Workers’ compensation is a type of insurance that is required for most businesses in Wisconsin. Workers’ comp protects employers and employees and provides employees with benefits if they get hurt on the job and are unable to work for a period of time. In Wisconsin, workers’ compensation is overseen by the Department of Workforce Development (DWD).
Workers’ Compensation Insurance Requirements
Most employers in Wisconsin are required to have workers’ compensation insurance. Employers with three or more full or part-time workers are required to have insurance. An employer with fewer than three employees must have insurance when the combined wages for any calendar quarter are $500 or more. Special rules may apply to subcontractors or independent workers, who may or may not be considered employees under the law.
Sole proprietors or owner-operators are generally excluded from the employee count. There are special rules in place for farm workers. Special provisions are in place for real estate brokers, agents, and salesforce. Companies must understand and follow workers’ compensation laws as they apply to their particular industry and company. Some businesses may get special approval to be self-insured. An experienced attorney will provide guidance and help you ensure that you are following the workers’ compensation laws as they apply to your business.
Penalties for Noncompliance
Penalties are in place for noncompliant businesses. When a company does not have workers’ comp insurance, or it has lapsed at the time of a claim, they are considered to be noncompliant. Such claims are paid through the Uninsured Employers Fund (UEF). The uninsured company is then required to reimburse the fund for all costs associated with the claim. If the non-compliant business fails to make payment, it will be subject to collection methods that may include warrants and property garnishment.
A noncompliant business also faces fines, even if no claims have been made. The penalty is twice the amount of what they should have paid for insurance during the period of lapse, or $750, whichever is greater. When the employer has a lapse of seven consecutive days, they must pay $100 for each day they were uninsured if this is the first time they were uninsured and if no injuries occurred during the uninsured period. Additionally, the business may be required to shut down entirely until insurance is obtained.
Employees may File a Lawsuit
In cases where an employer has failed to comply with workers’ compensation requirements, an employee who was hurt on the job may be able to file a lawsuit. This opens up the company to litigation that it otherwise would have avoided. Litigation can be expensive and is often lengthy. In addition, it could harm the reputation of the business. Many times, companies may decide to settle a lawsuit rather than allow it to become public knowledge. This can be incredibly costly and may be devastating to your brand.
Workers’ compensation issues can be complex for business owners. To learn more about workers’ comp matters, contact us today at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online for a consultation.