When an employer lowers its costs to do business by eliminating workers’ compensation insurance it gives them an unfair-unearned economic advantage over those employers in the same industry who are playing by the rules. Let’s use a roofing company as an example. Roofing companies who do buy the coverage lose out on bids for work because those underbidding them and getting the work are cheating on how they’ve lowered their costs that allowed them to submit a lower bid.
By allowing companies to cheat the system we place those companies who are playing by the rules at a competitive disadvantage; which means we need to force everyone to play by the rules and for there to be an apples-to-apples comparison when work is being bid. We own commercial real estate and before building out a suite we make the contractor provide us with an insurance binder proving they cover workers’ compensation of their employees. One way to force compliance is for those doing the hiring to run quality control and to do as we do, ask for proof of an insurance binder. Second, society could make the GC legally responsible. Or third we could make the employee make the choice on whether the risk of injury outweighs the rate of pay by forcing disclosure. Just as I wrote yesterday, “make it a felony to not disclose in writing to employees there is no workers’ compensation coverage that has been purchased. Then the employees can decide if the risk is worth the rate of pay.”
It’s not a perfect answer but it’s a move in the right direction.