65-04-33. Intentional acts - Failure to secure coverage - Uninsured - Noncompliance -
Failure to submit necessary reports - Penalty.
1. An employer may not employ any person, or receive the fruits of the labor of any
person, in a hazardous employment as defined in this title, without first applying for
workforce safety and insurance coverage for the protection of employees by notifying
the organization of the intended employment, the nature of the intended employment,
and the estimated payroll expenditure for the coming twelve-month period.
2. a. An employer that willfully misrepresents to the organization or its representative,
by statement or omission, the amount of payroll upon which a premium under this
title is based, or that willfully fails to secure coverage for employees, is liable to
the state in the amount of five thousand dollars plus three times the difference
between the premium paid and the amount of premium the employer should have
paid.
b. The organization shall collect a penalty imposed under this subsection in a civil
action in the name of the state, and the organization shall deposit a penalty
collected under this subsection to the credit of the workforce safety and insurance
fund.
c. An employer that willfully misrepresents to the organization or its representative,
by statement or omission, the amount of payroll upon which a premium under this
title is based, or that willfully fails to secure coverage for employees, is guilty of a
class A misdemeanor. If the premium due exceeds one thousand dollars, the
penalty for willful failure to secure coverage or willful misrepresentation to the
organization or its representative is a class C felony. If the employer is a
corporation or a limited liability company, the president, secretary, treasurer, or
person with primary responsibility is liable for the failure to secure workforce
safety and insurance coverage under this subsection.
d. In addition to the penalties prescribed by this subsection, the organization may
initiate injunction proceedings as provided for in this title to enjoin an employer
from unlawfully employing uninsured workers.
e. The cost of an investigation under this subsection which results in a criminal
conviction may be charged to the employer's account and collected by civil
action.
3. An employer that willfully makes a false statement or fails to make a statement in an
attempt to preclude an injured worker from securing benefits or payment for services,
or that willfully discharges or threatens to discharge an employee for seeking or
making known the intention to seek workforce safety and insurance benefits is liable to
the state in the amount of five thousand dollars. The organization shall collect a civil
penalty imposed under this section in a civil action in the name of the state, and the
organization shall deposit a penalty collected under this section to the credit of the
workforce safety and insurance fund. A willful violation of this section is a class A
misdemeanor. The cost of an investigation under this subsection which results in a
criminal conviction may be charged to the employer's account and collected by civil
action.
4. a. An employer that is uninsured for failure to secure coverage is liable for any
premiums, assessments plus penalties and interest due on those premiums, plus
a penalty of twenty-five percent of all premiums due during the most recent year
of failure to secure coverage.
b. An additional five percent penalty is due for each year of failure to secure
coverage before the most recent year beginning on the date the organization
became aware of the employer's failure to secure coverage, resulting in the
penalty for the second most recent year being thirty percent, for the third most
recent year being thirty-five percent, for the fourth most recent year being forty
percent, for the fifth most recent year being forty-five percent, and for the sixth
most recent year being fifty percent.
c. In addition, the organization may assess a penalty of up to five thousand dollars
for each premium period the employer failed to secure coverage. The
organization may not assess a penalty for more than six years of failure to secure
coverage.
d. The organization may assess an employer the actual cost and reserves of any
claim attributable to the employer during the time the employer failed to secure
coverage.
e. The penalties for employers are in addition to any other penalties by law. The
organization may reduce the penalties provided for under this section. An
employer may not appeal an organization decision not to reduce a penalty under
this subsection.
5. a. An employer in noncompliance is subject to a penalty of up to five thousand
dollars for each premium period the employer was in noncompliance.
b. The organization may not assess a penalty for more than six years of past
noncompliance.
c. The organization may reduce the penalties provided for under this section. An
employer may not appeal an organization decision not to reduce a penalty under
this subsection.
6. a. An employer that fails or refuses to furnish to the organization the payroll report
or estimate, or that fails or refuses to furnish other information required by the
organization under this chapter is subject to a penalty established by the
organization of up to five thousand dollars.
b. Upon the request of the organization, the employer shall furnish the organization
any of that employer's payroll records, payroll reports, and other information
required by the organization under this chapter and an estimate of payroll for the
advance premium year.
c. If the employer fails or refuses to provide the records within thirty days of a
written request from the organization, the employer is subject to a penalty of five
thousand dollars and a penalty not to exceed one hundred dollars for each day
until the organization receives the records.
d. The organization may not assess a penalty that exceeds one hundred fifty dollars
under this subsection against an organized township.
e. The organization may reduce penalties for employers under this subsection.
However, an employer may not appeal an organization decision not to reduce a
penalty.
