjoined picketing or assembly; prohibition

A person shall not declare or publicize the continued existence of actual or constructive picketing or assembly at a point or directed against a premises, if a court of competent jurisdiction has enjoined the continuation of the picketing or assembly at that point or premises.

Article 3 Contracts of Employment Contrary to Public Policy

§ 23-1341 Invalidity of employment agreement not to join, become or remain member of labor or employers' organization

Every undertaking or promise made, whether written or oral, express or implied, is contrary to public policy and void and shall not afford any reason for granting legal or equitable relief, when constituted or contained in a contract or agreement of hiring or employment between an employer and an employee or prospective employee, whereby:

Either party to the contract or agreement undertakes or promises not to join, become or remain a member of any labor organization or of any organization of employers.
Either party to the contract or agreement undertakes or promises that he will withdraw from the employment relation in the event he joins, becomes or remains a member of a labor organization or of an organization of employers.

§ 23-1342 Compelling or coercing another not to join labor union as requisite to employment; classification

A person who coerces or compels any other person to enter into an agreement, either written or oral, not to join or become a member of a labor organization, as a condition of the other person obtaining employment or continuing in the employment of such person, is guilty of a class 2 misdemeanor.

Article 4 Blacklisting

§ 23-1361 Blacklist; definition; exceptions; privileged communications; immunity

A. "Blacklist" means any understanding or agreement whereby the names of any person or persons, list of names, descriptions or other means of identification shall be spoken, written, printed or implied for the purpose of being communicated or transmitted between two or more employers of labor, or their bosses, foremen, superintendents, managers, officers or other agents, whereby the laborer is prevented or prohibited from engaging in a useful occupation. Any understanding or agreement between employers, or their bosses, foremen, superintendents, managers, officers or other agents, whether written or verbal, comes within the meaning of this section and it makes no difference whether the employers, or their bosses, foremen, superintendents, managers, officers or other agents, act individually or for some company, corporation, syndicate, partnership or society and it makes no difference whether they are employed or acting as agents for the same or different companies, corporations, syndicates, partnerships or societies.

B. It is not unlawful for a former employer to provide to a requesting employer, or agents acting in the employer's behalf, information concerning a person's education, training, experience, qualifications and job performance to be used for the purpose of evaluating the person for employment. It is not unlawful for a school district to provide information received as a result of a fingerprint check required by section 15-512 to any other school district if requested to do so by the person who was the subject of the fingerprint check or communicate to any school district if requested to do so by the person who applied for a fingerprint clearance card whether the person has been issued or denied a fingerprint clearance card. A copy of any written communication regarding employment must be sent by the employer providing the information to the former employee's last known address.

C. An employer who in good faith provides information requested by a prospective employer about the reason for termination of a former employee or about the job performance, professional conduct or evaluation of a current or former employee is immune from civil liability for the disclosure or the consequences of providing the information. There is a presumption of good faith if either:

The employer employs less than one hundred employees and provides only the information authorized by this subsection.
The employer employs at least one hundred employees and has a regular practice in this state of providing information requested by a prospective employer about the reason for termination of a former employee or about the job performance, professional conduct or evaluation of a current or former employee.

D. The presumption of good faith under subsection C of this section is rebuttable by showing that the employer disclosed the information with actual malice or with intent to mislead. This subsection and subsection C of this section do not alter any privileges that exist under common law. For the purposes of this subsection, "actual malice" means knowledge that the information was false or was provided with reckless disregard of its truth or falsity.

E. Communications concerning employees or prospective employees that are made by an employer or prospective employer, or by a labor organization, to a government body or agency and that are required by law or that are furnished pursuant to written rules or policies of the government body or agency are privileged.

F. An employer, including this state and its agencies, a labor organization or an individual is not civilly liable for privileged communications made pursuant to subsection E of this section.

G. In response to a request by another bank, savings and loan association, credit union, escrow agent, commercial mortgage banker, mortgage banker or mortgage broker it is not unlawful for a bank, a savings and loan association, a credit union, an escrow agent, a commercial mortgage banker, a mortgage banker or a mortgage broker to provide a written employment reference that advises of the applicant's involvement in any theft, embezzlement, misappropriation or other defalcation that has been reported to federal authorities pursuant to federal banking guidelines or reported to the department of insurance and financial institutions. In order for the immunity provided in subsection H of this section to apply, a copy of the written employment reference must be sent by the institution providing the reference to the last known address of the applicant in question.

H. A bank, savings and loan association, credit union, escrow agent, commercial mortgage banker, mortgage banker or mortgage broker is not civilly liable for providing an employment reference unless the information provided is false and the bank, savings and loan association, credit union, escrow agent, commercial mortgage banker, mortgage banker or mortgage broker providing the false information does so with knowledge and malice.

I. A court shall award court costs, attorney fees and other related expenses to any party that prevails in any civil proceeding in which a violation of this section is alleged.

§ 23-1362 Blacklisting; classification

A. A person commits blacklisting if he knowingly exchanges, solicits or gives out any labor blacklist.

B. A person who commits blacklisting is guilty of a class 2 misdemeanor.

Article 5 Agricultural Employment Relations

§ 23-1381 Declaration of policy

It is hereby declared to be the policy of this state that the uninterrupted production, packing, processing, transporting and marketing of agricultural products are vital to the public interest. It is also declared to be the policy of this state that agricultural employees are free to organize, to take concerted action and, through representatives of their own choosing, to enter into collective bargaining contracts establishing their wages and terms and conditions of employment or to refrain from engaging in any or all of these activities. It is further declared that there now exists an inequality of bargaining power between agricultural employers and labor unions, arising out of the seasonal character and perishable nature of such agricultural products, the mobility of agricultural labor and the fundamental differences between agriculture and industry. While the right to strike is a basic right of organized labor, such right must take into account the perishable character and the seasonal nature of agricultural products and must be limited and regulated accordingly. It is the intent of the legislature to provide a means to bargain collectively that is fair and equitable to agricultural employers, labor organizations and employees, to provide orderly election procedures to resolve questions concerning representation of agricultural employees and to declare that certain acts are unfair labor practices that are prohibited and that are subject to control by the police power of this state. The overriding special interest of this state with respect to certain secondary boycott activities originating in this state, but extending across state lines and directed at employers in other states, must be recognized, and such acts must be made unlawful and subject to control by the police power of this state.

§ 23-1382 Definitions

In this article, unless the context otherwise requires:

"Agricultural employee, permanent" means any employee who is over sixteen years of age, who has been employed by a particular agricultural employer for at least six months during the preceding calendar year and who is engaged in the growing or harvesting of agricultural crops or the packing of agricultural crops if packing is accomplished in the field. "Agricultural employee, temporary" means any employee who is over sixteen years of age, who is employed by a particular agricultural employer, who has been so employed during the preceding calendar year and who is engaged in the growing or harvesting of agricultural crops or the packing of agricultural crops if packing is accomplished in the field. If otherwise qualified, a person shall be considered an agricultural employee if an agricultural employer pays the wages of the employee for work performed for the employer's benefit or on his behalf, even though the supervision of the employee, the bookkeeping and the issuance of payroll checks are by a person other than the employer. In calculating a workday of an agricultural employee, one hour or more of employment in any one day shall be considered a workday. "Agricultural employee" also includes any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice and who has not obtained any other regular and substantially equivalent employment. "Agricultural employee" does not include any individual who:

(a) Is employed by his parent or spouse or by an immediate relative.

(b) Has the status of an independent contractor.

(d) Is employed as an executive, professional or technical employee.

(e) Has quit or has been discharged for cause.

(f) Is a tenant or sharecropper and reasonably directs or shares in the management of an enterprise engaged in agriculture.

(g) Is engaged in hauling or stitching functions.

