Woodline Furniture Mfg. Co. v. Department of Industrial Relations

An employer, cited at noon for a failure to have workers’ compensation insurance coverage for its employees, complains that the statutory penalty should not have been imposed because, later the same day, a policy was finally obtained. We disagree.

Facts

Woodline Furniture Mfg. Co., Inc., which is owned by Yan Kats and his family, employs 131 people to manufacture oak furniture and upholstered chairs, to assemble furniture manufactured by others, and to handle ancillary clerical work. Until May 1992, Woodline’s workers’ compensation insurance was provided by Pacific Rim Assurance Company. In early 1992, however, a dispute arose about Woodline’s failure to pay premiums which Pacific Rim claimed were due and on May 2, 1992, Pacific Rim cancelled Woodline’s coverage. Although Woodline made some efforts to obtain replacement insurance, it is undisputed that it remained uninsured for over six months, from May 3 through November 5. On November 25, State Fund issued a policy to Woodline, with an effective date of November 6, at 5:00 p.m.

Meanwhile, at 11:00 a.m. on November 6, Dennis Daily, an investigator with the Division of Labor Standards of the California Department of…