06 Sep What Happens When an Employer Does Not Have Workers’ Compensation
Workers’ compensation insurance is an invaluable resource for someone who is injured in an accident at work or who develops an illness that is job-related. The individual receives medical treatment and is compensated for lost wages without financial worries. Although Arizona law requires most employers to carry workers’ compensation insurance, not all of them comply with the law. When that happens, there are remedies to help injured workers.
Mandatory coverage for most Arizona workers
The law requires all employers that regularly hire workers in the course of doing business must carry workers’ compensation insurance. It does not matter whether they are employed full time or part time, all workers, including family members, aliens, and minors must be covered by compensation insurance. There are three situations under which an employer does not have to maintain insurance coverage:
- Independent contractors
- Casual workers not hired in the usual business of the employer
- Domestic servants working in their employer’s home
The owners of businesses without employees other than themselves do not have to maintain workers’ compensation insurance coverage. They are, however, entitled to obtain coverage for themselves, but it is not mandatory.
An employee has the right to voluntarily waive coverage under workers’ compensation, but it must be done in writing and before a work-related injury happens. The written waiver must be given to the employer who must file it with the state. Employees filing a waiver of coverage may later rescind it, but they must do so before they suffer an injury or illness on the job.
Employee rights when employers violate the law
When an employer fails to provide insurance as required by law, a worker injured at work has the right to file a lawsuit against the employer. The lawsuit is based upon the negligence of the employer in causing the injury. However, unlike other types of negligence lawsuits in which the injured party must produce evidence to prove the negligence of the party being sued, proof of the injury is proof of the negligence of the employer.
Instead of filing a lawsuit against the employer, an injured worker may file a claim for workers’ compensation benefits with The Industrial Commission of Arizona. The claim is handled by the Special Fund Division of the ICA and, if the worker is entitled to benefits, medical costs and lost wages are paid out of the Special Fund.
What happens to employers that do not carry workers’ compensation insurance?
If the Special Fund Division approves payment to an injured worker, it is entitled to reimbursement from the employer for the amount paid from the fund. A penalty equal to 10 percent of the benefits paid to the worker or $1,000, whichever amount is greater, is levied against the employer.
Even in cases in which there has not been a claim by an injured worker, an employer that fails to provide coverage is subject to a $1,000 civil penalty for the first offense and $5,000 for a second offense within five years. It is also a violation of the criminal laws chargeable as a felony to not have workers’ compensation insurance for workers.
Get advice from an Arizona workers’ compensation lawyer
Filing claims for workers’ compensation benefits must follow specific rules and guidelines to avoid having your claim delayed or denied. The process for obtaining benefits when your employer does not have workers’ compensation insurance should be reviewed and discussed with an attorney to ensure the best outcome.