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Beware Bad Tax Advice About Workers’ Compensation Payments

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If your tax preparer tells you that you need to claim your workers’ compensation payment as income, it’s time to find a new accountant.

Workers’ compensation benefits, whether paid as weekly checks or settlements, are NEVER taxable.

Now that tax season is in full swing, we’ve been getting calls and questions from clients who are being told otherwise by tax preparers.

The IRS is very clear about this:

Amounts you receive as workers’ compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers’ compensation act or a statute in the nature of a workers’ compensation act. The exemption also applies to your survivors. 

There’s a reason you didn’t receive a W2 or 1099 or any other type of tax document summarizing your workers’ compensations benefits for the last year. Those payments, including settlements, temporary total disability and ratings, ARE NOT taxable.

If you’ve heard the opposite from your accountant or tax preparer, please do not file your tax returns without first talking with another financial professional or someone who is familiar with your workers’ compensation case.

Lawmakers Ask for Federal Oversight of State Workers’ Comp Programs

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Ten powerful members of Congress, including Democratic presidential candidate Bernie Sanders, have asked the federal government to resume oversight and monitoring of workers’ compensation in the wake of drastic cuts to benefits for injured workers.

“State workers’ compensation laws are no longer providing adequate levels of support and compensation for workers injured on the job,” the lawmakers wrote. “The race to the bottom now appears to be nearly bottomless…”

Over the last decade, 33 states, including North Carolina, have cut workers’ compensation benefits, making it more difficult to qualify and giving employers more control over an injured workers’ medical care.

These so-called workers’ comp “reforms” have pushed many injured workers into poverty and have shifted the cost of caring for them to taxpayers, via Social Security Disability, Medicare, Medicaid and food stamps. Meanwhile, they have enriched insurances companies and big businesses.

The cuts in workers’ comp benefits coincide with the end of federal oversight and tracking of state-run programs.

Until 2004, the U.S. Department of Labor Department tracked changes in state workers’ comp laws and failures to meet 19 “minimum and essential standards for benefits” established by a 1972 commission created by President Richard Nixon.

Unchecked and without federal accountability for 11 years, many states have bowed to influence and pressure by insurance companies and big businesses and stripped injured workers of their rights and safety net.

The letter urged the federal agency Department to strengthen its oversight of state-run workers’ comp programs.

You can read the full text of the letter here. http://bit.ly/laborletter.

According to a news report by NPR, the Labor Department said in a statement it shares the lawmakers’ concerns. “Every year injured workers and their families are bearing more and more of the cost of workplace injuries and illnesses.”

However, the agency did not outline a specific plan for addressing these issues but did indicate it will work “with stakeholders to find real solutions.”
The cuts to workers’ compensation programs in North Carolina and elsewhere will continue without strong, vocal opposition to the big business and insurance interests. We praise these lawmakers for standing up for injured people.

It’s important that we as citizens support and vote for candidates who support injured workers and stand up for their rights. Please remember that as you go to the polls.

Call N.C. Senators to Oppose Workers’ Comp Trucking Bill

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Out-of-state trucking companies want to push the cost of caring for injured truck drivers onto North Carolina taxpayers.

It’s just the latest effort by big business to destroy North Carolina’s workers’ compensation system and to gut benefits in favor of profits.

N.C. Senate Bill 205, which is currently being considered in committee but could soon be brought to a vote in the N.C. General Assembly, seeks to change how trucking companies and their employees are covered when they’re injured on the job. If this legislation passes, it puts injured truck drivers at real risk and will shift the expense of covering their injuries to taxpayers.

Truck driving is one of the most dangerous occupations; many of the injuries are catastrophic.

A little background on how N.C. workers’ compensation laws work in regards to truck drivers:

In 2003, state law was enacted to allow allow trucking companies to cover their independent contractors in a blanket workers’ compensation policy. The law allows trucking companies to charge back the costs of that coverage to drivers, giving independent contractors coverage in the event of a wreck or other work-related injury. The N.C. Trucking Association supported this legislation.

