The State Industrial Commission's Workers' Compensation Advisory Council wants the Legislature to clarify the law allowing the commission to impose penalties on companies that don't purchase workers' compensation insurance.
Alan Hennebold, the commission's general counsel, said Utah law has two independent methods of dealing with companies not purchasing workers' compensation insurance.One part of the law authorized the commission to hold hearings to determine if insurance is required and the other part authorizes the commission to impose a penalty on those companies required to have insurance but haven't purchased any.
Hennebold said one section of the law supported by the council and adopted by the Legislature in 1994 has been effective in persuading employers to purchase the insurance.
For example, before the law was implemented there were about 50 referrals to the commission per month about companies without workers' compensation insurance. After the law became effective, that figure dropped to less than 10 referrals per month.
However, as the law is written, it can be interpreted to require the commission to go through the hearing process before the commission can apply the penalties, Hennebold said.
State law provides that when an employer is determined to require workers' compensation insurance and doesn't have any, the commission can impose the larger of a $1,000 penalty or three times the amount of the premium the employer would have paid for the insurance during the period of noncompliance.