If your employer has no State Insurance Fund policy

It is what Act 45-1935 provides when a worker is injured working for an employer which, in violation of the law, had no policy with the State Insurance Fund Corporation. The Act treats that situation differently from a normal case: the worker still receives treatment and compensation, but also regains the right to sue the employer for damages in court, a right they would not have had if the employer had been insured. The forum for the administrative case is the Industrial Commission, not the CFSE.

It applies to the worker or employee injured while working for a covered employer that was not insured, and to their beneficiaries in case of death. It is not the same as an insured employer refusing to fill out the accident report: there the policy exists and the case runs through the CFSE. Here the policy does not exist. Nor does the Act cover every accident: Article 4 excludes those occurring when the worker tries to commit a crime or to injure their employer or another person, when they injure themselves on purpose, when they are intoxicated and the intoxication caused the accident, and when their reckless imprudence was the sole cause of the injury.

• Every covered employer is obliged to insure its workers or employees with the State Insurance Fund Corporation and to post a written or printed notice, in a place visible to the public and easily legible, stating that it is insured (Article 16).Verified against the official source
• If the employer failed to insure, the injured worker or their beneficiaries may file a petition for compensation before the Industrial Commission and, in addition, bring an action for damages against the employer, just as if this Act did not apply (Article 13).Verified against the official source
• When starting the damages action, a copy of the complaint must be sent to the Administrator by certified mail. If evidence of that notice is not presented, the court gives fifteen (15) days and, that period having passed without it, dismisses the suit (Article 13).Verified against the official source
• The damages complaint must be sworn: the court examines it to find whether there is just cause of action before authorising attachment without bond over the employer’s property (Article 13).Verified against the official source
• In uninsured-employer cases both the worker and the employer may go to the Industrial Commission once the Administrator has declared the employer uninsured, and the employer has thirty (30) days to appeal that decision (Article 9).Verified against the official source
• No lawyer is needed to appear before the Administrator or the Industrial Commission. If one is hired, the Commission fixes the fee percentage, and in uninsured-employer cases that charge is made to the uninsured employer when the worker wins the case (Article 33).Verified against the official source

• The worker’s declaration before the Industrial Commission stating the pertinent and necessary facts, which is what the Commission uses to refer them to the Administrator for medical assistance (Article 13).
• The sworn damages complaint, if that action is brought, and the receipt of the certified-mail delivery of its copy to the Administrator (Article 13).

1. 1

   Step 1: First: do not go without treatment

   Article 13 is explicit that expenses for medical assistance, hospitalisation, medicine, compensation and other costs in uninsured-employer cases shall be paid by the Administrator charged to the Fund for Uninsured Employer Cases, once their amount is determined, in the same way as insured cases and without waiting for the compensation to be collected from the uninsured employer. That is, your employer having no policy does not put you outside the system nor force you to wait for the Fund to collect. The route is opened by the article itself: if the contention is between worker and employer, the worker may go to the Industrial Commission, which handles these cases with all urgency and preferentially, and after your declaration stating the pertinent facts the Commission refers you to the Administrator to provide due medical assistance.

2. 2

   Step 2: The protection the employer lost

   It is worth understanding the contrast because it changes your whole case. Article 18 says that when the employer insures its workers under this Act, the right to obtain compensation shall be the only remedy against the employer, even where the maximum compensation or benefits were granted. That is the insured employer’s immunity. Article 13 withdraws it where there was no policy: if any covered employer fails to insure the payment of compensations, any injured worker or their beneficiaries may proceed against that employer by filing a petition for compensation before the Industrial Commission and, in addition, may bring an action against the employer for damages, just as if this Act did not apply. Those are two routes, not an either-or: the administrative petition and the civil suit.

3. 3

   Step 3: The requirement that dismisses the suit if missed

   This is the paragraph that costs most to ignore. Article 13 provides that at the time of starting the damages action, the injured worker or their beneficiaries must comply with the requirement of sending a copy of their complaint by certified mail to the Administrator. Once the case is filed, the court will require evidence the Administrator has been notified. If that requirement was not met, the court will give the plaintiff fifteen days to do so, and if after that period the evidence has not been presented, the suit will be dismissed. Certified mail, to the Administrator, at the time of starting the action, and with the receipt kept: the Act offers no alternative way to evidence it and the remedy for non-compliance is dismissal.

4. 4

   Step 4: What the employer cannot raise in its defence

   The third paragraph of Article 13 closes three doors to the uninsured employer. In that proceeding it shall be no defence that the worker was guilty of contributory negligence, nor that they assumed the risk of the injury, nor that the injury was caused by the negligence of an independent contractor or subcontractor — this last with one proviso: unless that independent contractor or subcontractor had itself insured under the provisions of this Act. And the fourth paragraph closes the shortcut: no contract made between an employer and a worker proposing to permit the use of any of these defences shall be valid. If you were made to sign something along those lines, the Act says it does not count.

5. 5

   Step 5: Attachment without bond, and the deduction from the judgment

   Two economic rules from the same article. The first: in the damages action you will have the right, without posting bond, to attach the employer’s property for the amount the court determines to secure payment of the decision that follows, provided the court finds there is just cause of action after examining the complaint, which must be sworn. That attachment shall include attorney’s fees fixed by the court and shall be maintained until the case has been decided and the judgment amount satisfied. The second: if as a result of the damages action a judgment falls against the employer in excess of the compensation fixed by this Act, that fixed compensation, if paid or if secured with court-approved security, shall be deducted from the judgment. The same thing is not collected twice, but the excess is yours.

