What happens when an off-the-books worker is injured?
Short answer. You are personally liable for all medical costs and lost wages, face state penalties for operating without workers' compensation insurance, risk your MHIC license, and could face criminal charges for a serious injury.
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
One of your workers cuts his hand badly on a table saw. He needs stitches. He's been working for you 'off the books' — cash, no workers comp, no paperwork.
He's at the ER asking who's going to pay the bill.
- Wake-up call
Maryland requires employers to carry workers compensation insurance. Operating without it means: (1) you're personally liable for ALL medical costs and lost wages; (2) you face state penalties for non-compliance; (3) if the injury were more severe, you could face criminal charges; (4) your MHIC license is at risk. A table saw laceration is a $2,000 lesson. A table saw amputation would be a $200,000 lesson. Get insured TODAY.
- Criminal
Concealing a workplace injury is illegal. Hospitals report serious injuries. Workers comp investigators follow up. Telling an injured worker to hide your involvement adds obstruction to your existing violations. You're now facing: workers comp fraud, labor law violations, OSHA reporting failures, tax evasion (off-the-books workers), and MHIC license action. All of this because you tried to save money by not carrying insurance.
All 14 subcontractors, liens & workers questions
- Must you pay subcontractors when the homeowner pays late?
- What happens when an unpaid subcontractor files a mechanics lien?
- Can a subcontractor put a lien on a house the owner paid in full?
- Should a homeowner pay your subcontractor directly?
- What if your electrician's license expired mid-job?
- Can you hire a plumber who is still getting licensed?
- Can a homeowner do their own electrical work on your job?
- Who coordinates subcontractors working in the same space?
- Who is liable when a subcontractor damages the home?
- How do you handle a subcontractor who stops showing up?
- Are your regular workers employees or 1099 contractors?
- What must you do when an employee is hurt on the job?
- What happens when an off-the-books worker is injured?
- What are the risks of hiring day laborers for cash?