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If your business has employees in the state of Minnesota, you’ll need to make sure you adhere to Minnesota’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.
Who needs Workers’ Compensation Insurance in Minnesota?
Minnesota requires all employers, regardless of the number of employees they have, to obtain Workers’ Compensation Insurance. In Minnesota, an “employee” is generally defined as any individual who performs services for another, for hire, including minors, part-time workers, and workers who are not citizens.
The Minnesota Workers’ Compensation Act (WCA) defines all of the requirements for Workers’ Comp in Minnesota, and the Minnesota Workers’ Compensation Division (WCD) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.
What employees are covered under Workers’ Compensation in Minnesota?
Almost all workers are covered under Workers’ Compensation in Minnesota. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.
The following are categories of employees that are eligible for Workers’ Comp coverage:
- Full-time and part-time employees
- Apprenticeships and internships
- Undocumented workers
- Domestic workers earning $1,000 or more during a calendar quarter
- Agricultural workers who are not part of a family farm
The following are categories of employees that are generally excluded from Workers’ Comp coverage:
- Independent contractors
- Volunteers, except those in service of specific organizations, including emergency services, veterans homes, correctional facilities, and certain government agencies
- Casual or occasional workers
- Sole proprietors
- Agricultural employees who are part of family farms
- Domestic workers who make less than $1,000 during a calendar quarter
What Workers’ Compensation benefits do employees receive?
Under Workers’ Compensation in Minnesota, employers are required to provide the following benefits to employees who are injured in the course of employment:
- Medical expenses for medical treatment and supplies, including psychological, chiropractic, podiatric, surgical, and hospital treatment.
- Travel costs, copying charges, costs of medical reports, and, in some cases, attorney fees that are directly related to medical treatment.
- In the case of a permanent total disability, the reasonable value of nursing services by a member of the employee’s family.
- Repair or replacement of artificial members, glasses, dentures or artificial teeth, hearing aids, canes, crutches, or wheelchairs damaged in a work-related injury.
Temporary Total Disability Benefits
- If an injured employee is unable to return to work due to an injury or due to participation in an approved rehabilitation program, he or she is eligible to receive Temporary Total Disability (TTD) benefits while recovering, which provides 66 and two-thirds percent of a worker’s average weekly wage pre-injury.
- The WCD establishes minimum and maximum benefit amounts, which change yearly. From October 1, 2020, through September 30, 2021, the maximum TTD benefit was $1,116.88 per week. The minimum benefit amount was $130 per week or the injured employee’s average weekly wage if it is less than $130.
- TTD benefits are available until the injured employee is medically cleared to return to work or the employee returns to regular or modified employment. The maximum amount of time a worker can receive benefits is 130 weeks or 156 weeks if the employee is participating in a rehabilitation program.
Temporary Partial Disability Benefits
- An injured employee may be able to return to work while recovering in a partial or limited capacity. If the employee works fewer hours or receives lower wages during this time, he or she may be eligible for Temporary Partial Disability (TPD) benefits. TPD benefits provide 66 and two-thirds percent of the difference between a worker’s pre- and post-injury average weekly wage.
- The WCD establishes minimum and maximum benefit amounts, which change yearly. From October 1, 2020, through September 30, 2021, the maximum TPD benefit was $1,116.88 per week. The minimum benefit amount was $130 per week or the injured employee’s average weekly wage if it is less than $130.
- TPD benefits are available until the injured employee is medically cleared to return to work or the injured worker’s wages return to a pre-injury level. The maximum amount of time a worker can receive benefits is 225 weeks within 450 weeks of the date of injury. TPD benefits paid during a rehabilitation program, however, are not counted against the 225-week limit.
Permanent Partial Disability Benefits
- If an injured employee recovers from an injury but has a permanent partial impairment, he or she may be eligible for Permanent Partial Disability (PPD) benefits.
- The amount that is paid out for PPD benefits depends on specific scheduled impairments, which generally involve partial or total loss of use of the upper and lower extremities, hearing, or vision. Each scheduled impairment has a different rating, which is based on the percentage of disability to the body as a whole.
- The impairment rating is multiplied by a specific dollar amount or a number of weeks to determine the benefits that are payable.