In 2006, the statute was amended to exempt mom-and-mom trucking companies from providing this type of workers’ comp coverage when they contract with an owner/operator drivers using their own truck. The amended law is a balanced provision resulting from hours of negotiation. It was fair to small mom-and-pop trucking companies and to owner-operator drivers.

Senate Bill 205 would extend the mom-and-pop exemption to practically any operator working for an independent trucker. It undercuts the idea that all truck drivers should be covered under workers’ compensation.

Large out-of-state trucking companies have for years made efforts to push their workers’ compensation obligations off onto drivers, sub-contractors or the public. One of the ways they have done this is to substitute inferior “occupational accident” policies for workers’ compensation.

That’s what they want to do with SB 205. But these occupational accident policies are largely unregulated, notoriously difficult to deal with when claims are filed, and have widely varying provisions for medical or wage replacement coverage. As a result the cost of caring for injured truckers is shifted from industry to taxpayers.

If this legislation passes, it would lead to the misclassification of truck drivers as independent contractors, instead of employees, and leave drivers largely unprotected.

As I mentioned before, SB 205 is in committee, and our best chance of defeating this bad legislation is to stop it there before it’s sent to the full N.C. General Assembly for a vote. With the crossover deadline looming, that could happen soon.

Please reach out to the following members of the Senate Judiciary 2 Committee and let them know SB 205 is a bad idea:

Co-chair Senator Tamara Barringer
Republican – District 17
Wake
(919) 733-5653

Co-chair Senator Warren Daniel
Republican – District 46
Burke, Cleveland
(919) 715-7823

Co-chair Senator Shirley B. Randleman
Republican – District 30
Stokes, Surry, Wilkes
(919) 733-5743

Senator Stan Bingham
Republican – District 33
Davidson, Montgomery
(919) 733-5665

Senator Andy Wells
Republican – District 42
Alexander, Catawba
(919) 733-5876

Senator John M. Alexander, Jr.
Republican – District 15
Wake
(919) 733-5850
(Alexander is president of Cardinal International Trucks, a truck sales company.)

Senator Chad Barefoot
Republican – District 18
Franklin, Wake
(919) 715-3036

Senator Bill Cook
Republican – District 1
Beaufort, Camden, Currituck, Dare, Gates, Hyde, Pasquotank, Perquimans
(919) 715-8293

Senator David L. Curtis
Republican – District 44
Gaston, Iredell, Lincoln
(919) 715-3038

Senator Joyce Krawiec
Republican – District 31
Forsyth, Yadkin
(919) 733-7850

Senator Jim Davis
Republican – District 50
Cherokee, Clay, Graham, Haywood, Jackson, Macon, Swain
(919) 733-5875

Senator Tom McInnis
Republican – District 25
Anson, Richmond, Rowan, Scotland, Stanly
(919) 733-5953

When you call these legislators, let them know that you are reaching out to oppose Senate Bill 205, which is in the Judiciary 2 committee. Urge them to not let big out of state trucking companies push the costs of injured drivers off on onto taxpayers.

Thanks for your prompt action on this important legislative issue.

Retailers, insurers funding campaign to gut workers’ comp benefits in NC, elsewhere

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Walmart, Lowe’s, Macy’s, Kohls and many of the nation’s largest retailers, insurers and corporations are bankrolling campaigns to change workers’ compensation laws and limit benefits nationwide. North Carolina is one of the next states they’re targeting.

According to a recent piece in Mother Jones, the corporations are funding the Association for Responsible Alternatives to Workers’ Compensation (ARAWC), a lobbying group. ARAWC wants to introduce so-called “reform” legislation that would allow companies to opt out of state-mandated workers’ comp programs through what’s called an “option.”

Rest assured, this option will limit injured workers’ benefits and their access to ongoing treatment for their injuries, while saving companies and their workers’ comp insurers millions.

“Employers that opt out would still be compelled to purchase workers’ comp plans,” according to the article. “But they would be allowed to write their own rules governing when, for how long, and for which reasons an injured employee can access medical benefits and wages.”

