Archive for the ‘Workers’ Compensation Fraud’ Category

Surveillance Not Uncommon in Workers’ Compensation Cases

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Private investigators and hidden camera surveillance might seem like the stuff of suspenseful TV shows.

But getting “caught” on camera can be a concern in a workers’ compensation case.

In fact, it’s much more common than you might think. A worker gets hurt at work and sees a doctor. The doctor gives the worker restrictions and says, “These are the things you are not supposed to do or else you could hurt yourself. Don’t do these things and you will get better.”

The worker goes about their life, and their case progresses towards a mediation.

Then the worker and their attorney get to mediation and the attorney for the employer and insurance company pulls up a video that the insurance company claims to show the employee doing things that they were not supposed to do. The case is now in trouble.

In workers’ compensation, we call this surveillance.

Insurance companies routinely hire private investigators to video a hurt worker in the hopes that they will “catch” them doing something that is inconsistent with the restrictions the doctors set.

Even if you think you’re aware of your surroundings and that you would know if you were being watched, that’s often not the case.

A good private investigator is invisible and if they do their job well they stay that way.

I’ve seen video taken from a private investigator in a car, in a van, and even posing as a customer in a restaurant. And in this day in age where everyone has a mobile phone with a built-in video camera, you’re probably not even aware of how often in a day you could potentially be on camera. (You should also be careful about what you share on social media because those posts could be used against you, as well.)

Clients have asked me, “Is this legal? He filmed me at MY house and when I was in my yard!”

The answer is yes, it is legal.

It’s legal for anyone to videotape you in your yard, or anywhere else in public view. There is no expectation of privacy when you are in view of the public.
Clients have also said to me, “But I wasn’t doing anything outside my restrictions and the investigator’s report says that I was lifting or carrying more than my restrictions without any apparent difficulty. How would they know that?”

It is very easy for an investigator who was hired by an insurance company to say that you “appear” to be doing something outside your restrictions, or that you were lifting, carrying or walking without any apparent difficulty. We see those types of phrases in investigators’ reports all the time.

While we can always argue that the investigator is biased or just plain wrong, it’s much easier if we simply don’t have to make these arguments.

So, what does this mean to your case as an injured worker?

Does it mean you can’t live your life or that you should be paranoid about everyone around you? Draw the curtains at home and never go out? No.

It means you should be mindful of your surroundings and made sure you are following your doctor’s restrictions all the time regardless of where you are.

That means that if you have a lifting restriction of 20 pounds that you should not be trying to carry in that 40-pound bag of dog food from the store.

If you aren’t supposed to be standing more than 15 minutes at a time then at 16 minutes you should be finding a chair at the church luncheon.

Following your doctor’s restrictions all the time — both inside and outside of work — will not only help keep your worker’s compensation case on track, it will also help you heal and get better faster.

If you think you might be under surveillance on your workers’ compensation claim and you would like help, please contact us as soon as possible.

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.

Industrial Commission files criminal charges against 5 businesses without workers’ comp insurance

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A News & Observer investigation last year revealed that as many as 30,000 North Carolina businesses don’t have workers’ compensation insurance, which is required by state law, to protect their employees who are hurt on the job.

The N.C. Industrial Commission this week filed the first criminal charges against five Guilford County employers who have shirked this legal responsibility. According to an article in the News & Record, Guilford County is the first big target for proactive enforcement of workers’ compensation insurance.

Guilford County School Board Member Ed Price, who owns Ed Price & Associates Realtors, was among those charged. But he told the paper his workers’ comp insurance “fell through the cracks” during a business bankruptcy, and his company now has the required insurance to protect its employees.

Others charged are:

  • Andrew Joseph Kane of Tapestries Ltd. in Greensboro.
  • Ben Wade Armfield of Carolina Sample Books Inc. in High Point.
  • David Rash Thomas Jr. of The Arteri Inc., which does business as The Artery Gallery, in Greensboro.
  • Paul Brian Talley of Thrive Alive Inc., which does business as Lotus Lounge in Greensboro.

