Find out your legal options if you’re injured at work and your employer doesn’t have workers’ compensation coverage
Workers’ compensation insurance is a type of insurance that provides financial benefits to workers who are injured on the job.
One of the earliest examples of workers’ compensation dates back to 2050 B.C. when ancient Sumerians passed a law to pay workers for their injuries.
Much more recently, all 50 states have passed laws detailing which employers are required to carry workers’ compensation insurance.
Is my employer required to carry workers’ compensation insurance?
With the exception of Texas, all states require the vast majority of private and public employers to carry workers’ compensation insurance. Texas doesn’t require any private employees to carry workers’ compensation insurance.
In most states, employers are required to carry workers’ compensation insurance so long as they have at least 1 employee. In a minority of states, the requirement doesn’t kick in unless the employee has more than 1 employee (usually between 2 and 5).
The bottom line:
Chances are pretty good your employer is required by law to carry workers’ compensation insurance.
How can I find out if my employer carries workers’ comp insurance?
Although most employers are required to carry workers’ compensation insurance, some are not. What’s more, just because your employer is required to carry workers’ compensation insurance, doesn’t mean they actually do. It may be hard to believe, but some employers choose to defy the law and others simply forget to renew coverage.
You may remember receiving a packet of information about your workers’ compensation benefits when you were hired, or you may have seen the posters on the wall in your employer’s break room stating the name of your workers’ compensation carrier.
However, the best way to verify coverage is to visit your state’s Workers Compensation Insurance Rating Bureau (WCIRB) website. In most cases, you can simply type the name of your employer into the search tool to verify coverage. If you’re unable to verify coverage, call or email the WCIRB.
If your state doesn’t have a WCIRB, check with the National Council on Compensation Insurance (NCCI).
Will my employer be punished if they don’t have insurance (and should)?
If your employer is required to carry workers’ compensation insurance and is found to be operating without it, your employer will face harsh penalties.
The exact penalties vary by state but typically range from a hefty fine to jail time. Here are a few examples:
- In California, failing to carry workers’ compensation coverage is a criminal offense punishable by a fine of not less than $10,000 or imprisonment in the county jail for up to 1 year, or both.
- In Colorado, an employer who fails to carry workers’ compensation insurance may receive a cease and desist order. The order requires them to stop business operations until they have insurance. The business may be subject to fines of up to $250 for every day they do not have proper coverage.
- In New Jersey, failure to carry workers' compensation coverage is a criminal offense punishable by a fine of $10,000 or imprisonment for up to 18 months.
On top of fines and jail time, many states force the employer to compensate the injured employee.
How do I recover damages for an injury if my employer doesn’t carry workers’ compensation coverage?
If you were injured at work and your employer doesn’t have workers’ compensation insurance, you have a couple of options to recover damages depending on whether or not your employer is supposed to have workers’ compensation insurance:
Your employer is not required to have workers’ compensation insurance
If your employer isn’t required to carry workers’ compensation insurance, you might still be able to receive compensation by filing a personal injury lawsuit against your employer. Keep in mind that, unlike a workers’ compensation claim, you’ll need to prove that your employer was at fault for your injuries in order to recover damages through a personal injury lawsuit.
Your employer is supposed to have workers’ compensation insurance
If your employer doesn’t have insurance coverage (and should), you can contact your state’s workers’ compensation agency. Your state workers’ compensation agency will take legal action against your employer and may require your employer to pay you the amount you would have received through insurance.
To help make sure injured workers get the money they deserve, many states have created uninsured employee funds. These funds, which are typically funded by a small tax or fines collected from employers who were illegally uninsured, are all a little different but typically help ensure that injured employees can receive the benefits they should have received without having to deal directly with their employer (who may not even have the funds to pay the employees).
If your employer isn’t required to pay you the amount you would have received through insurance and you can’t get adequate funds from your state’s uninsured employee fund, you may still be able to recover damages by filing a personal injury lawsuit against your employer.