6. 6

   Step 6: What not insuring costs the employer

   Three layers. Administrative: the Administrator, when preparing the liquidation of these cases, includes a penalty equal to thirty per cent of the liquidation amount, and that penalty shall not be less than five hundred dollars; the money goes into the Fund for Uninsured Employer Cases. Property: the compensation and expenses the Administrator charges constitute a lien on all the employer’s property, declared preferential to every other charge or lien for taxes or any other concept, except mortgage credits, refaccionary credits and property taxes on the encumbered property for three years plus the current annuity. Criminal: Article 15 makes failing to insure a misdemeanour, punished with imprisonment for a term not exceeding six months or a fine not exceeding five thousand dollars, or both at the court’s discretion, and on a repeat both are imposed. The same penalty applies for failing to post the written or printed notice of being insured. The complaint is filed by the CFSE Administrator, its agents, an agent of the Department of Labour and Human Resources or of Treasury delegated by the Administrator, or any law enforcement officer.

7. 7

   Step 7: What an insured employer looks like, on the wall

   Article 16 describes the only sign the Act itself puts within a worker’s reach. Every covered employer must post a written or printed notice in a place visible to the public and in an easily legible form stating the fact of being insured. When the employer takes out its policy, the Corporation gives it the Printed Notice. And once the employer makes each semester’s payment, the Corporation gives a transparent gummed stamp printed with the year and semester covered by the payment, to be attached to the Printed Notice. That is: the notice on the wall with the current semester’s stamp on it. A missing notice does not by itself prove there is no policy — the one who declares an employer uninsured is the Administrator — but it is what the Act orders displayed, and not displaying it carries the same penalty as not insuring.

8. 8

   Step 8: Another thing the employer cannot do to you

   Article 20 addresses a different abuse and is worth naming here because it often appears alongside the previous one. No agreement made by an employee or worker to pay any portion of the premiums paid by their employer shall be valid. And any employer who for that purpose makes a deduction from the wages or salary of any employee entitled to this Act’s benefits, or who obtains from the employee a receipt stating they received as settlement of their compensation a sum of money that was not the one actually delivered, shall be guilty of a misdemeanour, subject to imprisonment for a term not exceeding six months or a fine not exceeding five thousand dollars. The Fund’s premium is paid by the employer. It does not come out of your cheque.

9. 9

   Step 9: If there was also a responsible third party

   The last paragraph of Article 13 covers the crossover. In cases declared uninsured where the accident arises from a third party’s negligence, the uninsured employer which has satisfied the Fund the amount of the case’s liquidation, or has secured its payment by depositing a bond satisfactory to the Administrator, may subrogate in the worker’s rights to recover the expenses incurred. In that proceeding you or your beneficiaries shall be a party, and any sum recovered in excess of the one satisfied to the Fund by the uninsured employer shall be made effective to you, or to your beneficiaries in case of death, without whose consent no extrajudicial settlement shall be valid. That consent is yours and is not a formality: without it, the agreement does not stand.

The administrative forum for these cases is the Industrial Commission of Puerto Rico, which is a separate agency from the State Insurance Fund Corporation. The Commission hears both employer and worker, giving them the opportunity to be heard and to defend themselves, adjusting as far as possible to the practices observed in the Court of First Instance; if a summoned party does not appear, they are understood to waive their right and the Commission may decide the case in default without further delay. Medical assistance is provided by the CFSE Administrator, to whom the Commission refers you. The damages action goes to court. The Act publishes no addresses, telephones, forms or portals for either agency, and we do not guess government internet addresses.

• Believing that if the employer has no policy you go without treatment: the Fund for Uninsured Employer Cases pays medical assistance in the same way as insured cases and without waiting to charge the employer.
• Filing the damages suit and not sending a copy to the Administrator by certified mail: the court gives fifteen days and then dismisses the suit.
• Thinking you must choose between the compensation petition and the damages suit: Article 13 allows both.
• Assuming Article 18’s immunity also protects the uninsured employer: that protection is only for the employer that insured its workers.
• Confusing this case with the employer who refuses to fill out the accident report: there the policy exists and the case runs through the CFSE.
• Accepting the employer’s plea that you were negligent or assumed the risk: Article 13 closes those defences when it was not insured.
• Signing an agreement letting the employer use those defences: the Act says no contract of that kind is valid.
• Letting the Fund premium be deducted from your cheque: Article 20 forbids it and punishes it as a misdemeanour.
• Believing you need a lawyer to appear before the Industrial Commission: Article 33 says you do not, and if you hire one the charge is made to the uninsured employer when you win.
• Filing the damages complaint unsworn: the court examines it sworn to find just cause of action before authorising attachment without bond.
• Assuming every accident is covered: Article 4 excludes crime, self-inflicted injury, intoxication that caused the accident, and reckless imprudence as the sole cause.
• Settling with the responsible third party without your consent when the uninsured employer subrogated: without that consent the extrajudicial settlement does not stand.

These are the government pages this guide is based on.

• Comisión Industrial de Puerto Rico (CIPR)

  Comisión Industrial

  bvirtualogp.pr.gov