If you employ one or more subject workers in the state of Oregon, you must provide workers’ compensation coverage for your employees.
You must provide insurance covers for almost all employees, and sometimes volunteers. There are some exceptions, such as:
These are very narrow exceptions; not all workers in these categories will be exempt. You should ask a workers’ compensation attorney or your insurance company before you assume your employees are exempt. For example, the legal test for an independent contractor is complex and specific to the facts of each situation. Do not assume that a written independent contractor agreement protects you. If a judge decides that you have miscategorized an independent contractor or subcontractor, you could be liable for injuries.
You may buy workers’ compensation insurance from any qualified commercial insurance company. The State Accident Insurance Fund Corporation (“SAIF”) offers insurance to most Oregon employers. You may provide your own coverage as a self-insured employer if you meet certain rigid requirements. Generally, a small business will have insufficient assets to qualify as a self-insured employer. If you cannot get coverage from an insurance company or SAIF, you be able to get coverage through the Oregon Assigned Risk Pool, managed by the National Council on Compensation Insurance.
Your insurance premiums will depend on many factors, such as:
Different insurance companies may offer different payment plans for premiums. For example, carpenters cost a higher rate than librarians, because carpentry is a more hazardous job. If two new employers hire carpenters for the same salary, they pay the same premium in the first year. But in future years, they may pay different premiums. For example, an employer who can show his carpenters have fewer injuries on the job may pay a lower premium.
When selecting an insurance company, you should examine such factors as:
If you have workers’ compensation insurance, your employees cannot sue you or other employees in court for negligence. The workers’ sole rights are to benefits provided by workers’ compensation insurance.
There are serious consequences if you do not buy workers’ compensation insurance for your subject workers. If a subject worker is injured and files a claim, you could be a “subject and non-complying employer.” Your employee will still receive workers’ compensation insurance benefits. The Workers’ Compensation Division, an agency of the state of Oregon, will provide the benefits. But then you must reimburse the Division for all claim costs. The Division will also assess a penalty against you, which can be large and difficult to dispute. If the Division decides you are a subject and non-complying employer and you disagree, you should appeal. You send the appeal to the Division. The deadline to appeal is 60 days from the date of the order finding you a subject and non-complying employer.
Claims costs may be large, because an injured worker may receive the following benefits:
Without insurance, you must repay the Workers’ Compensation Division for benefits. You will also pay a percentage processing fee (around 20%) and a penalty. Corporate structure cannot block these charges against your business. The charges will become a lien. The state will collect the lien as a tax. The lien pierces the corporate structure and passes through to individual officers and directors as personal liability. These liens are not dischargeable in bankruptcy.
Also, if you are a subject and non-complying employer, the injured worker may sue you in court for his or her injuries. In such a suit, you cannot rely on the exclusive remedy of workers’ compensation to protect you. A successful lawsuit may result in a large monetary judgment against you. This judgment is separate from the amounts you must pay to the Workers’ Compensation Division.
When a worker tells you he or she was injured at work and wants to file a claim, you must file that claim with your insurance company within five days. If you have workers’ compensation insurance, your insurer will defend you if there is a dispute on the claim. You must allow the worker to file a claim, even if you may believe the claim is not justified. If you have reasons to dispute a claim, share that information with your insurer. If you refuse to file the claim, you may have to pay penalties and attorneys’ fees.
You cannot discriminate against your employees who file claims. If you do, they may file a complaint with the Bureau of Labor and Industries, or a court case. Your workers’ compensation insurer likely will not defend you against such a claim. You must treat injured workers the same as all other workers. But they are still your employees and still subject to regular employment requirements and rules. If your employee has work restrictions, you can choose to give them a light duty position while they recover. If they have permanent restrictions, you may offer them a permanent modified job. The state may help pay for workplace modifications needed to help the employee return to work. Subject to some limitations, if the worker has a full release and asks for his or her job back, you must return the worker to the job at injury. This is true even if you have hired someone to replace them.
If you have questions about the claim process, you should contact your insurance company. You should cooperate with your insurance company throughout the claim process to avoid added expenses and litigation.
Legal Editor: Jovanna L. Patrick, March 2019