Firm-Wide blog

Colorado Fights to Protect Uninsured Workers

By Burg Simpson
January 10, 2018
4 min read

The state of Colorado requires all employers with even a single employee to carry workers’ compensation insurance. It does not matter if those employees are part time or full time. In fact, anyone who receives payment for services in Colorado is considered an employee, as far as workers’ compensation insurance is concerned.

There are exceptions, of course, such as:

  • Casual maintenance or repair workers who are paid less than $2,000 annually.
  • Licensed real estate agents and brokers who operate on commission.
  • Anyone who volunteers time or services for a ski area.
  • Certain business owners.
  • Independent contractors.
  • Certain domestic work, maintenance or repair work for a private homeowner that’s performed on a part-time basis.
  • Drivers under a lease agreement with a common or contract carrier.
  • Federal and rail employees, who are covered under federal law.
  • Certain corporate officers and members of limited liability corporations.

Skipping Workers’ Compensation Insurance Can Be Costly

Companies that fail to provide workers’ compensation insurance, however, face penalties that can grow exponentially, especially since the state’s Department of Labor and Employment employs a per-day formula when levying fines. Additionally, the department can also issue cease and desist orders to businesses who forego workers’ compensation insurance, which can be even more expensive.

The fines for failing to carry workers’ comp coverage can be up to “$250 for every day the employer fails or has failed to keep the insurance as required by articles 40 to 47 of the Colorado Workers’ Compensation Act for the first violation, with a maximum of $500 per day for subsequent violations.”  In addition, if a worker is injured the temporary and permanent benefits are increased by 50%.

The Director of the Division of Labor has been aggressive about going after businesses that fail to carry workers’ compensation insurance, particularly if they have been warned or had a small fine imposed then become a repeat offender. It is that accumulating interest that buried one Denver business in $841,000 in fines in 2014. Dami Hospitality, an eastern Denver hotel operator, failed to carry workers’ compensation insurance between 2006-2007 and 2010-2014. The proprietor managed to win the latest appeal, arguing successfully that the fines violated her “right to protection against excessive fines under the Eighth Amendment,” which resulted in the Colorado Court of Appeals remanding the case back to Colorado’s Industrial Claim Appeals Office for review.

Colorado Uninsured Employer Act

The Colorado Department of Labor has worked to try to get workers who were injured while employed by companies or individuals that did not carry workers compensation insurance covered. The Director’s office met with various stakeholders, including the Colorado workers’ compensation attorney association (WCEA) headed at the time by Burg Simpson attorney John Connell to draft a bill that would provide help for uninsured workers. Gov. John Hickenlooper signed the Uninsured Employer Act into law in June of last year, which establishes a fund for injured workers who are uninsured. The new law earmarks the fines levied on uninsured employers into the new fund designated specifically to cover injured workers, rather than allowing the money to simply flow into the state’s general fund.

In addition to providing the state’s labor department greater flexibility in imposing daily fines, the new law also allows the fund to pay for “medical benefits, funeral benefits, temporary disability, death benefits, permanent total disability, permanent partial disability, and disfigurement.”

Finally, the Uninsured Employer Act establishes The Uninsured Employer Board, which is made up of the director of the Colorado Department of Labor and Employment and four gubernatorial appointees – each of whom represents each of the relevant stakeholders, such as employers, labor groups, insurance carriers, and workers’ compensation attorneys.

“When employers do not maintain workers’ compensation insurance it leaves their employees in a devastating position if they get injured on the job,” Burg Simpson shareholder Nick D. Fogel said when Hickenlooper signed the bill into law. “Not having workers’ compensation insurance means injured workers have no ability to access medical or financial benefits.”

If you have been hurt on the job, do not assume the worst or try to handle your case on your own. Reach out to a Colorado workers’ comp lawyers at Burg Simpson Colorado by calling 303-792-5595. You can also fill out a Free Case Evaluation form here so we can take a look at your case and explain your options.

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