Code of Vermont Rules › Agency 24 - DEPARTMENT OF LABOR › Sub-Agency 010 - ADMINISTRATIVE DIVISION › Chapter 005 - RULE 45.0000 - RULES FOR ADMINISTRATIVE CITATIONS AND PENALTIES › Section 24 010 005 - RULE 45.0000 - RULES FOR ADMINISTRATIVE CITATIONS AND PENALTIES

Current through June, 2024
45.1000 Scope of Rules
These rules establish the procedure for issuing administrative
				citations, conducting hearings on citations and penalties, and assessing
				penalties.
The Commissioner, after notice and an opportunity for a
				hearing, may assess an administrative penalty against any person who violates
				the Workers' Compensation statute or any rule adopted pursuant to it, or any
				order issued by the Commissioner or the Workers' Compensation Division.
45.2000 Authority to Adopt Rules
45.2100. These rules are adopted
			 pursuant to
			 21 V.S.A. §§
										602,
			 603,
			 604,
			 663b,
			 688,
			 689,
			 690(b),
			 692,
			 702,
			 704,
			 705, and
			 708.
			 (Employer liability and Workers' Compensation);
45.2200.
									8 V.S.A. §§
										4793(c) and
			 4803.
			 (Licensing requirements); and
45.2300. 3 V.S.A. §§ 809-815.
			 (Administrative Procedure).
45.3000 Issuance of Administrative Citations
45.3100. The Director of the Workers'
			 Compensation and Safety Division may issue an administrative citation to any
			 person, including an employee, employer, attorney, medical provider, insurer or
			 a representative of the insurer, if the Director determines after an
			 investigation that the person has:
45.3110. Refused or neglected to comply with
			 the provisions of the Workers' Compensation Act (21 V.S.A. Chapter
			 9);
45.3120. Refused or neglected
			 to comply with the rules promulgated pursuant to the Act;
45.3130. Refused or neglected to file in a
			 complete and timely fashion any reports required by the Act or the rules, or
			 when ordered to do so by the Commissioner;
45.3140. Refused or neglected to comply with
			 any interim or final order issued by the Commissioner or his or her
			 representative; or
45.3150.
			 Willfully made a false statement or representation for the purpose of obtaining
			 any benefit or payment for either himself or herself or any other
			 person.
45.3200. Service of
			 Citation.
The administrative citation shall be served on the person by
				certified mail or personal service. Each citation shall be in writing and shall
				specifically describe the nature of the violation and include a citation to the
				specific statute, rule, or order alleged to have been violated. The citation
				shall also state the amount of the administrative penalty imposed, the
				debarment period if applicable, and the process for requesting a
				hearing.
45.3300. Response.
The person served with an administrative citation shall have 20
				days from the date of service to notify the Director in writing of his or her
				intent to contest the administrative citation and penalty. If the person does
				not file a notice contesting the citation, the citation and penalty shall be
				deemed a final order of the Commissioner.
45.3400. Enforcement Authority Not Limited
Administrative citations and penalties issued under these rules
				shall not limit the authority of the Commissioner to issue orders or seek
				injunctive relief and penalties through the court, or to take any other
				appropriate enforcement action authorized by law.
45.3500. Investigations and Determinations
			 Under
			 21 VSA §
										663b.
45.3510. If an allegation of claimant fraud
			 is submitted to the Department, a determination shall be made as to whether
			 further investigation is warranted. If warranted, the Commissioner shall order
			 the Workers' Compensation insurer to investigate the specific allegations of
			 fraud and submit a written report to the Department.
45.3520. The report submitted to the
			 Department shall contain:
45.3521.
			 A description of all action taken to investigate the allegations;
45.3522. The names and contact information of
			 all persons interviewed, along with a copy of any statements taken;
45.3523. Copies of any photographs, videos,
			 or other recordings taken as part of the investigation; the reports of any
			 investigators hired as part of the investigation; and,
45.3524. The insurer's opinion as to whether
			 fraudulent activity has occurred.
45.3525. The insurer shall provide the
			 Department with a status report on its investigation every 30 days, until a
			 final report is submitted.
45.3526.
			 The investigation and report shall be in addition to any actions related to
			 adjusting the claim.
45.3530. Upon
			 receipt of the insurer's report the Commissioner shall determine whether it is
			 complete, or whether additional information is necessary. Once a completed
			 report is received, the Commissioner shall provide the claimant with an
			 opportunity to respond in person or in writing within 30 days.
