When WCD discovers you should have coverage but don’t, it sends an order to you, stating the period of noncompliance and assessing a fine. The penalty for the first offense is two times the amount of premium you should have paid for insurance, with a minimum of $1,000.

If you continue to employ without coverage, the penalty goes to $250 per day with no limit on the total fine. In addition, WCD will request a permanent court injunction to force you to stay in compliance. If you disobey an injunction, you’re in contempt of court and subject to other types of sanctions, including jail time.

The expenses that result when a worker is injured could cost you even more than penalties. By law, a noncomplying employer is financially responsible for the same benefits insured workers receive. The law requires that a certified claims agent process the claim. You have to pay a fee for this processing in addition to claim benefit costs.

The total bill can (and often does) amount to hundreds of thousands of dollars. By law, bankruptcy can’t reduce this debt. Business owners cannot hide behind a corporation or limited liability company because corporate directors and officers and limited liability company members and managers are personally and seperately liable.

Exclusive remedy law suit protection doesn’t apply to noncomplying employers. So an employee can file suit against a noncomplying employer as well as having a legitimate workers’ compensation claim.


Rule reference: OAR 436-050 and OAR 436-080