"Agricultural employer" means any employer who is engaged in agriculture and who employed six or more agricultural employees for a period of thirty days during the preceding six month period and includes any person who provides labor and services on one or more farms as an independent contractor if such person, for a period of thirty days during the preceding six month period, employed six or more employees in such work. In calculating the number of agricultural employees employed by an agricultural employer or provided by an independent contractor, one hour or more of employment in any one day shall be considered a day of work. Agricultural employer also includes any employer who is engaged in agriculture with less than six agricultural employees and who voluntarily elects to be subject to this article by filing a request in writing with the board.
"Agriculture" means all services performed on a farm as defined in section 23-603, including but not limited to the recruiting, housing and feeding of persons employed or to be employed as agricultural employees by agricultural employers.
"Board" means the agricultural employment relations board.
"Farm" means any enterprise that is engaged in agriculture, that is operated from one headquarters where the utilization of labor and equipment is directed and whose tracts of land, if consisting of separate tracts of land, are located within a fifty mile radius of such headquarters.
"Labor dispute" means any controversy between an agricultural employer and his agricultural employees or their representative concerning terms, tenure or conditions of employment or concerning the association or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of employment.
"Labor organization" means any organization or any agency defined in sections 23-1301 and 23-1321.
"Person" means one or more individuals, labor organizations, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy or receivers.
"Professional employee" means:

(a) Any employee engaged in agricultural work that either:

(i) Is predominantly intellectual and varied in character as opposed to routine mental, manual, mechanical or physical work.

(ii) Involves the consistent exercise of discretion and judgment in its performance.

(iii) Is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.

(iv) Requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study in an institution of higher learning.

(b) Any employee who has completed the course or courses of specialized intellectual instruction and study described in subdivision (a), item (iv) and is performing such work, or is performing such work or related work under the supervision of a professional person while acquiring specialized instruction.

"Representative" means any individual or labor organization.
"Supervisor" means any individual who has authority to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward or discipline other employees, or responsibility to direct them, or to adjust their grievances, or effectively to recommend such action, if such authority requires the use of independent judgment.
"Ultimate consumer" means the person who purchases an agricultural product for consumption.
"Unfair labor practice" means any unfair labor practice listed in section 23-1385.

§ 23-1383 Rights of employees

A. Agricultural employees have the right to self-organization, to bargain directly for themselves, and to form and join or assist labor organizations to bargain collectively through representatives of their own free choosing, or to engage in lawful concerted activity for the purpose of collective bargaining or other mutual aid or protection, and each such employee has the right, without interference from any source, to refrain from any and all of these activities.

B. Agricultural employees also have those rights more particularly defined and described in articles 1 and 3 of this chapter and shall be protected from the practices described in article 4 of this chapter.

§ 23-1384 Rights of employer

An agricultural employer has the following management rights:

To manage, control and conduct his operations, including but not limited to the number of farms and their locations, methods of carrying on any operation or practices, kinds of crops, time of work, size and makeup of crews, assignment of work and places of work.
To hire, suspend, discharge or transfer employees in accordance with his judgment of their ability.
To determine the type of equipment or machinery to be used, the standards and quality of work, and the wages, hours and conditions of work. The terms of employment relating to wages, hours, conditions of work and matters of worker safety, sanitation, health and the establishment of grievance procedures directly relating to a job are subject to negotiation.
To work on his own farm in any capacity at any time.
To join or refuse to join any labor organization or employer organization.

§ 23-1385 Unfair labor practices; definition

A. It is an unfair labor practice for an agricultural employer:

To interfere with, restrain or coerce employees in the exercise of the rights guaranteed in section 23-1383 and articles 1 and 3 of this chapter or to violate the protection of employees from the practices described in article 4 of this chapter.
To dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it. An agricultural employer shall not be prohibited from permitting employees to confer with him during working hours without loss of time or pay.
To encourage or discourage membership in any labor organization by discrimination in regard to hiring or tenure of employment or any term or condition of employment.
To discharge or otherwise discriminate against an agricultural employee because he has filed charges or given testimony under this article.
To refuse to bargain collectively with the representatives of his employees, subject to section 23-1389. Nothing in this article shall be construed as requiring an agricultural employer to bargain collectively until a representative of his agricultural employees has been determined by means of a valid secret ballot election.
To discharge or otherwise discriminate against any person because he has filed charges or given testimony before the board or a court.
To threaten to have discharged any agricultural employee, or threaten to have wages of any agricultural employees reduced, solely because of any labor activity.

B. It is an unfair labor practice for a labor organization or its agents to:

Impose any economic sanction, to restrain or coerce agricultural employees in the exercise of their rights or to coerce or intimidate any employee in the enjoyment of his legal rights provided by this article, or to intimidate his family, picket his domicile or injure the person or property of any employee or his family. This paragraph does not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership.
Threaten or impose any economic sanction or reprisal against any person who is not a member of the labor organization in the exercise of rights under this article, including but not limited to the right to refrain from any or all concerted activity, or against any person, who is not a member of the labor organization, who refrains from compliance with a union rule, policy or practice that establishes or affects wages, hours or working conditions at such person's place of employment.
Restrain, coerce, or threaten or impose any fine or other economic sanction against any person who invokes the processes of the board, or the court, or against an agricultural employer or employee in the selection of his representatives for the purposes of collective bargaining or the adjustment of grievances.
Refuse to bargain collectively with an agricultural employer, provided it is the majority representative of his agricultural employees as determined pursuant to section 23-1389.
Cause or attempt to cause an agricultural employer to:

(a) Pay or deliver or agree to pay or deliver any money or other thing of value for services that are not performed or that are not to be performed.

(b) Establish or alter the number of employees to be employed or the assignment of the employees.

(d) Discriminate in regard to hiring or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization. Nothing in this subdivision prohibits agreements between labor organizations and agricultural employers that regulate hiring and tenure of employment on the basis of seniority, and the labor organization is not given power to determine seniority unilaterally.

Engage in a secondary boycott as defined in section 23-1321.
Induce or encourage or threaten, restrain or coerce any secondary employer or any executive or management employee of any secondary employer to make a management decision not to handle, transport, process, pack, sell or distribute any agricultural commodity of an agricultural employer with whom a labor dispute exists.
Induce or encourage the ultimate consumer of any agricultural product to refrain from purchasing, consuming or using such agricultural product by the use of dishonest, untruthful and deceptive publicity. Permissible inducement or encouragement within the meaning of this section means truthful, honest and nondeceptive publicity that identifies the agricultural product produced by an agricultural employer with whom the labor organization has a primary dispute. Permissible inducement or encouragement does not include publicity directed against any trademark, trade name or generic name that may include agricultural products of another producer or user of such trademark, trade name or generic name.
Restrain, coerce or threaten an ultimate consumer to prevent him from purchasing, consuming or using such agricultural product.
Threaten or engage in arson, libel, slander, injury to person or property or other violent conduct if the objective is to prevent the preparing for market, transporting, handling, displaying for sale, or selling of any agricultural product.
Intimidate, restrain or coerce agricultural employers in the exercise of the rights guaranteed by section 23-1384.
Picket or cause to be picketed, boycott or cause to be boycotted, or threaten to boycott or picket, or cause to be boycotted or picketed, any agricultural employer if the objective is to induce, encourage, force or require an agricultural employer to recognize or bargain with a labor organization as the representative of his agricultural employees, or the agricultural employees of an agricultural employer to accept or select such labor organization as their collective bargaining representative unless such labor organization is currently certified as the representative of such employees:

(a) If the agricultural employer has lawfully recognized in accordance with this article any other labor organization and a question concerning representation may not appropriately be raised under section 23-1389.

(b) If within the preceding twelve months a valid election under section 23-1389 has been conducted.

Call a strike unless a majority of the employees within the bargaining unit has first approved the calling of such a strike by secret ballot.

C. The expressing of any views, argument or opinion or the making of any statement, including expressions intended to influence the outcome of an organizing campaign, a bargaining controversy, a strike, lockout or other labor dispute, or the dissemination of such views whether in written, printed, graphic, visual or auditory form, if such expression contains no threat of reprisal or force or promise of benefit, does not constitute or is not evidence of an unfair labor practice or does not constitute grounds for, or evidence justifying, setting aside the results of any election conducted under any of the provisions of this article. A statement of fact by either a labor organization or an agricultural employer relating to existing or proposed operations of the employer or to existing or proposed terms, tenure or conditions of employment with the employer shall not be considered to constitute a threat of reprisal or force or promise of benefit. An employer shall not be required to furnish or make available to a labor organization, and no labor organization shall be required to furnish or make available to an employer, materials, information, time or facilities to enable such employer or labor organization, as the case may be, to communicate with employees of the employer, members of the labor organization, its supporters or its adherents.

