Sec. 31-288. Additional liability. Penalty for undue delay, noncompliance with insurance requirements and for defrauding workers' compensation insurance carrier. Notice of penalty to Attorney Gene
Sec. 31-288. Additional liability. Penalty for undue delay, noncompliance with
insurance requirements and for defrauding workers' compensation insurance carrier. Notice of penalty to Attorney General and State Treasurer. Payment. Civil
action for nonpayment. (a) If an employer wilfully fails to conform to any other provision of this chapter, he shall be fined not more than two hundred fifty dollars for each
such failure.
(b) (1) Whenever through the fault or neglect of an employer or insurer, the adjustment or payment of compensation due under this chapter is unduly delayed, such employer or insurer may be assessed by the commissioner hearing the claim a civil penalty
of not more than one thousand dollars for each such case of delay, to be paid to the
claimant. (2) Whenever either party to a claim under this chapter has unreasonably, and
without good cause, delayed the completion of the hearings on such claim, the delaying
party or parties may be assessed a civil penalty of not more than five hundred dollars
by the commissioner hearing the claim for each such case of delay. Any appeal of a
penalty assessed pursuant to this subsection shall be taken in accordance with the provisions of section 31-301.
(c) Whenever an investigator in the investigations unit of the office of the State
Treasurer, whether initiating an investigation at the request of the custodian of the Second Injury Fund, the Workers' Compensation Commission, or a commissioner, finds
that an employer is not in compliance with the insurance and self-insurance requirements
of subsection (b) of section 31-284, such investigator shall issue a citation to such employer requiring him to obtain insurance and fulfill the requirements of said section and
notifying him of the requirement of a hearing before the commissioner and the penalties
required under this subsection. The investigator shall also file an affidavit advising the
commissioner of the citation and requesting a hearing on such violation. The commissioner shall conduct a hearing, after sufficient notice to the employer and within thirty
days of the citation, wherein the employer shall be required to present sufficient evidence
of his compliance with said requirements. Whenever the commissioner finds that the
employer is not in compliance with said requirements he shall assess a civil penalty of
not less than five hundred dollars per employee or five thousand dollars, whichever is
less and not more than fifty thousand dollars against the employer.
(d) In addition to the penalties assessed pursuant to subsection (c) of this section,
the commissioner shall assess an additional penalty of one hundred dollars for each day
after the finding of noncompliance that the employer fails to comply with the insurance
and self-insurance requirements of subsection (b) of section 31-284. Any penalties assessed under the provisions of this subsection shall not exceed fifty thousand dollars in
the aggregate.
(e) The chairman of the Workers' Compensation Commission shall notify the State
Treasurer and the Attorney General of the imposition of any penalty, the date it was
imposed, the amount and whether there has been an appeal of said penalty. Any civil
penalty order issued pursuant to subsection (c) or (d) of this section shall state that
payment shall be made to the Second Injury Fund of the State Treasurer, and that failure
to pay within ninety days may result in civil action to double the penalty. The State
Treasurer shall collect any penalty owed, and if the penalty is not paid within ninety
days, the State Treasurer shall notify the chairman of the Workers' Compensation Commission and the Attorney General so that civil action may be brought pursuant to section
31-289. Any appeal of a penalty assessed pursuant to the provisions of subsections (c)
and (d) of this section shall be taken in accordance with the provisions of section 31-301. The chairman shall adopt regulations for the commissioners to use in setting fines
which shall require the commissioners to take into account the nature of the employer's
business and his number of employees.
(f) When any employer knowingly and wilfully fails to comply with the insurance
and self-insurance requirements of subsection (b) of section 31-284, such employer, if
he is an owner, in the case of a sole proprietorship, a partner, in the case of a partnership,
a principal, in the case of a limited liability company or a corporate officer, in the case
of a corporation, shall be guilty of a class D felony.
(g) Any employer who (1) has failed to meet the requirements of subsection (b) of
section 31-284, or (2) with the intent to injure, defraud or deceive any insurance company
insuring the liability of such employer under this chapter, (A) knowingly misrepresents
one or more employees as independent contractors, or (B) knowingly provides false,
incomplete or misleading information to such company concerning the number of employees, for the purpose of paying a lower premium on a policy obtained from such
company, shall be guilty of a class D felony and shall be subject to a stop work order
issued by the Labor Commissioner in accordance with section 31-76a.
(1961, P.A. 491, S. 11; P.A. 84-299, S. 1; P.A. 86-174, S. 1; P.A. 93-228, S. 6, 35; 93-419, S. 7, 9; P.A. 95-277, S. 1,
19; P.A. 96-267, S. 26; P.A. 07-80, S. 2; 07-89, S. 1.)
History: P.A. 84-299 added Subsec. (b), providing for penalties of up to $500 for each case by a party of undue delay
in the completion of hearings or the adjustment or payment of compensation; P.A. 86-174 added Subsec. (c), establishing
a civil penalty to be assessed against employers who don't comply with the insurance requirements of Sec. 31-284; P.A.
93-228 added Subsec. (d) to provide that employer which defrauds its workers' compensation insurance carrier for the
purpose of paying a lower premium is guilty of a class D felony, effective July 1, 1993; P.A. 93-419 made technical changes
in Subsec. (b), effective July 1, 1993; P.A. 95-277 amended Subsec. (c) to provide for specific procedures, penalties and
hearings associated with the failure of an employer to comply with insurance and self-insurance requirements, to make
assessment of civil penalty mandatory, to impose minimum penalty of not less than $500 per employee or $5,000 whichever
is less and to increase maximum penalty from $10,000 to $50,000, inserted new Subsecs. (d) re additional penalty after
the noncompliance finding, (e) re monthly transfer of penalty funds by the chairman of the Workers' Compensation
Commission to the custodian of the Second Injury Fund, appeal procedure and regulations to use in setting fines, and (f)
classifying knowing and wilful violations as a class D felony and relettered the existing Subsecs. (d) to (f), effective July
1, 1995; P.A. 96-267 amended Subsec. (e) to require the chairman to notify the State Treasurer and Attorney General when
penalties are imposed and when penalties are not paid within 90 days to give notice of the prescribed method of payment
and to give notice of potential double penalties for nonpayment; P.A. 07-80 amended Subsec. (b) by increasing penalty
for undue delay of payment or adjustment of compensation by employer or insurer and making technical changes; P.A.
07-89 amended Subsec. (g) by extending penalty under subsection to failure to meet requirements of Sec. 31-284(b),
subjecting violators to stop work order and making technical changes.
See Sec. 52-570e re action for damages resulting from violation of chapter.
Cited. 7 CA 142.