45.3540. After providing the claimant an
			 opportunity to respond, the Commissioner shall make a determination as to
			 whether fraud has occurred, and may assess penalties and order reimbursement as
			 appropriate.
45.4000
			 Administrative Citation and Penalty Hearing
45.4100. A person contesting a citation and
			 penalty issued pursuant to Rule
			 45.3000 shall be entitled to
			 a hearing before the Commissioner within 60 days of filing the notice to
			 contest. The 60-day time frame may be extended by the Commissioner if the
			 person makes a written request for additional time to prepare for the
			 hearing.
45.4200. Hearing Notice.
The hearing notice shall include the following:
45.4210. A statement of the time,
			 place, and nature of the hearing;
45.4220. A statement of the legal authority
			 and jurisdiction under which the hearing is to be held;
45.4230. A reference to the specific statute,
			 rule, or order involved in the hearing; and
45.4240. A short and plain statement of the
			 matters at issue.
45.4300. The
			 Commissioner shall appoint a hearing officer to hear the evidence, prepare
			 findings, and issue a decision. The procedures set forth in 3 V.S.A.
			 §§ 809-813, and § 815 shall apply to all hearings conducted
			 under these rules.
45.4400. The
			 person may appear at the hearing with counsel, present evidence, and examine
			 and cross-examine witnesses.
45.4500. Evidence shall be admitted at the
			 hearing as provided in
			 3 V.S.A. §
										810.
45.4600. The hearing officer may compel by
			 subpoena the attendance and testimony of witnesses and the production of books
			 and records in accordance with
			 21 V.S.A.
			 §
										603(a), and
			 3 V.S.A.
			 §§ 809a and 809b.
45.4700. Nothing in this section shall
			 prohibit the informal disposition of a citation by stipulation, agreed
			 settlement, consent order, or default. An informal disposition of the citation
			 may proceed using clear and simple documentation without complete adherence to
			 the requirements of this section.
45.5000 Administrative Penalties
45.5100. False Statement or
			 Representation.
45.5110. A person
			 who willfully makes a false statement or representation for the purpose of
			 obtaining any benefit or payment either for himself or herself or another
			 person shall be assessed an administrative penalty of not more than $
			 20,000.00, in accordance with
			 21 V.S.A. §
										708.
45.5120. Except as provided in 45.5160 -
			 45.5190, the Commissioner shall not reduce a penalty imposed under rule 45.5110
			 if:
45.5130. The false statement or
			 representation was made to establish the compensability of the claim;
			 or
45.5140. The false statement or
			 representation involved falsifying medical records; or
45.5150. The false statement or
			 representation was sworn testimony.
45.5160. Penalty Reduction Factors.
The Commissioner may reduce the penalty if the person
				demonstrates:
45.5170. That
			 the person has repaid or entered into an agreement to repay the benefits or
			 amounts received as a result of the false statement or representation;
			 and
45.5180. The benefit or payment
			 gained was less than the amount of the penalty; or
45.5190. The person has agreed to forfeit any
			 claim for additional Workers' Compensation benefits based on the alleged
			 workplace injury.
45.5200.
			 Forfeiture of Benefits.
45.5210. An
			 employee who willfully makes a false statement or representation of material
			 fact for the purpose of obtaining a Workers' Compensation benefit shall forfeit
			 all or a portion of his or her right to benefits based on the alleged workplace
			 injury.
45.5220. Partial Forfeiture
			 of Benefits.
45.5230. In the
			 Commissioner's discretion, an employee may forfeit only a portion of his or her
			 Workers' Compensation benefits if:
45.5240. The employee has repaid the benefits
			 or entered into an agreement to repay the benefits received as a result of the
			 false statement or representation; or
45.5250. The benefit or payment to be gained
			 was less than $ 1,000.00; or
45.5260. The benefit or payment to be gained
			 was limited to one portion of the Workers' Compensation benefit to which the
			 employee was entitled. In this instance, the benefits owed the employee that
			 were not received as a result of the false statement or representation shall
			 not be forfeit.
45.5300. Referral
			 to Department of Financial Regulation.
Whenever the Commissioner has reason to believe that an
				employer has willfully made a false statement or representation for the purpose
				of obtaining a lower Workers' Compensation premium, written notice and any
				supporting documentation shall be provided to the Commissioner of Financial
				Regulation along with a request to investigate and take any appropriate action
				on the matter.