D. For the purposes of this section, "bargain collectively" means the performance of the mutual obligation of the agricultural employer and the representative of the agricultural employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment that directly affect the work of employees, or the negotiation of an agreement, or to resolve any question arising thereunder. Bargain collectively includes the furnishing of necessary and relevant information in connection with the negotiation of an agreement or any issue arising under such agreement, or requiring as a condition for entering into an agreement the execution of a written contract incorporating any agreement reached if requested by either party. The failure or refusal of either party to agree to a proposal, to the making, changing or withdrawing of a lawful proposal or to the making of a concession does not constitute, or is not evidence, direct or indirect, of, a breach of this obligation. The board in any remedial order shall not direct either party to make any concession, agree to any proposal or make any payment of money except to employees who are reinstated with back pay as provided in section 23-1390. This section does not require any agricultural employer to bargain collectively with respect to any management rights. "Management rights", as used in this subsection, includes but is not limited to the right to discontinue the entire farming operation or any part of the operation, to contract out any part of the work of the operation not covered by a labor contract, to sell or lease any of the real or personal property involved in the operation or to determine the methods, equipment and facilities to be used in producing agricultural products or the agricultural products to be produced.

E. If there is in effect a collective bargaining contract covering agricultural employees, the duty to bargain collectively also means that no party to the contract may terminate or modify the contract, unless the party desiring such termination or modification:

Serves a written notice on the other party to the contract of the proposed termination or modification not less than sixty days prior to the expiration date of the contract, or if such contract contains no expiration date, sixty days prior to the time it is proposed to make such termination or modification.
Offers to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed modifications.
Continues the contract in full force and effect without resorting to a strike or lockout for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later.

F. The duties imposed on agricultural employers, agricultural employees and labor organizations become inapplicable on an intervening certification of the board, under which the labor organization or individual that is a party to the contract has been superseded as or ceased to be the representative of the employees subject to section 23-1389, and the duties so imposed shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract. Any agricultural employee who engages in a strike within the sixty day period specified in this subsection loses his status as an agricultural employee of the agricultural employer engaged in the particular labor dispute for the purposes of this section and sections 23-1389 and 23-1390, but such loss of status for such employee terminates when he is reemployed by such employer.

§ 23-1386 Agricultural employment relations board; members; terms; appointment

A. An agricultural employment relations board is established that consists of seven members.

B. The governor shall appoint the members of the board. Two of the members shall be appointed as representatives of agriculture employers, two of the members appointed shall be representatives of organized agricultural labor and the three additional members, one of whom shall be the chairman of the board, shall be appointed as representatives of the general public. The term of office of the members is five years. On the initial appointment, one of the labor representatives shall be appointed for a term of one year, one of the representatives of the general public shall be appointed for a term of one year, one of the agricultural representatives shall be appointed for a term of two years, one of the representatives of the general public shall be appointed for a term of two years, one of the agricultural representatives shall be appointed for a term of three years, one of the labor representatives shall be appointed for a term of four years, and one of the public members of the board shall be appointed for a term of five years. Any individual appointed to fill a vacancy of any member shall be appointed only for the unexpired portion of the term of the member he is succeeding. Members of the board may be removed from office by the governor on notice and a hearing for neglect of duty or malfeasance in office but for no other cause.

C. The governor shall appoint two alternate members. One of the alternates shall be appointed as a representative of organized agricultural labor and the other as a representative of agriculture. Alternates shall be appointed for terms of five years. Any individual appointed to fill a vacancy of any alternate shall be appointed only for the unexpired portion of the term of the alternate he is succeeding. Alternates may be removed from office by the governor on notice and a hearing for neglect of duty or malfeasance in office, but for no other cause. No alternate may participate in deliberations of the board except in the absence of a board member representing his area of interest.

D. The governor shall appoint a general counsel of the board. The general counsel is the exclusive legal representative of the board, has final authority, on behalf of the board, with respect to the investigation of charges and the issuance of complaints under section 23-1390 and with respect to the prosecution of such complaints by the board, and has such other duties as the board may prescribe or as may be provided by law. The general counsel shall appoint such assistants as needed to carry out the work of the office.

E. A vacancy on the board does not impair the right of the remaining members to exercise all of the powers of the board, and four members constitute a quorum of the board. The board shall have an official seal that is judicially recognized.

F. The principal office of the board shall be in the city of Phoenix, but it may meet and exercise any of its powers at any other place.

G. The board may meet in executive session on the decision of a majority of the members of the board.

H. Meetings of the board may be called by the chairman or by a majority of the members of the board by giving written notice to the chairman who shall notify all of the members of the board as to the time and place of the board meeting.

§ 23-1387 Powers and duties

A. By one or more of its members or by such agents or agencies as it may designate, the board may prosecute any inquiry necessary to its functions in any part of this state. A member of the board who participates in any such inquiry shall not be disqualified from subsequently participating in a decision of the board in the same case.

B. The board shall adopt rules pursuant to title 41, chapter 6 as may be necessary to carry out this article.

C. The board may also establish offices in such other cities as it deems necessary and shall determine the region to be served by such offices. The board may delegate to the heads of these offices as it deems appropriate its powers under section 23-1389 to determine the unit appropriate for the purpose of collective bargaining, to investigate and provide for hearings, to determine whether a question of representation exists and to direct an election by a secret ballot and to certify, within a reasonable period of time, the results of such election. The board may review any action taken pursuant to the authority delegated under this subsection by any regional officer on a request for a review of such action filed with the board by any interested party. Any such review made by the board, unless specifically ordered by the board, does not operate as a stay of any action taken by the regional officer. The entire record considered by the board in considering or acting on any such request or review shall be made available to all parties before the consideration or action, and the board's findings and action thereon shall be published as a decision of the board.

§ 23-1388 Officers and employees of the board

A. The board may appoint an executive secretary and such attorneys and other employees as it may from time to time find necessary for the proper performance of its duties. Compensation for all such personnel shall be as determined pursuant to section 38-611.

B. The board may not employ any attorney for the purpose of reviewing transcripts of hearings or preparing drafts of opinions, except that any attorney employed for assignment as a legal assistant to any board member may review such transcripts and prepare such drafts for the board member.

C. No administrative law judge's report may be reviewed, either before or after its publication, by any person other than a member of the board or his legal assistant, and no administrative law judge may advise or consult with the board with respect to exceptions taken to his findings, rulings or recommendations.

D. At the discretion of the board, attorneys appointed under this section may appear for and represent the board in any case in court.

§ 23-1389 Representatives and elections

A. Representatives selected by a secret ballot for the purposes of collective bargaining by the majority of the agricultural employees in a unit appropriate for such purposes are the exclusive representatives of all of the agricultural employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages, hours of employment or other conditions of employment. If ratification of any such contract is required, the right to vote in such ratification is limited to the employees in the bargaining unit. Any individual agricultural employee or a group of agricultural employees at any time may present grievances to their agricultural employer and have such grievances adjusted, without the intervention of the bargaining representative, if the adjustment is not inconsistent with the terms of a collective bargaining contract or agreement then in effect. The bargaining representative may be present at such adjustment.

B. The board shall decide in each case whether in order to ensure to employees the fullest freedom in exercising their rights the unit appropriate for the purposes of collective bargaining shall consist of either all temporary agricultural employees or all permanent agricultural employees of an agricultural employer working at the farm where such employer grows or produces agricultural products, or both. In making unit determinations the extent of a union's extent of organization shall not be controlling. Principal factors should be the community of interest between employees, the same hours, duties and compensation, the administrative structure of the employer and the control of labor relations policies.

C. The board shall investigate any petition and, if it has reasonable cause to believe that a question of representation exists, shall provide for an appropriate hearing on due notice, if such petition has been filed in good faith in accordance with the rules that may be prescribed by the board:

By an agricultural employee or group of agricultural employees or any individual or labor organization acting in its behalf alleging that thirty per cent or more of the number of agricultural employees in the unit in question either wish to be represented for collective bargaining and that their employer declines to recognize their representative or assert that the individual or labor organization that has been certified or that is being currently recognized by their employer as the bargaining representative is no longer a representative.
By an agricultural employer, alleging that one or more individuals or labor organizations have presented to him a claim to be recognized as the representative or that an individual or labor organization that has previously been certified as the bargaining representative is no longer a representative.