Only two states, Texas and Oklahoma, give employers the option of setting up their own workers’ comp plans, outside of the state system.  ARAWC has already helped write legislation to make an “option” the law in Tennessee, and the group’s executive director has said the goal is to change workers’ comp laws in every state.

These option plans do not provide the same protections and level of benefits for injured workers. 

Businesses can save millions of dollars by opting out and writing plans with narrow benefits, putting pressure on their competitors to do the same. “It creates a race to the bottom,” says Michael Clingman, a workers’ advocate in Oklahoma, which passed an opt-out measure in January 2014. The state’s oil and gas industry, along with major retailers, such as the craft store chain Hobby Lobby, pushed hard for the change—with help from a lobbyist, Steve Edwards, who now heads ARAWC’s legislative strategy. Dillard’s, a department store chain with 10 locations in Oklahoma, took advantage of the change by requiring workers to report injuries before the end of their shift to be eligible for workers’ comp. Walmart and Dillard’s declined to comment for this article.

We are expecting ARAWC to target North Carolina’s workers’ comp laws soon by introducing more “reform” legislation in the North Carolina General Assembly. ARAWC has already hired lobbyists in our state to push the “option” model with conservative legislators, according to Mother Jones. Since there’s a lot of money at stake, we expect a well-financed campaign to bring a workers’ comp “option” to North Carolina.

When that happens, you’ll probably hear the other side say that employer-run workers’ comp plans will mean less tape for injured workers, shorter wait times for benefits and better medical outcomes. 

But they’ll fail to tell you that you’ll likely be unable to see the doctor of your choice and that their plan won’t pay for things like artificial limbs, hearing aids, home care, funeral expenses, or disability modifications to a home or a car for injured workers. This type of plan is especially bad for workers who are severely hurt and with injuries that cause longterm health problems and complications.

The proposed Tennessee “option” legislation would allow employers to stop paying workers’ comp benefits after only three years, even if the injured worker needs continuing medical treatment and cannot return to work.

We’ll continue to monitor this situation in North Carolina and tell you what you can do to protect workers’ rights here.

 

Hospitals Fail to Protect Nurses from Injuries

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You probably don’t think of nursing as a dangerous profession.

But each year, more than 35,000 nurses, orderlies and nurses assistants suffer back and arm injuries that are serious enough that they have to miss work, according to surveys from the Department of Labor’s Bureau of Labor Statistics (BLS).

A recent NPR series found that nursing employees “suffer roughly three times the rate of back and other musculoskeletal injuries as construction laborers,” all in the course of their everyday job duties — lifting and moving patients.

These are not minor injuries, but life changing ones that may require multiple surgeries and a cocktail of prescription drugs and pain medications. Many injured nurses lose their careers because of their injuries and will endure chronic pain and mobility issues for the rest of their lives.

Research has shown that there’s no safe way for nurses to move patients manually without risking serious injury to themselves. 

“The bottom line is, there’s no safe way to lift a patient manually,” William Marras, director of The Ohio State University’s Spine Research Institute, which has conducted landmark studies on the issue, told NPR “The magnitude of these forces that are on your spine are so large that the best body mechanics in the world are not going to keep you from getting a back problem.”

Yet hospitals continue to stress the same safe patient handling techniques and protocols when there’s a better solution that would prevent a majority of back and arm injuries in nurses. There is equipment available to help nurses move patients safely, without risk of injury, but few hospitals are wiling to invest money in these lifts, hoists and other devices, NPR found.

And only 10 states have comprehensive programs specifically designed to protect nursing staff at hospitals. North Carolina is not one of them.

 

 One of the nurses profiled in the NPR series worked at Asheville’s Mission Hospital. Though her injury clearly happened on the job, the hospital tried to deny her workers’ compensation benefits by claiming it happened while she was at home. You can listen to that story here

Listen to the full NPR series about nurses and workplace injuries here.

