It is important to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.
If you employ one or more subject workers in the state of Oregon,
you must provide workers’ compensation coverage for your employees.
Almost all employees, and sometimes volunteers, must be provided with
insurance coverage. There are some exceptions, such as: domestic servants;
people doing gardening, maintenance and repair work on private homes;
some casual workers; sole proprietors; partners and officers of corporations;
newspaper carriers; amateur athletes; and people who own or have a
leasehold interest in and operate motor vehicles carrying logs, rocks,
gravel, sand or asphalt. But these are very narrow exceptions that
have been qualified by court decisions. You should consult a workers’ compensation
lawyer before assuming that your employees or even subcontractors are
exempt. Do not assume that a written independent contractor’s
agreement insulates you. If the independent contractor fails to obtain
coverage for its employees, you could be held ultimately liable for
any injuries to its employees. What’s more, the legal test for
independent contractor status is very strict.
To obtain coverage, you may purchase workers’ compensation insurance
from any qualified commercial insurance company, the State Accident
Insurance Fund Corporation known as SAIF, or, if you meet certain rigid
requirements, you may provide your own coverage as a self-insured employer.
Generally, a small business will have insufficient assets to qualify
as a self-insured employer. If you are unable to obtain coverage from
an insurance company or SAIF, you may obtain coverage through the Oregon
Assigned Risk Pool, managed by the National Council on Compensation
Insurance.
If you have workers’ compensation insurance, in most cases your
employees injured on the job cannot sue you in a civil court for injuries
resulting from your negligence as an employer. The workers’ sole
rights are to obtain benefits provided by workers’ compensation
insurance.
If you neglect to obtain workers’ compensation insurance for
your employees, you will be a “subject and non-complying employer.” Despite
your failure to obtain insurance, your employees injured on the job
will still receive workers’ compensation insurance benefits.
The Workers’ Compensation Division, an agency of the state of
Oregon, will provide workers’ compensation insurance benefits
to your employees, but you will be obligated to reimburse the department
for all claim costs and a penalty. Since an injured worker is entitled
to the following benefits, claims costs may be substantial:
- payment of a portion of his or her wages while unable to work;
- payment of medical bills;
- vocational assistance and retraining costs, and
- payment of permanent disability and death benefits that may arise out of the injury.
All benefits will be processed for the Workers’ Compensation
Division and charged against you, along with a percentage processing
fee (of around 20 percent) and a penalty. Note that the charge against
your business cannot be blocked by any corporate structure. It will
be reduced to a lien and collected as a tax that pierces corporate
structure and passes through to individual officers and directors as
personal liability. Such liens are not dischargeable in bankruptcy.
Additionally, if you are a subject and non-complying employer, the
injured worker may be able to sue you in court for his or her injuries.
In such a suit, you will be prohibited from asserting certain key defenses.
A successful lawsuit may result in a substantial monetary judgment
entered against you.
If a worker makes a claim against you for workers’ compensation
benefits, you must file that claim with your insurance company within
five days. You must accept the claim form, even though you may feel
the claim is not justified. If you object to a claim, share that information
with your insurer when you file the claim. If you fail to file the
claim, you may be required to pay a penalty and the claimant’s
attorneys’ fees.
If you have workers’ compensation insurance, and an injured worker
files a request for a hearing to obtain additional benefits or some
other relief, you will be defended by an attorney hired by your insurance
carrier.
Naturally, you must pay for the insurance you purchase. Your premiums
will depend on the type of employees you have (how hazardous is the
job?), your payroll, and your own experience in providing a safe (or
dangerous) work environment. Additionally, different insurance companies
may offer different plans for payment of premiums. Carpenters, for
example, are subject to a higher rate of classification than librarians
because carpentry is a more hazardous occupation. If two new employers
hire carpenters for the same salary, they probably will pay the same
premium in the first year. Thereafter, if one employer can demonstrate
through actual experience that his carpenters have fewer injuries on
the job, his or her net premiums in the future periods probably will
be lower.
When selecting an insurance company, you should examine such factors
as:
- What type of payment plans are available?
- How efficiently does the company manage its claims?
- What type of legal services does the company provide its insured?
- What assistance will the company provide to help you improve the safety of your work environment?
Legal Editor: Jennifer R. Roumell, April 2008