Amount of penalty for lack of coverage determined by comp law
Case name: Crawford v. Phillips d/b/a Men at Work Car Care Center, No. COA08-615 (N.C. Ct. App. 04/21/09, unpublished).
Ruling: In an employee's suit for workers' compensation benefits, the North Carolina Court of Appeals reversed and remanded the industrial commission's calculation of penalties against the employer for its failure to carry workers' compensation coverage.
What it means: Under North Carolina law, where an employer has failed to carry workers' compensation insurance as required by law, the amount of the penalty is determined by law, rather than at the discretion of the court.
Summary:A former worker sued a car wash business for workers' compensation benefits for injuries sustained in a slip-and-fall accident. The worker was awarded disability benefits and medical benefits from the accident. The employer never obtained a valid workers' compensation insurance policy, which is required by North Carolina law for all employers with more than three full-time employees. The law provides a mandatory monetary penalty for employers that fail to obtain workers' compensation coverage. The employee argued that the industrial commission erred when it assessed a $50 per day penalty from the date of the accident.
The employee claimed the penalty should go back to 1988 when the employer started the business and failed to obtain workers' compensation insurance. The Court of Appeals agreed with the employee that the commission's calculation was improper. It noted that the monetary penalty for failure to secure workers' comp coverage is not within the discretion of the court but is determined by the law. The employer admitted that he never secured workers' compensation insurance for his business.
The court ruled the penalty should date back to 1988 and remanded the case to the commission for an assessment of the proper penalty to be imposed on the employer.
June 15, 2009
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