When Your Employer Has No Coverage
Most workers assume their employer carries workers’ compensation insurance. It is, after all, required by law. But not every employer follows through. If you are injured on the job and discover your employer is uninsured, you are not without options.
Nearly All Employers Are Required to Carry Coverage
Almost every employer is required to maintain active workers’ compensation insurance. This includes part-time workers, seasonal workers, and even individuals hired for a single day. The requirement applies regardless of business size.
There are very limited exceptions. But the general rule is broad. If someone is performing work for a business and receiving pay for that work, the employer needs a valid policy in place.
Our friends at Hurwitz, Whitcher & Molloy often see cases where injured workers don’t realize the coverage gap until after they’ve already been hurt. That discovery raises immediate questions about who will pay for medical treatment, how lost wages will be covered, and whether the worker has any recourse at all.
What Penalties Does the Employer Face
The consequences of failing to carry workers’ compensation insurance are both civil and criminal.
Civil penalties under Section 52 of the Workers’ Compensation Law include fines of up to $2,000 for every 10-day period an employer operates without coverage. These fines accumulate quickly and are not capped. The Workers’ Compensation Board can also issue a stop-work order, forcing the business to shut down until coverage is obtained.
Criminal penalties apply as well. For employers with five or fewer employees, failing to secure coverage is a misdemeanor. For those with more than five, it can be a felony. Corporate officers are not shielded and can be held personally liable.
How Injured Workers Can Still Receive Benefits
This is the part that matters most if you’re the one who was injured.
The state maintains an Uninsured Employers’ Fund (UEF), administered by the Workers’ Compensation Board. When an employer fails to carry required insurance and a worker is hurt, the UEF steps in to pay benefits. Those benefits can include:
- Medical treatment related to the workplace injury
- Lost wage replacement based on the worker’s average weekly earnings
- Disability benefits for temporary or permanent impairment
- Death benefits to dependents in fatal workplace accidents
The UEF then pursues reimbursement from the employer, so the financial burden ultimately falls back on the noncompliant business.
Filing a Claim Against an Uninsured Employer
The claims process follows the same general framework as any other workers’ comp claim. You still need to report your injury to your employer, seek medical treatment, and file with the Workers’ Compensation Board. The Board will identify the employer as uninsured and route your claim through the UEF.
These cases can be more contentious. An uninsured employer facing significant financial exposure may contest your claim, challenge the nature of your injury, or dispute whether you were actually an employee. Misclassification as an independent contractor is a common defense.
A workers’ comp lawyer can be particularly valuable in these situations. Having legal representation early helps establish the employment relationship, preserve evidence, and push the claim forward when the other side becomes adversarial.
Take Action to Protect Your Rights
If you’ve been hurt at work and believe your employer may not carry workers’ compensation insurance, do not assume you are out of options. The law was designed to protect workers in this situation. Report your injury, file your claim, and seek guidance from an attorney who handles claims involving uninsured employers.