D. If the board finds on the record of such hearing that a question of representation exists, it shall direct an election by secret ballot and shall certify the results. If a second labor organization files a petition for an election alleging that thirty per cent or more of the employees in the unit in question desire to be represented by that labor organization, the board shall require that the names of both labor organizations appear on the ballot. In any election the voters shall be afforded the choice of "no union". If in a representational election more than one union is on the ballot, and none of the choices receives a majority vote, a second election shall be held. The second election shall be between the union receiving the highest number of votes and "no union". In any election a labor organization shall obtain a majority of all votes cast in that election in order to be certified as the bargaining representative of all of the employees in that unit.

E. In determining whether or not a question of representation exists, the same rules of decision apply irrespective of the identity of the persons filing the petition or the kind of relief sought. In no case may the board deny a labor organization a place on the ballot by reason of an order with respect to such labor organization or its predecessor not issued in conformity with section 23-1390.

F. Within five days of receipt of such a petition, the agricultural employer may file a challenge to such petition on the ground that the authorization for the filing of such petition is not current or that such authorization has been obtained by fraud, misrepresentation or coercion. The petition shall not act to stay the election proceeding, but if it is thereafter determined that the authorizations are not current or are obtained by fraud, misrepresentation or coercion the petition will be dismissed.

G. No election may be directed or conducted in any bargaining unit or any subdivision of a bargaining unit within which, in the preceding twelve month period, a valid election has been held. Employees who are engaged in an economic strike and who are not entitled to reinstatement are eligible to vote under such rules as the board finds are consistent with the purposes and provisions of this article in any election conducted within three months after the commencement of the strike. Any agricultural employee who is found to have sought or accepted employment only for the purpose of affecting the outcome of an election is not eligible to vote in an election conducted pursuant to this article for a period of twelve months from the date of that election.

H. Nothing in this section shall be construed to prohibit the waiving of hearings by stipulation for the purpose of a consent election in conformity with rules or decisions of the board.

I. Within ten days after an election is directed by the board or a consent election agreement is approved by the board and on request of the board, the agricultural employer shall furnish to the board a list of agricultural employees in the bargaining unit who are qualified to vote, and this list shall be made available to the organizations or other interested employees involved in the election.

J. On the filing with the board, by thirty per cent or more of the agricultural employees in a bargaining unit covered by a certification or by an agreement between their employer and a labor organization made pursuant to section 23-1385, of a petition alleging the desire that such representation authority be rescinded, the board shall conduct an election by secret ballot of the employees in such unit and shall certify the results to the labor organization and the employer.

§ 23-1390 Prevention of unfair labor practices

A. The board, as provided in this section, may prevent any person from engaging in any unfair labor practice.

B. If it is charged that any person has engaged in or is engaging in any such unfair labor practice, the board, or any agent or agency designated by the board for such purposes, may issue and cause to be served on the person a complaint stating the charges in that respect and containing a notice of hearing before the board or a member of the board or an administrative law judge at least five days after the serving of the complaint. Hearings shall be conducted pursuant to title 41, chapter 6, article 10. No complaint may issue based on any unfair labor practice occurring more than six months before the filing of the charge with the board and the service of a copy of the complaint on the person against whom the charge is made, unless the person so aggrieved was prevented from filing the charge by reason of service in the armed forces, in which event the six month period shall be computed from the day of the person's discharge. Any such complaint may be amended by the member or administrative law judge conducting the hearing or the board in its discretion at any time before the issuance of an order based on the complaint. The person so complained of may file an answer to the original or amended complaint, may appear in person or otherwise and may give testimony at the place and time fixed in the complaint. In the discretion of the board or the member, agent or agency conducting the hearing, any other person may be allowed to intervene in the proceeding and to present testimony.

C. The testimony taken by the board or such member or administrative law judge shall be reduced to writing and filed with the board. Thereafter, in its discretion, the board on notice may take further testimony or hear argument. If on the preponderance of the testimony taken the board determines that any person named in the complaint has engaged in or is engaging in any unfair labor practice, the board shall state its findings of fact and shall issue and cause to be served on the person an order requiring the person to cease and desist from the unfair labor practice and shall take such affirmative action, including reinstatement of employees with or without back pay, as will effectuate the policies of this article. If an order directs reinstatement of an employee, back pay may be required of the employer or labor organization, as the case may be, responsible for the discrimination suffered by the employee. The order may further require the person to make reports from time to time showing the extent to which the person has complied with the order. If on the preponderance of the testimony taken the board determines that the person named in the complaint has not engaged in or is not engaging in any unfair labor practice, the board shall state its findings of fact and shall issue an order dismissing the complaint. No order of the board may require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to the individual of any back pay, if the individual was suspended or discharged for cause. If the evidence is presented before a member of the board, or before an examiner or examiners of the board, the member, or the examiner or examiners, as the case may be, shall issue and cause to be served on the parties to the proceedings a proposed report, together with a recommended order, that shall be filed with the board, and if no exceptions are filed within ten days after service of the order on such parties, or within such further period as the board may authorize, such recommended order becomes the order of the board and is as prescribed in the order.

D. Until the record in a case is filed in a court, as provided in this section, the board at any time on reasonable notice and in a manner as it deems proper may modify or set aside, in whole or in part, any finding or order made or issued by it.

E. The board may petition the superior court in any county where the unfair labor practice in question occurred or where the person resides or transacts business for the enforcement of the order and for appropriate temporary relief or a restraining order. On the filing of the petition the court shall cause notice to be served on the person, and thereupon has jurisdiction of the proceeding and of the question determined therein, and may grant such temporary relief or restraining order as it deems just and proper and may make and enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the board.

F. Except as provided in section 41-1092.08, subsection H, final decisions of the board are subject to judicial review pursuant to title 12, chapter 7, article 6.

G. If an order of the board made pursuant to this section is based in whole or in part on facts certified following an investigation pursuant to section 23-1389 and there is a petition for the enforcement of the order, the certification and the record of such investigation shall be included in the transcript of the entire record required to be filed under subsection E of this section, and the decree of the court enforcing the order of the board shall be made and entered based on the pleadings, testimony and proceedings set forth in the transcript. The court shall not enforce any order of the board that rests, in whole or in part, on evidence adduced from witnesses who have not testified under oath and who have not been subject to cross-examination by opposing parties.

H. Unless specifically ordered by the court, the commencement of proceedings under subsection E or F of this section does not operate as a stay of the board's order.

I. Petitions filed under this article shall be heard expeditiously, and if possible within ten days after they have been docketed.

J. On issuance of a complaint as provided in subsection B of this section charging that any person has engaged in or is engaging in an unfair labor practice, the board may petition the superior court in any county where the unfair labor practice in question is alleged to have occurred or where the person resides or transacts business for appropriate temporary relief or a restraining order. On the filing of any such petition the court shall cause notice to be served on the person and thereupon has jurisdiction to grant to the board such temporary relief or restraining order as it deems just and proper.

K. If it is charged that any person has engaged in an unfair labor practice, the preliminary investigation of the charge shall be made immediately and shall be given priority over all other cases except cases of like character in the office where it is filed or to which it is referred. If, after such investigation, the officer to whom the matter may be referred has reasonable cause to believe that the charge is true and that a complaint should issue, the officer shall petition, on behalf of the board, the superior court in the county where the unfair labor practice in question has occurred or is alleged to have occurred, or where the person alleged to have committed the unfair labor practice resides or transacts business, for appropriate injunctive relief pending the final adjudication of the board with respect to the matter. On the filing of any such petition the superior court has jurisdiction to grant any injunctive relief or temporary restraining order it deems just and proper, notwithstanding any other law, except that no temporary restraining order may be issued without notice unless a petition alleges that substantial and irreparable injury to the charging party will be unavoidable and the temporary restraining order is effective for no longer than five days and will become void at the expiration of such period. On the filing of any such petition the court shall cause notice to be served on any person complained against in the charge and the person, including the charging party, shall be given an opportunity to appear in person or by counsel and present any relevant testimony. For the purposes of this subsection, the superior court is deemed to have jurisdiction of a labor organization either in the county in which the organization maintains its principal office or in any county in which its duly authorized officers or agents are engaged in promoting or protecting the interests of employee members. The service of legal process on an officer or agent constitutes service on the labor organization and makes the organization a party to the suit.