The Financial Toll of a Workplace Injury

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More on how workers’ compensation in America is broken and driving people into poverty, this time from The Washington Post.

Getting hurt on the job is especially financially crippling for low-wage workers and Latinos, who have “disproportionately high injury rates,” and when they are hurt those ” injuries can slice 15 percent off a person’s earnings over 10 years after the accident,” according to the Post and an analysis of a Department of Labor report on occupational injuries and wage inequality.

According to the Post:

There are two main components to the financial implications of a workplace injury. The first is the legal status of the people getting injured. A staggering number of workers in the construction industry are misclassified as independent contractors, which means they’re not entitled to workers’ compensation payments. Also, more of them are employees of temporary staffing agencies, who tend to be less well-trained and less likely to report their injuries. Businesses will often contract out their most dangerous work, which allows them to keep their own workers’ compensation premiums to a minimum. 

The second component is the degradation of workers’ compensation programs themselves. That issue is addressed by a report ProPublica and NPR, which looks at how employers have lobbied states to get out of paying as much as they used to in workers’ compensation, leaving injured workers with inadequate treatment.

You can read the full Washington Post article HERE and the NPR report on so-called workers’ compensation “reform” HERE, as well as my take on it HERE.

Workers Suffer From Workers’ Comp “Reform”

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For years in North Carolina and in other states, the insurance industry and big businesses have been pushing to “reform” what they’ve described as an inefficient, wasteful and costly workers’ compensation laws.

Legislators and voters have been snowed by the rhetoric, and the laws have been changed. Dismantled. Stripped down. Dehumanized.

 A system that once protected workers who were injured on the job and provided them with medical treatment and financial benefits to compensate for their injuries and help them on the long road to recovery is now woefully inadequate and harms the people it was designed to protect.

A yearlong investigation by NPR and ProPublica confirms what we have maintained for years: workers’ compensation “reform” has taken a horrible toll on injured workers and shifted cost to taxpayers, while insurance companies’ profits soared and employers’ workers’ compensation costs declined. Workers are being forced into poverty because of their injuries, and their medical care is inadequate.

“Over the past decade, state after state has been dismantling America’s workers’ comp system with disastrous consequences for many of the hundreds of thousands of people who suffer serious injuries at work each year,” the investigation revealed.

“They call them reforms. That’s a real insult to workers,” Sen. Bob Casey, D-Pa., said in the report.

You can read and listen to the full NPR report here and view statistics and graphs that show how workers’ rights and benefits have eroded over the last 10 years at ProPublica.

Among the findings:

  • Since 2003, 33 states, including North Carolina, have passed workers’ comp laws that reduce benefits or make it more difficult for those with certain injuries and diseases to qualify. Florida is the worst, cutting benefits by 65 percent since 1994.
  • Benefits vary dramatically from state to state. The same injury in one state can be worth two to three times as much in one state versus another. For example, a worker who loses an eye in Alabama is entitled to $27,280 in maximum compensation for the injury, compared to $261,525 in Pennsylvania.
  • Because of caps and arbitrary time limits on workers’ compensation, benefits are running out long before people recover. Senate Bill 174, passed in 2013 in North Carolina, changed procedures for appealing an employers’ decision to end benefits.
  • States have given employers and insurers more control over medical decisions, meaning that many injured workers aren’t getting surgeries, medicine and other medical treatment their doctors recommend.  In 37 states, including North Carolina, workers can’t pick their own doctor or are required to use a physician on a list provided by their employer or the insurance company. In North Carolina, injured workers can file a request to change doctors, but changes to the state’s workers’ compensation law have made it much more difficult to switch.
  • Despite claims that workers’ comp premiums are out of control, employers’ costs for workers’ comp insurance is the lowest it has been since the 1970s. And insurers had their most profitable year in more than a decade in 2013, raking in 18 percent in profits. They have succeeded in shifting the cost of caring for injured workers to taxpayers,  through Social Security Disability Insurance, Medicare and Medicaid and food stamp programs.

