The California Department of Industrial Relations is clear: “California employers are required by law to have workers’ compensation insurance, even if they have only one employee.” A business or nonprofit organization that improperly fails to provide workers’ compensation coverage may face serious sanctions. In this blog post, our Fresno workers’ compensation defense lawyers highlight the key things you should know about the penalties for not providing workers’ compensation coverage in California.
Uninsured Employers in California Face Major Penalties
Under California Labor Code § 3700, employers are required to provide no-fault workers’ compensation insurance to all employees. Companies that fail to offer the mandated coverage are deemed “uninsured.” An uninsured employer may face some (or all) of the following sanctions:
- A Civil Damages Lawsuit from an Injured Employee: Workers’ compensation insurance is designed to be an exclusive legal remedy for employees hurt on the job. A worker covered by workers’ compensation insurance cannot file a personal injury lawsuit directly against their employer. However, that does not apply to uninsured workers’ compensation claims. An injured worker can file a civil lawsuit against an uninsured employer to seek compensation for medical bills, lost wages, pain and suffering, and other damages.
- Automatic Penalty Compensation Awarding to the Injured Worker: California also allows workers to seek penalty compensation from an unlawfully uninsured employer. In most cases, penalty compensation is worth an additional 10% of the value of the underlying workers’ compensation claim.
- Fines from the State Regulators: Regulatory agencies in California have the authority to fine unlawfully uninsured employers. Most often, these fines will be levied directly against the company or organization. Though, in some cases, California regulators will also fine the business owner in their personal capacity.
- Criminal Charges in California: Finally, uninsured employers in California could face criminal penalties. Although typically reserved for the most extreme of cases, a business owner who knowingly fails to obtain mandatory workers’ compensation coverage can be arrested, charged with a misdemeanor criminal offense, and subject to jail time.
A Central California employer facing potential penalties for failing to obtain workers’ compensation coverage must take immediate action to protect its rights and interests. As a general rule, these cases are initiated when an employer receives a legal notice called a Special Notice of Lawsuit (SNOL)—a worker in California must send this when filing an uninsured employer claim. If you or your company received an SNOL, it is imperative that you seek professional representation.
Call Our Fresno, California Workers’ Compensation Defense Lawyers for Proactive Legal Help
At Yrulegui & Roberts, we are standing by ready to advocate for your rights. If you have any questions about defending an uninsured workers’ compensation claim, we are more than ready to help. Contact us right away for a completely confidential consultation. With legal offices in Bakersfield, Sacramento, and Fresno, we provide workers’ compensation defense services throughout Central California, including in Stockton, Santa Barbara, San Luis Obispo, Oxnard, and Van Nuys.