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How much can I be fined for not having workers' comp insurance?

As an employer, you may have a number of obligations related to your business. For example, you may need to hire staff for an upcoming season or you could be dealing with an employee's lawsuit. However, you could find yourself in a particularly difficult situation if you are uninsured. In Los Angeles, and across the entire state of California, employers are required to provide workers' compensation coverage, even if they only have one employee. If your business does not have workers' comp, you could face various consequences, including stiff fines.

According to the Department of Industrial Relations, the state of California can fine you as much as $100,000 if you do not have workers' comp insurance. Furthermore, you could be sentenced to one year behind bars and hit with at least $10,000 in fines if you are facing these charges. In addition to costly fines, you could have to cover an employee's medical expenses if they suffer an injury or illness while working and you do not have workers' compensation coverage. Moreover, you may find yourself in the middle of legal action.

Employers fail to provide workers' comp for a number of reasons. In some cases, an employer may not realize they were required to buy insurance, while others may be uninsured in an attempt to try and save money. Regardless, a lack of insurance can spell disaster for businesses both large and small and if you have found yourself in this position, it is vital to carefully examine your options.

This post is not to be interpreted as legal advice.

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