Carmel-By-The-Sea, CA(WorkersCompensation.com) – It’s imperative that business owners stay on top of their workers’ compensation policies; failure to do so could cause it to lapse, resulting in potentially severe consequences when or if they are caught. A business owner in Monterey County learned that the hard way.
Back in September of 2018, an investigator with the state Labor Commissioner’s office arrived at the Lafayette Bakery and told the owner that they had to immediately shut their doors because they had failed to carry workers’ compensation insurance for their employees. They were not to open until they obtained a new policy.
A spokesperson for the Department of Industrial Relations (DIR) said the inspection had been initiated after the DIR requested proof of workers’ compensation insurance last June.
The owner was given 10 days to fulfill the request but never did; as a result, in September the matter was passed along to the Labor Commissioner’s Office Bureau of Field Enforcement (BOFE) which conducted the inspection and issued the citation to Lafayette Bakery.
Four days later the bakery did open after securing workers’ compensation for their workers; however, the company lost thousands of dollars in lost product. Under the stop order, the owner also had to pay all employees that were affected by the work stoppage. The owners scrambled to reopen as quickly as possible; but in the process, lost the money they spent three years saving to buy a new oven for the bakery.
Little did the bakery owner know, he worst was yet to come. Since the bakery had not paid the monetary amount that was due from the citation issued in September, a judgment was filed last month in Monterey County Superior Court.
On March 5 the court ordered Lafayette Bakery to pay a penalty of $166,080 to the Labor Commissioner’s Uninsured Employers Fund, which was more than what the bakery would have paid in workers’ compensation insurance premiums during the time in which it was uninsured.
In the judgment paperwork, Lafayette went without workers’ comp insurance from April 2, 2017, to Sept. 11, 2018. Marion Vial, baker and owner Jean Bernard Vial’s daughter, says the insurance lapsed after the bakery’s accountant failed to update a debit card that made automatic payments, and the situation went unnoticed until the Labor Commissioner’s inspector showed up.
Lafayette Bakery had 15 days to pay the fine unless the owners were going to appeal. Sammy Vial who is Marion’s wife and bakery general manager stated in a news release, “Between the fine and the storms that shut down [the bakery in] Carmel, we’re trying to recover. We’re not taking any pay right now beyond paying our rent. We told the lady over the phone that we don’t have the money. We said we can either figure out a payment plan or close up and go back to France. There are other bakeries in the family there, but our employees here have become our family, and we treat them as such.”
“California labor law requires that all employers provide workers’ compensation benefits if they employ one or more employees. As seen in this case, complying with the law is less costly than violating it,” noted a DIR spokesperson in a statement to WorkersCompensation.com.