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Do MN Require Workers Comp Insurance?

Are you planning on starting a business or perhaps your company is growing exponentially, and you want to know more about workman’s comp in Minnesota? Fortunately, the law is quite straightforward and can be easily applied to most businesses. Read on below to find out about Workmans’ Comp Insurance in Minneapolis, how you can adhere to these, and run your business legally.

What is Workers Comp Insurance?

Worker’s compensation is an insurance policy that the employer must pay an employee in terms of benefits in times of disability, job-related injuries, and even death. These benefits come straight from an employer’s pocket and will need to start on the first day of the job. However, it’s not just about the protection of employees, but also protects employers from potential lawsuits.

What Kinds of Worker’s Comp Benefits Are There?

These generally come in two kinds, known as permanent or temporary. A permanent benefit is paid out when an employee has been incapacitated indefinitely as a result of injury or illness while on the job. If a doctor confirms that the condition has no chance of improvement, then the insurance provider will need to pay a percentage of the employee’s lost earnings for a time determined by the state.

A temporary benefit is calculated similarly to a permanent benefit but involves an employee who is unable to work or perform their duties to the best of their ability for a limited time. They will be able to make insurance payments to help them cover for their reduced or lost wages, along with medical costs related to the workplace illness or incident. Once a doctor confirms that they’re fit to work, then these benefits will stop.

Do All Businesses Need to Have Worker’s Comp?

Throughout the state, employers are required to provide worker’s comp, even if they have just one employee. However, there are a few exceptions to this rule, which includes:

  • Household employees
  • Some farmworkers
  • Casual employees (someone who works for a business inconsistently, such as relatives of the business owner who aren’t formally included in the payroll)

Previously, independent contractors were exempt from worker’s compensation coverage, but Minnesota recently expanded the coverage to include them in a wide range of industries. However, there are specific classifications of employees in this kind of work, which is why the Minnesota Department of Labor and Industry provided criteria that can help to determine eligibility.

What are the Benefits Included in Worker’s Comp?

There are various benefits you can receive from worker’s compensation, such as:

  • Coverage of hospital bills
  • Payout of lost wages
  • Other medical expenses

However, they may also provide death benefits in case of untimely death due to a workplace accident. Apart from the coverage of lost wages, worker’s compensation will also pay for burial and funeral costs. These benefits are based on 67% of the deceased’s weekly wages, where their benefits are paid to anyone dependent on the employee, including:

  • Their spouse
  • Underage children
  • Children under the age of 25 that are full-time students
  • Disabled adult children who are dependent on the employee
  • Other legal dependents, such as elderly parents

What are the Employer’s Responsibilities When an Accident Occurs?

According to Minnesota law, an employee can file a claim for worker’s compensation within three years from the date of illness or injury, provided that the state’s initial reporting procedures were followed. If there are no reports filed, the statute of limitations can be extended to six years from the date of the incident. This is why it’s important to take note of any workplace incidents, even if it seems small at the time.

Should your employees become sick or injured as a result of their work, it’s best to get as much information as you can. Whether you were present during the incident or not, you must create a report as soon as possible. Filing this report will ensure that every single detail is fresh in the minds of everyone involved and those who witnessed the incident.

Be sure to consider the following things when filling out your incident report:

  • What occurred?
  • When did the incident occur?
  • Where did the incident occur?
  • What is the illness or injury?
  • Was there a need for medical help?
  • Were there witnesses present?
  • Does the employee have medical documentation of the incident?

It’s always best to keep detailed records of any illness or injury that happens in your workplace. Moreover, it will help to have a standard incident report form ready in case of incidents. This will help to keep things organized and clear in times when a third party such as a lawyer becomes involved.

What are the Penalties for Not Providing Worker’s Compensation?

If you need to cut costs to keep your company afloat, it’s never a good idea to start with worker’s compensation. This is especially true because there are strict penalties for not providing proper coverage. In the state of Minnesota, any business operating without sufficient worker’s compensation insurance may need to freeze hiring until you provide insurance.

Furthermore, you could face fines for the breach of state requirements which may reach as much as $1,000 for every employee and each week that they’re without coverage. Apart from these penalties, you will also be required to pay the cost of your employee’s worker’s comp benefits along with a fine of 65% of those benefits should they get injured at work.

Find Out More about Workman’s Compensation in Minnesota

While it may seem like you’re cutting costs by eliminating worker’s compensation, this will not help you in the long run. If you’re hesitant with worker’s compensation because you don’t know enough about it, don’t hesitate to reach out to us for more details. At Osterbauer, we can help you determine the right Workmans Comp Insurance in Minneapolis for you and your company.


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