Workers’ compensation is a type of no-fault insurance for all work-related injuries and illnesses. In addition to being employer-financed, it is mandatory under the Pennsylvania Workers’ Compensation Act. In fact, employers who fail to provide workers’ compensation insurance may face criminal prosecution as well as lawsuits from wronged employees.
Why is workers’ comp mandatory in Pennsylvania? The system is meant to protect employers and employees by providing an “exclusive remedy” for on-the-job injuries. It is meant to help employees by providing medical treatment and compensation for lost wages without the need to prove negligence or wrongdoing on the part of their employer or a co-worker. Employees can recover workers’ compensation benefits regardless of who was to blame. It helps employers by protecting them from lawsuits filed by injured employees. The workers’ compensation system was built to streamline the payment of benefits and reduce litigation costs for all parties.
PA Workers’ Compensation Coverage Requirements
Although workers’ compensation is mandatory, exceptions apply to employees who are:
- Covered by other workers’ compensation laws (such as railroad workers, longshoremen, and federal employees);
- Domestic workers (whose coverage is optional);
- Certain licensed, commission-only real estate salespersons or brokers who qualify as independent contractors;
- Agricultural workers who earn less than $1,200 or work fewer than 30 days in a year; and
- Workers who have been granted exceptions for religious reasons or as executives.
All other Pennsylvania employers with at least one employee must carry workers’ comp insurance.
Do PA Companies Need Workers’ Comp for 1099 Workers?
Workers who file Form 1099-MISC, Miscellaneous Income with the IRS instead of W-2 forms are considered nonemployees. This may include independent contractors and freelancers who are not actually employed by a company but instead perform services for a fee.
1099 workers are not eligible for workers’ compensation in Pennsylvania.
There are situations, however, where an employee could be misclassified as an independent contractor. When this happens, employers can be held accountable for attempting to avoid paying workers’ compensation premiums, taxes, and other fees related to their employees.
Legal Recourse for Workers’ Compensation Violations
Failures to comply with Pennsylvania workers’ compensation laws are taken very seriously. If an employer is uninsured and an employee suffers a work-related injury or illness, the Uninsured Employers Guaranty Fund will be used to cover the injured worker’s claim. The Pennsylvania Department of Labor & Industry will then seek reimbursement from the employer in question. This reimbursement will include penalties, interest, fees, and other costs.
The Pennsylvania Department of Labor & Industry will also prosecute the uninsured employer and any accountable individuals for every day that the company was uninsured. Failure to maintain workers’ compensation coverage may be charged as a misdemeanor in Pennsylvania, punishable by a $2,500 fine and up to 1 year in jail for every single day that there was no coverage. If charged as a felony, a $15,000 fine and up to 7 years in prison may apply for every single day of non-coverage.
Injured employees can also take legal action to hold their employers accountable for failing to provide workers’ compensation insurance. Cases of this kind can be filed in civil court and employees would be able to seek the full and fair value of their claim, plus damages.
How HHR Helps
At Handler, Henning & Rosenberg LLC, we’re committed to helping workers throughout Pennsylvania who have been injured on the job. We know how to handle traditional workers’ compensation claims as well as complex cases involving denials, delays, and failures to maintain workers’ comp coverage. We can even pursue a third-party personal injury lawsuit against any individual or company (outside of your employer or a co-worker) who was to blame for your injuries. With every case, our goal is to maximize our client’s recovery; this is the best way to ensure they can get the treatment and full support they need.