Make sure policyholders are aware of the current state of fines for workplace noncompliance.

In addition to the federal Occupational Safety and Health Administration (OSHA), several states in which SFM operates have their own occupational safety and health administrations. Each has the authority to issue fines for a number of workplace violations.

For the primary states in which SFM operates, the following have their own Occupational Safety and Health Plans :

• Minnesota
• Iowa
• Indiana
• Tennessee

South Dakota, Nebraska and Kansas follow federal OSHA standards.

Below is a rundown of information agents may want to communicate to policyholders about these states, and the risks associated with workplace violations.

Federal OSHA penalties

To begin, the U.S. Occupational Safety and Health Administration has its own set of fines for violations.

As of this writing, these are the maximum penalty amounts for of certain types workplace malpractice:

• Serious; other-than-serious; posting requirements – $16,131 per violation
• Failure to abate – $16,131 per day beyond the abatement date
• Willful or repeated – $161,323 per violation

Note that OSHA typically updates its fine amounts annually.

Minnesota OSHA penalties

In Minnesota, the maximum penalties for violations are as follows:

• Nonserious violation – $15,625
• Serious violation – $15,625
• Willful violation – $156,259 (smaller penalties may be assessed to smaller employers)
• Repeated violation – $156,259 per violation
• Failure to abate violation – $15,625 per day beyond the prescribed abatement date
• Fatality penalty – $50,000 (minimum total negotiable fine)

Iowa

Iowa’s rules regarding maximum citations for workplace noncompliance are:

• Willful violation – $156,259
• Repeated violation – $156,259
• Serious violation – $15,625
• Other-than-serious violation – $15,625
• Failure to correct violation – $15,625 per day
• Posting, reporting or record-keeping violation – $15,625

Indiana

Indiana OSHA penalties are assessed in accordance with state law and can be calculated using the Indiana Field Operations Manual . Maximum fines for certain types of violations are:

• Posting Requirements – $7,000 per violation
• Nonserious – $7,000 per violation
• Serious – $7,000 per violation
• Knowing (did not contribute to employee fatality) – $70,000 per violation
• Repeat – $70,000 per violation
• Knowing (contributed to employee fatality) – $132,598 per violation
• Failure to correct – $7,000 per violation per day it continues (30-day maximum)

Tennessee

Lastly, Tennessee OSHA has its own Penalty Program, which investigates and assesses penalties for violations of the Tennessee Workers’ Compensation Act other than those covered by the Uninsured Employers Fund and the Employee Misclassification Education and Enforcement Fund. 

The department’s website lists dozens of penalties for workers’ compensation violations.

Conclusion

While most employers don’t set out to violate OSHA standards, agents should remind policyholders of the potential for hefty fines for noncompliance.

Billing changes due to endorsements can catch policyholders off guard.

When agents receive a notice of an endorsement, they can help ease the concerns of policyholders by alerting them right away. Although clients may expect changes because of their annual premium audit, they may be less familiar with the process involving endorsements.

As a reminder, endorsements can be made for a variety of reasons, such as adding or removing a state of operation, changing their installment plan, changing their payroll amounts or changing their address. Sometimes these changes affect their premium amount; sometimes they do not.

At SFM, the premium audit occurs just after a client’s policy period ends, so at that point they are making payments on their new policy for the year — those payments could potentially go up depending on what was discovered in the audit. It should be noted that when there is an audit premium impact, it is billed more quickly than premium-bearing endorsements.

That’s why it’s doubly important to give policyholders a heads-up regarding any endorsements.

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A new U.S. Department of Labor (DOL) rule regarding who qualifies as an independent contractor took effect in the spring of 2024.

The new rule adopted a new six-factor test for determining whether a worker is an independent contractor. (However, employers must also be aware of their respective state requirements.)

Due to this change, some employers may have questions on whether they need workers’ compensation policies to cover independent contractors. Generally, employers are required to provide coverage for lost wages and medical costs due to work injuries for an employee, but not an independent contractor.

Also, depending on the jurisdiction or contract requirements, workers’ compensation policies for subcontractors may be required from the general contractor in order to secure a job.

Agents can help employers navigate these complexities by checking out our blog, Are your workers independent contractors or employees?

This new DOL rule also underscores the value of breaking out work comp coverage from a group insurance plan. Using SFM provides an extra layer of service and expertise for employers who may find challenges navigating the independent contractor rule and its implications for workers’ compensation.

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Agents and policyholders can now access the latest batch of SFM promotional videos on YouTube.

The four videos highlight the strengths SFM brings to policyholders.

Check out the videos on YouTube:

• SFM Mutual Insurance – Protecting workers from harm
• SFM Mutual Insurance – 34 states with coverage
• SFM Mutual Insurance – Your trusted partner in workers’ comp coverage
• SFM Mutual Insurance – Let’s work together

Also, the videos are available on our Marketing videos page.

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The recording of SFM’s recent webinar on safe driving and the implications for workers’ compensation is now available for agents and clients.

During the hourlong webinar, held in June 2024, SFM professionals shared their extensive knowledge on:

• Why driving is the most dangerous work activity
• Types of driving-related injuries
• The claims process, including investigations
• How to prevent driving incidents and establish a safe driving program
• The consequences of a driving-related injury for the company and the employee
• Question-and-answer session

Also, you can find previous webinars on our website, featuring a number of important work comp topics, including:

• Hiring and onboarding
• Claims 101
• Avoiding litigated claims
• Fundamentals of a return-to-work program
• Loss prevention 101
• Winter slips and falls

Lastly, be sure to sign up for alerts on future SFM webinars.

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You can find a wealth of information on current policies in SFM Agency Manager (SAM), including the upcoming e-mod for policies that are renewing soon.

Renewal e-mods are typically available in SAM as early as 90 days prior to the renewal.

To find it, just log in to SAM and go to “Policies,” and click on the policy you’re interested in. On the policy overview screen, you’ll find the upcoming e-mod in the right column, toward the bottom just under the current e-mod.

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SFM is planning to participate in several industry events in the coming months, including:

• July 28-31: American Association of State Insurance Compensation Funds annual conference in Providence, R.I.
• Aug. 27-28: Independent Insurance Agents of Iowa annual convention in Altoona, Iowa.
• Sept. 8-10: Independent Insurance Agents of South Dakota annual convention in Sioux Falls, S.D.
• Oct. 5-8: Insurors of Tennessee annual convention in Nashville, Tenn.
• Oct. 9-11: Independent Insurance Agents of Nebraska annual convention in Kearney, Neb.
• Sept. 23-26: International Association of Industrial Accident Boards 110th convention in Toronto, Canada
• Nov. 11-12: Big I Indiana annual convention in Indianapolis

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Here’s a look at the latest updates and milestones for SFM’s underwriting staff over the past few months.

• Underwriting Technical Specialist Ashley Butcher completed her Chartered Property and Casualty Underwriter designation (she was also promoted to Business Team Leader of Small Business Accounts)
• Vice President, Director of Underwriting Brian Bent was appointed to the National Council on Compensation Insurance (NCCI) Underwriting Committee
• Kevin Simberg was promoted to Underwriting Technical Specialist
• Gabby Frein was promoted to Senior Underwriter
• Eric Olafson was promoted to Underwriting Technical Specialist
• Michele Schaeperkoetter was promoted to Marketing Underwriter Specialist
• Carmen Klug was promoted to Business Team Leader of Wisconsin Accounts

Other SFM news of note:

• Cody Allen was promoted to Territory Manager
• Mark Lewis was promoted to Business Team Leader of the Small Business Accounts team

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