FAQ: What happens if the Board finds me liable, but I don’t have WC insurance?
The Uninsured Employers’ Fund (“UEF”) will pay the WC benefits up front, but you will be subject to civil and criminal penalties for failing to secure WC insurance for your employees.
In my eight years of solo practice, I have seen several small business owners (“SBOs”) bankrupted by a single WC claim. You might save money initially by paying workers off the books, not claiming them on tax or insurance forms, etc., but you are also breaking the law and will eventually have to pay your share – in one way or another. SBOs who have been cheating the system do not make sympathetic defendants and often pay far more in the long run than the cost of hiring a payroll or other service to maintain accurate documentation. I recommend that you speak to both an attorney and an accountant when establishing your worker agreements. An accountant can give advice on tax law (to an extent), but only a lawyer can give you actual legal advice.
DISCLAIMER: This article is intended only as general information. It is not legal advice and does not establish an attorney-client relationship. Additionally, some laws and procedures might have changed. If you need specific legal advice, please contact an attorney to discuss your circumstances.