PRESS RELEASE
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Colorado
Department of Labor and Employment • (303)
318-8004 • Fax: (303) 318-8070 |
For Immediate Release
Date:
January 11, 2008
Contact:
Office of Government, Policy and Public Relations
Phone:
(303) 318-8004
Fax:
(303) 318-8070
STATE URGES EMPLOYERS TO BE
WARY WHEN TOLD
THEY NEED NOT CARRY WORKERS COMPENSATION INSURANCE
Bad advice and misconceptions can lead to fines of up
to $250 per day
(
“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 requirements.
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
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