Will bill calling for greater discretion in work comp fines pass?

May 09 2017

Under Colorado law, those businesses found to be lacking the necessary workers’ compensation coverage for the first time face fines of up to $250 per day, with this amount jumping to between $250 to $500 per day for repeat offenders.

While this might not seem like much, the reality is that the balance of the fines can get very high, very quickly — sometimes with the offending outfit unaware that they have done anything wrong and, once discovered, unable to do anything about it. 

To illustrate, consider the experience of a Denver-based motel operator fined for failing to carry work comp back in 2006 and which believed it had rectified the problem.

As it turned out, however, due to an error on the part of the insurer, which it ultimately admitted in court documents, the motel operator never actually had work comp insurance and never knew of the problem.

It was ultimately fined $841,000 by the Division of Workers’ Compensation, which indicated that it did not have authority under state law to reduce the fine despite the underlying circumstances.

The matter ultimately came before the Colorado Court of Appeals back in February, which called the fine excessive and remanded the matter back a state panel to recalculate.

In the meantime, Rep. Tracy Kraft-Tharp (D-Arvada) worked with officials with the Department of Labor and Employment to devise a bill that, if passed, would address these types of situations by doing the following:

  • Provide Division of Workers’ Compensation officials with greater discretion/leeway regarding the imposition of work comp fines
  • Establish a new fund to help cover costs for injured workers whose employers failed to carry work comp insurance financed by the fines levied against bad-actor employers

While the measure, House Bill 1119, passed the House by a margin of 37-28 last week and has gained support from most of the business community, its fate remains uncertain as it heads before the Senate’s State, Veterans and Military Affairs Committee and the session heads races toward its conclusion on Wednesday.

That’s because several lawmakers have voiced concerns that it calls for unnecessary government expansion. Others, like the highly influential Workers Compensation Coalition, have argued that the bill is too permissive, and should only give leeway to first-time offenders or subsequent offenders at establishments with changes in ownership.

Stay tuned for updates on this measure …

Consider speaking with a skilled legal professional to learn more about your rights and your options if you’ve been seriously injured in a workplace accident and saw your claim for workers’ compensation benefits denied.