Colorado DWC Urges Employers To Be Wary When Told They Need Not Carry Workers Compensation
Bad advice and
misconceptions can lead to fines of up to $250 per day
Denver, CO (CompNewsNetwork) - Officials with the Division of Workers'
Compensation are reporting that incorrect advice from accountants, insurance agents and
even attorneys is the most common excuse given by employers when confronted by Division
staff for failure to carry workers' compensation insurance.
"Workers' compensation premiums represent one expense employers should not
forego,” stresses Donald J. Mares, executive director of the Colorado Department of Labor
and Employment, the state agency that includes the Division of Workers' Compensation.
"Like most things in life, there are a few exceptions but in most cases the law requires
employers to carry workers' compensation coverage, either through a carrier or, if the
company qualifies, through self-insurance.”
Not having the coverage can be a costly mistake. Employers can face
fines of up to $250 per day for every day the coverage was not in place. Before 2005,
businesses could avoid penalties by quickly purchasing workers' compensation insurance
after their failure to have coverage was uncovered. However, today's law requires
that fines be assessed for any period of noncompliance after July 1, 2005. Depending
on the length of time the business was out of compliance, those fines could total tens of
thousands of dollars, almost certainly higher than the premium costs.
Myths and misconceptions about workers' compensation still circulate in the
business community and believing that part-time employees and family members do not have to
be covered has tripped up many employers. The Division of Workers' Compensation
reports that another critical misconception is that some employees are independent
contractors and are therefore outside the coverage requirements of the law. However,
Division staff will discover that the independent contractor status cannot be supported by
the true working relationship that is in place.
So what is an employer to do? Most want to keep down the cost of doing
business, but at the same time, no employer wants to be subjected to fines for
noncompliance with the law. The Division of Workers' Compensation advises employers
to think carefully when told they may be exempt from workers' compensation coverage
There is a wealth of information online at www.coworkforce.com/dwc and employers are urged
to call the Division of Workers' Compensation with their questions. The Colorado
Division of Workers' Compensation's Coverage Enforcement Unit can be reached at
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