BILL ANALYSIS
H.B. 3191
By: Price
05-04-95
Committee Report (Unamended)
BACKGROUND
Currently there are non-profit organizations which desire to
participate in school-to-work transition programs whereby the non-profit organization places secondary school students, age 16 to 18,
with private employers for purposes of training and to expose the
student to the real world work environment. Additionally, this
puts the participating student in a much better position if he or
she wishes to enter straight into the work force upon graduation
from high school. One of the reasons why such a program needs the
participation of a non-profit organization is that most private
employers whose employees are covered by workers' compensation
insurance coverage do not cover anyone under the age of 18.
Since the private company's workers' compensation insurance
coverage will not cover the student employee, the insurance
coverage will be paid by the non-profit organization. Another
words, the student will be an employee of the non-profit
organization even though he or she will be under the direction,
supervision and control of the private employer. Because of this,
private companies are reluctant to participate in this program due
to extra liability exposure. Except under extreme circumstances,
when an employee is covered by workers' compensation insurance, the
employee may not assert a cause of action against the employing
company for compensable injury. In school-to-work transition
programs, the workers' compensation insurance is not provided by
the private company, thereby exposing the company to extra
liability for common law negligence under the borrowed servant
doctrine.
PURPOSE
The purpose of this bill is to encourage and facilitate these types
of placement programs without wrongly increasing any participant's
liability, nor limiting any participant's rights. The loop-hole
described above will be closed for the participating company, while
at the same time all rights and causes of action will be preserved
for the student participant. All participation will be on a
voluntary basis with all four participating parties being in a more
advantageous position. The participating schools will offer their
students practical training experience while also giving their
students a "leg up" in the job market upon graduation for those who
either do not desire, or can not, pursue a higher education. The
participating student gains training in a field of interest, which
not only provides extra money, but also gives the student a "foot-
in-the-door" in regards to full-time permanent employment. The
participating non-profit organization fulfills its mission of
helping others in a constructive manner, as well as increased
exposure among businesses and potential contributors. The
participating company has the opportunity to train, employ and
evaluate a potential work force on a cost-incentive, non-committal
basis.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.
SECTION BY SECTION ANALYSIS
Section 1. Chapter 406, Labor Code, is amended by adding
Subchapter I.
SUBCHAPTER I. COVERAGE OF STUDENTS EMPLOYED IN CERTAIN PROGRAMS
SPONSORED BY NONPROFIT ORGANIZATIONS.
Section 406.181. Definitions. (1) "Nonprofit organization" ,
(2) "Student"
Section 406. 182. COVERAGE THROUGH SPONSORING ORGANIZATION.
(a) Applies to a school-to-work transition program sponsored by a
nonprofit organization in which the organization provides workers'
compensation coverage and the student performs service for a third
party.
(b) Establishes benefit eligibility for a student who
participates in the school-to-work program. The student is an
employee of the nonprofit organization, not the third party to whom
the student provides services. The third party is not liable for
any compensable injury incurred by student while providing service.
(c) Does not limit or prohibit a student from bringing a cause
of action against a third party that a third party employee who is
entitled to workers' compensation insurance coverage provided by
the third party.
Section 2. This Act applies only to a claim that occurs on or
after the effective date of this Act. A claim based on a
compensable injured that occurred before that date is governed by
the law in effect at the time of the injury occurred.
Section 3. Emergency Clause.
SUMMARY OF COMMITTEE ACTION
H.B. 3191 was considered by the Committee on Business and Industry
in a public hearing on May 2, 1995. No one testified in support,
against or on the bill. Without objection, H.B. 3191 was left
pending before the committee. H.B. 3191 was reconsidered on
pending business by the committee in a formal meeting on May 4,
1995. H.B. 3191 was reported favorably to the full house with the
recommendation that it do pass and be printed, by a record vote of
8 (eight) ayes, 0 (zero) nays, 0 (zero) present-not-voting, 1 (one)
absent.