Notice of noncompliance to employer -- Enforcement power of division -- Penalty.
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(1)
(a) In addition to the remedies described in Section 34A-2-210, if the division has reason to believe that an employer is conducting business without securing the payment of benefits in accordance with Section 34A-2-201, the division shall deliver written notice of the noncompliance to the employer by certified mail or personal service to the employer's last-known address.
(b) If the employer does not demonstrate compliance with Section 34A-2-201 to the division within 15 days after the day on which the notice is delivered, the division shall issue an order requiring the employer to appear before the division and show cause why the employer should not be ordered to comply with Section 34A-2-201.
(c) If the division finds that an employer has failed to comply with Section 34A-2-201, the division shall require the employer to comply with Section 34A-2-201.
(2)
(a) Except as provided in Subsection (2)(d), after the division makes a finding of noncompliance described in Subsection (1)(c), the division shall, in accordance with Title 63G, Chapter 4, Administrative Procedures Act, and this Subsection (2), impose a penalty against the employer.
(b) Except as provided in Subsection (2)(e), a penalty imposed under Subsection (2)(a) shall be the greater of:
(i) $1,000; or
(ii) three times the amount of the premium the employer would have paid for workers' compensation insurance based on the rate filing of the workers' compensation insurance carrier that provides workers' compensation insurance under Section 31A-22-1001, during the period of noncompliance.
(c) For purposes of Subsection (2)(b)(ii):
(i) the premium is calculated by applying rates and rate multipliers to the payroll basis under Subsection (2)(c)(ii), using the highest rated employee class code applicable to the employer's operations; and
(ii) the payroll basis is 150% of the state's average weekly wage multiplied by the highest number of workers employed by the employer during the period of the employer's noncompliance multiplied by the number of weeks of the employer's noncompliance up to a maximum of 156 weeks.
(d) The division may waive the penalty described in this Subsection (2) if:
(i)
(A) the finding of noncompliance is the first finding of noncompliance against the employer under this section;
(B) the period of noncompliance was less than 180 days;
(C) the employer is currently in compliance with Section 34A-2-201; and
(D) no injury was reported to the division in accordance with Section 34A-2-407 during the period of noncompliance; or
(ii)
(A) the employer is a corporation;
(B) each employee of the corporation is an officer of the corporation; and
(C) the employer is currently in compliance with Section 34A-2-201.
(e)
(i) The division may reduce the penalty described in this Subsection (2) if:
(A) the finding of noncompliance is the first finding of noncompliance against the employer under this section;
(B) the employer is currently in compliance with Section 34A-2-201;
(C) no injury was reported to the division in accordance with Section 34A-2-407 during the period of noncompliance; and
(D) upon request from the division, the employer submits to the division the employer's payroll records related to the period of noncompliance.
(ii)
(A) The reduced penalty shall be an amount equal to the premium the employer would have paid for workers' compensation insurance based on the rate filing of the workers' compensation insurance carrier that provides workers' compensation insurance under Section 31A-22-1001, during the period of noncompliance.
(B) The division shall calculate the amount described in Subsection (2)(e)(ii)(A) using the payroll records described in Subsection (2)(e)(i)(D).
(f) The division may reinstate the full penalty amount against an employer if the Uninsured Employers' Fund is ordered to pay benefits for an injury that occurred but was not reported during the period of noncompliance for which the division waived or assessed a reduced penalty under this subsection.
(3) A penalty imposed under Subsection (2) shall be:
(a) deposited in the Uninsured Employers' Fund created by Section 34A-2-704;
(b) used for the purposes of the Uninsured Employers' Fund specified in Section 34A-2-704; and
(c) collected by the Uninsured Employers' Fund administrator in accordance with Section 34A-2-704.
(4)
(a) An employer who disputes a determination, imposition, or amount of a penalty imposed under Subsection (2) shall request a hearing before an administrative law judge within 30 days of the date of issuance of the administrative action imposing the penalty or the administrative action becomes a final order of the commission.
(b) An employer's request for a hearing under Subsection (4)(a) shall specify the facts and grounds that are the basis of the employer's objection to the determination, imposition, or amount of the penalty.
(c) An administrative law judge's decision under this Subsection (4) may be reviewed pursuant to Part 8, Adjudication.
(5) An administrative action issued by the division under this section shall:
(a) be in writing;
(b) be sent by certified mail or personal service to the last-known address of the employer;
(c) state the findings and administrative action of the division; and
(d) specify its effective date, which may be:
(i) immediate; or
(ii) at a later date.
(6) A final order of the commission under this section, upon application by the commission made on or after the effective date of the order to a court of general jurisdiction in any county in this state, may be enforced by an order to comply: