Workers Compensation

Good general contractors demand proof of Workers’ Compensation insurance before hiring subcontractors. This type of insurance–commonly known as Workers’ Comp–protects workers if they are injured on the job by paying for their medical bills and other costs. But today, the News & Observer published a story that sheds light on a scam that puts workers at risk, leaving them vulnerable and unprotected.

Real insurance is expensive, but it is one of the costs of doing business–if you own a business and expect your employees to perform potentially dangerous work, then you need to protect them. To get around the costs, the scheme involves subcontractors purchasing “ghost” insurance instead of actual workers’ comp insurance. The the newspaper article described the case of contractor and employer Jimmy Worrell, and one of his long-time workers, Clementé Hernandez Gonzalez. According to the article, when Jimmy Worrell wanted proof of insurance coverage for his five-man crew, he apparently lied about the nature of his business:

He told his insurance agent that he had no employees and would exclude himself from the policy, his right as a sole proprietor. He declared that the crew of five he managed was made up of independent contractors instead of employees; the policy he bought covered a “ghost,” an unknown employee who might unexpectedly join him to work during the year.

It’s unclear how many of the roughly 140,000 policies sold to North Carolina businesses each year are these bare-bones policies. No one keeps official count, but the North Carolina Rate Bureau knows of about 16,000 of the ghost policies written for high-risk employers that couldn’t buy workers’ compensation insurance on the open market….

Officials at the Industrial Commission have seen the ghost policies for years, but they have not asked the legislature to address the practice. And when they see insurance agents sell ghost policies in improper circumstances, they rarely, if ever, report the problems to the Department of Insurance, which regulates agent conduct.

Such failure to communicate among state agencies has enabled business owners who break the law to flourish, while those following the law say they are increasingly shut out of work because of the high costs of doing business legally.

To read the full article in the News & Observer, click here:  Injured Worker Pays for Employer’s Gamble

Guest blog, written by Joey Hodgin, an attorney and head of the Workers’ Compensation practice for HensonFuerst Attorneys.

As an attorney, I have represented hundreds of injured workers for the better part of 10 years.  Now, I suspect that as soon as you read the word “attorney,” a certain percentage of you started swearing at your computer screen, while others probably offered a prayer.  I don’t pretend to be a saint, but I’m not that bad of a guy either.  At least my 3 year old daughter doesn’t think so, especially ever since I told her we’d go out for ice cream this weekend.  But as an attorney who has represented a decade’s worth of injured people, I do have some insight that I’d like to share.  It’s actually insight that puts all of us in the same boat.  So, please read on…maybe we can become friends.

I was struck by a recent article in the News & Observer about employers who fail to follow the law requiring them to purchase Workers’ Compensation Insurance. (“When N.C. Employers Dodge Workers’ Comp Costs” April 1, 2012).  The focus of the article was the problem created for injured workers when employers fail to follow the law and carry insurance.  Make no mistake:  In some cases, lives are ruined.

from the News & Observer

I represented a lady several years ago—let’s call her Diane—who was a waitress for a local breakfast spot.  She had spent most of her working life serving food and pouring coffee.  Part of her job was to walk next door to the gas station and get the newspaper, which she would bring back and put on the counter for customers to read.  One morning, she went to get the paper.  She tripped.  She broke her hip.  Her employer did not carry insurance.  Diane is in her 60s and likely will not work again. She had to sign up for Medicaid to get her surgery bills paid.

To be sure, this accident had devastating consequences on Diane’s life, much as it did for Danny Allred, the injured employee who was cited in the N&O article.  But there is a broader problem—one that most of us don’t think about:  Our tax dollars—yours and mine—paid for Diane’s surgery.  We paid because her employer didn’t follow the law.

