Conducting business in the Virgin Islands poses unique challenges not often encountered in the states, but also unique opportunities. This 20-part blog series will offer tips for doing business in the U.S. Virgin Islands, covering a broad array of topics affecting employers. Part one of this series addresses workers’ compensation insurance.

Tip 1: Virgin Islands Issues Updated Guidance for Workers’ Compensation Insurance

The Virgin Islands Department of Finance recently issued an updated “Manual of Classifications and Basic Rates,” which outlines the premium rates for various classifications of employees that became effective on January 1, 2020, as well as additional increases that will become effective on January 1 of calendar years 2021 through 2023. According to information provided by the Department of Finance, rates had not been increased for more than 20 years.

The Office of the Government Insurance Fund remains the exclusive authorized provider of workers’ compensation insurance in the territory. Although the premiums have increased, the requirements for obtaining coverage are unchanged and include the following:

• Premiums are based upon the salary paid to employees, up to a ceiling of $8,424.00 per year for any employee.

• No later than February 28 of each calendar year, employers must file a report identifying the number of employees in each occupation or industry classification and the salaries for the prior calendar year.

• No later than February 28 of each calendar year, employers must file a report identifying the estimated number of employees in each occupation or industry classification and the salaries for the current calendar year.

• By March 31 of each calendar year, employers must remit any premiums due based upon the calculations contained in the prior year’s actual- and current-year estimated reports.

The consequences for failing to file the required forms or make the required payments include potential civil penalties as well as potential civil liability in the event an employee sustains an injury during a period when the employer did not have the required insurance.

Key Takeaways

Employers with operations in the Virgin Islands may wish to review the updated materials issued by the Department of Finance, calendar the applicable deadlines, and budget for and make the appropriate payments.

In addition to securing coverage, employers may consider utilizing the reporting or payment deadlines as an opportunity to evaluate and update policies and conduct training to minimize the likelihood of recurrence of any situations that contributed to injuries in the past.

Employers also may want to keep in mind that the coverage furnished by the Government Insurance Fund bars claims against only the employer named in the certificate issued by the Department of Finance. Accordingly, employers may want to evaluate possible exposure that may be associated with claims of individuals employed by any other businesses that operate on the employer’s premises to determine what additional measures may be appropriate to mitigate the risk associated with such claims.