Let’s discuss what is required from Employers in Minnesota when it comes to workers compensation?
Minnesota workers’ compensation laws define what the employer responsibilities in the state’s workers’ compensation system are. The Division of Workers’ Compensation (DWC), part of the Minnesota Department of Labor and Industry (MDLI), monitors compliance with workers’ compensation requirements throughout the state.
In Minnesota Workers’ compensation is a system of no-fault insurance that provides monetary and medical benefits to employees, or their survivors, for work-related injuries and illnesses.
All employers in Minnesota (regardless of size) are required to have workers’ compensation coverage. Employers may satisfy this requirement either by purchasing a workers’ compensation insurance policy or by obtaining the DWC’s approval to self-insure. It is most common that employers will purchase a workers compensation policy to provide coverage to employees. All employers must pay the full cost of providing the workers compensation coverage and may not require their employees to pay any portion of the premium.
Since most employers will purchase coverage through an insurance policy, the insurance carrier must notify the DWC, within 10 days, that a policy that has been issued, renewed, cancelled or terminated.
NOTIFICATION OF COVERAGE
Employers must post a notice to employees that they have a workers’ compensation insurance policy that complies with state law. The notice must be displayed in a conspicuous place and must advise employees of:
- Their rights and obligations in the workers’ compensation system;
- The assistance available to them;
- How the workers’ compensation system works; and
- The name and address of the workers’ compensation carrier that is insuring them or the fact that their employer is self-insured.
Employers may use this model poster to satisfy these requirements. The notice must be displayed at all locations where the employer is engaged in business.
WHAT TO DO IF THERE IS A CLAIM
Employers must use the DWC’s First Report of Injury form to notify their insurance carriers or the DWC of any work-related injury or illness claims for employees. If an incident results in an employee’s death or serious injury, the employers must report it to the DWC within 48 hours. This initial report may be made by telephone or personal notice, but employers must still submit the First Report of Injury form within seven days from when the incident happened.
Any other work-related injury must be reported to the employers’ insurance carrier within 10 days of an incident if it:
- Results in employee incapacity (total or partial); or
- Prevents the injured employee from performing his or her labor for more than three calendar days.
Insurance carriers and self-insured employers are required to file the First Report of Injury form with the DWC within 14 days of the incident.
When an employee fatality takes place after an initial injury is reported, employers are required to report the fatality to the DWC within 48 hours of when they first learn of it. An employer that provides notice to the Occupational Safety and Health Division of the Minnesota Department of Labor and Industry of a fatality or a severe injury is considered to have satisfied its reporting obligations with the DWC.
At the time the First Report of Injury form is filed with the DWC, employers must also provide a copy of the injury report and the “Minnesota Workers’ Compensation System Employee Information Sheet” to the affected employee.
BENEFIT PAYMENTS AND REPORTING
Employers must begin paying workers’ compensation benefits to or for injured employees as soon as reasonably possible.
- Medical benefits must be paid no later than 30 calendar days after receiving a bill for treatment, unless the employer denies the charge. If only part of a bill is in dispute, employers are required to pay the undisputed part of the bill within the established guidelines.
- Other benefits must begin within 14 days after the employer receives actual notice of an injury or death. An extension to begin payment within 30 days is possible if approved by the DWC. Periodic benefits, such as temporary total disability or death benefits, must be paid at intervals as nearly as possible to the intervals when employee wages are paid. However, the DWC may authorize the lump-sum payment of periodic benefits.
Employers are required to notify the DWC when they first pay benefits to an injured employee. The DWC may require employers to continue filing payment receipts to monitor compliance with Minnesota’s workers compensation laws. At its discretion, the DWC may inspect these filings to determine compliance.
BENEFIT Discontinuance and Termination
An employer may discontinue paying temporary total disability benefits when an injured employee returns to work. In this case, the employer must notify the DWC of the discontinuance of benefits and the justification for it within 14 days of the date when the employer has notice that the injured employee has returned to work. Employers must also notify every affected employee of their intention to discontinue the payment of benefits. Employees have the right to object to the discontinuance.
Discontinuance of benefits for any reason other than an employee’s return to work must wait until the discontinuance notice and any applicable reports have been filed with the DWC.