Not possible, you may think, but it’s true.  Medicaid is funded by tax dollars taken from the paychecks of people who work. People like me, and probably you.  We work…pay taxes…follow the law.  But some deadbeat employer out there doesn’t follow the law.  He doesn’t purchase insurance.  Why?  He’d rather increase his profits.  And, he’d much rather we, the taxpayers, pay for the surgery.  He knows, as the N&O article revealed, that there are virtually no consequences for being a deadbeat employer.

If that doesn’t make your blood boil, I don’t know what does.

I know, I know . . . some of you are saying that employers without insurance are not deadbeats—they’ve just fallen on hard times and can’t afford it.  Well, a lot of us have fallen on hard times in recent years.  Yet, we still follow the law and meet our responsibilities.  We pay our car insurance.  We pay our homeowner’s insurance.  We pay our medical insurance.  Why should it be any different for a business?  So let’s just call the “fallen on hard times” rhetoric what it really is: an unjustifiable excuse.

You see, you can fail to enforce penalties against uninsured employers.  You can cut back on the medical benefits that employees receive when employers actually do have insurance.  But, the problem won’t go away.   It is a fact:  business and industry have always, and will always, have workers that get hurt.  It’s nobody’s fault.  It’s just the way it is.  I’m certainly not suggesting that companies should be penalized out of existence when a worker is hurt.  That doesn’t help anybody.  What I am saying is that businesses should pay for their own wreckage.  They should pay the cost, not us.  We’re not the ones profiting off the backs of their workers, they are.  If injuries are a “cost of doing business,” then let business pay those costs.

So the next time you hear somebody talking about not being able to afford Workers’ Compensation Insurance, or how the rates are just too high, or how we need to scale back on workers’ benefits, remember what those comments really mean.  It’s all code, another way of saying that they’d rather have you pay for it.

To learn more about how HensonFuerst pursues the rights of injured workers, visit our dedicated Workers’ Comp webpage at http://www.lawmed.com/WorkersComp/

When workers get hurt on the job, they can rack up thousands of dollars in medical expenses and lost wages. Reputable employers carry insurance to cover their employees’ work-related costs. In fact, workers’ compensation insurance is required for employers who have three or more employees.

The News & Observer conducted an investigation into how well local companies follow those laws. The results were frightening. According to an article published in today’s News & Observer, tens of thousands of employers don’t carry the required insurance. In addition, when workers became injured, the state Industrial Commission has done little to make sure that their medical bills are paid. The good news is that the investigation results were eye-opening to the Commission:

“In response to the issues you raised, we now have some concrete plans,” said Pamela Young, chairwoman of the North Carolina Industrial Commission, the state agency charged with enforcing the workers’ comp laws.

Those plans include a contempt hearing involving more than a dozen employers on May 22 to settle workers’ claims that have dragged on for years, and special hearing to deal with lingering uninsured cases. Companies that ignore the commission’s orders to pay their workers will be called back, as well.

According to Joseph Hodgin, a Workers’ Compensation lawyer with HensonFuerst Attorneys:

We should all applaud the Industrial Commission for cracking down on uninsured employers.  Our state’s workers are our most important resource.  The idea of leaving them hurt without any meaningful way to receive medical attention is unacceptable.

I am pleased to see that the Industrial Commission is taking action that will positively affect all of us.  Make no mistake, the problem of uninsured employers does not just affect injured workers.  When an employer does not carry insurance, many injured workers do the only thing they can, which is to turn to public assistance for help.  This assistance is funded by our tax dollars.  Cracking down on uninsured employers helps all of us.

According to the news article, Pamela Young says she has been working to establish a process for dealing with uncooperative employers since 2009. Tracy Curtner, an attorney currently in private practice who used to work for the Commission said that she had already created a contempt procedure in 2008, and that it was “set and ready to go” back then.

Whatever the reason for the delay, we’re happy that it appears that action will finally be taken. Injured workers–and all North Carolina residents–deserve better than uninsured and unlawful employers.

To read the full story in the News & Observer, click here:  NC agency will force employers to pay

To learn more about Workers’ Compensation rights, visit our dedicated webpage here: HensonFuerst Workers’ Comp