- Injured employees may request PPD benefits to be paid in a lump sum. This lump-sum payment may be discounted to the present value.
Permanent Total Disability Benefits
- If an injured employee develops a permanent total disability precluding the possibility of earning any wages, he or she may be eligible for Permanent Total Disability (PTD) benefits.
- PTD benefits provide 66 and two-thirds percent of a worker’s average weekly wage pre-injury, payable as long as the employee remains permanently and totally disabled.
- The WCD establishes minimum and maximum benefit amounts, which change yearly. From October 1, 2020, through September 30, 2021, the maximum PTD benefit was $1,116.88 per week, and the minimum benefit amount was $744 per week.
- After the first $25,000 in PTD benefits is paid, benefits can be reduced by the amount of disability benefits being paid in Social Security Disability Insurance (SSDI) benefits.
Vocational Rehabilitation Benefits
- Injured covered employees may be entitled to vocational rehabilitation if they are unable to return to work for at least 13 weeks. Vocational rehabilitation is designed to restore the injured worker to a job related to his or her former employment or return the injured worker to a job in another work area that produces an economic status as close as possible to their pre-injury status.
- Vocational rehabilitation may include a variety of services, including job placement assistance, retraining support, job counseling, or on-the-job training.
- Employers are required to pay up to $15,000 to cover funeral expenses.
- A worker’s surviving dependents may be eligible to receive up to 66 and two-thirds percent of the deceased employee’s average weekly wages, up to the maximum average weekly wage set by the WCA.
- Death benefits may be adjusted when a deceased employee’s spouse remarries or when a dependent child reaches the age of 18.
What are the penalties for breaking Minnesota Workers’ Compensation laws?
Failure to adhere to the Workers’ Compensation laws set out by the WCD can result in significant fines and even the closure of your business. In order to avoid any costly penalties, it’s important to consult the WCD or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:
Failure to Purchase Coverage
- Failure to secure adequate Workers’ Compensation Insurance may result in a fine of up to $1,000 per affected employee. Each week that a business is in noncompliance counts as a separate offense.
- Employers that willfully and intentionally fail to secure coverage may be charged with a gross misdemeanor, punishable by fines of up to $3,000.
Unpaid or Delayed Benefits
- Failure to pay the required weekly compensation benefits to an injured employee or formally deny a claim within 14 days of receiving notice of a work-related injury or illness or failing to pay an injured employee’s medical expenses within 30 days of receiving a bill may result in administrative fines.
- Employers may also be required to reimburse any payments made by the Special Compensation Fund, which provides workers’ comp benefits when an employer does not have sufficient coverage.
- Frivolously denying, delaying, or intentionally underpaying benefits may result in fines of up to 30 percent of the total amount of benefits due to an injured employee.
Using Employee Wages for Workers’ Comp Coverage
- Using an employee’s wages to fund Workers’ Compensation benefits may result in a misdemeanor charge, punishable by fines of up to 400 percent of the amount of employee wages withheld.
Unfiled Reporting or Notification
- If an employer fails to notify employees before denying a claim or discontinuing benefits, they may be fined $500.
- Failure to post a notice in the workplace that states compliance with Workers’ Compensation laws may result in a $500 fine.
- If an employer fails to file any report required by the WCD, they may be fined $500 per failure.
How much does Workers’ Compensation Insurance cost in Minnesota?
According to the National Academy of Social Insurance Workers’ Compensation Report (October 2019), the average employer cost for Workers’ Compensation in Minnesota was $1.03 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.
How does the Workers’ Compensation claims process work in Minnesota?
The claims process in Minnesota begins with the employee. If an employee suffers a work-related injury or illness, he or she must report the condition to the employer in writing within 14 days of the injury or accident. Any delay in reporting may result in delays in the claims process or a denial of the claim.
The employer must then investigate the claim and notify the injured employee of the status of the claim within 45 days. If the employer has not notified the employee of their intent to deny, admit, or begin payments on a claim within 45 days, they may face penalties from the WCD.
Minnesota Workers’ Compensation Insurance Resources
For more information on Minnesota Workers’ Compensation laws and requirements, please visit the following resources: