See also: State Compensation Fund
The Industrial Commission of Arizona (ICA) was created in 1925 to oversee state programs related to workplace safety and workers’ compensation (Laws 1925, Chapter 83). The Arizona Constitution, Article 18 outlines provisions related to labor and Section 8, adopted in 1925, specifically addresses workers’ compensation.
Statutory authority is found in Arizona Revised Statutes, Title 23. In addition to general provisions establishing the ICA, statute prescribes powers and duties relating to employment practices and working conditions; and workers’ compensation. (See A.R.S.§§ 23-101 et seq., 23-201 et seq., and 23-901 et seq.
The Industrial Commission is a regulatory agency that oversees a number of functions related to employment in Arizona. Its purpose has remained essentially the same since it was created in 1925. The Commission is responsible for labor related issues regarding occupational safety and health, youth employment laws, resolution of wage-related disputes, minimum wage, vocational rehabilitation, and workers’ compensation coverage. The ICA also conducts investigations of “whistleblower” discrimination complaints filed by employees against their employer. The ICA Administrative Fund is funded by annual assessments on workers’ compensation premiums.
When Laws 1925, Chapter 83 initially created the Industrial Commission, it specified a governor-appointed commission of three members serving six year terms. Commissioners were prohibited from holding any other position and were paid an annual salary of $5,000. The Commission was empowered to hire employees, although new hires had to be approved by the Governor.
Commissioners were given broad powers, including the right to enter any “place of employment” for the purpose of collecting facts and statistics. They were expected to administer and enforce laws regarding the safety and well-being of employees, promote out of court dispute resolution (mediation, arbitration), collect and publish statistics related to employment and employees, create free employment assistance agencies, and investigate any petition regarding unsafe unemployment.
The Commission could be petitioned for a hearing on the reasonableness and lawfulness of any Industrial Commission order and no court proceedings could be initiated against the Commission until a hearing petition had been filed and addressed.
Lastly, the Commission created and ran a State Compensation Fund, which offered liability insurance to employers.
Laws 1943, Chapter 26 made the Commission the exclusive remedy in cases of “occupational diseases,” and created a liability insurance fund to cover compensation for employees who contracted an occupational disease as a result of their employment.
The Commission was expanded to five members serving five-year terms by Laws 1968, 4th Special Session, Chapter 6. The Commission was authorized to hire a director, who in turn was required to hire hearing officers who were members of the state bar. A Division of Safety was also created to establish safety standards for various industries and to investigate violations.
The State Compensation Fund, which had been a part of the ICA, was established as a separate agency by Laws 1968, 4th Special Session, Chapter 6 to provide a ready market for worker’s compensation insurance coverage for Arizona employers. A board and manager were also put in place to oversee the State Compensation Fund, with the manager handling day-to-day operations of the Fund.
Laws 1980, Chapter 246 replaced hearing officers with administrative law judges who reported to the State Personnel Commission rather than the Board.
The State Compensation Fund continued until January 1, 2013 when it was privatized and replaced by a successor mutual insurer corporation that assumed all liabilities and assets of the SCF. The successor was Copper Point Mutual Insurance Company. (See Laws 2010, Chapter 268 and Laws 2011, Chapter 157.) Note: Please see the state agency history for the State Compensation Fund, https://azlibrary.gov/starl/administrative-histories?body_value=state+compensation+fund for additional information.
Laws 2012, Chapter 321 required the director of the Industrial Commission to be confirmed by the Senate and serve at the pleasure of the Governor. Previously the director could only be dismissed for cause.
Laws 2016, Chapter 128 provided that personnel of the Division of Occupational Safety and Health review board would be employed and supervised by the Industrial Commission Director, rather than the chairman of the review board.
Laws 2017, Chapter 147 was an omnibus measure which exempted model system programs from inspections and investigations conducted by the Division of Occupational Safety and Health. The measure established standards for these programs, which are voluntarily implemented, and required the programs to meet certain standards and to exceed basic compliance with safety and health laws. The measure also modified the appointment process for the Occupational Safety and Health Review Board; addressed special inspector certificates related to boiler inspections; and repealed the Elevator Advisory Board. Portions of the measure related to the Board are conditioned on federal OSHA approval before January 1, 2020 (Section 22).
A second measure enacted in 2017 outlined a process for an interested party to settle and release all or any part of a workers’ compensation claim for compensation, benefits, penalties or interest. The ICA is required to approve settlements. The measure also allowed the Department of Economic Security and the Office of Economic Opportunity to share unemployment insurance
information with specific entities to prevent, investigate and prosecute workers’ compensation fraud. See Laws 2017, Chapter 287.
Laws 2018, Chapter 212 modified the language adopted in 2017 relating to full and final settlements of workers’ compensation claims. The measure deleted the requirement for the ICA to determine if a full and final settlement is in the best interest of the employee and outlined a process for those employees represented by counsel as well as those employees who are not represented by counsel. The measure also added language regarding supportive medical maintenance benefits.
- Arizona Constitution, Article 18, Section 8
- Arizona Revised Statutes
- Session Laws
- Laws 1925, Chapter 83
- Laws 1943, Chapter 26
- Laws 1968, Fourth Special Session, Chapter 6
- Laws 1980, Chapter 246
- Laws 2010, Chapter 268
- Laws 2011, Chapter 157
- Laws 2012, Chapter 321
- Laws 2016, Chapter 128
- Laws 2017, Chapter 147 and Chapter 287
- Laws 2018, Chapter 212
- Arizona Administrative Code §§R20-5-101 et seq.
Industrial Commission of Arizona website
Master List of State Programs
State Agency Histories, State Compensation Fund
related collections at Arizona State Archives
Record Group 123 – Arizona Industrial Commission