Penalties for Not Obtaining Worker's Compensation Insurance

There are severe penalties for the failure of an employer to provide worker's compensation insurance coverage. First, if a worker is injured, the employer is personally liable, for uninsured benefit claims for which your employees are eligible. [s. 102.85 (5), Wis. Stat.]

Second, the Worker's Compensation Division actively enforces the Wisconsin Worker's Compensation Act (Act). If an uninsured employer fails to obtain insurance when required, the Department may order the uninsured employer to cease operations until the uninsured employer complies with the Act. [s. 102.28 (4), Wis. Stat.]

By law, a penalty is imposed on an employer for failing to have worker's compensation insurance coverage where required. The normal penalty is twice the amount of premium not paid during an uninsured time period or $750, whichever is greater. Under certain circumstances, an employer who has an illegal lapse in worker's compensation insurance of seven consecutive days or less, can be subject to a penalty of $100 for each day he/she is uninsured up to seven days, provided 1) the employer has not previously been penalized for not having worker's compensation insurance coverage; and 2) no injury that the employer is liable for under s. 102.03, Wis. Stat., occurred during the uninsured period. If the illegal lapse is greater than seven days, the normal penalty assessment will apply.

In addition, an uninsured employer is personally liable for reimbursement to the Uninsured Employers Fund (UEF) for benefit payments made by the UEF under s. 102.81 (1), Wis. Stat., to an injured employee (or the employee's dependents) of the uninsured employer and do not have the normal exemptions of property from seizure and sale on execution of a judgment. The penalties and reimbursements to the UEF are mandatory and non-negotiable.