In the State of California, all employers must provide workers' compensation insurance for their employees. This insurance covers medical expenses and lost wages if an employee is injured on the job. If an employer does not have workers' compensation insurance, they may face criminal charges and fines. You also have the right to recover damages directly from the employer to cover the costs of your workplace injuries.
That being said, collecting damages from an uninsured employer may be easier said than done. Let's take a closer look at your options for holding an employer liable if they do not carry workers' compensation insurance.
What the Law Says
California Labor Code 3700 requires all employers to provide workers' compensation insurance coverage for their employees. This includes out-of-state employers who have employees working in California. If an employer does not have workers' compensation insurance, it is a misdemeanor offense (CLC 3700.5). If convicted, the employer may be subject to criminal penalties, including imprisonment for up to one year and a minimum fine of $10,000.
In addition, if an employer fails to carry workers' compensation insurance, the law gives the injured employee the legal right to sue the employer directly for damages, just as with any other personal injury claim. (CLC 3706). Likewise, if the employee dies from their injuries, the employee's dependents may file a wrongful death claim against the employer.
Holding an Uninsured Employer Liable
If you're injured on the job, and your employer doesn't carry workers' comp, you have two basic options for holding the employer liable: pursuing the equivalent of workers' compensation benefits from the employer directly or filing a civil personal injury claim.
Seeking Workers Compensation
Workers' compensation insurance is designed to cover your medical expenses and lost wages if you're injured at the workplace—but if that insurance is not in place, your employer is legally responsible for covering the expenses that workers' compensation would have paid for. You would initiate this process by filing a claim directly against the employer at the workers' compensation court. An experienced workers' compensation attorney can facilitate this process for you.
Filing a Separate Personal Injury Claim
Being injured at work automatically entitles you to workers' compensation benefits regardless of who was at fault for the accident. When the employer is covered by insurance, they are usually protected from civil lawsuits over negligence issues—but if they don't have the insurance, no such protection exists. Thus, if your workplace accident was caused by employer negligence, you have the right to file a personal injury claim against the employer in addition to the workers' compensation claim. To succeed in a personal injury lawsuit, you must prove that the employer was negligent and that their negligence led to your injuries.
Uninsured Employers Benefits Trust Fund (UEBTF)
Regardless of your right to collect damages under the law, the reality is that without workers' compensation insurance, your employer may not have enough money to compensate you for your injuries and losses. (For uninsured small business owners, even a single workers' comp claim could drive them into bankruptcy—not to mention the fines they will owe the government for not carrying insurance.) Nevertheless, you still have options for collecting benefits.
The State of California has established the Uninsured Employers Benefits Trust Fund (UEBTF) to provide workers' compensation benefits to employees who are injured while working for an uninsured employer. If your employer didn't carry insurance and you were hurt at work, you can file a claim with the UEBTF. The UEBTF will then pay benefits to you as if your employer had carried the required insurance. You can file a claim with the UEBTF regardless of whether you also plan to file a civil lawsuit against your employer, but if you do file a civil suit and win a settlement, the UEBTF benefits must be repaid out of that settlement.
It's important to understand that the UEBTF is not an insurance company, and it is not funded by taxpayers. The UEBTF is instead financed through penalties levied against employers who violate the law by not carrying workers' compensation insurance.
Whatever the situation is, our experienced personal injury attorneys can help you craft the best strategy to obtain the maximum possible recovery. Call our office at (818) 781-1570 for a free consultation.