2023 Laws of Puerto Rico › TITLE ELEVEN - Workmen’s Compensation (§§ 1 — 268) › Chapter 1 - Workmen’s Accident Compensation (§§ 1 — 42) › § 16 - Uninsured employers

In case of an accident to a workman or employee while working for an employer who, in violation of law, is not insured, the Manager of the State Insurance Fund shall determine the proper compensation plus the expenses in the case, and shall collect from the employer, to be covered into the Uninsured-Employer Cases Fund hereinafter created, such compensation and expenses, both of which shall constitute a lien on all the property of the employer; Provided, That said compensation and expenses are hereby declared to be liens preferred over any other charge or lien for taxes or for any other reason, with the exception of mortgage credits, crop loans, and property taxes on property encumbered for three years and the current annuity burdening the property of the employer upon its attachment to secure the said compensation and expenses; Provided, further, That the Industrial Commission shall grant both the employer and the workman or employee in the case an opportunity to be heard in their defense, following, as far as possible, the practice observed in the Court of First Instance; and Provided, also, That if after the parties have been summoned by such means as the Commission may adopt, they or either of them should fail to appear to be heard in their defense, it shall be understood that such party or parties waive their rights, and the Industrial Commission may decide the case in default, without further delay.
If any employer comprised in this chapter should fail to insure the payment of compensation for work accidents pursuant to this chapter, any injured worker or employee or their beneficiaries may act against said employer by filing a petition for compensation before the Industrial Commission, and may also file suit for damages against the employer, as if this chapter were not applicable. Provided, That at the time the suit for damages is filed, the injured worker or employee or their beneficiaries shall meet the requirement of sending a copy of the suit to the Administrator by certified mail. Once the case is filed, the court shall require evidence that the Administrator has been notified. If said requirement has not been met, the court shall grant the plaintiff fifteen (15) days to do so. If after this period such evidence has not been presented the suit shall be dismissed. Whenever the court determines that there is just cause for action after an examination of the complaint, which must be duly sworn, they shall be entitled in such suit, without giving bond, to attach the employer’s property in the amount determined by the court to secure payment of the judgment handed down. The lawyers’ fees which shall be fixed by the court shall be included in the attachment which shall be maintained until judgment has been rendered and the amount thereof has been paid. If, as a result of said suit for damages, judgment is handed down against the employer in excess of the compensation fixed hereunder the compensation fixed, if paid or secured by a collateral approved by the court, shall be deducted from the judgment.
In such proceedings, the fact that the workman or employee was guilty of contributory negligence; or that he assumed the risk of the injury; or that the injury was caused by the negligence of a contractor or independent subcontractor, unless such contractor or independent subcontractor is insured in accordance with the provisions of this chapter, shall not constitute a defense for the employer.
No contract made between an employer and a workman or employee purporting to allow the use of any of these defenses shall be valid.
In those cases where the controversy is between the employer and the Manager, in connection with the insurance coverage (employer’s status), if the employer refuses to accept liability for the accident, the case shall be taken by the Manager to the Industrial Commission, which shall decide the controversy following the procedure established by this chapter; but if the employer accepts liability for the accident, the Manager shall, after the workman has received proper medical attendance, and has been discharged, proceed to liquidate the case, and shall collect from the employer the amount of the workman’s compensation plus expenses incurred.
In those cases in which the employer is uninsured and the dispute is between the worker and the employer, the worker may appear before the Industrial Commission which shall attend to those cases urgently and preferentially and upon a statement of the worker setting forth the pertinent and necessary facts, the Industrial Commission shall refer the worker to the Administrator so that the latter may provide medical assistance and once the worker has been discharged, shall proceed to liquidate the case and collect from the employer the compensation and the expenses incurred as provided in this chapter. In those cases whereby the worker is somehow disabled, the employer shall be given the opportunity to contradict the medical evidence, should he/she so wish, in which case the employer may appear before the Industrial Commission within the term fixed in § 11 of this title. Furthermore, the Administrator of the State Insurance Fund Corporation, in preparing the liquidation in these cases shall include therein a penalty equal to thirty percent (30%) of the total amount of the liquidation; Provided, That said penalty shall not be less than five hundred dollars ($500). The total amount of said penalty shall be covered into the Fund for Uninsured Employer Cases.
Expenses for medical attendance, hospitalization, medicines, compensation and other expenses in the case of uninsured employers, shall be paid by the Manager chargeable to the Uninsured-Employer Cases Fund, pursuant to the provisions of § 3 of this title once the amount thereof chargeable, in like manner as in the insured cases, is determined and without waiting to collect the compensation from the uninsured employer. Said fund shall be made up from a contribution equivalent to two thousand dollars ($2,000) for each case of death in which compensation has not been allocated due to the absence of legal dependency; from the proceeds from all the fines and penalties for violations of this chapter covered into the State Fund, plus the amount of the collections made as a result of the liquidation of cases of uninsured employers. Employers from whom is collected, according to law, the total amount of the premium levied upon them for the current year, and further, for the immediately preceding year, on the basis of a total computation of the salaries, wages and other remunerations paid to his employees, plus the amount of the liquidations of accident cases which occurred under their employ during any period of time for which they may have been declared uninsured employers, shall not be subject to the penalty prescribed in the foregoing paragraph.