§ 23-1391 Investigatory powers

A. The board, or its duly authorized agent or agencies, shall have access to, at all reasonable times, for the purpose of examination, and the right to copy any evidence of any person being investigated or proceeded against that relates to any matter under investigation or in question. The board or any member of the board on application of any party to such proceedings forthwith shall issue to such party subpoenas requiring the attendance and testimony of witnesses or the production of any evidence in such proceeding or investigation requested in such application. Within five days after the service of a subpoena on any person requiring the production of any evidence in his possession or under his control, such person may petition the board to revoke, and the board shall revoke, the subpoena if in its opinion the evidence whose production is required does not relate to any matter under investigation, or any matter in question in such proceedings, or if in its opinion such subpoena does not describe with sufficient particularity the evidence whose production is required. Any member of the board, or any agent or agency designated by the board for such purposes, may administer oaths and affirmations, examine witnesses and receive evidence. The attendance of witnesses and the production of the evidence may be required from any place in this state at any designated place of hearing.

B. In case of contumacy or refusal to obey a subpoena issued to any person, the superior court in the county within the jurisdiction of which the person guilty of contumacy or refusal to obey is found or resides or transacts business, on application by the board, has jurisdiction to issue to such person an order requiring the person to appear before the board, or a member, agent or agency of the board, to produce evidence if so ordered or to give testimony touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as contempt.

C. Complaints, orders and other process and papers of the board, or a member, agent or agency of the board, may be served either personally, by registered or certified mail, by telegraph or by leaving a copy at the principal office, place of business or residence of the person required to be served. The verified return by the individual personally serving or leaving the copy, setting forth the manner of the service, and the return post office receipt, if registered or certified, or telegraph receipt and mailed or telegraphed as provided in this subsection, are proof of service. Witnesses summoned before the board or its members, agent or agency shall be paid the same fees and mileage that are paid witnesses in the superior court and witnesses whose depositions are taken, and the persons taking the depositions are entitled to the same fees as are paid for like services in the superior court.

D. The departments and agencies of this state, if directed by the governor, shall furnish the board, on its request, with all unprivileged records, papers and information in their possession relating to any matter before the board.

§ 23-1392 Violation; classification

Any person who knowingly resists, prevents, impedes or interferes with any member of the board or any of its agents or agencies in the performance of duties pursuant to this article or who violates any provision of this article is guilty of a class 1 misdemeanor. This section does not apply to any activities carried on outside this state.

§ 23-1393 Court jurisdiction

A. Any person who is aggrieved or is injured in his business or property by reason of any violation of this article, or a violation of an injunction issued as provided in this section, may sue in the superior court in the county having jurisdiction of the parties for recovery of any damages resulting from the unlawful action, regardless of where such unlawful action occurred and regardless of where such damage occurred, including costs of the suit and reasonable attorney fees. On the filing of the suit the court also has jurisdiction to grant injunctive relief or a temporary restraining order as it deems just and proper. Petitions for injunctive relief or temporary restraining orders shall be heard expeditiously. Petitions for temporary restraining orders alleging a violation of section 23-1385 shall be heard forthwith and if the petition alleges that substantial and irreparable injury to the petitioner is unavoidable such temporary restraining orders may be issued pursuant to rule 65 of the Arizona rules of civil procedure.

B. In the case of a strike or boycott, or threat of a strike or boycott, against an agricultural employer, the court may grant, and on proper application shall grant as provided in this section, a ten day restraining order enjoining such a strike or boycott, provided that if an agricultural employer invokes the court's jurisdiction to issue the ten day restraining order to enjoin a strike as provided by this subsection, the employer as a condition must agree to submit the dispute to binding arbitration as the means of settling the unresolved issues. If the parties cannot agree on an arbitrator within two days after the court awards a restraining order, the court shall appoint one to decide the unresolved issues. Any agricultural employer is entitled to injunctive relief accorded by rule 65 of the Arizona rules of civil procedure on the filing of a verified petition showing that his agricultural employees are unlawfully on strike or are unlawfully conducting a boycott, or are unlawfully threatening to strike or boycott, and that the resulting cessation of work or conduct of a boycott will result in the prevention of production or the loss, spoilage, deterioration or reduction in grade, quality or marketability of an agricultural commodity or commodities for human consumption in commercial quantities. For the purpose of this subsection, an agricultural commodity or commodities for human consumption with a market value of five thousand dollars or more constitutes commercial quantities.

C. For the purpose of this article, the superior court has jurisdiction of a labor organization in this state if such organization maintains its principal office in this state, or if its duly authorized officers or agents are engaged in promoting or protecting the interests of agricultural employee members or in the solicitation of such prospective members in this state.

D. The service of any summons, subpoena or other legal process of the superior court on an officer or agent of a labor organization, in his capacity as such, constitutes service on the labor organization.

E. Any labor organization that represents employees as defined in this article, and any agricultural employer, are bound by the acts of its agents. Any such labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of this state.

F. For the purposes of this article, in determining whether any person is acting as an agent of another person in order to make the other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subsequently ratified is not controlling. Nothing in this section shall be deemed to preclude an agent being sued both in his capacity as an agent and as an individual.

§ 23-1394 Scope of article

This article applies only to such persons, labor organizations or activities as are not within the jurisdiction of the national labor relations act or the jurisdictional guidelines established by the national labor relations board.

§ 23-1395 Limitations

A. Nothing in this article, except as otherwise specifically provided, shall be construed as to interfere with or impede or diminish in any way the right to strike, or to affect the limitations or qualifications on that right.

B. Nothing in this article prohibits any individual employed as a supervisor from becoming or remaining a member of a labor organization, but no employer subject to this article may be compelled to deem such supervisors as agricultural employees for the purpose of any law, either national or local, relating to collective bargaining.

Article 6 Organizational Rights

§ 23-1411 Public safety employee organizational rights; definition

A. Public safety employees serving any city, town, county or fire district in this state have the right to join employee associations which comply with the laws of this state and have freedom to present proposals and testimony to the governing body of any city, town, county or fire district and their representatives. A person shall not be discharged, disciplined or discriminated against because of the exercise of these rights.

B. This section shall not be construed to compel or prohibit in any manner any employee wage and benefit negotiations.

C. For the purposes of this section, "public safety employee" includes a probation officer or surveillance officer who is employed by this state or a political subdivision of this state.

Article 7 Labor Organizations

§ 23-1421 Third-party benefits organizations; damages; exemptions; exclusive remedy; statute of limitations; applicability; definitions

A. An employee who has suffered calculated damages may recover three times the calculated damages from a third-party benefits organization for the cost of benefits paid by the employee. An employer that has suffered calculated damages may recover three times the calculated damages from a third-party benefits organization that paid for the cost of employee benefits. The calculated damages are as follows:

For health, pension or vacation or sick leave benefits, any monies paid by or for the employee during a twelve-month period that is more than one hundred twenty percent of the cost of equivalent health, pension or vacation or sick leave benefits. To show equivalency, the plaintiff may submit a mathematical or an actuarial data analysis that demonstrates that the employee would have received at least ninety-five percent of the same value from a product available through the employer or on the general market.
For training benefits, any monies paid by the employer or employee in excess of one hundred twenty percent of any reasonable training costs incurred during a twelve-month period for the specific benefit of the employee's job skill.
For any other benefit, any monies paid by the employer or employee in excess of $1,000 during a twelve-month period where no direct benefit can be attributed to the employee.

B. An employee may recover calculated damages attributable to monies paid by the employee's employer for that employee if:

The employee sends a certified letter to the employer's statutory agent in this state that advises the employer that the employee intends to pursue such a claim unless the employer objects within ninety days.
The employer does not object. An employer's failure to object in writing within ninety days constitutes a waiver of the employer’s right to recover pursuant to this section to the extent of the employee's recovery.

C. A third-party benefits organization is not liable pursuant to this section if the third-party benefits organization satisfies all of the following:

Provides a reconciliation to its member employees through United States mail or email that would reasonably allow an employee to determine the costs and expenses of the benefits. The reconciliation must be listed by benefit for a twelve-month period and provide the following:

(a) The specific rates charged to the employee and employer.

