Employers Who Fail to Carry Workers Comp Insurance Face Steep Penalties
Most employers in Pennsylvania are legally obligated to secure workers’ compensation insurance for the benefit of employees. This mandatory system provides benefits for both workers and companies. By providing coverage for workers, those injured on the job will have access to benefits if they become unable to work and need medical care. In exchange, companies are shielded from liability for injuries their employees suffer while working.
However, those who fail to maintain workers’ comp insurance and who are not exempt from the requirement can face harsh penalties for this oversight.
Failing to carry workers’ comp insurance is a criminal offense; a noncompliant employer in Pennsylvania can face fines up to $2500 and/or one year in prison for each day that the employer does not have coverage for employees. Each day that an employer does not carry workers’ compensation insurance constitutes a separate offense.
Generally this offense is a misdemeanor, but if a court finds that the failure to comply with workers’ compensation requirements is intentional, the employer may face felony charges.
To understand the potential consequences for an employer who is not maintaining proper coverage, consider the recent case of Zullinger Meats Inc. The president and vice president of the company are currently facing 299 counts of failure to provide workers’ comp insurance coverage, because the company allegedly did not carry workers’ comp coverage from Mar. 8, 2008 through Dec. 21, 2008.
As the president and vice-president were aware that they were supposed to carry insurance, these crimes have been charged as felonies.
Beyond the criminal penalties, though, an employer who fails to carry workman’s comp insurance exposes the company to significant civil liability. Although employers are generally shielded from personal injury claims from their employees, this is not true if the company fails to maintain workers’ comp insurance.
If an employee is injured on the job and the employer was negligent, the employee can sue the company. In the event of serious injury, a personal injury lawsuit may be much more costly for the company in the long run.
To protect both a company and its employees, employers should always maintain workman’s comp benefits. Weighing the potential consequences, this is the obvious choice.
It is important that those injured in the workplace understand their rights and options. Although Pennsylvania is among the best states in the country for protecting the rights of injured workers, this alone does not ensure fair compensation. For more information following a workplace injury, speak with a knowledgeable workers’ compensation attorney.