By: The Workers' Compensation Practice Group
The General Assembly recently passed an Amendment to the Virginia Workers’ Compensation Act section 65.2-805. This code section assesses a civil penalty against employers who fail to have workers’ compensation coverage when it is required. The new amendment increases the penalties significantly to not more that $250 a day for each day of noncompliance, up to a maximum of $50,000, plus collection costs. This change goes into effect on July 1, 2014.
Coverage requirements for employers are complicated. An employer that regularly employs three or more employees (part-time or full-time) is required to have workers’ compensation insurance under the Act. The requirements become more complex for businesses that use subcontractors or independent contractors. Designating someone as an “independent contractor” does not necessarily mean they will not be counted as an employee for purposes of determining coverage, whether the employer provides a 1099 to them or not. The Commission looks at whether the employer exerts control over how the “independent contractor’s” work is performed to determine whether they are actually an employee. See the attached Notice from the Virginia Workers’ Compensation Commission for more information. Feel free to contact any of our workers’ compensation attorneys at (804) 775-3100 should you have any questions.
