Business owners in California are required to provide workers’ compensation coverage for all their employees. To avoid criminal prosecution, most company owners comply with this law. Business executives may want to ensure their policies don’t lapse because the financial consequences of the lack of insurance may be severe.
An employer in another state recently convicted of a misdemeanor and received a suspended sentence. In addition, he was ordered to pay almost $4,000 in restitution and fines of $400 for neglecting to renew his workers’ compensation insurance after it lapsed. It was reported that the business owner paid wages to employees but claimed that they were all subcontractors. The Bureau of Workers’ Compensation apparently worked with the company owner and allowed him to pay past due insurance premiums. However, he apparently continued to declare the workers as subcontractors.
Furthermore, it was discovered that the company owner reported inaccurate wage figures to the Ohio Bureau of Workers’ Compensation. He was ordered to enter into a payment plan, but he apparently failed to do so. His conviction on a second-degree misdemeanor followed his failure to comply with state labor laws.
The lack of insurance can also result in potentially damaging lawsuits in the event of serious workplace injuries. However, company owners in California can take certain steps to minimize or resolve the consequences of neglecting to renew required insurance coverage. Experienced workers’ compensation attorneys are available to help uninsured business owners address noncompliance issues. A lawyer can also provide support and guidance in cases in which such charges are already pending.
Source: workerscompensation.com, “Ohio Trucking Company Owner Failed to Maintain Workers’ Comp Coverage“, Jan. 4, 2016