States conduct investigations, interviewing individuals, questioning employees, and inspecting company files to determine if the company is in violation of any state statutes. If yes, then a stop-work order is issued.
A stop-work order notice is a legal document that forces a company to immediately cease all work until the infractions outlined in the order have been rectified.
Why do companies receive stop-work orders?
Reasons include:
- No work comp insurance
- Failing to report a claim to an insurance carrier
- Withdrawing work comp insurance premium from an employee’s paycheck
- Threatening an employee that submits a work comp claim
- Misclassifying employees
- Hiding remuneration (i.e. wages, stipends, etc)
Penalties
It depends on the state.
Most noncompliance penalties generally start at $500 per day. Plus, additional surcharges involving twice the work comp insurance premium you should have paid for the uninsured time lapses during the last 24 months. Moreover, depending upon the state, a business owner can also be penalized up to $5,000 per employee that you wrongly classified as an independent contractor.
Did you receive a stop-work order notice because your company does not have workers comp insurance?
Failing to secure Workers Compensation Insurance is a critical mistake.
Call us now at 1-800-860-9467 or submit your company details. In turn, we will diligently work around the clock to quickly secure work comp insurance coverage.