State regulators aren’t fining companies that fail to provide workers’ compensation even though some employers repeatedly let their coverage lapse, a state audit has found.
In a report given Monday to the Legislative Audit Committee, state auditors said the regulators don’t believe they have the authority to fine companies once they agree to get insurance.
Most companies in the state are required to have such insurance to pay for medical care and the lost wages of people injured at work. If a company doesn’t have coverage, an injured worker must hire a lawyer and pursue a claim.
Rep. Val Vigil said employers can save money for a year or two by avoiding buying insurance until they caught, giving them an unfair advantage over companies that follow the law. He said legislators may need to change the law to make the system work.
“We’ve developed a system that allows employers to play games,” he said.
The audit found that between June 2001 and December 2003 claims were filed against 345 employers that did not have workers’ compensation coverage.
The Division of Workers’ Compensation referred 265 companies to the state attorney general for refusing to provide proof of insurance.
Companies that lack coverage are at risk of having to increase an injured employee’s compensation and benefits by 50 percent. However the audit found this “does not provide sufficient remedy for employers who repeatedly violate insurance requirements.”
Regulators do have the power to shut down an employer who doesn’t carry insurance but that sanction has only been used once in 11 years.
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