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Workers Compensation Insurance Compliance
Workers' Compensation Insurance Compliance (for employers)
The Workers' Compensation Compliance Division investigates reports of employers failing to provide workers' compensation coverage and works with them to ensure compliance with the Illinois Workers' Compensation Act. When necessary, the division works with the Illinois Attorney General's Office to pursue civil and criminal penalties before the Illinois Workers' Compensation Commission and in criminal courts. The division also coordinates with business and labor groups to help inform employers about compliance.
Workers' Compensation Insurance: It's the LAW
Illinois law requires employers to provide workers' compensation insurance for almost everyone who is hired, injured, or whose employment is localized in Illinois.
An employer that knowingly and willfully fails to provide workers' compensation insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. Corporate officers can be held personally liable if the company fails to pay the penalty.
An employer that knowingly fails to provide workers' compensation insurance, loses the protection provided to employers by the Workers' Compensation Act. An employee who is injured during the time the employer was uninsured may sue the employer in civil court, where damages are unlimited.
IDOI Brochure - Workers' Compensation Insurance Compliance
Employers FAQs
- How many employees does an employer have to have to come under the Act?
- Do employees who are family members have to be insured?
- What are the penalties if an employer fails to carry workers' comp insurance?
- I am a sole proprietor/business partner/corporate officer/member of a limited liability company. Do I have to buy workers' compensation insurance?
- How can I make a complaint against an insurance company?
- Does an out-of-state company have to provide Illinois workers' compensation insurance?
- Will my group health plan or occupational disability insurance cover workers' compensation cases?
- Who can I contact if I still have workers' compensation insurance compliance questions?
If the employer has one employee, even a part-time employee, the employer must provide workers' compensation insurance coverage.
Yes, unless
- They are bona fide corporate officers, or
- They work for an agricultural enterprise that employs less than 400 working days of labor per quarter during the preceding calendar year, exclusive of working hours of the employer's spouse and other members of his/her immediate family residing with him or her.
An employer that knowingly and willfully fails to provide workers' compensation insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000. Corporate officers can be held personally liable if the company fails to pay the penalty.
If an employer is found to be noncompliant with any provisions of paragraph (a) of Section 4 more than once, the Illinois Workers' Compensation Commission (IWCC) may assess a fine up to $1,000 per day for each day of noncompliance, with a minimum penalty of $20,000.
If, after a hearing, the Commission finds that an employer failed to provide workers' compensation insurance coverage, such failure shall be deemed to be an immediate serious danger to the public health, safety and welfare. This will justify the issuance of a work-stop order, requiring cessation of all its business operations. If the business is declared extra-hazardous, the Commission may issue a work-stop order even before holding a hearing.
In addition, corporate officers who are found to have negligently failed to provide insurance may be guilty of a Class A misdemeanor; if they are found to have knowingly failed, they may guilty of a Class 4 felony.
An employer that knowingly fails to provide workers' compensation insurance, loses the protection provided to employers by the Illinois Workers' Compensation Act. An employee who is injured during the time the employer was uninsured may sue the employer in civil court, where damages are unlimited.
Sole proprietors, bona fide corporate officers, business partners and members of limited liability companies may elect to come under the Act, or they may choose not to. This does not apply to employers in extra-hazardous occupations. Employers in extra-hazardous occupations, such as construction, trucking, or a business operating at construction sites, must have workers' compensation insurance.
Click here to file a complaint with the Illinois Department of Insurance. If you choose to file the complaint online, select the link for workers' compensation. If you choose a hard copy of the form, click on the link for property and casualty.
IDOI cannot investigate the merits of a workers' compensation case, nor will it investigate a "he said/she said" argument. You must provide evidence of inappropriate behavior, e.g., show a company paid last year's fee schedule amounts in the new year. If you have a problem with a Third Party Administrator, identify the insurer that hired the TPA.
The Illinois Workers' Compensation Act covers:
- Persons whose employment results in injury within Illinois
- Persons whose work is principally located within Illinois
- Persons whose contract for hire was made in Illinois
If an out-of-state company conducts business with its employees in Illinois, even if the workers reside outside of Illinois, that company must provide a workers' compensation insurance policy that includes Illinois coverage for those workers.
If an employee from an out-of-state company is injured doing work in Illinois, he or she has the right to file a claim in Illinois. Only a workers' compensation insurance policy that includes Illinois on its coverage is valid.
No. Group health, occupational disability, general liability, disability, or property insurance will not cover workers' compensation liability and do not comply with the law. Only a workers' compensation policy fulfills this requirement. This coverage must be purchased from a carrier authorized to write workers' compensation insurance in Illinois.
- George Sweeney
- Manager, Workers' Compensation Compliance Division
- 312/814-8224