An employer has a responsibility towards his workers to maintain the financial obligations required by the law. Worker’s compensation insurance is one such obligation. If an employer refuses to pay and misappropriates the money they receive solely for that purpose, they are guilty of a crime and will be punished accordingly.
An Employer's Responsibility
Worker’s compensation insurance was created to help companies offset the cost of caring for an employee's injuries that were sustained while performing their duties. The compensation would bear the financial responsibility for the medical bills so that the company would not suffer large losses and the patient would receive the medical care they need.
The Cost to the Employee
When an employer fails to comply with the law and does not pay the Worker’s compensation premiums that are collected from their employees, they can find themselves in both legal and financial straits, especially if an employee has been injured. If the employee has been left to pay for their own medical expenses, the company may eventually be liable for the expenses as well as any other damages that are incurred by the employee.
The owner of a company or whoever is responsible for collecting and paying the premiums may be liable for much more than just the money that was illegally taken. A judge may order the assets of the company to be liquidated or a judgment levied against the company that requires restitution to the injured parties. If the person responsible for misappropriation of funds is found guilty, he may receive jail time.
A Wisconsin businessman was found guilty of misappropriation of funds and was ordered to spend three years in a Federal prison for not complying with the laws governing Worker’s Compensation insurance. Instead of paying his employees' claims, Gregory Chmielewski kept almost $7.3 million dollars and used it for his own gain. His disregard for his employees' welfare left many of them to pay for their own claims and medical bills.
Misappropriation of funds is a crime that may result in prison time if the amount of money is substantial. The financial damage caused by this action reaches far beyond the employer/employee relationship and can have lasting repercussions.