{"id":5118,"date":"2016-04-04T10:47:57","date_gmt":"2016-04-04T15:47:57","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/liability-and-insurance\/workers-compensation-employer-responsibilities.html"},"modified":"2024-05-23T02:33:28","modified_gmt":"2024-05-23T07:33:28","slug":"workers-compensation-employer-responsibilities","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/workers-compensation-employer-responsibilities.html","title":{"rendered":"Workers’ Compensation Noncompliance: Employer Consequences"},"content":{"rendered":"\n
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Workers' Compensation Noncompliance: Employer Consequences<\/h1>\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

In most states, employers must carry workers’ compensation insurance. They may have the option of using a private workers’ compensation insurance carrier or buying through the state.<\/p>\r\n

In some states, larger employers can self-insure or act as their own insurance companies. Smaller companies may not need workers’ compensation insurance at all.<\/p>\r\n

If an employee suffers a workplace injury, they file a workers’ comp claim. The carrier pays for medical care without any determination of fault.<\/p>\r\n

Employers who fail to provide workers’ compensation<\/a> insurance may face fines, criminal prosecution, and civil liability. In some states, the labor board has the authority to close a business until the employer complies with their workers’ comp insurance requirements.<\/p>\r\n

Workers’ Compensation Laws<\/h2>\r\n

All states except <\/a>Texas<\/a> require employers to carry a workers’ compensation insurance policy for their employees. The number of employees necessary for workers’ comp coverage varies from state to state. In California, even one employee<\/a> is enough.<\/p>\r\n

Some types of workers are exempt from workers’ comp insurance. For example, agricultural and railroad workers use other types of workplace insurance.<\/p>\r\n

Small-business owners have the same duties as larger employers, except for some recordkeeping requirements. Penalties for failure to provide workers’ compensation benefits depend on state laws.<\/p>\r\n

Legal Penalties and Fines<\/h2>\r\n

State laws contain a wide range of possible legal penalties for employers who do not provide the proper workers’ compensation insurance<\/a> for their workers. Fines can mount quickly, so employers should not hope their workers never suffer work-related injuries.<\/p>\r\n

Employers may face fines from $100 to $5,000 per employee per day for failure to provide workers’ comp insurance. States may issue fines whether an employee has incurred any medical expenses or not. Courts may order employers to pay an injured worker’s medical bills out of pocket.<\/p>\r\n

Several states have the authority to close businesses that are out of compliance with the workers’ compensation system. This action is known as a stop-work order. A business can be shut down over things like:<\/p>\r\n