The Manager of the State Insurance Fund is hereby authorized to transfer from the Reserve Fund to the Uninsured-Employer Cases Fund up to the amount of five hundred thousand dollars ($500,000), which amount shall be devoted to cover the costs of cases which on the date of approval of this act may be pending collection; Provided, That the total amount of the collections hereinafter made in cases of uninsured employers, paid chargeable to the funds herein authorized to be transferred, shall be reimbursed to the Reserve Fund; and Provided, further, That there shall be maintained in the Uninsured-Employer Cases Fund, through transfer from the Reserve Fund when necessary, and subject to reimbursement, sufficient funds which at no time shall be less than fifty thousand dollars ($50,000), for the prompt payment of future cases of uninsured employers. Provided, That for Fiscal Year 2012-2013, the sum of twenty-four million dollars ($24,000,000) shall be transferred from the Reserve Fund to the 2012-2013 Budget Support Fund. Provided, further, That for Fiscal Year 2013-2014, the sum of forty million dollars ($40,000,000) shall be transferred from the Reserve Fund to the 2013-2014 Budget Support Fund in two installments of twenty million dollars ($20,000,000) to be made on or before September 30 th, 2013 and March 31 st, 2014, respectively. Likewise, for Fiscal Year 2014-2015, the sum of fifteen million dollars ($15,000,000) shall be transferred from the Reserve Fund to the Legal Liability Fund.
Likewise, there shall be transferred from the Reserve Fund and/or any other account thus identified by the State Insurance Fund Corporation, the sum of fifty-five million, four hundred and thirty thousand dollars ($55,430,000) to the “2015-2016 Municipal Support Fund’; the sum of thirty-one million, nine hundred and forty-nine thousand dollars ($31,949,000) to the “2015-2016 Legal Liability Fund’; and the sum of twelve million, six hundred and twenty-one thousand dollars ($12,621,000) to the “Special Education Student’s Therapy and Service Fund”, created by Act No. 73-2014, for a total of one hundred million dollars ($100,000,000).
The Manager of the State Insurance Fund or the person he may designate is hereby authorized to collect, by constraint proceeding as established in the Administrative Political Code of Puerto Rico, the liquidations of cases of uninsured employers, which shall include all expenses incurred.
In those cases in which it may be necessary to sell at public auction the employer’s property which was attached, to insure recovery of the compensation, expenses, and the penalty that may be fixed in the case, the Manager of the State Insurance Fund shall, if no bidder attends, adjudicate the property object to the sale to the State Insurance Fund for the amount of the debt; Provided, That the employer may redeem the property within the term of one year from the date of the adjudication, subject to the payment of the compensation awarded, plus expenses and other additional charges; Provided, That in any case in which, prior to the taking effect of this act, the Commonwealth of Puerto Rico has adjudicated to itself any property attached to insure recovery of the compensation accruing to a workman or employee, or to his beneficiaries, according to the provisions of the Workmen’s Accident Compensation Act, if said property is not being used by the Commonwealth of Puerto Rico, or has not been sold or transferred, such property shall be transferred by the Commonwealth of Puerto Rico to the State Insurance Fund, in payment of the debt, giving for such purposes the corresponding property ownership title, and the owners, successors or assignees must be notified immediately in person and/or by edicts, if their address or whereabouts are unknown, of the act and date of said transfer to the State Insurance Fund.
The owners, successors or assignees of the properties so transferred may redeem the said properties within the term of one year, reckoning from the date of the transfer to the State Insurance Fund, by paying to the latter the sum owed plus expenses and additional charges which the Commonwealth of Puerto Rico has incurred in the possession of the property.
The Manager may alienate, through sale in public auction, the properties acquired as provided above, once the term fixed for its redemption has elapsed. From the amount of the sale there shall be deducted the costs of the case and any balance thereof shall be refunded to the owner of the property, or to his successors or assignees.
The provisions of § 3 of this title shall be applicable to cases of uninsured employers.
In cases declared uninsured in which the accident is due to negligence of a third person, the uninsured employer who has paid to the State Insurance Fund the total amount of the liquidation of the case or who has secured payment by depositing a bond to the satisfaction of the Manager, may subrogate himself to the rights of the workman to recover the expenses incurred by him as a result of the accident. The workman or employee or his beneficiaries shall be parties to the proceeding brought in the cause of action they may have against a third person or against the uninsured employer, as the case may be, and any sum collected in excess of the sum paid to the State Insurance Fund by the uninsured employer to cover the liquidation of the case shall be paid to the injured person or to his beneficiaries in case of death, and no extra-judicial transaction shall be valid without their consent.
History —Apr. 18, 1935, No. 45, p. 250, § 15; Apr. 22, 1942, No. 43, p. 454, § 1; May 14, 1943, No. 162, p. 524, § 1; June 22, 1957, No. 94, p. 439, § 5; June 26, 1959, No. 88, p. 246, § 1; June 24, 1960, No. 96, p. 26, § 1; May 18, 1987, No. 20, p. 61, § 1; renumbered as § 13 on July 1, 1996, No. 63, § 3; Sept. 16, 2004, No. 343, § 3; July 2, 2012, No. 134, §. 3; June 30, 2013, No. 43, § 6, eff. July 1, 2013; July 1, 2014, No. 78, § 15; July 2, 2015, No. 105, § 3.