The Penalties for Not Carrying Workers’ Compensation Insurance in Arizona Explained

In Arizona, every employer is required to provide workers’ compensation insurance for its employees.  Failing to carry workers’ compensation insurance carries grave consequences for employers whose employees are uninsured on the job.  When an employer doesn’t have workers’ compensation insurance, just one adverse disability claim can result in a potentially devastating employee lawsuit or cause the dissolution of your company.

Employers who violate the Arizona Workers’ Compensation Act by failing to have workers’ compensation insurance can face fines, civil penalties and/or imprisonment.  Under A.R.S. §23-932, failing to maintain workers’ compensation insurance is a Class 6 felony.  In addition to criminal liability, an uninsured employer may be assessed a civil penalty of $1,000.00 for failure to obtain workers’ compensation insurance, whether or not an employee files a workers’ compensation claim.   The penalty is increased to $5,000.00 for a second instance of being uninsured and $10,000.00 for a third offense.  Since the State must pay the claims for uninsured employers through the Special Fund, the Fund will seek reimbursement from the uninsured employer for any benefits paid to the injured worker plus a penalty of 10% of the benefits paid or $1,000.00, whichever is greater.

Palmer Law Offices provides advice and representation for uninsured employers, contractors, and small businesses regarding the legal and financial risks they run by not providing workers’ compensation insurance to its employees.  Our experienced and aggressive workers’ compensation defense lawyers advise uninsured employers as to their risks and defenses available to them thereby minimizing the potential consequences.

If you are worried about how a workers’ compensation claim could affect your business, talk to an Arizona uninsured employer defense attorney at Palmer Law Offices.  Call us today at 602-277-2007 or contact the Firm at our website.