Employer Obligations

The workers’ compensation system provides compensation for employees who were injured at work or suffered an illness because of their job.  If the injury is great enough to result in death, workers’ compensation benefits are paid to the employee’s surviving spouse and children or other dependants.

In most states, employers are required to purchase workers’ compensation insurance from an insurance company.  In some states, large companies are allowed to self-insure, or act as their own insurance company.  Small companies, those with fewer than three or four employees, may not be required to have workers’ compensation insurance.  When an employee is injured and files a workers’ compensation claim, this claim is then filed with the insurance company, or with the self-insuring employer, who pays the workers’ compensation benefits.  These benefits may include medical and disability compensation, depending on your state.

Unless an employer falls within a specific exception (such as the exception for small companies), the employer without workers’ compensation insurance may be fined and they may be subject to civil and criminal liability.

Penalties

If an employer doesn’t have workers’ compensation insurance, that employer may be subject to the following penalties:

• Fines
• Criminal Prosecution
• The employer may be held responsible for paying workers’ compensation benefits to the inured employee
• An injured employee may be able to sue the employer, where the employee would have normally filed a workers’ compensation claim