CO Code § 8-43-409 (2021)
2021 Colorado Code|Title 8 - Labor and Industry|Article 43 - Procedure|Part 4 - Enforcement and Penalties|§ 8-43-409. Defaulting Employers - Penalties - Enjoined From Continuing Business - Fines - Procedure - Definition - Repeal

  An employer subject to the terms and provisions of articles 40 to 47 of this title who fails to insure or to keep the insurance required by such articles in force, allows the insurance to lapse, or fails to effect a renewal of the insurance shall not continue business operations while such default in effective insurance continues. Upon receiving information that an employer is in default of its insurance obligations, the director shall investigate and, if the information can be substantiated, shall notify the employer of the opportunity to request a prehearing conference on the issue of default. As part of the director's investigation, the director may verify that all employees of that employer are insured through the employer's workers' compensation plan. The director may forward any workers' compensation coverage issue to the employer's workers' compensation carrier for further investigation by the carrier. Thereafter, if necessary, the director may set the issue of the employer's default for hearing in accordance with hearing time schedule and procedures set forth in articles 40 to 47 of this title and rules promulgated by the director. Upon a finding that the employer is in default of its insurance obligations, the director shall take either or both of the following actions:   Order the employer in default to cease and desist immediately from continuing its business operations during the period such default continues;    For every day that the employer fails or has failed to insure or to keep the insurance required by articles 40 to 47 of this title in force, allows or has allowed the insurance to lapse, or fails or has failed to effect a renewal of such coverage, impose a fine of:   Not more than two hundred fifty dollars for an initial violation; or    Not less than two hundred fifty dollars or more than five hundred dollars for a second and any subsequent violation. For purposes of this subparagraph (II) only, if an employer has been fined pursuant to subparagraph (I) of this paragraph (b) and the director determines that substantially the same people or entities were involved in forming a subsequent employer, the initial violation referred to in subparagraph (I) of this paragraph (b) shall be deemed to have already occurred with regard to violations committed by the subsequent employer. (1.5)   A violation that occurs more than seven years after the date the preceding violation ended is subject to a fine up to the maximum amount permitted pursuant to subsection (1)(b)(I) of this section.    After any fines have been imposed pursuant to subsection (1)(b)(I) or (1)(b)(II) of this section, the director has the discretion to enter into a settlement agreement and accept as consideration an amount less than the minimum fine allowed by subsection (1)(b)(II) of this section.    Notwithstanding articles 40 to 47 of this title 8, fines pursuant to this section may be imposed only for periods that take place no more than three years prior to the date an employer is notified by the division of a potential violation of the requirements of articles 40 to 47 of this title 8.    This subsection (1.5) is repealed, effective July 1, 2022. Before its repeal, this subsection (1.5) is scheduled for review in accordance with section 24-34-104.             A cease-and-desist order issued or fine imposed by the director under subsection (1) of this section shall include specific findings of fact that reflect:   The employer received notice of a hearing, when applicable;    The employer employs employees for whom it must carry workers' compensation insurance under the provisions of articles 40 to 47 of this title;    The employer does not or did not have a policy of workers' compensation insurance in effect; and    The employer continues or continued to operate its business in the absence of such coverage.       Notwithstanding any other provision of articles 40 to 47 of this title, after the entry of a cease and desist order and upon the request of the director, the attorney general shall immediately institute proceedings for injunctive relief against the employer in the district court of any county in this state where such employer does business. In any such district court proceeding, a certified copy of any cease and desist order entered by the director in accordance with the provisions of subsection (1) of this section based upon evidence in the record shall be prima facie evidence of the facts found in such record. Such injunctive relief may include the issuance of a temporary restraining order under rule 65 of the Colorado rules of civil procedure, which order shall enjoin the employer from continuing its business operations until it has procured the required insurance or has posted adequate security with the court pending the procurement of such insurance. The court, in its discretion, shall determine the amount that shall constitute adequate security.    