Under Oregon workers' compensation law, a construction contractor with 3 employees working on a commercial project must obtain workers' compensation coverage. What is the penalty for failing to provide required coverage?
Correct Answer
B) Fine of $500 per employee per day
Oregon law imposes penalties of $500 per employee per day for failure to maintain required workers' compensation coverage.
Why This Is the Correct Answer
Oregon Revised Statutes require employers to maintain workers' compensation coverage for all subject workers. The penalty for non-compliance is $500 per employee per day without coverage. For a contractor with 3 employees, this means $1,500 per day. The per-employee, per-day structure creates a rapidly escalating penalty that incentivizes immediate compliance.
Why the Other Options Are Wrong
Option A: Warning letter only for first offense
Oregon workers' compensation violations do not result in a mere warning letter for a first offense. The state treats non-compliance as a serious violation because uninsured workers face financial devastation if injured. Fines begin immediately — there is no informal first-offense grace period.
Option C: Suspension of contractor license only
License suspension alone would be insufficient to protect workers from on-the-job injury risk. Oregon law combines financial penalties with potential license action — the $500/employee/day fine is the primary penalty, not a substitute for it. License suspension may occur in addition to fines, not instead of them.
Option D: Fine of $1,000 per employee per day
$1,000 per employee per day is double the actual Oregon penalty rate. While this might seem like a reasonable escalated penalty, the correct figure under Oregon law is $500 per employee per day. Confusing $500 with $1,000 is a common exam mistake.
Memory Technique
Oregon workers' comp penalty = '$500 per head per day.' Picture 3 workers, each with a $500 fine badge on their hard hat. Three badges × $500 = $1,500/day. The longer you wait, the more badges accumulate.
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