In Pennsylvania, For employers who don’t have workers compensation coverage, it can be quite costly

In Pennsylvania, employers who fail to carry workers compensation coverage are taking huge risks.  Those risks are not just limited to significant financial risk, but also to possible criminal prosecution.

Workers compensation insurance for employers
Workers Conpensation insurance coverage is critical for employers in Pennsylvania

These types of situations often occur where a business, usually a home repair contractor, general construction contractor, a dry wall contractor, a subcontractor working under a general contractor on a larger project, has individuals working with them, and they assume them to be a ‘subcontractor’.  That is a huge assumption to make, and often, an incorrect assumption.  Rarely do we come across these circumstances where an actual strong argument exists that the injured party may be a ‘subcontractor’.

Most of the time, I represent the unfortunate injured worker.  Those injuries can be financially, emotionally, and physically devastating.  The injured worker is out of work with no income, the ’employer’ refuses to pay any medical bills or treatment because they were not an ’employee’, and either treatment halts, or medical bills rack up.  It’s  a vicious cycle.   What then happens is the injured worker seeks out Counsel, in which we represent many of them, we seek insurance, find out there is no coverage, and then have file a claim with the PA Uninsured Employers Guaranty Fund (UEGF).  The UEGF steps in and acts like the insurance carrier.  Problem is, the UEGF is well  underfunded.  However, once the UEGF is involved, the risks to the uninsured business rises dramatically.

From the other perspective, I also represent uninsured employers.  The risk is high.  Not only could the employer be responsible for lost wages and medical bills of the injured employee, which can be staggering, but also significant legal and deposition fees to defend the claim, the legal fees of the injured employee, and the legal fees of the UEGF.  After all that, the uninsured employer could then face criminal penalties for not carrying workers compensation coverage.   It just is not worth saving a few bucks a month in workers compensation premiums when compared to the tens of thousands of dollars, or more, of liability, that could lie ahead if a workers get injured while on a job for you.  You might think that it won’t happen in your situation, that won’t happen to me, or my subs are close friends, but injury and liability changes everything.   For home remodel contractors, construction contractors, dry wallers, and other construction related contractors, the Construction Workplace Misclassification Act, passed in 2012, is the governing act that holds liability, employment status, and criminal penalties.

Don’t interpret employment status on your own.  It is complex and not nearly as clear as you think.  He may be a friend of yours.  He may even be a relative of yours.  However, when injury occurs, things change rapidly.

Best ways for contractors to avoid this is to purchase workers compensation coverage.  The other ways it to establish your subs who work with you are true subcontractors, including a written subcontractor agreement.  Mooney & Associates can help protect you from these unfortunate situations.  We can help you avoid completely unnecessary risk.  For a consultation, simply call today at 717-200-HURT or 1-877-632-4656.

Mark Buterbaugh

Attorney representing injured workers and Social Security Disability clients in Pennsylvania and Maryland.