The issuance of an order to cease and desist, the imposition of a fine pursuant to subsection (1) of this section, or the issuance of an order for injunctive relief against an employer for failure to insure or to keep insurance in force as required by articles 40 to 47 of this title shall be the penalty for such failure within the meaning of section 8-43-304 (1) and such penalty shall be in addition to the increase in benefits that section 8-43-408 requires.    The director or administrative law judge shall report to the division each time a fine is imposed pursuant to subsection (1) of this section. Each such report shall include the amount of the fine and the name of the offending party.    A certified copy of any final order of the director ordering the payment of a fine imposed pursuant to subsection (1) of this section may be filed with the clerk of the district court of any county in this state at any time after the period of time provided by articles 40 to 47 of this title for appeal or seeking review of the order has passed without appeal or review being sought or, if appeal or review is sought, after the order has been finally affirmed and all appellate remedies and all opportunities for review have been exhausted. The party filing the order shall at the same time file a certificate to the effect that the time for appeal or review has passed without appeal or review being undertaken or that the order has been finally affirmed with all appellate remedies and all opportunities for review having been exhausted. The clerk of the district court shall record the order and the filing party's certificate in the judgment book of the court and entry thereof made in the judgment docket, and it shall thereafter have all the effect of and constitute a judgment of the district court, and execution may issue thereon from said court as in other cases. Any such order may be filed by and in the name of the director.    Fines collected pursuant to this section on or after July 1, 2018, shall be transmitted to the state treasurer, who shall credit the total amount of the fine to the Colorado uninsured employer fund, created in section 8-67-105.    For the purposes of this section, “construction site” means a location where a structure that is attached or will be attached to real property is constructed, altered, or remodeled.      History. Source: L. 90: Entire article R&RE, p. 516, § 1, effective July 1. L. 91: Entire section amended, p. 1326, § 42, effective July 1. L. 93: Entire section amended, p. 1279, § 1, effective June 6. L. 98: (1), (2), and (4) amended and (5) to (7) added, p. 161, § 1, effective April 6. L. 2004: IP(1) amended and (8) added, p. 614, § 1, effective August 4. L. 2005: (1), IP(2), (2)(c), (2)(d), and (7) amended, p. 198, § 1, effective July 1. L. 2009: IP(2) and (2)(a) amended,(SB 09-070), ch. 49, p. 176, § 4, effective August 5. L. 2017: (1.5) added and (7) amended,(HB 17-1119), ch. 317, p. 1707, § 8, effective July 1.    Editor's note:   This section is similar to former § 8-52-110 as it existed prior to 1990.   ANNOTATION   Law reviews. For article, “HB 17-1119 Brings Reform to Workers' Compensation”, see 46 Colo. Law. 58 (Nov. 2017).   Subsection (1) does not violate an employer's right to due process by requiring that the employer timely request a prehearing conference as a prerequisite to an administrative hearing. The statute, as clarified by the notice to show compliance, provides an employer with the opportunity to respond and present supporting evidence of the employer's compliance or exempt status. Therefore, it affords the necessary procedural protections and does not violate the employer's right to due process. Kuhndog, Inc. v. Indus. Claim Appeals Office, 207 P.3d 949 (Colo. App. 2009).   When determining whether a fine imposed for an employer's failure to maintain workers' compensation insurance is constitutionally excessive under the eighth amendment, the employer's ability to pay should be considered. Dami Hospitality v. Indus. Claim Appeals Office, 2017 COA 21 , 457 P.3d 621, aff'd in part and rev'd in part on other grounds sub nom. Colo. Dept. of Labor & Emp't v. Dami Hosp., 2019 CO 47M, 442 P.3d 94.   In evaluating whether a fine imposed against an employer for failing to maintain workers' compensation insurance is constitutionally excessive, the relevant inquiry is whether each per diem fine is grossly disproportionate to the violation, and not whether the aggregate amount of fines imposed is excessive. Colo. Dept. of Labor & Emp't v. Dami Hosp., 2019 CO 47M, 442 P.3d 94.