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Connecticut gets tough on employers who avoid workers’ comp

States across the country are getting tough with employers who are misclassifying employees as contractors. Some may wonder why employers would choose to risk penalties associated with this decision. One potential motivation for employers: cutting the bottom line. When a worker is classified as a contractor employers can avoid paying taxes, cut overtime costs and do not need to cover the cost of workers' compensation insurance for that worker.

More and more employers who choose to misclassify their workers are paying the price. States, including Connecticut, are conducting investigations to find these employers and issuing hefty penalties. A recent report by the Insurance Journal discussed a recent audit completed in the state. Connecticut ran the audit for a year and ultimately reclassified almost 3,500 workers. The state was motivated by the fact that employers basically get out of paying payroll taxes on workers classified as contractors. As a result of this audit, Connecticut officials discovered employers skimped on close to $1.5 million in unpaid payroll taxes.

Misclassification does not just hurt the state's revenue. Employers that use this practice can outbid other companies that properly compensate their employees. In addition to hurting these companies, the practice also leaves workers unprotected. If a worker is injured while working as a contractor he or she will likely not receive payment from the employer since workers' comp benefits generally do not extend to offer protection to contractors.

Workers' comp basics

Workers' compensation is a benefit program that is designed to offer two levels of protection. First, it helps protect workers' who are injured while completing job related tasks. Second, it helps shield employers from lawsuits. The program generally is used in place of a civil suit. This is beneficial for the employee as well, since the worker should receive compensation in a much timelier manner than would result through a lawsuit.

Workers' who qualify for these benefits receive compensation to help cover the cost of medical expenses and lost work. The program provides benefits for a variety of injuries, ranging from traumas received while on the clock to diseases that develop over decades of exposure to harmful toxins, like asbestos leading to lung cancer.

Workers' compensation in Connecticut

The type of coverage available varies by state. The State of Connecticut's Workers' Compensation Commission notes that in addition to coverage for medical treatment and lost work, the Workers' Compensation Act also provides continued health insurance coverage while injured.

Navigating the system can be intimidating. Those who are injured on the job should contact an experienced Connecticut workers' compensation lawyer to discuss their situation and better ensure their legal rights and remedies are protected.

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