45.5400.
			 Debarment; False Statement or Representation.
45.5410. In addition to the penalties listed
			 in rule 45.5110 above, the Commissioner shall prohibit an employer who
			 willfully makes a false statement or representation for the purpose of deriving
			 any benefit, including a lower insurance premium, from contracting, directly or
			 indirectly, with the State or any of its subdivisions, for up to three
			 years.
45.5420. Any prohibition
			 from contracting with the State shall be made only after consultation with the
			 Commissioner of Buildings and General Services or the Secretary of
			 Transportation, or other agencies as appropriate. When the Commissioner
			 believes that debarment is appropriate, the Commissioner shall provide written
			 notice and supporting documentation to the Commissioner of Buildings and
			 General Services or the Secretary of Transportation or other Agency or
			 Department head as appropriate. The debarment shall be ordered if no objection
			 is raised by the Department or Agency consulted within five business days of
			 receiving notice of the proposed debarment. If an objection is raised, the
			 Commissioner shall consider it, but in his or her discretion may order the
			 debarment nevertheless.
45.5440. An
			 initial violation shall subject the employer to a debarment period of one
			 year.
45.5450. A second violation
			 occurring within three years of the previous violation shall subject the
			 employer to a debarment period of two years.
45.5460. A third or subsequent violation
			 occurring within three years of the most recent violation shall subject the
			 employer to a debarment period of three years.
45.5470. The Commissioner may reduce the
			 period of debarment if the employer demonstrates that the non-compliance was
			 the result of a good faith misunderstanding of the law's requirements,
			 excusable neglect, or other mitigating factor.
45.5500. Administrative Penalty; Failure to
			 Insure.
45.5510. An employer that
			 fails to comply with the requirements of
			 21 V.S.A. §
										687 (maintaining workers' compensation
			 insurance or self-insurance as required by law) shall be assessed an
			 administrative penalty of not more than $ 100.00 per day for the first seven
			 days that the employer neglected to secure coverage and not more than $ 150.00
			 for every day thereafter. An employer shall ensure that any subcontractor it
			 has hired for a particular job is in compliance with
			 21 V.S.A. §
										687.
The per day penalty shall be based on the annual- North
				American Classification System (NAICS) for the employer. NAICS groupings for
				Industry Sector may be found in the appendix to this rule.
45.5511. For employers with NAICS Industry
			 Sectors 11, 51, 52, 53, 54, 55, 61, 71, 92, the penalty shall be $ 30 per day
			 for each day without insurance for an initial violation. If a second violation
			 occurs within three years of the initial violation, the per day penalty shall
			 be doubled. If a third violation occurs within three years of the initial
			 violation the penalty shall be assessed at the full statutory rate.
45.5512. For employers with NAICS Industry
			 Sectors 31, 32, 33, 42, 44, 45, 62 the penalty shall be $ 40 per day for each
			 day without insurance for an initial violation. If a second violation occurs
			 within three years of the initial violation, the per day penalty shall be
			 doubled. If a third violation occurs within three years of the initial
			 violation the penalty shall be assessed at the full statutory rate.
45.5513. For employers with NAICS Industry
			 Sectors 21, 22, 23, 48, 49, 56, 72, 81 the penalty shall be $ 50 per day for
			 each day without insurance for an initial violation. If a second violation
			 occurs within three years of the initial violation, the per day penalty shall
			 be doubled. If a third violation occurs within three years of the initial
			 violation the penalty shall be assessed at the full statutory rate.
45.5520. Penalty Reduction Factors.
The Commissioner may reduce the penalty assessed under section
				45.5500 if the employer demonstrates:
45.5530. That the failure to secure or
			 maintain Workers' Compensation insurance was inadvertent or the result of
			 excusable neglect and was promptly corrected;
45.5540. That the penalty amount
			 significantly exceeds the amount of any premium expenditures that would have
			 been paid if an insurance policy had been properly secured or maintained;
			 or
45.5550. That the small size of
			 the employer and the non-hazardous nature of the employment presented minimal
			 risk to employees.
45.5560. Failure
			 to Insure; Stop-Work Order.
45.5570. If an employer fails to comply with
			 the requirements of
			 21 V.S.A. §
										687 after investigation by the Commissioner,
			 the Commissioner shall issue an emergency stop-work order to the employer.
