OAR 436-080-0040: Assessment of Civil Penalties Against Noncomplying Employer

(1) Calculation of premium amounts. For the purpose of this rule, “premium for the period of noncompliance” means the estimated premium the employer would have paid during the period of noncompliance if workers’ compensation insurance had been provided. The director will estimate the premium for the period of noncompliance, subject to the following: (a) The director will use the applicable assigned risk rates established by the National Council on Compensation Insurance effective during the period of noncompliance. The rates are available for purchase at www.ncci.com, or are available for review during regular business hours at the Workers’ Compensation Division, 350 Winter Street NE, Salem OR 97301; (b) If the employer provides payroll information that is adequate to determine actual payroll amounts and duties performed by workers, the director will assign the payroll amounts to the applicable assigned risk rates; and (c) If the employer does not provide payroll information that is adequate to determine actual payroll amounts and duties performed by workers: (A) The director may estimate payroll by multiplying the total number of workers employed during the period of noncompliance by the state average weekly wage; and (B) The director may assign all estimated payroll to the classification that best describes the employer’s type of business. (2) Assessment of civil penalties under ORS 656.735(1). The director will assess a civil penalty under ORS 656.735(1) for a person’s first violation of ORS 656.052(1) in an amount equal to the greater of: (a) $1,000; or (b) 200 percent of premium for the period of noncompliance. (3) Assessment of civil penalties under ORS 656.735(2). If an employer continues to violate ORS 656.052(1) after an order under OAR 436-080-0010 has become final, the director will assess an additional civil penalty of not more than $250 for each calendar day the violation continues, commencing with the first day of noncompliance after the initial noncomplying period. To determine the amount of a civil penalty assessed under this section, the director may consider factors including, but not limited to: (a) The number of subject workers employed by the noncomplying employer; (b) The nature of the noncomplying employer’s business; (c) The premium for the period of noncompliance; and (d) The employer’s compliance history. (4) Penalty reductions. The director may reduce the amount of a civil penalty assessed under section (2) or (3) of this rule, subject to the following: (a) To be eligible for a reduced penalty, the employer must: (A) Agree to not contest the penalty order; (B) Provide evidence that the employer has complied with ORS 656.017, or that it is no longer a subject employer; (C) Provide adequate payroll information to enable the director to calculate premium for the period of noncompliance under subsection (1)(b) of this rule; and (D) Make arrangements for prompt payment of the reduced penalty amount; (b) The director will not reduce a civil penalty if the employer fails to comply with subsection (a) before the order assessing the penalty becomes final, unless the director determines there was good cause for the delay; (c) A penalty assessed under section (2) of this rule may be reduced to the greater of: (A) $500; or (B) 105 percent of premium for the period of noncompliance; and (d) A penalty assessed under section (3) of this rule may be reduced to the greater of: (A) $1,000; or (B) 150 percent of premium for the period of noncompliance. If 150 percent of premium for the period of noncompliance is equal to or greater than $250 per calendar day of noncompliance, there will be no reduction of the penalty amount.