May 17, 1996
Fund will protect uninsured workers
Richard C. Wegner, Acting Secretary of the Department of Industry, Labor and Human
Relations, today announced that a new program authorized by the state legislature to pay
claims of injured workers whose employers were not covered by Worker's Compensation
Insurance would go into effect on July 1 for accidents occurring after June 30th of this
year.
The Uninsured Employer Fund will pay benefits to injured workers from fines paid by
illegally uninsured employers. To date, collections have raised over $4.2 million as a
reserve for injury claims. In addition, the state will seek collection of any benefits paid
from the employer responsible for the workplace injury.
Wegner said the introduction of the new program would be accompanied by a stepped up
enforcement campaign to crack down on employers who do not have mandatory worker's
compensation insurance.
Wegner emphasized that the vast majority of the Wisconsin employer community is very
conscientious about maintaining worker's compensation. In Wisconsin, about 110,000
employers maintain proper coverage. "We owe it to these employers to get tough with
their competitors who try to secure an advantage by avoiding required insurance," Wegner
said.
Through the aggressive use of information technology systems, Wegner said the state
intends to make it virtually impossible for uninsured employers to continue to avoid
detection. Cross referencing with other records will succeed in identifying employers who
fail to sign up for worker's compensation insurance.
"However, consistent with this agency's policy of education first, and enforcement second,
we have begun a thorough educational campaign through the rest of the year to inform all
employers of their obligation to obtain worker's compensation insurance," Wegner said.
In cases where willful violation of this obligation is clear, the department will exercise its
full authority to force wayward employers to obtain coverage through fines and, if
necessary, closure orders.
The number and size of claims to be filed against the new fund are highly uncertain.
Financial safeguards have been built in to protect the fund from the sudden or
unanticipated losses that have plagued similar programs elsewhere. In addition, careful
investigation of the claimant and employer will weed out fraudulent claims, injuries
occurring before July 1, 1996, and other non-covered claims.
Nonetheless, in a new program without precedent, such as this one, it is difficult to project
with certainty how much demand will be made on it. "We will watch this situation closely,"
Wegner said, "and take whatever actions are necessary, including suspending benefits if
the program ceases to remain self-sufficient."
Wegner added that the department has stepped up its cooperative partnership with the
Wisconsin Council on Safety and with trade associations to promote safety programs.
"Our first objective is to encourage effective safety programs to prevent worker injuries
from occurring in the first place," Wegner said. "But when injuries do occur we want to
make sure the employer is covered by worker's compensation insurance, and that the
claims processing system administered by our department is efficient and fair."
"The Uninsured Employer Fund is designed to provide protection for uninsured workers
but it should never be seen as an excuse for any employer to avoid insurance," Wegner
added. "We intend to get that point across with appropriate educational programs and,
when necessary, enforcement actions."
Worker's compensation insurance is usually obtained through an insurance agent.
Employers who have trouble finding an insurer willing to cover their company can apply for
coverage through the Wisconsin Compensation Rating Bureau, 2200 North Mayfair Road,
Wauwatosa, WI 53226.
Employers who are uncertain whether they need worker's compensation insurance can
write the Worker's Compensation Division at 201 East Washington Avenue, Room 261,
Madison, WI 53702 or call 608/266-1340. The free brochure, Facts for Employers about
the Wisconsin Worker's Compensation Law, is also helpful.