The state of workers compensation in America has changed significantly since 1970, when Congress first established a commission to study state laws as part of the Occupational Safety and Health Act. According to NPR’s report:

Convened by President Richard Nixon and led by John Burton, a Republican economist and law professor, the commission unanimously concluded that state laws were “inadequate and inequitable.”

The commission made dozens of recommendations that laid the foundation for modern workers’ comp systems: Nearly every employee should be covered. Workers should be able to pick their own doctors. If employees couldn’t work, they should get two-thirds of their wages up to at least the state’s average wage. Compensation should last as long as the person is disabled, with no arbitrary caps. Spouses should receive death benefits until they remarry, children until they graduate from college.

A ProPublica analysis of state laws done in consultation with Burton found that only seven states now follow at least 15 of the recommendations made during the Nixon administration. Four states comply with fewer than half of them.

We will continue to follow this story here on our blog and the Deuterman Law Group Facebook page. Be sure to follow us there for updates, links to additional coverage and more about what you can do to protect the rights of injured workers in North Carolina.

CANCELLED Family Fest DUE TO WEATHER

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Because of bad weather, we are canceling this event. But be sure to check back her and visit our Facebook page for information about a possible rain date and the raffles.

If you’ll be at the Greensboro holiday parade on Saturday, be sure to stop by the Deuterman Law Group offices afterward for some family fun — all to benefit a great cause!

Family Fun Fest is from 2 – 4 p.m. in our parking lot at 317 S. Greene St.

We’ll have food, games, raffle drawings, face painting, a cake walk and more for kids of all ages.

You’ll even have the chance to take a photo with your favorite snowman!

Admission is free, but to participate in the games and activities, you’ll need tickets.

Bring a can of food for Urban Ministry for a ticket — or donate $1 to earn two tickets.

Throughout the holiday season, we are sponsoring a food drive for Urban Ministry. For more information on where and what types of food to donate, click here.

 

Holiday Food Drive

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Once again, we are sponsoring a holiday food drive for Urban Ministry.

Did you know …

Greensboro ranks number 1 in the nation for rise in poverty in neighborhoods? 

1 in 4 families here are food insecure?

Guilford County has more than 2000 homeless children.

We will be collecting food donations for Urban Ministry at our offices in Greensboro and Winston-Salem, and a number of other businesses and organizations to have agreed to be drop-off locations for this food drive.

You may drop off donations of canned and nonperishable food at the following locations:

  • Deuterman Law in Greensboro
  • Deuterman Law in Winston-Salem
  • Jefferson Elementary School
  • Stumble Stiltskins
  • Corner Bar
  • Chase Logeman Corp.
  • All American Fitness
  • Speakeasy Tavern
  • Tap Room
  • Addison Point Apartments
  • Tailgators Bar and Billiards
  • Davidson’s Inc.

Click here for ideas on what type of food to donate. Please, no glass containers or opened packaging. 

Food collected will be distributed to families in crisis.

Thanks for supporting and Urban Ministry in our goal to end hunger in our community.

Employers’ cost for workers’ comp insurance decreases in NC

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The N.C. Insurance Commissioner approved a 3.4 percent rate decrease for workers’ compensation insurance premiums for 2015.

The rate decrease was requested by the N.C. Rate Bureau, a group representing insurance companies, the News & Observer reported. This is further proof that North Carolina’s worker’s compensation system is working as it should and is not “broken,” as big businesses and insurance companies insist when they push for changes to state laws.

Rest assured, if insurance companies were seeing an uptick in workers’ comp claims or fraudulent cases, as they so often claim in their pleas to lawmakers, they would not have requested the rate decrease.

By the insurers own actions, it is clear further workers’ compensation “reform” is not needed in North Carolina.

The workers’ comp insurance rate decrease will take effect in April, and it’s estimated that 95 percent of businesses in the state will pay less for the coverage that protects their workers in case of an injury.

In 2014, workers’ comp insurance rates rose an average of 4.2 percent.

The actual rates paid vary based on the type of business and the number of past workers’ comp claims.