Reflections from Maine’s Workers’ Compensation Executive Director

By Rudman Winchell Attorney Virginia Kozak Putnam

In January 2011, Paul H. Sighinolfi, Esq., became the Executive Director and Chair of the Board for the State of Maine Workers’ Compensation Agency, after 30 years of practicing law in the area of workers compensation at Rudman Winchell. In this capacity, he is in charge of running the day to day operations of the agency. At the end of the 124th Legislative Session, Executive Director Sighinolfi was asked to review LD 1571, An Act To Amend the Laws Governing Workers’ Compensation.

On February 6, 2012, Executive Director Sighinolfi submitted his report and a hearing was held before the Labor, Commerce, Research and Economic Development Committee on February 17. Since then there have been several work sessions before the Committee. I recently spoke with Executive Director Sighinolfi to obtain his thoughts on his new position, the proposed legislation, and his goals.


VKP: You practiced law for approximately 30 years. Did you feel prepared for your new position as Executive Director of Workers’ Compensation?

PHS: I do not think someone could do this job well without a legal education. I supervise nine hearing officers, a small law firm of advocates and several other staff attorneys. I think my legal education plus years of experience prepared me for much, but not all, of my job responsibilities. In addition to the foregoing, my job requires me to create and defend a $15 million budget, oversee the development of a medical fee schedule, testify with some regularity on workers compensation and labor issues before legislative committees, and because we have no personnel office (there is a central office for most state agencies), I have to address all of the personnel issues that arise when you have more than 100 employees. My education, years of practice and life experiences have prepared me reasonably well to do this job. Every day has been an adventure.

VKP: What have been the greatest challenges so far?

PHS: There have been two big challenges, the first is dealing with personnel issues directly associated with retirements that were part of the State’s effort to reduce the number of state employees. The second challenge has been dealing with pieces of legislation that directly impact on the workers’ compensation system in Maine.

VKP: What are these pieces of legislation?

PHS: The first piece of legislation deals with who is an independent contractor, as opposed to an employee, for workers’ compensation purposes. If an employer calls a person an independent contractor, that employer does not pay workers’ compensation insurance, does not contribute to unemployment, and is able to avoid certain taxes. There has been a major national trend towards classifying people as independent contractors in order to avoid these additional costs. The second piece of legislation would cause a significant change in the workers’ compensation system.

VKP: Is this legislation you refer to the legislation that grew out of LD 1571, An Act to Amend the Laws Governing Workers’ Compensation?

PHS: Yes, I was charged at the end of the last legislative session with reviewing LD 1571. I put together a group of 12 people, six from labor orientation and six from management. We spent hours discussing LD 1571 and at the end, decided that the bill would not do what was desired. In the Executive Director’s report, I said that there are some areas in workers’ compensation that could use improvement and I wrote another bill. Andre Cushing, the sponsor of LD 1571, recommended that LD 1571 be withdrawn. In legislative terms, it’s called “ought not to pass.” The Committee on Labor, Commerce, Research and Economic Development turned my report into LR 2781, an Act to Review and Restructure the Workers’ Compensation System. LR 2781 will hopefully be turned into a bill. We are still negotiating certain parts of the proposed bill and need to reach a level of compromise before it can become a bill.

VKP: What are the key features of LR 2781?

PHS: First, we would change the way employees are compensated from 80% of their after tax weekly wage to two-thirds of their gross wage. The reason for making that recommendation is that it brings simplicity to the system and it really doesn’t change the numbers. Second, the most contentious part of the Workers’ Compensation Act today is Section 213 and that is a provision that deals with partial benefits. At present we have this arbitrary cliff that if you are over the cliff, you get benefits for the duration of your incapacity which is essentially your lifetime. If you don’t go off the cliff, if you stay on solid ground, you get benefits for a period not to exceed 520 weeks. My proposal is that we do away with the cliff entirely because it brings uncertainty, imprecision, and a lot of litigation. Instead, I have suggested that everybody who is entitled to partial benefits, receives partial not to exceed 618 weeks. When we compare that number to the rest of the northeast what you learn is that it’s a richer system than the rest of the northeast states but not the richest in the country. In addition I proposed that we change the cap for the maximum benefit you can get paid on a weekly basis, and I recommended we change ours from the present figure of $643 to $713. $713 represents 100% of the State average weekly wage. Every other state in the northeast, except New York, has a higher maximum compensation rate. Connecticut for example is $922, Massachusetts is almost $1100, Vermont is $1092, and New Hampshire is $1287. And so when you look at increasing the number of weeks somebody can get benefits and increasing the maximum compensation rate, if you run the numbers for the total exposure, they still are not as great at the rest of the northeast states. Third, the bill requires notice of an injury to the employer within 30 days. It is presently 90 days. This gives the employer time to investigate contemporaneously and also provides the employer with an opportunity to fix a dangerous condition in the workplace, if one exists, more quickly. Finally, this legislation brings back the appellate division to workers’ compensation cases. Currently only 4% of appeals are accepted by the Law Court.

VKP: Finally, what are your goals as Executive Director?

PHS: My goals are pretty simple. I want to ensure the board operates in compliance with its mission statement set forth at 39A MRSA section 151-A. This statement provides: The board’s mission is to serve the employees and employers of the State fairly and expeditiously by ensuring compliance with the workers’ compensation laws, ensuring the prompt delivery of benefits legally due, promoting the prevention of disputes, utilizing dispute resolution to reduce litigation and facilitating labor-management cooperation.
Rudman Winchell thanks Executive Director Sighinolfi for the time he took to provide us with this information and wish him the best of luck in his role.