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Besides other potential liability, employers risk being fined by the Department of Labor and Industry (DLI) for failing to provide workers' compensation insurance for their employees, regardless of whether an injury has occurred. The employer may be ordered to provide the necessary insurance coverage, to refrain from employing any person at any time without insuring the employee and to pay a penalty of up to $1,000 for each employee each week during the time the employee was not insured.

Ten days to comply:  other penalties, consequences

An employer has 10 days to comply with or contest a department order concerning insurance coverage. If an objection is not received by the commissioner, the order is considered final and cannot be appealed. 

If the employer contests the order, the matter will be referred to a workers' compensation judge to decide whether the fine or other terms of the order are justified. If the employer loses, the judge may order the employer to pay additional penalties if uninsured people were employed while the case was pending.

Injured employee, no employer coverage

If an employee suffers a compensable injury and the employer has not purchased insurance coverage or followed the proper procedures for self-insurance, the employee may request the state Special Compensation Fund pay the appropriate benefits.

A compensation judge will first determine whether the employer is liable for the worker's injury and, if appropriate, order the Special Compensation Fund to pay all appropriate compensation benefits to the employee and order the employer to reimburse the Special Compensation Fund along with a penalty in the amount of 65 percent of those benefits.