(b) The direct expense rates charged to the plan by third-party insurers and plan providers.

(d) The total direct claims expenses or payments to beneficiaries, if any, in this state and nationally.

(e) A list of total payments made to any third-party insurers or plan providers in this state and nationally.

(f) A list of all administrative and other expenses not listed in subdivisions (a) through (e) of this paragraph incurred in this state and nationally.

(g) A list that summarizes the difference between the revenues and expenses in subdivisions (a) through (f) of this paragraph in this state and nationally listed in total dollars and as a percentage of revenue.

Allows an employee to opt out of any health, pension or vacation or sick leave benefits and to choose either:

(a) Benefits from the employee's employer if the employer agrees and the employer withholds payment to the third-party benefits organization for that particular benefit category.

(b) Benefits outside the employment relationship if the employer withholds payment from the third-party benefits organization for that particular benefit category and forwards the monies to the employee.

Eliminates any penalty for an employee or employer to terminate the relationship with the third-party benefits organization, including liability for any benefits that are actuarily underfunded.

D. A claim for calculated damages may be brought against a third-party benefits organization in superior court or any other appropriate venue. Except as otherwise set forth in this section, the court shall award a plaintiff any calculated damages that the plaintiff has suffered along with any other relief to which the plaintiff may be entitled. This section provides the exclusive remedy for a violation of this section. This section does not create a cause of action between an employee and employer.

E. This section applies to any third-party benefits organization that establishes or negotiates the rates or collects monies for employee benefits on behalf of a resident of this state or an employer that has employees located in this state.

F. Actions for calculated damages must be brought within four years after the cause of action accrues.

G. This section does not apply to any of the following:

An insurer, insurance agent or investment management firm.
A third-party administrator performing a purely administrative role.
An employee who is employed by the federal government or a political subdivision of this state.

H. For the purposes of this section:

"Benefits":

(a) Means monies paid by an employee or employer to a third-party benefits organization for the benefit of the employee and includes health, pension, training or vacation or sick leave benefits or other benefits.

(b) Does not include labor organization membership dues.

"Third-party benefits organization" includes any labor organization as defined in sections 23-1301 and 23-1321 and any Taft-Hartley trust, other fund or entity used to administer any benefit required by a labor agreement adopted by a third-party benefits organization.

Article 8 Public Employer Union Contracts

§ 23-1431 Public employers; public monies; contracts; union activities; standing; state preemption; definitions

A. A public employer may not spend public monies for union activities.

B. A public employer may not enter into an employment contract with a public employee to engage in union activities or provide paid leave or any form of compensation for the purposes of engaging in union activities. An employment contract that violates this section is against public policy and is void and unenforceable.

C. Any person who is a resident of this state and the attorney general have standing in any court of record to bring suit against any public employer of this state to remedy any violation of this section. If a court finds that a public employer has violated this section, the court shall award reasonable attorney fees and costs to the party who brought the action.

D. This section does not apply to any existing employment contract that is in effect before September 24, 2022. Any existing employment contract that is in effect before September 24, 2022 and that conflicts with this section may not be renewed or extended.

E. The regulation of the use of public monies and public employees for union activities is a matter of statewide concern and is necessary to enforce the constitution of Arizona. The prohibition against using public monies for union activities is not subject to inconsistent regulation by any public employer. The regulation of the use of public monies and public employees for union activities pursuant to this article is not subject to further regulation by a county, city, town or other political subdivision of this state and preempts all inconsistent laws, rules, regulations, codes, ordinances, policies or other laws adopted by any public employer.

F. This section does not prohibit a public employee from using the employee's personal leave for union activities.

G. For the purposes of this section:

"Employment contract" means any formal or informal employment contract, agreement or memorandum that contains terms and conditions of employment with any public employee or group of public employees.
"Public employee":

(a) Means any individual who is employed by a public employer.

(b) Does not include law enforcement officers or paid firefighters.

"Public employer" means this state or any branch, department, division, agency or authority of this state or a city, town or other political subdivision of this state.
"Union" means any association or organization, incorporated or unincorporated, that is authorized to represent and bargain for public employees.
"Union activities" means:

(a) Political activities performed by a union that involve advocating for the election or defeat of any political candidate.

(b) Lobbying activities performed by a union that involve attempting to influence the passage or defeat of federal or state legislation, local ordinances or any ballot measure.

Chapter 9 Employment Protection Act

Article 1 General Provisions

§ 23-1501 Severability of employment relationships; protection from retaliatory discharges; exclusivity of statutory remedies in employment

A. The public policy of this state is that:

The employment relationship is contractual in nature.
The employment relationship is severable at the pleasure of either the employee or the employer unless both the employee and the employer have signed a written contract to the contrary setting forth that the employment relationship shall remain in effect for a specified duration of time or otherwise expressly restricting the right of either party to terminate the employment relationship. Both the employee and the employer must sign this written contract, or this written contract must be set forth in the employment handbook or manual or any similar document distributed to the employee, if that document expresses the intent that it is a contract of employment, or this written contract must be set forth in a writing signed by the party to be charged. Partial performance of employment shall not be deemed sufficient to eliminate the requirements set forth in this paragraph. Nothing in this paragraph shall be construed to affect the rights of public employees under the Constitution of Arizona and state and local laws of this state or the rights of employees and employers as defined by a collective bargaining agreement.
An employee has a claim against an employer for termination of employment only if one or more of the following circumstances have occurred:

(a) The employer has terminated the employment relationship of an employee in breach of an employment contract, as set forth in paragraph 2 of this subsection, in which case the remedies for the breach are limited to the remedies for a breach of contract.

(b) The employer has terminated the employment relationship of an employee in violation of a statute of this state. If the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute or the public policy set forth in or arising out of the statute, including the following:

(i) The civil rights act prescribed in title 41, chapter 9.

(ii) The occupational safety and health act prescribed in chapter 2, article 10 of this title.

(iii) The statutes governing the hours of employment prescribed in chapter 2 of this title.

(iv) The agricultural employment relations act prescribed in chapter 8, article 5 of this title.

(v) The statutes governing disclosure of information by public employees prescribed in title 38, chapter 3, article 9.

All definitions and restrictions contained in the statute also apply to any civil action based on a violation of the public policy arising out of the statute. If the statute does not provide a remedy to an employee for the violation of the statute, the employee shall have the right to bring a tort claim for wrongful termination in violation of the public policy set forth in the statute.

(i) The refusal by the employee to commit an act or omission that would violate the Constitution of Arizona or the statutes of this state.

(ii) The disclosure by the employee in a reasonable manner that the employee has information or a reasonable belief that the employer, or an employee of the employer, has violated, is violating or will violate the Constitution of Arizona or the statutes of this state to either the employer or a representative of the employer who the employee reasonably believes is in a managerial or supervisory position and has the authority to investigate the information provided by the employee and to take action to prevent further violations of the Constitution of Arizona or statutes of this state or an employee of a public body or political subdivision of this state or any agency of a public body or political subdivision.

(iii) The exercise of rights under the workers' compensation statutes prescribed in chapter 6 of this title.

(iv) Service on a jury as protected by section 21-236.

(v) The exercise of voting rights as protected by section 16-1012.

(vi) The exercise of free choice with respect to nonmembership in a labor organization as protected by section 23-1302.

(vii) Service in the national guard or armed forces as protected by sections 26-167 and 26-168.

(viii) The exercise of the right to be free from the extortion of fees or gratuities as a condition of employment as protected by section 23-202.

(ix) The exercise of the right to be free from coercion to purchase goods or supplies from any particular person as a condition of employment as protected by section 23-203.

(x) The exercise of a victim's right to leave work as provided in sections 8-420 and 13-4439.

B. If the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute or the public policy prescribed in or arising out of the statute.

§ 23-1502 Constructive discharge

A. In any action under the statutes of this state or under common law, constructive discharge may only be established by either of the following:

Evidence of objectively difficult or unpleasant working conditions to the extent that a reasonable employee would feel compelled to resign, if the employer has been given at least fifteen days' notice by the employee that the employee intends to resign because of these conditions and the employer fails to respond to the employee's concerns.
Evidence of outrageous conduct by the employer or a managing agent of the employer, including sexual assault, threats of violence directed at the employee, a continuous pattern of discriminatory harassment by the employer or by a managing agent of the employer or other similar kinds of conduct, if the conduct would cause a reasonable employee to feel compelled to resign.

