Workers' compensation insurance unraveled: Rhode Island employer's guide

Why workers’ compensation insurance is necessary

Workers’ compensation insurance protects businesses and employees from financial loss should an accident or injury occur in the workplace. For employers, having a workers’ compensation policy in place protects them from costly litigation and potential liability should a worker be injured on the job.

Let’s talk about the employers that need to have a workers’ comp policy in place by law.

Which employers need to obtain workers’ compensation insurance in Rhode Island?

With limited exceptions, Rhode Island employers with more than one (1) employee are subject to the general provisions under Rhode Island law, which states that every person, firm, and private corporation, including public service corporations are required to purchase workers’ compensation insurance. Rhode Island businesses are also required to display a poster in the workplace that shows workers’ compensation insurance coverage.

Are there any exemptions?

There are some exemptions to Rhode Island workers’ compensation coverage including domestic service employees, agricultural workers, certain real estate employees, and casual employees. Municipal employees may also be exempt if the municipality does not choose to be covered. Shareholders in a corporation, general or limited partners in a partnership, or any individual who is a member in a limited-liability company are also excluded from the workers’ compensation requirements.

In addition, other exemptions include sole proprietors and independent contractors, with any person identifying as an independent contractor in Rhode Island required to file a “Notice of Designation as Independent Contractor” for each business that they contract with. In some cases, it may be difficult to ascertain whether a person is a sole proprietor or an independent contractor. When status is in doubt, the decision will be made by the workers’s compensation court.

Businesses can download a Workers’ Compensation Act poster in English or Spanish from the Department of Labor and Training to be displayed in their place of business. The poster provides information such as the name of the insurance company administering the workers’ compensation policy, the adjusting company, and their telephone number and policy effective date and is required by Rhode Island General Law.

What does workers’ compensation insurance cover in Rhode Island?

Workers’ compensation insurance coverage begins on the fourth day from the date of injury. Coverage includes the following areas:

• Missed wages – If a work-related illness or injury causes a worker to miss work, they can be compensated weekly.
• Ongoing care – Ongoing care is available for workers that require additional treatment including surgery or physical therapy.
• Rehabilitation services – Injured employees are entitled to any necessary rehabilitation services that will help you return to work, including physical, vocational, and psychological rehabilitation when needed.
• Partial disability – Partial disability benefits are available to workers that are unable to work but are not totally disabled.
• Total disability – Total disability is available for workers that are unable to return to any type of employment.
• Death benefits – In the case of a worker’s death, death benefits are paid to a surviving spouse or other surviving dependents.

How can Rhode Island employers purchase workers’ comp insurance?

Workers’ compensation coverage can be purchased from any licensed private carrier. For high-risk or newer businesses that cannot obtain insurance through a private insurance carrier, you may be able to obtain coverage through state funding.

What are the penalties for non-compliance with workers’ compensation laws?

We hate to be the bearer of bad news, but businesses that are required to carry workers’ compensation coverage may face penalties if they do not comply.

Penalties for non-coverage may include:

• A fee of $1,000 per day for each day that the proper coverage is not in place
• Complete shutdown of the business until proper coverage is in place
• A $10,000 fine for businesses that do not obtain proper coverage
• A felony conviction that includes two years in prison

In addition, employers who fail to display a workers’ compensation poster that identifies their current insurance carrier or adjuster can face a $250 fine.

How are workplace injuries reported?

Any employee injured on the job should seek medical care immediately. The injury or illness must also be reported to the workers’ compensation representative at their company or their human resources department. In turn, the employer is then required to report the injury to their workers’ compensation carrier within ten days of the illness or injury occurring.

The employer’s insurance company is responsible for reporting the injury and will determine if the injury or illness is covered under the workers’ compensation policy. If the injury is fatal, it must be reported within 48 hours of occurrence. Employers face a $250 fine for late or non-reporting of an injury.

Can employees choose a physician to treat work-related injuries?

Under Rhode Island law, employees are free to choose their own medical care provider for initial medical care. This includes any emergency room visit or injury-related visit. However, if an employee changes doctors for the same injury, they will need to use an approved physician or provider if the employer has one. If they do not, the employee is free to use the medical provider(s) of their choice.

More resources for Rhode Island employers

For more information on Rhode Island workers’ compensation requirements, contact the Rhode Island Workers’ Compensation Fraud and Compliance Unit at 401-462-8100 option #4. Below are some additional resources that may be helpful to Rhode Island employers.

• Workers’ Compensation Brochure for Employers
• Workers’ Compensation Laws, Rules, and Regulations
• Workers Compensation Benefits 
• Basic Questions About Workers’ Compensation