Workers’ compensation coverage exists to protect the staff of your business from any injuries or illnesses that may take place while on the job. Workers’ comp can provide your employees with:
- Medical care and bills: Medical care from a work-related injury is typically paid at no expense to the employee. As a business owner, you’ll cover any reasonable and necessary medical charges.
- Payments for an employee who’s permanently disabled once maximum medical improvement is reached.
- Payments for an employee with a permanent impairment or who’s permanently disabled.
- Payments for temporary indemnity benefits if an injured employee can’t work.
- Survivor benefits for survivors of those killed on the job.
- Dispute resolution through the WCA’s ombudsman, mediation, and administrative court system.
All businesses in New Mexico are required to supply workers’ compensation coverage if they employ three or more workers.
Even if one of those employees works in New Mexico and the other two work in another state, your business is still required to carry workers’ comp coverage. No matter the location, if you have three or more employees, you must have workers’ comp insurance.
Anyone who works for your business may be considered an employee. This may include:
- Owners of other business if they work for your business
- Family members who work for your business
- Part-time employees
- Temporary employees
- Seasonal employees
- Employees working in non-profit, charitable, and religious organizations
- Agricultural employees
- On-call workers
If your New Mexico business is in construction, all workers must be covered by workers’ comp. Regardless of how many people you employ, you’re required to carry workers’ compensation if your business is licensed under the provision of the Construction Industries Licensing Act.
Similarly, if your business is headquartered in a state outside New Mexico and you employ construction workers in New Mexico, you’re required to carry workers’ compensation insurance.
You’re exempt from providing workers’ comp to independent contractors. There’s no one set way to label a person as an independent contractor or an employee, but there are some questions to help you determine if you’re required to provide workers’ compensation coverage:
- Who controls what the worker does?
- Who controls the business aspects of the worker’s job (salary, whether work expenses are reimbursed, who provides work supplies, etc.)?
- Do you have written contracts or employee benefits with the worker?
- Is the work this employee performs a key aspect of the business?
Contact the Employer Compliance Bureau at (505) 841-6851 if you need help determining if someone is an independent contractor or an employee.
There are three types of workers’ compensation coverage you can obtain as a New Mexico small business:
Private commercial companies must be licensed by the New Mexico Office of Superintendent of Insurance (OSI) with its premium rates approved by the OSI to supply you with workers’ compensation in the voluntary, commercial market.
If your business is high-risk, you may not be able to obtain workers’ comp coverage in the commercial or group self-insurance markets.
If you recently launched your small business, you can also be a part of this pool before seeking coverage in the commercial market.
Being in the assigned risk pool is more expensive than the voluntary market, so if your business is in the pool, you should have plans to get into another market.
Large businesses and government entities that are financially capable are allowed to provide their own workers’ comp insurance.
- You can face penalties for not obtaining workers’ comp coverage if you’re required to do so. These penalties can range from fines to injunctions against your business.
- The WCA will request that you attend a hearing if you fail to obtain coverage after initial contact from the Employer Compliance Bureau.
- Your business can be held liable for paying medical bills and a percentage of the injured employee’s wages if there’s an accident and you don’t have workers’ compensation insurance.
- You must fulfill additional requirements when obtaining workers’ comp coverage, including:
- Paying the workers’ comp assessment fee to the New Mexico Taxation and Revenue Department. This is a quarterly fee of $4.30 per employee each calendar quarter.
- Displaying a copy of the Workers’ Compensation Act poster and a Notice of Accident form in an appropriate location at your business.
- Complying with each of the workers’ comp safety inspection requirements.
- If an employee gets injured on the job, as an employer you should:
- Sign the Notice of Accident form.
- Encourage any employee injured on the job to seek reasonable and necessary medical treatment.
- Notify your insurance company within 72 hours of the injury.
- In writing, clarify with the injured employee if you or them will have first selection of a health care provider in the case of necessary medical attention.
- Communicate both with the insurer and the injured employee throughout the entire recovery process.
- Provide any possible workplace accommodations for the recovering worker.
- If you’re actively hiring (pre-injury job or modified work), you should offer to rehire the injured worker.
- Be aware that any employee of yours who’s injured on the job should do the following:
- Seek medical care for any job-related injuries or illnesses in a timely fashion.
- Notify you, the business owner, within 15 days of the initial accident by completing the Notice of Accident form and giving it to you.
- Keep lines of communication open with you, the adjuster, and health care provider.
- Go to the authorized health care provider and inform you of which provider will offer treatment.
- Take any prescribed medications as directed and take appropriate steps to get back to proper health.
- Notify you when they’re medically released to return to work.
- Your employees can continue to work while recovering from a work-related accident, as long as they’re approved by their healthcare provider to do so. This could include modified or alternative work.
Remember, every situation is different. New Mexico workers’ compensation laws are subject to change, so be sure to do your research and speak with a trusted advisor.
Please note that this content is intended for educational purposes only. As laws change regularly, refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about the basics of workers’ comp or check your current rate in 3 minutes.