B. As a precondition to the right of an employee to bring a constructive discharge claim against an employer pursuant to subsection A, paragraph 1 of this section, the employee shall take each of the following actions before deciding whether to resign:

Notify an appropriate representative of the employer, in writing, that a working condition exists that the employee believes is objectively so difficult or unpleasant that the employee feels compelled to resign or intends to resign.
Allow the employer fifteen calendar days to respond in writing to the matters presented in the employee's written communication under paragraph 1 of this subsection.
Read and consider the employer's response to the employee's written communication under paragraph 1 of this subsection.

C. If an employee reasonably believes that the employee cannot continue to work during the period for the employer to respond to the employee's written communication regarding the conditions allegedly constituting constructive discharge, the employee is entitled to a paid or unpaid leave of up to fifteen calendar days or until the time when the employer has responded in writing to the employee's written communication, whichever occurs first.

D. Any communications or actions by an employer in response to an employee's communications about the employee's working conditions shall not be deemed an admission by the employer that it has committed any action that gives rise to any claim or cause of action by the employee against the employer.

E. An employer shall be deemed to have waived the right to notice under subsection A, paragraph 1 if the employer fails to provide written notice to its employees of the requirements of this section as follows:

Notice by the employer under this section shall be provided by the posting of a notice, substantially in the form set forth in paragraph 2 of this subsection, in conspicuous places on the employer's premises where notices to employees are customarily posted, by including substantially similar language in an employment handbook or policy manual that is distributed to employees or by including the notice in a written communication that is provided to employees.
A notice that is substantially in the following form satisfies the notice requirements of this section:

Notice

An Employee is encouraged to communicate to the employer whenever the employee believes working conditions may become intolerable to the employee and may cause the employee to resign. Under section 23-1502, Arizona Revised Statutes, an employee may be required to notify an appropriate representative of the employer in writing that a working condition exists that the employee believes is intolerable, that will compel the employee to resign or that constitutes a constructive discharge, if the employee wants to preserve the right to bring a claim against the employer alleging that the working condition forced the employee to resign.

Under the law, an employee may be required to wait for fifteen calendar days after providing written notice before the employee may resign if the employee desires to preserve the right to bring a constructive discharge claim against the employer. An employee may be entitled to paid or unpaid leave of absence of up to fifteen calendar days while waiting for the employer to respond to the employee's written communication about the employee's working condition.

F. Notwithstanding any other requirements of this section, an employee may bring a constructive discharge claim without prior written notice in the event of outrageous conduct by the employer or by a managing agent of the employer including sexual assault, threats of violence directed at the employee, a continuous pattern of discriminatory harassment by the employer or by a managing agent of the employer or other conduct if the conduct would cause a reasonable employee to feel compelled to resign.

Chapter 10 Employment Relationships

Article 1 General Provisions

§ 23-1601 Declaration of independent business status

A. Compliance with this chapter and the execution of a declaration of independent business status in compliance with this section are not mandatory in order to establish the existence of an independent contractor relationship between an employing unit and an independent contractor. The failure of a party to execute a declaration in compliance with this section does not create any presumptions and is not admissible to deny the existence of an independent contractor relationship.

B. Any employing unit contracting with an independent contractor may prove the existence of an independent contractor relationship for the purposes of this title by the independent contractor executing a declaration of independent business status, as provided by this section, and by the employing unit acting in a manner substantially consistent with the declaration. Compliance with this section creates a rebuttable presumption of an independent contractor relationship between the independent contractor and the employing unit with whom the independent contractor contracts. Any declaration of independent business status shall be signed by the independent contractor, be dated and substantially comply with the following form:

This declaration of independent business status is made by (contractor) in relation to services performed by the contractor for or in connection with (contracting party). The contractor states and declares the following:

The contractor acknowledges that the contractor operates the contractor's own independent business and is providing services for or in connection with the contracting party as an independent contractor.
The contractor acknowledges that the contractor is not an employee of the contracting party and the services rendered for or in connection with the contracting party do not establish any right to unemployment benefits or any other right arising from an employment relationship.
The contractor is responsible for all tax liability associated with payments received from or through the contracting party and the contracting party will not withhold any taxes from payments to the contractor.
The contractor is responsible for obtaining and maintaining any required registration, licenses or other authorization necessary for the services rendered by the contractor.
The contractor acknowledges at least six of the following:

(a) That the contractor is not insured under the contracting party's health insurance coverage or workers' compensation insurance coverage.

(b) That the contracting party does not restrict the contractor's ability to perform services for or through other parties and the contractor is authorized to accept work from and perform work for other businesses and individuals besides the contracting party.

(d) That the contracting party expects that the contractor provides services for other parties.

(e) That the contractor is not economically dependent on the services performed for or in connection with the contracting party.

(f) That the contracting party does not dictate the performance, methods or process the contractor uses to perform services.

(g) That the contracting party has the right to impose quality standards or a deadline for completion of services performed, or both, but the contractor is authorized to determine the days worked and the time periods of work.

(h) That the contractor will be paid by or through the contracting party based on the work the contractor is contracted to perform and that the contracting party is not providing the contractor with a regular salary or any minimum, regular payment.

(i) That the contractor is responsible for providing and maintaining all tools and equipment required to perform the services performed.

(j) That the contractor is responsible for all expenses incurred by the contractor in performing the services.

The contractor acknowledges that the terms set forth in this declaration apply to the contractor, the contractor's employees and the contractor's independent contractors.

C. Subsections A and B of this section do not apply to any employing unit that is licensed or is required to be licensed pursuant to title 32, chapter 10 unless the employing unit is contracting with an independent contractor to perform services that do not require a license pursuant to title 32, chapter 10 for or in connection with the employing unit.

D. Execution of a declaration of independent business status under this section is optional and this section does not require an independent contractor to execute a declaration of independent business status to be considered an independent contractor. Any employing unit or independent contractor may rely on any provision in this title for the purposes of establishing an employment or independent contractor relationship.

E. The execution of a declaration of independent business status and substantial compliance with the declaration pursuant to this section does not operate to the same effect as or otherwise act as a substitute for a written agreement executed pursuant to section 23-902, subsection D.

§ 23-1602 Determination of employment relationship; prohibition

Except for the enforcement of chapter 2, article 10 of this title, any supervision or control exercised by an employing unit to comply with any statute, rule or code adopted by the federal government, this state or a political subdivision of this state or any requirement of licensing, professional or ethical standards may not be considered for the purposes of determining the independent contractor or employment status of any relationship or individual for the purposes of this title. This section does not otherwise affect any investigatory or enforcement authority related to the determination of the independent contractor or employment status of any relationship as provided by this title or federal law.

§ 23-1603 Qualified marketplace contractors; definitions

A. A qualified marketplace contractor shall be treated as an independent contractor for all purposes under state and local laws, regulations and ordinances, including employment security laws prescribed in chapter 4 of this title and workers' compensation laws prescribed in chapter 6 of this title, if all of the following apply:

All or substantially all of the payment for the services performed by the qualified marketplace contractor is related to the performance of services or other output.
The services performed by the qualified marketplace contractor are governed by a written contract executed between the qualified marketplace contractor and a qualified marketplace platform.
The written contract required by paragraph 2 of this subsection provides for all of the following:

(a) That the qualified marketplace contractor is providing services as an independent contractor and not as an employee.

(b) That, pursuant to paragraph 1 of this subsection, all or substantially all of the payment paid to the contractor shall be based on the performance of services or other output.

(c) That the qualified marketplace contractor is allowed to work any hours or schedules the qualified marketplace contractor chooses. If the qualified marketplace contractor elects to work specified hours or schedules, a contract may require the qualified marketplace contractor to perform work during the selected hours or schedules.

(d) That the qualified marketplace contract does not restrict the contractor's ability to perform services for other parties.

(e) That the qualified marketplace contractor bears all or substantially all of the qualified marketplace contractor's own expenses that are incurred by the qualified marketplace contractor in performing the services.

(f) That the qualified marketplace contractor is responsible for the taxes on the qualified marketplace contractor's own income.

