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My Employer Doesn’t Have Workers’ Comp Insurance

Episode 33: Kentucky workers’ compensation attorney Jeff Roberts discusses what happens when an employer doesn’t have workers’ compensation insurance policy or has allowed the policy to lapse.  This creates a serious issue for both the company, and more importantly workers who may become injured on the job.  Jeff explains how those workers can still pursue benefits.

Common Excuses Employers Give for Not Carrying Workers’ Comp Insurance

  • I didn’t have it or didn’t know I needed to carry workers’ compensation insurance.
  • I had a policy but I let it lapse.
  • You’re not really an employee.  You’re just an independent contractor.

Employer Doesn't have workers' comp insurance

Jeff explains that the above reasons happen fairly often.  In Kentucky, if an employer has one or more employees, the company is required to carry workers’ compensation insurance.  Small businesses that have grown over time can try to claim they didn’t’ realize they needed to carry the coverage.  However, this still does not relieve them of the responsibility or the liability. You can still get benefits even if your employer doesn’t have workers’ comp insurance.

It’s not uncommon for a company to try to classify workers as 1099 independent contractors.  This status would mean that the workers aren’t actually employees, so the company wouldn’t be required to cover them.  However, it may be proven that the company intentionally misclassified the workers to avoid related expenses, such as workers’ comp coverage and other related benefits.

Are Out-of-State Employers Required to Carry Kentucky Workers’ Compensation?

This is a situation Jeff has seen, especially in the construction field.  This can occur when a company hires local union labor for the job.  The company may have a valid policy in its own state, but neglects to carry or sign up for a coverage in Kentucky.  Again, this does not exempt the company from its responsibility or liability.

What if an Employer Doesn’t Have Workers’ Comp Coverage?

If you work for a company that doesn’t have workers’ compensation coverage, you may still have a valid workers’ comp injury claim.  Kentucky has the Uninsured Employers’ Fund.  This was set up to provide benefits for injured workers whose employer isn’t adequately insured.

A portion of every Kentucky employers’ premiums are used to pay for the Uninsured Employers’ Fund.  Workers can pursue their claims including medical benefits, lost wages, permanent disability benefits, vocational rehabilitation, etc.

Are There Types of Jobs that Aren’t Covered by Kentucky to Workers’ Comp?

Yes.  Agricultural work is typically exempted.  However, there’s an exception.  If the farmer has migrant workers, federal law requires workers’ compensation coverage.  In Jeff’s experience, the policy will typically cover all employees, even though they are only required to cover the migrant workers.

Interestingly, Kentucky law allows companies to purchase workers’ compensation coverage, even if the company is not required to have it.  This may prevent the business from being sued in civil court for a personal injury.  The employees may be limited to pursuing compensation and damages according to Kentucky workers’ comp law.

Can I Sue an Employer for My Injuries if They Don’t Have Coverage?

There is a provision in Kentucky law that may give you the option.  If there is no coverage, again, you can pursue benefits from the Kentucky Uninsured Employers’ Fund.  However, you may also be able to bring a claim in civil court for pain and suffering against the employer.  This claim is not allowed under Kentucky workers’ compensation law.  However, since the employer wasn’t providing workers’ comp, they may have exposed the company to a civil lawsuit by the injured worker.

What Happens if the Employer Had Coverage, but It Lapsed?

The injured worker still has access to the Kentucky Uninsured Employers’ Fund.  It’s also possible that the employer actually paid the premium but the insurance carrier failed to enact or renew the policy in a timely manner.  If this is the situation, the injured worker may be able to pursue a normal workers’ comp claim against the employer, once the paperwork issue is resolved by the insurance carrier.

What if the Employer Claims the Worker Is a 1099 Independent Contractor?

These cases can be more complex.  If the employer is correct, they may be exempt.  However, if it can be proven that the worker has been misclassified by the employer and should actually be considered an employee, the employer can be held liable and responsible.  This may involve extensive litigation to prove the correct status of the worker.  One of the key determining factors is the amount of control over the day-to-day activities the employer exhibits.

Again, Jeff often sees this issue arise when a laborer is injured in the construction trade.  Although, he explains, the more reputable construction companies avoid this issue by properly covering their workers.

What Happens if I’m Injured while Working Outside of Kentucky?

If you work for a Kentucky company and have to travel outside of Kentucky, you are still covered by Kentucky workers’ compensation law.  A trucking company based in Kentucky would be responsible for covering a worker who gets injured in Tennessee, Florida or even Montana.  You may also have the option of filing a workers’ comp claim under the law of the state in which you were injured.  Those benefits may be actually better than Kentucky benefits. 

What if My Boss Pays Me in Cash or with a Check?

This factor doesn’t really matter in regards to workers’ comp.  It will come down to your employment classification.  If you receive a W-2 at the end of the year, it’s easy to prove you’re an employee, regardless of what your boss or company may try to claim. You may still be able to file a claim, even if your employer doesn’t have workers’ comp insurance.

As a precaution, you should you keep a record of any cash payments you receive.  This is important because it will be used to determine your Temporary Total Disability benefit payments (TTD). 

It’s important to remember that you are responsible for paying taxes, even on cash “under the table” compensation.  Jeff also handles social security disability claims.  If a person decides to avoid paying taxes by taking cash, they may not be eligible for certain social security benefits, because they weren’t paying into the system. 

We hope you found this episode insightful and helpful.  Thank you for listening!

Is It Time to Speak with an Attorney about Your Workers’ Compensation Claim?

The office phone number is (270) 753-0053.  For more information, visit This podcast is meant to provide information and is not legal advice.  Jeff’s principal office is located at 509 Main Street, Murray, Kentucky.  Co-host Jim Ray is a non-attorney spokesperson.  This is an advertisement.