If you have three or more employees, chances are that you are required to have workers’ compensation insurance. Almost every business in the United States that has employees must deal with the question of workers’ compensation. Most states, including Georgia, require employers to purchase insurance to handle their statutory obligations to workers who suffer a work-related illness or injury.

However, business owners will offer a lot of reasons why they don’t have workers’ comp but it is necessary for doing business.
Amanda Yenerall, an attorney with Stewart Melvin & Frost, specializes in workers’ compensation law, representing employers, insurers and third-party administrators. Amanda joins us to discuss what deters some business owners from getting workers’ comp and the consequences of not having it.

Question: What are some of the reasons you hear why business owners don’t have worker’s compensation insurance?

Amanda: Some business owners think worker’s compensation insurance is just a burdensome government program. It’s really unnecessary and not a big deal.
Some think it is too cost prohibitive. And sometimes a business owner wrongfully believes an employee is just an independent contractor.

Question: What are the consequences for a business owner who does not have workers’ comp insurance?

Amanda: If an employee gets injured at work, and the employer does not have workers’ compensation insurance and is supposed to, the employer faces not only potential fines, penalties but even possible criminal prosecution.

The business owner also is responsible for payment of medical bills and possibly wages replacement to the employee.
If an employee has a significant or catastrophic injury, those costs can be astronomical. Thus, it is a very dangerous and bad idea to risk not having workers’ compensation insurance.

Not only is not having worker’s compensation dangerous to the employer, it can also be detrimental to the injured employee as the employer may not be able to pay the benefits that the employee is entitled to by law. Also workers’ compensation is good for Georgia employers – it’s a trade-off where employers are protected from being sued by their employees in exchange for employers providing medical and income benefits in the event of a work-related injury or illness.

Question: Who enforces worker’s compensation laws in Georgia?

Amanda: The Georgia State Board of Workers’ Compensation has an Enforcement Division whose mission is “to work with businesses operating in Georgia to assure compliance under the Workers’ Compensation Law, to deter fraud through public relations and investigations, and to enforce the rules and regulations of the Workers’ Compensation Board.”

On its website, there is a form for reporting workers’ compensation fraud and non-compliance. So, there does not have to be a work place injury for an employer to be reported for violating the law by not having workers compensation insurance as required by Georgia law. If an employee files a claim for benefits, that is another way the employer can get caught not having insurance.

So, overall, an uninsured employer risks being responsible (and in some cases even personally) for the employee’s workers’ compensation benefits, attorney’s fees, penalties and even criminal prosecution.
It is not worth the risk to not have workers’ compensation. It’s a gamble that does not pay off.