			 Additionally, an employer that fails to secure Workers' Compensation coverage
			 after being ordered in writing to do so by the Commissioner shall be assessed
			 an administrative penalty of up to $ 250.00 for every day the employer fails to
			 obtain coverage after being ordered to do so, and may also be assessed an
			 administrative penalty of up to $ 250.00 per employee for every day that the
			 employer has failed to secure the ordered Workers' Compensation
			 coverage.
45.5571. The stop-work
			 order shall clearly state the name of the employer, the penalties for violating
			 the order, the process for having the order rescinded, and the method to appeal
			 the order.
45.5572. A stop-work
			 order may be appealed pursuant to VRCP 75.
45.5580. Debarment; Violation of Stop-Work
			 Order.
45.5590. In addition to the
			 penalties listed in Rule 45.5570 above, the Commissioner shall prohibit an
			 employer that has been issued a stop-work order pursuant to
			 21 V.S.A.
			 §
										692(b) from
			 contracting, directly or indirectly, with the State or any of its subdivisions,
			 for up to three years.
45.5591.
			 Prior to issuing any debarment penalty, the Commissioner shall consult with the
			 Commissioner of Buildings and General Services and the Secretary of
			 Transportation, or other agencies as appropriate. The consultation may occur
			 informally provided that a written or electronic record of that consultation
			 naming the employer involved, a description of the violation(s), the proposed
			 debarment period, and any response received from the Commissioner of Buildings
			 and General Services or the Secretary of Transportation is maintained. The
			 debarment shall be ordered if no objection is raised by the Department or
			 Agency consulted within five business days of receiving notice of the proposed
			 debarment. If an objection is raised, the Commissioner shall consider it, but
			 in his or her discretion may order the debarment nevertheless.
45.5592. An administrative determination
			 shall be issued to advise the employer of the debarment period and the
			 employer's appeal rights.
45.5593.
			 In establishing a debarment period under this section, the Commissioner may
			 consider any relevant mitigating factors, including the employer's good faith
			 or excusable neglect, or the impact of debarment on public health and
			 safety.
45.5594. An initial
			 violation shall result in a debarment period of one year, prior to
			 consideration of any mitigating factors.
45.5595. A second violation occurring within
			 three years from the previous violation shall result in a debarment period of
			 two years, prior to consideration of any mitigating factors.
45.5596. A third or subsequent violation
			 occurring within three years from the most recent violation shall result in a
			 debarment period of three years, prior to consideration of any mitigating
			 factors.
45.5597. Notwithstanding
			 any mitigating factors, the debarment period shall not be less than the period
			 during which the employer was in violation of
			 21 V.S.A. §
										687.
45.6000 Severability Clause
In the event any part or provision of these rules is held to be
				illegal, this shall not have the effect of making void or illegal any of the
				other parts or provisions of these rules.
45.6600 Other Penalties
45.6610. Non-compliance with an interim or
			 final order.
Any person, including an employer or Workers' Compensation
				insurance carrier who fails to comply with an interim or final order of the
				Commissioner shall be assessed a penalty of $ 500.00. An additional penalty of
				$ 100.00 per day shall be assessed for each day the person fails to comply
				after the date set for compliance. The total penalty shall not exceed $
				5,000.00. The Commissioner may reduce the penalty if the person demonstrates
				that non-compliance was the result of excusable neglect.
45.6620. A self-insured employer or Workers'
			 Compensation insurance carrier that fails to ensure that any of its agents or
			 subcontractors complies with the Workers' Compensation statute or rules, or
			 with an interim or final order of the Department, shall be assessed a penalty
			 of $ 500.00 for a first offense. A first offense shall be defined as one
			 instance of failing to comply with the statute, rule, or order in one claim.
			 The employer or a Workers' Compensation insurance carrier shall be assessed an
			 additional penalty of $ 500.00 for each additional instance of failing to
			 comply but shall not be assessed a penalty in excess of $ 5,000.00. In
			 addition, the agent or subcontractor of an employer or insurer who refuses or
			 neglects to comply shall be assessed a penalty of $ 50.00 for each instance of
			 refusing or neglecting to comply with the Act, but shall not be assessed a
			 penalty in excess of $ 5,000.00.
45.6630. Penalty; Failure to Submit Forms or
			 Reports; Technical Violations
45.6635. An employer that fails to submit a
			 First Report of Injury (Form 1) within 72 hours of receiving notice or
			 knowledge of a claimed work-related injury causing an absence of one day or
			 more, or necessitating medical attendance, shall be assessed a penalty of $
			 100.00 for each violation.
