Posted on October 23rd, 2017
Well, the worst has happened. An employee has been hurt on the job, and you don’t have no workers comp insurance.
Maybe you’re a startup and didn’t think you needed it?
Maybe you haven’t gotten around to it, or don’t think you can afford workers’ compensation insurance?
Both of these seem like perfectly legitimate reasons.
But in the eyes of the law, when somebody is hurt on the job, there is no excuse. You need to have workers comp insurance. In fact not having workers comp is a criminal offense!
According to Section 3700.5 of the California Labor Code it is a misdemeanor punishable by a fine of not less than $10,000. Or even scarier imprisonment in the county jail for up to one year!
Additionally, the state can issue penalties of up to $100,000 against you if you are an uninsured employer.
Scary stuff huh? Well take a deep breath, here is what you are looking at if someone is hurt on the job when you don’t have workers’ comp insurance.
Step One: Get Workers’ Compensation Insurance Immediately to Avoid Future Problems
I feel the need to say this up front. Just in case you are scanning the rest of this article, weighing the pros and cons of skipping getting workers’ compensation insurance.
There is no risk-versus-reward or business case that can be made for skipping this critical step. It’s illegal and irresponsible. We will get into the fines and charges in the next section.
But believe me they are so heavy that the risk does not match the reward. If you cannot afford workers comp insurance than you cannot afford to have employees period.
It doesn’t matter if you’re a simple startup. As soon as you have employees, you should have workers’ compensation insurance.
There’s No Such Thing as a Safe Office
You may think, I’m running an office space, not a factory. How are people going to get hurt? Well, they can and they will.
First of all, people fall in offices all the time. In fact, office workers are 2 to 2.5 times more likely to suffer disabling injuries from a fall than non-office workers.
All it takes is an extension cord across the walkway, a slippery/wet floor, or somebody trying to use a chair instead of a ladder.
Or do you have an industrial stapler? Then your employees’ thumbs are never safe. People get hurt, and people have missed time because of this.
If you think you don’t need workers’ compensation Insurance, you need to consider that:
- According to the Bureau of Labor Statistics, more than 3 million nonfatal workplace injuries and illnesses were reported in the private sector in 2013.
- Musculoskeletal disorders (MSDs) account for more than $15 billion in workers’ compensation costs.
- Workplace violence is a very serious problem. In fact, of the 4,547 fatal workplace injuries that occurred in the U.S. in 2010, 506 were workplace homicides.
As you can see, even the most seemingly harmless office environments can be vulnerable to workplace injuries or even fatalities. These are not scare tactics. This is a reality. So you need to be prepared for the worse to happen.
Will Getting Workers Comp After the Fact Help Me?
If you did not have workers compensation insurance and an employee gets hurt than they were not covered. Meaning getting the coverage afterwards is not going to help in that specific situation it will only help in future situations.
But you should still get the coverage as soon as possible. The employee that was hurt and not covered will have to be dealt with as a separate situation with its own set of consequences.
Getting the workers comp insurance right away will help you with future incidents. Also when one employee files a claim, others tend to follow suit (funny how that happens right?). This will at least protect you from that situation. Also when you are dealing with the non covered employee incident you can show the court that you at least have rectified the situation for the future and that will make you look better in their eyes.
Step Two: Ensure the Employee Gets the Medical Attention They Need
This is the most important part. Your employee’s safety is you’re number one priority. You need to make sure they are completely looked after, and a medical professional can safely and expertly assess the short term and long term effects of what happened.
If somebody twists an ankle on the fall, don’t just give them ice and tell them to elevated. Send them to the hospital to get a full x-ray.
You don’t want to be seen as trying to sweep the problem under the rug. If you do this it will come back to bite you.
Step Three: Never offer Someone Who’s Hurt on the Job “Hush Money”
Never ever offer the employee money out of your pocket, or the businesses pockets, for them not to report this injury or sue you.
There are almost no scenarios in which this actually works. And it’s also illegal. The second you even have this conversation with an employee, you’re breaking the law.
You are breaking the law when you did not protect yourself with workers’ compensation insurance in the first place, so do not dig yourself into a deeper hole.
So if somebody is hurt on the job, do not offer them money or extended time off to “keep this between us.”
If this conversation ever comes up in a court of California law, you’re going to be in a lot of trouble. If the situation evolves into a battle between you and the employee its a sure bet they will bring this up.
Step Four: Speak to a Lawyer Immediately
This is your next priority. You need to seek legal counsel or get a lawyer who works with uninsured workers’ compensation lawsuits immediately.
You could be facing steep fines or even jail time if someone is hurt on the job.
You need an experienced lawyer to help you map out all your options, and help you minimize the damage to yourself personally as the business owner, as well as the business.
In terms of penalties, you could be facing:
- A misdemeanor punishable by imprisonment in the county jail for up to 12 months, a fine of up to $10,000, or both.
- The Division of Labor Standards Enforcement (DLSE) will fine you $1,000 per employee who is on the payroll at the time the stop order is issued and served, up to $100,000.
- You may have to pay twice the amount the employer would have paid in workers’ compensation insurance premiums during the period the employer was uninsured or $1,500 per employee.
On top of that, if the person hurt on the job files a workers’ compensation claim that goes before the workers’ compensation Appeals Board, you could be facing:
- A penalty of $10,000 per employee who was on the payroll at the time of injury, if the injury is compensatable.
- Or $2,000 per employee, if the injury was non-compensable, up to a maximum of $100,000.
And that’s just for a first offense. If you’re found guilty a second time, the fine can skyrocket up to $50,000, or three times the premium a court determines that you, as the employer, would have had to pay.
Be Prepared for Someone to Be Hurt on the Job
California Labor is one of the most unique and challenging areas of law. The entire system is so one sided and slanted against employers.
And in all of those crazy unfair labor laws the ones dealing with workers compensation are the worst.
Think about it. You could actually face jail time for being illegally uninsured! Now with all my experience I have never had one of my client spend time in jail for this but its a scary possibility all the same.
Bottom line you need to protect yourself and your business by making sure you are fully covered with workers compensation insurance when you have employees in California.
Now if you are in the situation where you have had a workers comp claim filed and you do not have insurance you need to contact me right away.
Not going to lie. Its a tough situation you are in now. But you can help yourself tremendously by working with a law firm that specializes in (and understands) the challenges of this area and has successful strategies to fight back for you.
We can help you today. Begin by booking a free 15-minute consultation.