Minnesota law prohibits employers from requiring their employees to refund or return any benefit overpayment if the payment was:
- Voluntarily paid;
- Apparently or seemingly in accordance with Minnesota’s workers’ compensation laws; and
- Received by the employee in good faith.
To recover overpaid benefits, employers may take a partial credit (up to 20 percent) of future periodic benefits such as benefits for temporary total disability, temporary partial disability, permanent partial disability, permanent total disability, retraining, death, economic recovery or impairment compensation. Employers may not offset overpaid benefits against medical expenses or any penalty awarded to the employee for late payment or underpayment of benefits.
Minnesota workers’ compensation laws allow for recovery or reimbursement of overpaid benefits when payments are not received in good faith. Benefits are not received in good faith if:
- They are obtained through fraud; or
- The employee knew the compensation was paid under a mistake of fact or law and has not refunded it.
Employers must retain or arrange for the retention of:
- All billing data that is electronically transmitted by health care providers to pay for the treatment of an injured employee; and
- All electronically transmitted payment remittance advice.
This information must be retained for at least seven years in the standard electronic transaction format required by the Minnesota Department of Health. Employers must be able to provide this data to the DWC or the Department of Labor and Industry within 120 days of a request.
In addition, this information is considered confidential data on individuals. Confidential data is protected nonpublic data and employers must take adequate measures to ensure it is kept safe and private. However, the DWC may use this data to publish aggregate statistics and other summary information regarding the costs and outcomes of treatment in the workers’ compensation system.
Minnesota Division of Workers’ Compensation (DWC) website
Electronic Reporting Effective Aug. 31, 2020, all documents must be filed with the DWC electronically. More information is available here.
Workplace Poster – Employers may use this notice to satisfy their posting requirements.
Minnesota Department of Administration website
Employer Guidance – More information about workers’ compensation requirements is available in this handbook.
WHAT HAPPENS IF MY BUSINESS DOES NOT FOLLOW THE WORK COMP RULES?
Minnesota workers’ compensation laws impose penalties on employers that fail to comply with state requirements. The Division of Workers’ Compensation (DWC), part of the Minnesota Department of Labor and Industry, enforces compliance with these laws throughout the state.
Employers must maintain adequate workers’ compensation coverage for their employees through either an insurance policy or the DWC’s authorization to self-insure. Employers that operate without the required coverage may be subject to numerous fines and even criminal charges.
The fine for failing to provide workers’ compensation coverage as required is $1,000 per affected employee. Each week in which an employee is not adequately covered is a separate offense. These fines may become a lien on any employer property.
In addition, Minnesota law prohibits every state and local licensing agency from issuing or renewing a license to an employer that does not submit proof of adequate workers’ compensation coverage. Employers that falsely a proof of coverage to a licensing agency may be subject to a $2,000 fine.
Employers that willfully and intentionally fail to provide adequate coverage for their employees may be charged with a gross misdemeanor, which is punishable by fines of up to $3,000.
REQUIRING EMPLOYEES TO FUND THEIR COVERAGE
Employers may not allow or require their employees to pay any portion of their workers’ compensation coverage. Employers that charge or deduct any funds from employee wages for the costs of workers’ compensation coverage may face misdemeanor charges and a fine of up to 400 percent of the amount withheld from the employees’ wages. Some exceptions may be possible with DWC approval.
FAILURE TO PAY BENEFITS
Employers must begin paying workers’ compensation benefits to an injured employee or formally deny his or her workers’ compensation claim within 14 days after receiving notice of a work-related condition. Employers must also pay medical expenses for treatment of an employee’s work-related condition within 30 days after receiving a bill from a medical provider. Employers that fail to make these payments on time are subject to administrative fines and may be required to reimburse any payments made by the Special Compensation Fund, which provides workers’ compensation benefits to injured employees whose employers do not have adequate coverage.
If an employee is entitled to receive workers’ compensation benefits and the employer fails to pay the benefits on time, the DWC may order the employer to pay the employee an additional amount that is calculated as a percentage of the late or unpaid benefits. The penalty rate increases for greater delays in payment, as outlined in the table below.
|Number of Late Days||Penalty Rate||Maximum|
|15||30 percent||Up to $500|
|16 -30||55 percent||Up to $1,500|
|30-60||80 percent||Up to $3,500|
|61 or more||105 percent||Up to $5,000|
Instead of this graded penalty, however, the DWC may impose a $2,000 fine against any employer that does not pay benefits or that fails to file a notice of denial in a timely manner.
