Avenues of Compensation for Those Injured While Working for Uninsured Employers

Workers' Compensation Uninsured EmployersPART 1 of 2

Despite Massachusetts’ law mandating nearly all employers to carry workers’ compensation insurance, many Massachusetts’ employers choose to fraudulently conduct business without workers’ compensation insurance coverage in order to increase profits while passing the cost of work-related injuries on to injured workers, their families and taxpayers.  There are several potential avenues of compensation for an employee who is injured during the course of his employment with an uninsured employer.   Injured workers can file a workers’ compensation claim for wage loss and medical benefits with the Commonwealth’s Workers’ Compensation Trust Fund.  A claim for workers’ compensation benefits should be filed against a general contractor who hired the uninsured employer, if one can be identified.  Additionally, an injured worker may also bring civil, or “third party” claims against his or her employer, a general contractor and/or any other third parties that may have caused or contributed to the employee’s injury.

Workers’ Compensation Claim

Workers’ Compensation claims involving uninsured employers are governed by the Code of Massachusetts Regulations, 452 C.M.R. 3.04.  The first step an employee’s attorney must undertake is to file an “Insurer Request Certification” with the Department of Industrial Accidents in order to verify that the employer did not carry workers’ compensation insurance on the date of the work injury.  This form, which can be downloaded at the DIA’s website, certifies to the DIA that the employee and employee’s attorney has attempted to contact the employer to verify whether the employer did in fact have a workers’ compensation policy in effect on the date of the accident.  After this has been filed, the DIA Trust Fund should contact the employee attorney requesting that the employee complete and sign a Form 170 (Affidavit of Employee in Application for Trust Fund Benefits).  Once the Form 170 has been filed, the employee is then allowed to file his or her claim (Form 110) for workers’ compensation benefits.  

If the uninsured employer was contracted to perform work by a third party, and a general contractor – subcontractor relationship can be established, a claim for workers’ compensation benefits should be initiated against the general contractor pursuant to M.G.L.A. Chapter 152 §18.  Section 18 mandates that the general contractor’s workers’ compensation insurer shall be responsible for payment of workers’ compensation benefits if a general contractor – subcontractor relationship can be established.   Inquiries as to the identity of the general contractor’s insurer can be made online at the DIA website’s “Online Insurance Inquiry” page.

Since the alleged general contractor’s insurer may deny liability by asserting that its insured was not the general contractor, claims for benefits should be asserted against both the general contractor and the Trust Fund, with the Trust Fund being the fall back option in the event the general contractor’s defense succeeds.  Separate claims should be filed against the Trust Fund and the general contractor.  All subsequent pleadings filed at the DIA should include a caption that identifies the uninsured employer as the “employer”, the Trust Fund as the “employer’s insurer”, the general contractor as the “Section 18 employer”, and the general contractor’s insurer as the “Section 18 insurer.”  These identifications which distinguish the identity of the parties are important in the event that a defendant general contractor in the third party civil negligence claim later tries to assert that the injured worker was their employee, and thus the injured worker’s third party claims against them are barred by the exclusivity remedy provision of the workers’ compensation statute.  If the pleading simply lists the Section 18 employer/general contractor as the “employer”, this pleading could be used by the general contractor trying to escape tort liability to further support their assertion that the injured worker was their employee (and thus the workers’ compensation exclusive remedy provision applies).

Pursuant to the Department of Industrial Accidents’ Reviewing Board’s decision in Karen Cappello v. DTR Advertising Inc. (2011), the insurer for the general contractor shall be responsible for paying any Section 28 awards (doubling workers’ compensation benefits) arising out of the willful misconduct of an uninsured employer (subcontractor).  If the workers’ compensation case is resolved via lump sum settlement before any civil claims are resolved, and the lump sum settlement was inclusive of future Section 28 exposure, the employee’s attorney should attempt to get the insurer to stipulate to an allocation of Section 28 benefits in order to shield that percentage of the recovery from the insurer’s Section 15 lien recovery on the civil claim proceeds.  Although every case should be evaluated on its own set of facts, generally an employee’s attorney should not file a Section 28 claim against the employer until all third party claims have been resolved.  Delaying the filing of the Section 28 claim until after the third party claims are settled prevents the third party defendant from asserting the fact that the employee blamed their own employer’s willful conduct for causing their harm in an attempt to attribute the harm caused to the employee to the plaintiff’s employer.

Part 2, Civil and Third Party Claims for Damages will be published on Friday, October 25