Tuesday, May 27, 1997
A new state program is succeeding in its goal of protecting more people who are injured in the workplace, announced Bruce Hagen, deputy secretary of the Department of Workforce Development.
The program, begun last year, compensates injured workers whose employers were uninsured and takes enforcement action against companies that do not carry the required worker's compensation insurance.
Hagen said Wisconsin's program may be the most successful in the nation. "Few states protect uninsured workers like we do," Hagen said. "No other state does so without going to the taxpayers."
Fewer than 20 states maintain a fund for workers and Wisconsin's is the only one that is funded entirely from fines against non-complying employers.
In 1996, the Wisconsin's Uninsured Employers Fund fined 1,078 employers a total of $1.2 million for operating without worker's compensation insurance. As a result of those enforcement actions, 40,000 workers were covered for the first time, said Gregory Krohm, Worker's Compensation Division administrator.
Before the program began, the only recourse for an unprotected worker who was hurt on the job was to sue the uninsured employer. Many such small employers, unable to pay the often-catastrophic medical and indemnity costs, declared bankruptcy, leaving the injured worker with no compensation.
"The great thing about this program is that the employers who cause the problem pay for the program," Krohm said. "These problem employers are a small minority of the total business community who are trying to seek an unfair competitive advantage by illegally avoiding worker's comp insurance."
The program began accepting claims on July 1, 1996. During its first six months of operation, the fund paid $259,272 in worker's compensation benefits for 21 workers who were injured while working for illegally uninsured Wisconsin employers. In the course of paying valid claims, the Worker's Compensation Division is made aware of the uninsured company, Krohm explained.
The program is entirely funded through fines assessed against employers who do not carry the required worker's compensation insurance coverage. The fund grew by over $1 million last year to a total of $4.8 million at the close of 1996.
The program has sophisticated enforcement tools. It has the authority to levy fines and can move to shut down businesses that refuse to comply. Last year, the Worker's Comp Division initiated legal action against 10 employers who refused to obtain worker's comp insurance, seeking court orders that they be shut down.
Uninsured employers face a mandatory penalty of twice the amount of premium the employer would have paid during the uninsured period, or $750, whichever is greater. The Worker's Comp Division is authorized to collect those fines by warranting liens against assets or by levying the amount directly from the employer's financial institution.
"These same employers are also subject to unpredictable and potentially catastrophic losses for workers injured while they operate without coverage," Krohm said. When an injury occurs, the employer is responsible for payment of all medical and wage costs. "It is not uncommon for the costs to exceed $50,000a year for a permanent disability claim," Krohm added.
Employers who are uncertain whether they need worker's compensation insurance, contact the Worker's Compensation Division, 201 E. Washington Ave., Room 261, Madison, WI 53707 - or by calling 608/266-0416.
Workers who think they may be eligible under the Uninsured Employers Fund should call 608/266-1340.