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Increased Fines for Employers Who Do Not Maintain Workers’ Compensation Coverage

Our work injury attorneys understand that cases where employers have not complied with requirements to obtain coverage may require additional litigation.

money-problems.jpgIn a recent article, the News Virginian is reporting a substantial increase in the penalties faced by employers who do not maintain workers’ compensation coverage from their employees.

Workers’ compensation insurance has often been presented as a compromise aimed at striking a fair balance between the needs of workers and the needs of employers. Under the workers’ compensation plan, an employee has a means to quickly obtain compensation for an on-the-job injury without the need to file a civil lawsuit against their employer.

On the one hand, this allows workers to get money much faster than a traditional lawsuit and should not create any hostility between the worker and his or her employer. A civil negligence lawsuit can be costly and may take years to resolve. However, the workers’ compensation claim is considered an exclusive remedy under most state systems, including Massachusetts.

While there are exceptions to the exclusive remedy rule outlined in Chapter 158 of the Massachusetts General Laws (Serious or Willful Employer Conduct), the general rule is that, if you qualify for workers’ compensation after being injured on the job, you cannot also sue your employer for negligence. The importance of this rule is that, while it is by no means guaranteed, a verdict or settlement in a civil lawsuit may be substantially higher than a workers’ compensation settlement. This is clearly a benefit to the employer.

Another benefit to the employer is that it can choose to deny a workers’ compensation claim for a variety of reasons. Sometimes the employer is justified in the denial, but often times it is not. As your Boston workers’ compensation lawyer can explain, there are ways to appeal a denial of workers’ compensation benefits.

Another benefit to the employer is that there is a fixed cost from month to month for workers’ compensation insurance coverage as opposed to the possibility of owing an unspecified sum of money in the event that the employee wins civil judgments.

However, it is still necessary to force employers to maintain workers’ compensation coverage. According to the article discussed above, the previous law in Virginia is that if employers do not purchase coverage for their employees, they would have to a pay a fine between $500 and $5,000. Under the newly created legislation, the fine for a violation is $250 per day and for a total of $50,000. This is the first increase in the penalties for noncompliance in more than two decades.

There are several reasons employers do not maintain coverage. Some employers do not realize that the cost of not having coverage may be far greater than reasonable cost of maintaining coverage. There also appears to be a number of employers who are not aware of the requirement that they obtain coverage for all employees.

Whatever the reason may be, if you have been injured at work and your employer does not have a workers’ compensation insurance policy, the case will be more complex than a standard claim.

If you are injured on the job in Massachusetts, call the Law Offices of Jeffrey S. Glassman for a free and confidential consultation to discuss your workers’ compensation claim: 1-888-367-2900.

Additional Resources:

Penalties larger now for failure to insure employees, July 21, 2014, The News Virginian

More Blog Entries:

U.S. Lags in Safety Protections for Temp Workers, June 23, 2014, Massachusetts Workers’ Compensation Lawyers Blog