45.6640
			 An employer that fails to provide an employee with a copy of the First Report
			 of Injury (Form 1) promptly, after filing it with the Department, shall be
			 assessed a penalty of $ 50.00 for each violation.
45.6650. Any person, including an employer or
			 Workers' Compensation insurance carrier who fails to submit any form required
			 by the Workers' Compensation statute or rules to be filed with the Department
			 shall be assessed a penalty of $ 100.00 for each violation.
45.6660. An employer or insurance carrier
			 that fails to comply with
			 21 V.S.A. §
										640a shall be assessed a penalty of $
			 500.00.
45.6670. An employer or
			 Workers' Compensation insurance carrier that fails to file any interim or final
			 report required by
			 21 V.S.A. §§
										701,
			 702,
			 or
			 703
			 shall be assessed a penalty of $ 100.00 for each violation.
45.6680. An employer or Workers' Compensation
			 insurance carrier that fails to file any statistical report requested by the
			 Commissioner or his or her designee pursuant to
			 21 V.S.A. §
										704 shall be assessed a penalty of $
			 1,000.00.
45.6690. The penalty for
			 any administrative or technical violation not otherwise noted in this section
			 shall be $ 500.00.
45.7000
			 Violations of 21 VSA Section 690(b)
45.7100. The Commissioner may issue a written
			 request directing an employer to provide a Workers' Compensation Compliance
			 Statement. Upon receipt of a request the employer shall provide all information
			 required by
			 21 VSA §
										690(b) within thirty days of
			 receiving the request. An employer may request additional time in which to
			 respond, and if good cause is demonstrated, the Commissioner may grant
			 additional time to respond.
45.7200. An employer that fails to comply
			 with a request for a compliance statement within thirty days, or if an
			 extension is granted, by the extension date may be subject to a penalty of up
			 to $ 5000.00 a week until compliance occurs.
45.72100. The penalty for a first offense
			 shall be $ 1000.00 for the first week of noncompliance and shall increase $
			 500.00 for each subsequent week up to a maximum of $ 5000.00 per week. The
			 penalty for subsequent failures to comply with a request for a compliance
			 statement shall be $ 5000.00 per week
45.72200. Penalty Reduction Factors
The Commissioner may reduce the penalty assessed under this
				section if the employer demonstrates:
That the failure to provide a compliance statement was
				inadvertent or the result of excusable neglect and was promptly corrected;
				or,
The assessed penalty is out of proportion with the small size
				of the employer.
Falsifying Compliance Statement
45.7300. An employer that falsifies
			 information on a compliance statement shall be subject to an administrative
			 penalty of $ 5000.00 for each week that the falsification occurred.
45.8000 Severability
In the event any part or provision of these rules is held
				invalid, the invalidity shall not affect the remainder of the rules that can be
				given effect without the invalid provision, and to this end these rules are
				severable.
45.9000
			 Effective Date
These Rules are effective February 13, 2017
Appendix to Rule 45. 2012 NAICS.
The following table provides a general description of the two
				digit NAICS sector codes and the corresponding Rule 45 penalty section.
Rule 45 Section
Sector
Description
$S 45.5511
11
Agriculture, Forestry, Fishing and Hunting
$S 45.5513
21
Mining, Quarrying, and Oil and Gas Extraction
$S 45.5513
22
Utilities
$S 45.5513
23
Construction
$S 45.5512
31-33
Manufacturing
$S 45.5512
42
Wholesale Trade
$S 45.5512
44-45
Retail Trade
$S 45.5513
48-49
Transportation and Warehousing
$S 45.5511
51
Information
$S 45.5511
52
Finance and Insurance
$S 45.5511
53
Real Estate and Rental and Leasing
$S 45.5511
54
Professional, Scientific, and Technical Services
$S 45.5511
55
Management of Companies and Enterprises
$S 45.5513
56
Administrative and Support and Waste Management and
						  Remediation Services
$S 45.5511
61
Educational Services
$S 45.5512
62
Health Care and Social Assistance
$S 45.5511
71
Arts, Entertainment, and Recreation
$S 45.5513
72
Accommodation and Food Services
$S 45.5513
81
Other Services (except Public Administration)
$S 45.5511
92
Public Administration
More detailed information on NAICS Codes and industry sectors
				is available at:
https://www.census.gov/cgi-bin/sssd/naics/naicsrch§chart=2012