Nearly 400 West Virginia companies, reportedly owing $2.4 million in workers’ compensation premiums, interest and penalties, have lost their business licenses and will be forced to close their doors.
The state Department of Tax and Revenue, working in cooperation with the West Virginia Workers’ Compensation Commission, issued business registration certificate revocation notices last week. Twelve companies that paid defaulted workers’ comp debts totaling $68,000 after receiving notices have been returned to good standing with the Commission and their business licenses will be restored.
“You are hereby notified that your West Virginia business registration license is revoked as of the date of your receipt of this letter,” the Tax Department notices stated. “You are no longer authorized to conduct business in the state of West Virginia.”
Gregory Burton, executive director of the Workers’ Compensation Commission, said the revocation of business licenses is an action of last resort.
“Each of these businesses has been listed in our Employer Violator System and each has had ample opportunity to reconcile their accounts before we recommended to the Tax Department to take this final step,” he said. “We don’t want to force anyone to close their doors. But companies that don’t pay their fair share expose themselves and their employees to risk in the event of a workplace injury or illness. They enjoy an unfair advantage over their competitors who do pay their premiums on time – and they’re breaking the law.”
T.J. Obrokta Jr., the Commission’s general counsel, said 2003’s landmark reform legislation, known as Senate Bill 2013, gave Workers’ Compensation powerful enforcement tools to ensure compliance. “We now have the ability to work with other state agencies to revoke business licenses, permits, contracts, certificates or other authority an employer needs to do business in West Virginia if they don’t pay their workers’ compensation premiums,” Obrokta explained. “In years past, we would have had to wait until those licenses or permits came up for renewal. Now we can be much more aggressive in our enforcement efforts.”
Each of the defaulted companies now slated for closure had received at least four notices over a period of several months before the Commission turns their names over to a licensing authority. The businesses also had received a warning notice from the Tax Department in September, but had reportedly failed to resolve their defaulted account.
“They have had six bites at the apple, so to speak,” Obrokta said. “Now, if they continue to operate without resolving their debt, the Commission and the Tax Department will work with the West Virginia State Police and go out and physically shut them down.”
Under the Employer Violator System, any individual who owns, controls or has an interest of 10 percent or more in a company on the Commission’s default list will not be able to obtain any state license, certificate or permit for any other company until the outstanding balance is paid or a repayment agreement is established.
Repayment agreements typically require the employer to deposit at least 25 percent of the outstanding debt. The Commission works with employers to establish a payment schedule for the remaining debt at 8 percent interest.
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