Small Businesses Slapped With Heavy Noncompliance Fines
Thursday, June 2, 2016 | 0
Colorado’s state Division of Workers’ Compensation is hitting small businesses with noncompliance fines totaling hundreds of thousands of dollars, often notifying them years after their period of shirking insurance requirements began, The Complete Colorado reports.
That leaves businesses such as Soon Pak’s Star Motel in Denver owing enormous, unexpected debts to the state that, if enforced, may put it out of business.
Pak owes $841,200 for eight years of failing to comply with workers’ compensation insurance requirements. She was only notified of the fine — which grew by the day — after those years had passed.
After asking the state why she was not notified sooner, she was told it was because the Colorado Department of Labor and Employment was understaffed.
“When I went to [the] state, they told us ... they don’t have many people for the inspection of [whether] they have the insurance or not,” Pak told the Complete Colorado. “That’s not, you know, my problem. That’s their problem. If one year, no insurance, they have to let us know.”
Under HB 05-1139, a 2005 bill intended to ensure businesses comply with workers’ comp requirements, the CDLE can collect fines of up to $250 per day from first offenders and $251 to $500 per day from second offenders.
A fiscal note released alongside the bill estimated the average fine for second offenders would be around $28,000, suggesting that delinquent businesses would be notified within 60 to 90 days of their coverage lapse.
But that was only a suggestion. The bill stopped short of delineating a timetable for notifying offenders, and that’s where the trouble started.
Now, business owners such as El Trompito Taqueria’s Silvia and Luis Atunez are on the hook for $516,700 for violations reaching back five years.
Like Pak, Silvia Atunez is a first-generation immigrant who speaks English as a second language. Also like Pak, she says she did not know she was out of compliance, and now she doesn’t know what to do about a fine of more than a half-million dollars.
Besides Atunez and Pak, there are 13 other open cases in which businesses owe more than $100,000 in fines, CDLE spokeswoman Cher Haavind told the Complete Colorado.
Haavind declined to comment on the “soundness and appropriateness of the policy” in an email, but she did say the Workers’ Comp Division was “committed to being held accountable for the efficiency and transparency with which we carry out our statutory responsibility to ensure workers’ comp coverage.”
To read the full story and watch a video featuring interviews with the small business owners facing fines, click here.
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