(g) That the contract and the association created by the contract may be terminated without cause by either party to the contract at any time on reasonable notice given to the other party.

B. For services performed by a qualified marketplace contractor before August 6, 2016, the qualified marketplace contractor shall be treated as an independent contractor for all purposes under state and local laws, regulations and ordinances, including employment security laws prescribed in chapter 4 of this title and workers' compensation laws prescribed in chapter 6 of this title, if both of the following apply:

All or substantially all of the payment for the services performed by the qualified marketplace contractor is related to the performance of services or other output.
The services performed by the qualified marketplace contractor are governed by a written contract executed between the qualified marketplace contractor and a qualified marketplace platform that conforms to the requirements of subsection A, paragraph 3 of this section.

C. Compliance with this section is not mandatory in order to establish the existence of an independent contractor relationship. The exclusion of any contractor or digital platform from this section does not create any presumptions and is not admissible to deny the existence of an independent contractor relationship.

D. This section does not apply to:

Service performed in the employ of a state, or any political subdivision of the state, or in the employ of an Indian tribe, or any instrumentality of a state, any political subdivision of a state or any Indian tribe that is wholly owned by one or more states or political subdivisions or Indian tribes, provided that such service is excluded from employment as defined in the federal unemployment tax act (26 United States Code sections 3301 and 3306(c)(7)).
Service performed in the employ of a religious, charitable, educational or other organization that is excluded from employment as defined in the federal unemployment tax act (26 United States Code sections 3301 through 3311), solely by reason of 26 United States Code section 3306(c)(8).

E. For the purposes of this section:

"Qualified marketplace contractor" means any person or organization, including an individual, corporation, limited liability company, partnership, sole proprietor or other entity, that enters into an agreement with a qualified marketplace platform to use the qualified marketplace platform's digital platform to provide services to third-party individuals or entities seeking those services. Qualified marketplace contractor does not include any contractor when the services performed consist of transporting freight, sealed and closed envelopes, boxes or parcels or other sealed and closed containers for compensation.
"Qualified marketplace platform" means an organization, including, but not limited to, a corporation, limited liability company, partnership, sole proprietor or any other entity, that both:

(a) Operates a digital website or digital smartphone application that facilitates the provision of services by qualified marketplace contractors to individuals or entities seeking such services.

(b) Accepts service requests from the public only through its digital website or digital smartphone application, and does not accept service requests by telephone, by facsimile or in person at physical retail locations.

Qualified marketplace platform does not include any digital website or smartphone application where the services facilitated consist of transporting freight, sealed and closed envelopes, boxes or parcels or other sealed and closed containers for compensation.

§ 23-1604 Franchisor and franchisee; owner of a mark and licensee; employment relationship; definitions

A. For the purposes of this title:

A franchisor is not an employer or co-employer of either a franchisee or an employee of the franchisee, unless the franchisor agrees, in writing, to assume the role of employer or co-employer of the franchisee or the employee of the franchisee.
The owner of a mark is not an employer or co-employer of either the licensee or an employee of the licensee, unless the owner of the mark agrees, in writing, to assume the role of employer or co-employer of the licensee or the employee of the licensee.

B. For the purposes of this section:

"Franchisee" has the same meaning prescribed in 16 Code of Federal Regulations section 436.1.
"Franchisor" has the same meaning prescribed in 16 Code of Federal Regulations section 436.1.
"Licensee" means a third party to whom the owner of a mark licenses the owner's mark for the purpose of independently conducting business using the licensed mark.
"Mark" has the same meaning prescribed in section 44-1441.

§ 23-1605 Motor carriers; employment status; safety improvement; definitions

A. The deployment, implementation or use of safety improvement by or as required by a motor carrier or its related entity, including by contract, may not be considered when evaluating a person's status as an employee, independent contractor or jointly employed employee under any state law.

B. For the purposes of this section:

"Motor carrier" has the same meaning prescribed in section 28-5201.
"Safety improvement" means any device, equipment, software, technology, procedure, training, policy, program or operational practice intended and primarily used to improve or facilitate any of the following:

(a) Compliance with traffic safety or motor carrier safety laws.

(b) Safety of a motor vehicle.

(d) Safety of third-party users of a public highway as defined in section 28-5201.

Chapter 11 Municipal Firefighter Cancer Reimbursement

Article 1 General Provisions

§ 23-1701 Definitions

In this article, unless the context otherwise requires:

"Commission" means the industrial commission of Arizona.
"Firefighter" has the same meaning prescribed in section 23-901.09.
"Fire investigator" has the same meaning prescribed in section 23-901.09.
"Fund" means the municipal firefighter cancer reimbursement fund.
"Municipal payor" means any of the following:

(a) A workers' compensation insurer used by a city or town.

(b) A self-insurance program approved pursuant to section 23-961 used by a city or town.

§ 23-1702 Municipal firefighter cancer reimbursement fund; exemption; rulemaking; annual report

A. The municipal firefighter cancer reimbursement fund is established consisting of monies deposited in the fund pursuant to section 23-1703. The commission shall administer the fund. Monies in the fund shall be used to reimburse municipal payors for the compensation and benefits paid by municipal payors to municipal firefighters and municipal fire investigators under section 23-901.09 for:

Compensation for temporary partial disability, permanent partial disability and lost earning capacity as prescribed in section 23-1044.
Compensation for temporary total disability and permanent total disability as prescribed in section 23-1045.
Medical, surgical and hospital benefits as prescribed in section 23-1062.
Death benefits as prescribed in section 23-1046.

B. The fund consists of the following:

Fees from cities and towns deposited pursuant to section 23-1703.
Monies received from any other source, including federal monies, investment income and private grants, gifts, contributions and devises.

C. The commission shall annually distribute the monies in the fund on a prorated basis based on the amount of the individual compensation and benefits paid by a municipal payor for compensation and benefits to a municipal firefighter or municipal fire investigator for a disease, infirmity or impairment as prescribed in section 23-901.09 in proportion to the statewide aggregate of all compensation and benefits paid to municipal firefighters and municipal fire investigators pursuant to section 23-901.09 for the fiscal year. The annual distributions may not exceed the statewide aggregate of all compensation and benefits paid by municipal payors to municipal firefighters and municipal fire investigators pursuant to section 23-901.09 for the relevant fiscal year. Monies remaining undistributed at the end of a fiscal year shall remain in the fund and be available for annual distributions in future fiscal years. The commission may not reimburse monies for expenses relating to case management, vocational rehabilitation or similar nonmedical costs. The prorated share shall be distributed to the municipal payors entitled to a share without regard to the order in which the respective compensation and benefits were paid in the fiscal year.

D. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

E. The commission shall adopt rules pursuant to title 41, chapter 6 to carry out this chapter.

F. On or before April 1 of each year, the commission shall submit a report to the legislature and the municipal payors reimbursed from the fund on the financial status of the fund. The report shall include all of the following:

The total number of fund reimbursement claims the commission received in the immediately preceding fiscal year.
For the immediately preceding fiscal year, the number of fund reimbursement claims, the total dollar amount of fund reimbursement claims paid by the fund and the amount paid to each municipal payor reimbursed by the fund.
The amount of any anticipated surplus in the fund.

§ 23-1703 Assessment

A. The commission shall assess and collect fees from cities and towns for deposit in the fund. The fee shall be assessed to each city and town that receives state shared revenues pursuant to sections 42-5029 and 43-206. The total amount of fees for all cities and towns shall be $15,000,000 in each fiscal year. The share of fees assessed in each fiscal year to each city and town is based on the population of the city or town as determined by the most recent population estimates of the United States census bureau as of July 1 in proportion to the total population of all incorporated cities and towns.

B. The commission shall assess the fees under this section not later than July 31 of each year, and the fees are payable immediately on assessment. If a city or town fails to pay the assessment in full on or before September 30, the commission shall notify the state treasurer who shall withhold the delinquent amount from the distribution of monies to the appropriate city or town pursuant to sections 42-5029 and 43-206.

C. All monies paid to the commission or withheld by the state treasurer for the fees assessed pursuant to this section shall be deposited in the fund.

D. Cities and towns may meet their obligation for the assessment from any source of city or town revenue designated by the appropriate city or town. City and town payments made pursuant to this section are excluded from the applicable expenditure limitations.