Wisconsin Worker's Compensation for Business Owners
By Matthew Van Nuland - Epiphany Law
For most Wisconsin employers, the thought of a Worker's Compensation claim is scary. Trying to keep your business afloat while navigating the countless rules seems impossible. At first glance, the rules appear to be stacked against the business. With the right guidance, however, a Wisconsin worker's compensation claim should not mean the end of your business. In fact, a claim shouldn't even be all that scary.
The Wisconsin Department of Workforce Development defines worker's compensation as a system of no-fault insurance that pays benefits to employees for accidental injuries or diseases related to an employee's work. Payment to employees is typically prompt, and much more certain than other states. In exchange, employers have limited liability. The question for every business owner then, is why do claims appear to threaten the success of my business? That answer is two parts.
First, and the most likely answer is perception. Because every bad story is told a thousand times more than every good story, the perception is that every worker's compensation claim shuts down a business. But, perception is not reality in this situation. The second reason is a failure to obtain insurance. Like anything, not having insurance places 100% of the risk on the business. As if that risk weren't enough, the business can also face penalties and fines. But, once insurance is in place the insurance company assumes nearly all of the risk. So, the first step to not allowing a worker's compensation claim to shut down your business is obtaining the right insurance.
But, even after obtaining insurance, a business may still be liable to an injured worker. Worker's compensation insurance does not cover every risk associated with a workplace injury. The two most common uninsured scenarios are (i) safety violations and (ii) an employer's failure to timely report a fatality or injury.
A safety violation may result in an employer being liable for a 15% increase in compensation, up to a maximum of $15,000.00 Or, in other words, a penalty equal to 15% of the compensation awarded to the injured employee. Safety violations can include a violation of a safety order/statue, failure to use a safety device or failure to obey an established safety rule. Thankfully, by following safety rules installing safety devices and providing employees with training and guidelines, employers can limit their risk.
An employer's failure to timely report a workplace incident is susceptible for two different penalties. First, an intentional failure to report a workplace injury may result in an employer being assessed a penalty of up to $15,000.00 or 200% of the compensation paid to the injured employee. On the other hand, an employer who negligently fails to timely report an injury may be assessed a penalty of 10% of the injured employee's compensation if the delay in reporting causes an untimely payment. Thankfully an employer's reporting period is pretty generous. In the event of a work-related fatality, an employer must report said fatality to the Wisconsin Department of Workforce Development and the Worker's Compensation Division, Madison Office, within 24 hours of the fatality. This doesn't seem too extreme considering the severity of the triggering event. On the other hand, employers must report a workplace injury to their insurance carrier within 7 days of the incident. This timeframe also seems very reasonable.
Although this article is not an exhaustive list of the different ways an employer can be susceptible to liability, it does include two of the biggest risks under Wisconsin's worker's compensation laws. Even though a business has limited liability, it is still very important to make sure you properly navigate each worker's compensation claim. The attorneys of Epiphany Law are always happy to help reduce the risk and ensure your future success.