A Salinas transmission shop owner was operating without Workers’ Comp coverage, which drew the attention of the California Workers’ Comp Fraud Unit. In a Feb 20, 2013 compliance check, it was discovered the business was operating without licenses as well as appropriate insurance.
Mr. Grinberg points out that it could have been a lot worse. This came out as a result of a compliance check, rather than from an injured worker. Had there been an injured worker, this employer would have been personally liable for benefits to which the injured worker was entitled under Workers’ Comp.
The issue is tricky for some employers who operate with a network of “independent contractors,” and thus think they have no Workers’ Comp responsibility or requirement. An independent contractor who becomes injured on the job and has no health insurance becomes a huge potential liability to such a business owner. The injured contractor, facing medical care costs without insurance, would have motivation to allege that the nature of their working relationship constituted employment. Once established, the uninsured employer is at great personal risk.
In this case, the employer ‘only’ had to secure insurance, pay a large fine, and spend one night in jail.
Better to build in the cost of a workers’ comp policy to your pricing model for services, and have the correct coverage–it’s just good risk management.
Leave a Reply