Employers and Insurers Responsible for Most Workers' Comp Fraud
Interesting YouTube discussion involving Leonard Jernigan, Jr., a fellow workers' compensation attorney in North Carolina and chairman of the fraud task force of the Workers' Injury Law and Advocacy Group (WILG).
The next time someone tells you they think most people who are collecting workers' compensation are cheating the system, direct them to this video. It might not be as dramatic as a report by John Stossel, but at least it's accurate.
Click here to see the video on workers' compensation fraud.
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The Real Facts On Workers' Compensation Fraud
As an attorney who represents injured workers, I get so upset by the widespread public perception that most people who are collecting workers' compensation are "faking it" and somehow defrauding the system.
I know that's simply not true. The overwhelming majority of people who apply for workers' compensation benefits are injured and unable to work because of those injuries. But the media and the insurance companies have done a great job conducting smear campaigns that cast injured workers in a bad light. They've subverted the facts with anecdotes and a few damning videos and created the impression that workers' compensation fraud by employees is rampant. But in reality, only about 1 percent of all workers' compensatioin claims are found to be fraudulent.
However, fraud by employers and insurers is much more prevalent and costs billions of dollars annually. There's a human cost, too. Injured workers who are the victims of workers' compensation fraud often are unable to collect benefits that would make their lives easier and help them get the treatment they need.
Leonard Jernigan Jr., a fellow workers' comp attorney in North Carolna and the chairman of the fraud task force for the Workers Injury Law and Advocacy Group (WILG) has an interesting article in Workers First Watch about the prevalence -- and cost -- of employer and insurance fraud. In it, he provides the straight scoop on workers' compensation fraud.
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New York Contractors Charged in Workers' Comp Fraud
Honest workers can sometimes fall prey to dishonest bosses trying to cheat the workers' compensation system, leaving employees vulnerable and without benefits when they're injured on the job.
That's what's happening in New York, where some people working as contractors were charged with cheating the system byforging workers' compensation insurance benefits. At the same time, they were failing to provide insurance coverage for their workers who were injured.
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Washington man gets jail time for workers' compensation scam
Injured people deserve fair and just compensation, especially if their injuries prevent them from working. Unfortunately, not everyone plays by the rules.
Willard Leech of Bellingham, Wash., learned that the hard way. He got jail time for illegally collecting workers' compensation for a low-back injury that supposedly prevented him from working.
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Victory for maligned injured worker
It’s a classic case of no good deed goes unpunished.
A Bakersfield, Calif., school worker who hurt his shoulder while helping police capture a suspect at a nearby school had his workers' compensation claim rejected.
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California employee gets justice in workers' compensation fraud case
For any state considering workers' compensation reform, California should be a cautionary tale.
After his election, Governor "Arnold" began working to reform the state's WC system, promising that changes would save businesses millions, if not billions, in reduced premiums. But years later, those savings still have not been realized, and the reforms have been devastating for injured workers. The only winners from workers' comp reform in California? The insurance companies.
Recently, an injured worker who had been falsely accused of workers' compensation fraud after filing a claim received some measure of justice.
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Companies misclassify workers to avoid offering workers' compensation coverage
The Illinois state government is investigating whether some Illinois construction companies are deliberately misclassifying workers as independent contractors instead of employees. The companies are allegedly boosting their profits by failing to withhold taxes and, more seriously, by shirking their responsibility to carry workers compensation coverage. Employees of these allegedly unscrupulous companies without workers' compensation insurance who are unlucky enough to be injured on the job are the ones who ultimately have to pay for these ill-begotten profits.
This is another example of how employers continue to run roughshod over the workers' comp system, while workers' compensation insurance companies spend billions to convince the public that the blame for rising costs lies on worker malfeasance.
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California construction company charged in Workers' Compensation Fraud
Today we’re highlighting another case of alleged workers’ compensation fraud committed by an employer, this time in Riverside, Calif..
The owners of Banning Construction Company (also known as TF Ventures and All Service, Inc), are charged with an on-going scheme dating back to 2001 to defraud the state.
Carter Lee Pendergrass, 56, his son Joshua, 25, and their business associates, Timothy Cassidy and his wife, Karen, both 51, are each facing dozens of counts of insurance fraud, money laundering and filing false income tax statements, according to court documents. The charges involve collected losses over $6 million which include unpaid payroll taxes and lost money on insurance premiums.
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Busting myths about workers compensation
The bloggers over at Tort DeForm, The Civil Justice Defense Blog, are tackling workers’ comp in their Mythbusters series.
They argue that workers’ compensation laws are inherently ineffective and overly bureaucratic. The rising costs of workers’ compensation benefits are negatively affecting employers while an adversarial system is penalizing employees, placing most of the burden of proof on them for the claim.
The full thrust of the article is that neither employees or their employers are benefiting or being protected by the workers’ compensation system.
The blog also weighs in on workers’ comp fraud, specifically “the fraud of worker fraud.”
According to Tort DeForm,
“In the early 1990’s, insurers and businesses began a misleading media campaign focusing on employee fraud, even though only a tiny percentage of workers – one to two percent – engaged in it. Despite its lack of substance, the campaign caused rights and benefits to be cut in many states, and created an unfair stigma for injured workers.”
