Amendment to MA Workers’ Compensation StatuteBy | On Feb 09, 2011
Governor Patrick has signed into law “An Act Further Regulating Workers’ Compensation,” also known as the Workers’ Comp Private Right of Action Bill (“PRA Bill”).
The PRA Bill creates a private right of action for employees and business competitors against employers that fail to pay their workers’ compensation insurance premiums.
As was previously the case, the Massachusetts Department of Industrial Accidents has the authority to issue stop work orders and assess civil and criminal penalties for violations of the workers’ compensation statute. But now employees, and business competitors, may bring a private right of action against offending employers as well.
Employers must be particularly careful in regard to misclassifying individuals as independent contractors. Such individuals are rarely covered by the employer’s workers’ compensation insurance. However, if they are misclassified, they may be able to bring a suit under the PRA Bill.
So the best way for an employer to avoid liability is to make certain that is has properly classified all of its employees and independent contractors, and to make certain it pays its workers’ compensation insurance premiums properly.
That being said, the employer does have an opportunity to correct any errors after learning of a potential suit. The law only permits a case to be filed against an employer 90 days after it and its insurer are notified of the complaint and intent to file. The suit may only go forward if the insurance carrier does not attempt to collect what is owed during that 90-day notice period.
Plaintiffs who can show that an employer violated the workers’ compensation statute are entitled to recover 25% of the full value of what is owed, up to a maximum of $25,000. They are also entitled to liquidated damages, which would increase their recovery by whichever of the following is less: (1) another 25% of the full value of what is owed; or, (2) $25,000.
The rest of the recovered funds will go to the Massachusetts workers’ compensation Trust Fund for injured workers whose companies failed to pay workers’ compensation insurance.