A bill currently before the Massachusetts Senate would make failure to purchase workers’ compensation insurance a felony offense. Senate Bill 915 was reportedly designed to deter companies that do business in Massachusetts from failing to maintain or purchase workers’ compensation coverage. Currently, business owners who fail to purchase coverage in the state may be guilty of a misdemeanor offense that is subject to a maximum fine of $1,500 and up to one year in prison. The proposed law would increase the penalty dramatically. Convicted business owners would face a maximum fine of $10,000 and up to five years in prison.
Regan and the advisory council have endorsed Senate Bill 915. Others, such as Bill Vernon of the National Federation of Independent Business believe the proposed law may deter job growth in Massachusetts. Vernon claims current penalties are sufficient to keep employers from misclassifying workers in an effort to avoid paying for workers’ compensation insurance. He stated stiffer penalties will definitely hurt business owners who unintentionally misclassify their employees as independent contractors.