Workers compensation insurance was designed as a compromise
to keep businesses running and to more quickly return injured workers back to
the job. The simple agreement took away
most of the employee’s rights to sue the employer and in response they were guaranteed
certain benefits if injured, made sick or killed on the job. The rules of the North Carolina Workers
Compensation System have been presided over by the NC Industrial Commission. These rules have favored the employer over
the employee for quite some time now and this month the Industrial Commission
showed once again that their sympathies lie with the employer over the injured
employee.
In early May, 2012, Governor Bev Perdue ordered a swift
reform of our system. She was made aware
of a number of claims filed by injured employees against their uninsured
employers that have gone unpaid for years.
In a show of strong action, the
North Carolina Industrial Commission rounded up about 100 delinquent employers
and threatened them with jail time should they not pay their injured employees
what they are due. It was beginning to
look like the unpaid injured employees were finally going to be treated fairly
by their government.
But let’s back up a bit.
If the employer’s part of the work comp bargain is to carry a workers
compensation insurance policy, then how did we end up with so many
uninsured employee injuries? This can
happen in several ways. An employer
could fail to make a payment and have its work comp insurance policy
cancelled. Or they could just decide to
drop the coverage or never buy it in the first place since the NC Industrial
Commission has never set up a system for finding the uninsured employers out
there. Or, they may simply not have to
buy a policy due to a crazy rule in North Carolina. This rule states that if you have less than 3
employees, you don’t have to purchase a policy if you don’t want to. If you don’t buy a policy though, you still have
to pay for all loses that occur to your employees just as if you were the
insurance company. This rule makes no
sense to me. Why should a small
employer be more able to pay for on the job injuries of its employees than a
larger employer? I would think that a
small employer is even less likely to have the assets needed to pay a claim. NC is one of the few states with such a silly
rule and to go along with this, NC also has one of the most lax enforcement of
the workers compensation rules that you will find. It is estimated that in NC there are as many
as 10,000 employers with no insurance coverage at all.
With Governor Perdue’s new initiative to find the scofflaws
and make them pay or go to jail, there was a glimmer of hope that someday we
might not hear any more of these sad stories where an employee is maimed for
life and the employer, not having purchased any workers compensation insurance,
claims that he has no assets to pay the claim.
But now, as we saw this week, when push came to shove, the North
Carolina Industrial Commission chose the welfare of the employers over the
injured employees. No employers were
thrown in jail, those that couldn’t or wouldn’t pay what is owed to injured
workers were granted extensions to make good on their settlements. Businesses can now flaunt the law and not
purchase work comp insurance and do so with impunity. Will the Industrial Commission find ways to
identify them and force them to obey the law like other states do? Will they change the law to force all employers
with any employees at all to purchase a policy to protect what they don’t have
the assets to protect? I doubt it.
Clinard Insurance
Group, located in Winston Salem, NC insures thousands of small businesses
all across the state. We urge every
business with any employees at all to buy a workers compensation insurance
policy to protect their assets and their employees. If you would like help with your workers
compensation insurance, please call us toll free, at 877-687-7557.
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