Every state including Oregon mandates specific laws for employers to offer workers’ compensation insurance coverage to ensure that employees’ finances are safe in the event of an unexpected work-related injury, illness, or death.
Workers’ compensation insurance coverage protects the employer from complete financial liability and possible legal action. Instead of a huge liability cost, the employer pays a premium based on the size of the business, number of employees, type of industry and the amount of injuries the business has been accountable for in the past, in comparison with other businesses in the same field. Each year a business’ insurance premium can raise, lower, or stay the same depending on these factors.
Keep in mind that lawsuit protection does not apply to non-complying employers. So, an employee can file suit against a non-complying employer in addition to having a legitimate workers’ compensation claim. Carrying workers’ compensation insurance is vital to your business.
If you do not have required workers’ compensation coverage, Workers’ Compensation Division (WCD) of Oregon 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 workers without coverage, the penalty increases to $250 per day with no limit on the total fine. By law, bankruptcy will not reduce this debt. In addition, WCD will request a permanent court injunction to force you to comply. If you disobey an injunction, you’re in contempt of court and subject to other types of sanctions, including jail time.
Workers’ compensation covers the employee’s medical expenses and provides a specific percentage of the employee’s wages for the period they are unable to work due to injury. In case of death, coverage also spans to compensate a percentage of the deceased employee’s wages to their family to keep them on their feet. If an employee is no longer able to perform the duties of their previous position, workers’ compensation insurance coverage will also cover the cost of training for another comparable position within the company, if available. Workers’ compensation insurance coverage is a necessity to ensure the safety and peace of mind of all employees within a company in almost any work related incident.