While these penalties may be assessed against an insurance provider, Minnesota law allows insurers to recover any portion of the fine from the employers they cover, in proportion to the employer’s fault in causing the delay. Any penalty paid by an insurer will be treated as a loss in an experience rated plan, retrospective rating plan or dividend calculation (where appropriate) and may affect an employer’s future insurance premiums.
In addition to the fines described above, the DWC may require an employer to pay interest on any delayed benefit. The annual interest rate for late payments totaling $50,000 or less depends on the secondary market yield for U.S. Treasury bills. The annual interest rate for amounts higher than $50,000 is 10 percent.
Reimbursing the Special Compensation Fund
If the Special Compensation Fund pays an employee’s benefits, the DWC may require the employer to:
- Reimburse the Special Compensation Fund for the actual amount of benefits paid to the employee;
- Cover any attorney fees paid to the employee’s attorney by the Special Compensation Fund; and
- Pay a penalty equal to 65 percent of all the benefits that the DWC orders to be paid to the employee.
DENYING OR DISCONTINUING A CLAIM
Minnesota’s workers’ compensation laws require employers to notify their injured employees before they deny a claim or benefits or discontinue benefit payments to an employee. The notice must explain the basis for the denial or discontinuance and must be specific enough to clearly convey, without further inquiry, the basis of the decision. The DWC may impose a $500 fine on an employer that fails to provide this notice.
FRIVOLOUS CLAIMS AND DENIAL OF PAYMENT
Employers may be subject to a fine of up to 30 percent of the total amount of benefits payable to an injured employee if they inexcusably delay in paying the benefits. The DWC may also increase the benefit amount by 25 percent and require the payment of an annual interest rate of up to 12 percent for any inexcusable delay.
Inexcusable delay of payment includes:
- Withholding payments until the employee agrees to sign a waiver releasing his or her right to claim further benefits;
- Denying a claim or presenting a claim or defense without a good faith investigation of the facts or on a basis that is clearly contrary to fact or law for the purpose of delaying payments or discontinuing compensation;
- Unreasonably delaying payment or discontinuing compensation;
- Neglecting or refusing to pay compensation; and
- Intentionally underpaying compensation.
VIOLATION OF RECORDING AND REPORTING REQUIREMENTS
Employers that fail to file any report required by Minnesota’s workers’ compensation laws may be subject to a $500 fine per failure.
Employers are prohibited from retaliating against an employee who seeks workers’ compensation benefits. An employer that unlawfully retaliates may be sued in court for damages, and a court may order it to pay:
- The actual cost of damages incurred by the injured employee;
- Up to three times the amount of compensation to which the employee was entitled; and
- Court costs and reasonable attorneys’ fees.
Employers are subject to the same penalties if they intentionally obstruct an employee who is seeking workers’ compensation benefits.
FAILURE TO CONTINUE EMPLOYMENT
An employer may be required to pay a penalty of up to $15,000 if it refuses to offer continued employment to an injured employee. The penalty applies only if:
- The employer has more than 15 full-time equivalent employees;
- The employer refused to offer continued employment without reasonable cause; and
- Employment is available to the injured employee within his or her limitations.
POSTING REQUIREMENT VIOLATION
Employers must display a notice in their workplaces stating that they have a workers’ compensation insurance policy that complies with state law. The DWC provides a model poster employers may use to satisfy these requirements. Employers that fail to post a notice may be subject to a $500 fine.
PROHIBITED PRACTICES AND PENALTIES FOR SELF-INSURED EMPLOYERS
Self-insured employers are subject to additional penalties for failures to comply with Minnesota’s workers’ compensation laws. These penalties may be imposed in addition to any other penalty prescribed by law.
If a self-insured employer has more than 30 violations in any 12-month period, the DWC may revoke its authorization to self-insure and may recommend revocation of any other state licenses from the Minnesota Department of Commerce.
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