Glad to know that other bloggers out there are talking about this deception.
For more on Tort DeForm’s take on WC, visit the blog.
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80 WC claimants in NJ ordered to pay their employer $2.2 million
An alarming Federal District Court decision from New Jersey:
A group of wokers who sought workers' compensation benefits after their factory closed were ordered to pay more than $2.2 million to their former employer.
The company levied racketeering charges against the employees and accused them of conspiring to defraud the company by making false injury claims. The saddest part is that the workers, in part because they may not have understood what was happening, did not contest the lawsuit. And so, without any contested hearing on the merits of the case, U.S. District Judge Stanley Chesler signed a default judment against the workers.
Judge Chesler ordered the employees to repay the company's attorney fees, costs, compensatory damages and even workers' compensation awards that had been paid to two former factory workers.
The judgment is alarming, not least because it is a default judgment and the viewpoints and positions of the workers were not heard. I've got to agree with others workers' rights attorneys who told the Star-Ledger newspaper in New Jersey that the case "signals a 'frightening precedent' that can be used to quell legitimate employee injury claims" and may make attorneys hesitant to take on workers' cases.
The Michigan-based company involved had 12.8 billion in sales last year, and obviously had plenty of money to hire competent attorneys to bring this federal case. The workers, many of whom had salaries of $16,000 or $17,000 a year, would probably have had trouble paying attorneys to defend them, had they realized the necessity of responding to the suit.
Read more about the case here.
Defrauding the WC system
We've written here before about how unscrupulous employers commit more workers' compensation fraud than do greedy employees.
Here's a story about one such case in New Mexico. The owners of a roofing company are charged with providing a bogus documents that said they carried workers' compensation coverage for their business when they really didn't.
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Another Workers' Comp Myth Debunked: Undocumented workers are entitled to benefits
Workers' compensation for undocumented workers is a hot button issue right now.
Stats show that Latino workers are injured on the job at a disproportionate rate.
The real tragedy occurs when an undocumented worker is injured. Many employers try to deny these employees workers' compensation benefits, and they're often successful in doing so.
According to an article from McClatchy Newspapers:
"In one national study, university researchers surveyed 2,660 day laborers, most of them working illegally. One in five said he'd suffered a work injury. Among those who were hurt in the last year, 54 percent said they didn't receive the medical care they needed, and only 6 percent got workers' comp benefits."
But the law is clear. Undocumented workers, even if they are working in the U.S. illegally are entitled to workers' compensation benefits -- lost wages and medical treatment.
From the same article:
"Employers in at least 20 states, arguing that their employees shouldn't receive injury benefits because they're illegal immigrants, have fought and lost in courts and review boards. Among those employees were a California laborer who hurt his back lifting sacks of coffee, an Arizona auto mechanic who was hit in the eye by flying debris, a Maryland carpenter who cut his hand on a saw, and a North Carolina construction worker who suffered a brain injury when he fell 30 feet onto a concrete floor."
I encourage you to read the entire McClatchy article to learn more about how some workers are being denied benefits to which they are lawfully entitled.
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SC Senate Democrat's blog highlights insurance greed
Senate Democrat Leader John C. Lander III of the South Carolina talks about the shocking freedom that insurance companies have in establishing their premium rates for workers' compensation. How is it possible that they have gotten away with this gross advantage?
More examples of how the insurance companies have distorted public perception of workers' compensation fraud.
http://scsenatedems.blogspot.com/2007/03/workers-compensation-makes-insurance.html
Posted By Grace Kanoy In Insurance Practices , WC Fraud | Permalink | 1 Comments |
Employer Fraud - A Billion Dollar Problem
A new study by the Fiscal Policy Institute (FPI) illustrates just how costly employer workers’ compensation fraud can be.
In New York state, the cost is a staggering $1 billion every year – the result of companies that either don’t pay their workers compensation insurance premiums or underpay because they lie about the size of their work force. Honest companies end up paying higher premiums as a result, and injured workers are forced to go without the workers' compensation benefits that they are entitled to.
This study further supports my point that workers comp fraud is much more prevalent among employers than among workers, and it is clearly more of a financial drain on the system. The basis of the workers' compensation system is a compromise between employers and employees - employees forgo their traditional tort remedies in order to obtain a swift recovery, and employers are assured capped damages but are liable for work related injuries regardless of negligence. When employers perpetrate fraud on the workers' comp. system, which they do in far greater numbers than employees, the bargain is eroded.
You can read more about the study in the New York Times (registration may be required) and in this press release from The New York State Public Employees Federation, which is urging reform and a crackdown on employer workers’ compensation fraud.
To read the full FPI report, click here
PBS frontline article investigates WC fraud in North Carolina
This PBS frontline article offers some good stats on wc fraud and supporting references. The same Dateline television show referred to in an earlier blog about WC fraud is referred to in the PBS frontline investigation.
See www.pbs.org/wgbh/pages/frontline/shows/workplace/etc/fraud.html
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Rampant Workers' Compensation Fraud is a Myth
A supposedly injured worker is caught on hidden-camera video doing strenuous work in his backyard.
Footage such as this, shown on NBC’s Dateline, makes for compelling television news. But it also perpetuates the myth that workers’ compensation fraud is rampant.
But it’s not.
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