R.I. Court to Decide Next Week on Personal Liability of Nightclub Owners for $1 Million Workers’ Comp Penalty

August 12, 2004

  • August 12, 2004 at 1:30 am
    Raymond C Caron CPCU says:
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    according to the RHode Island Workers Compensation law manual, section 28-36-15 states that “any employer required to secure the payment of compensation under the providiaons of chapters 29-38 inclusive of this title who fails to secure that compensation shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not more than $1,000 per day or by inmpronment for not more than one year.” It further states that the corporate officers shall be severally peronaly liable, jointly for any benefits that may accrue in respect to injury to employee. In other words the corporate officers cannot hide behind the corporate veil. I can’t understand why this matter is being deliberated.

  • August 12, 2004 at 2:26 am
    Andy Simpson says:
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    This might answer your question. I think it has to do with exhausting all legal possibilities, even if remote.

    The Station is the only known asset of the Derderians’ company, Derco LLC, which is a limited liability company.

    The Derderians’ lawyers maintain that it wasn’t until after the Derderians nightclub burned that the General Assembly in late 2003 amended state law to allow for the administrative penalties against corporate officers.
    Also, this past July, the General Assembly added language to include members and managers of limited liability companies, or LLCs, according to The Station’s attorneys.

    The state labor department, however, claims that the changes by the Assembly were meant to clarify the laws that provide tax advantages and not to excuse LLCs from workers compensation laws and rules.

    Hope this helps clear up the issue.

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