Most New Mexico businesses with employees are required to pay for workers' compensation insurance (WC or workers' comp insurance). The insurance provides compensation to employees who suffer work-related injuries. Here are some basic facts that you need to know about workers' comp insurance in New Mexico as a business owner and employer.
A New Mexico business with three or more employees, including part-time workers, seasonal workers, and family members, is required to carry workers' compensation insurance. Businesses that are required to be licensed by the state's Construction Industries Licensing Act must carry WC insurance if they have just one employee. An exception applies for household servants and for businesses whose workers are covered by the Federal Employees' Compensation Act or other federal programs. Another exception applies to members of LLCs or corporate officers who own less than ten percent of the company. Executive employees, such as LLC members or corporate officers, who own ten percent or more of the company must be counted as employees, but they may choose to exempt themselves from WC coverage.
The New Mexico Workers' Compensation Administration (WCA) is the primary state agency that handles workers' comp claims. Most of the law for WC insurance is contained in New Mexico's Workers' Compensation Act (Chapter 52 of the New Mexico Statutes). In addition to the Act, there are also administrative rules that cover workers' compensation in New Mexico.
In New Mexico, workers' compensation insurance is available through private insurance companies. If your business is unable to obtain coverage through a private insurer, you can get coverage through the New Mexico Insurance Department. There is also an option to self-insure, but this may not be advisable for smaller businesses, in part because it requires that a lot of money be set aside to cover potential claims.
You must inform your workers' comp insurer within 72 hours of learning of an employee's injury. You have the right to choose which doctor the employee will see — promptly tell the employee who that doctor is. If the injury results in more than seven days of lost work, then, within ten days, you also must file an Employer's First Report of Injury or Illness (FROI) form with the WCA.
Beyond these initial steps, there are subsequent steps to the WC claims process, not covered here.
Initial decisions on claims are made in conjunction with your WC insurer. You must file the FROI form even if you want to dispute the employee's claim. You can file a complaint with the WCA that disputes an employee's claim. In such cases, the matter will first be handled through mediation. The WCA also has its own administrative court, and if you are not satisfied with the result of mediation, you can appeal to have a formal hearing before a judge of that court. From there, you have the option to appeal further within the state trial and appeals court system.
If you think the claim is fraudulent, you also can contact the Enforcement Bureau of the WCA.
For additional information, check the WCA's Employer Guidebook.
If you don't carry workers' compensation insurance you may be subject to various penalties and costs. Among other things, you may be prohibited from conducting business and subject to a penalty of up to $1,000 per day. In addition, you can be held liable for WC payments made to employees from the state's Uninsured Employers' Fund including a penalty of 15-50% of those amounts, plus interest and fees.
There are many other workers' compensation requirements for New Mexico employers that are not covered here, such as putting up posters about workers' compensation coverage where employees can see them. For more information, see the Nolo website section on workers' compensation and the New Mexico Workers' Compensation Administration website.