State law requires businesses with three or more employees to have workers’ compensation insurance or offer coverage through self-insured programs.

Business owners who knowingly fail to carry workers’ comp insurance can be charged with a Class H felony and sentenced to jail time, but few are. Businesses also can be fined $100 a day for not having insurance, but the state has historically been lax in collecting these fines.

It’s usually injured workers and taxpayers who pay the price.

It can be very difficult to collect on a workers’ compensation claim if the employer doesn’t have insurance. This means that many injured people never get the medical treatment or the financial payments they deserve. Many will find themselves destitute, bankrupt, in pain, unable to return to work and forced to turn to welfare and other government programs to meet their basic needs.

The government did not file felony charges and it is not seeking the maximum punishment for the Guilford County businesses owners accused of violating the law. They have been charged with misdemeanors. All are due in court Sept. 23 to answer to the charges against them.

We’ll continue to follow this case and any others brought against local businesses.

It’s very serious business when companies don’t have workers’ compensation insurance.

It’s our hope the state will continue to crack down on businesses that don’t comply with the law and to protect innocent injured workers.

The best solution is to catch and penalize uninsured companies before their employees are injured on the job.

We need tougher enforcement of the existing laws so companies that don’t follow the rules pay the price with fines and jail time.

Employees can do their part, as well. If you suspect your employer does not have workers’ compensation insurance, contact the N.C. Industrial Commission’s fraud investigations section at (888) 891-4895. The commission can also confirm whether a company has adequate insurance.

If you are injured at work and discover your employer doesn’t have workers’ comp insurance, report your injury immediately to the Industrial Commission. Don’t wait to report the injury or to get treatment, even if your boss encourages you to do so.

Workers’ comp fraud? The truth about “questionable claims”

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If you believe the insurance industry, the number of so-called “questionable workers’ compensation claims” is up 7 percent from a year ago and 38 percent from 2011, while the total number of workers’ comp claims has decreased.

A new report from the National Insurance Crime Bureau claims more people are faking workplace injuries, lying about or exaggerating their symptoms or filing workers’ comp claims for injuries that did not take place at work. A few newspapers, including the Los Angeles Times, have even run with the report, which seems to indicate that workers’ comp fraud is on the rise.

But the report and its findings can’t be trusted because the data about these so-called “questionable claims” comes directly from the National Insurance Crime Bureau’s membership — nearly 1,100 insurance companies.

When insurance companies don’t want to pay a claim, they can categorize it as questionable and refer it to NCIB for review and investigation. In almost all cases, it’s a deny-and-delay tactic that has little to do with the actual merits of the workers’ comp claims.

The NCIB report on workers’ comp fraud is based on those cases that its member insurance companies review for further investigation, in hopes of not having to pay benefits. The NCIB report conveniently fails to mention how many of “questionable claims” actually ended up being fraudulent or non compensable claims.

And the reason is simple. The vast majority of workers’ comp fraud is perpetrated by employers, not injured workers. 

But the insurance industry uses reports like this, as well as advertising and other heavy-handed tactics, to shape public opinion about people who file for workers’ comp or Social Security disability. It’s the same strategy they used to create the myth of the frivolous lawsuit, so effectively dispelled in the film, “Hot Coffee.”

 

 

Be wary of these so-called reports, especially when the source of the data is the insurance industry. These companies have a huge financial incentive to deny claims and to convince the voting public that certain states need stricter workers’ comp laws.

I noticed an interesting pattern in the “questionable claims” data from the NCIB. States where workers’ comp reform has been on the legislative agenda recently had the biggest increases in “questionable claims.”

Coincidence? Or cooking the numbers to convince legislators support their reform bills? 

You decided. You can view the entire NCIB report here

 

Misclassifying employees to avoid workers’ compensation is fraud

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One of the most rampant kinds of workers’ compensation fraud involves employers misclassifying workers as independent contractors so they can avoid carrying workers’ compensation insurance for those employees.

The Salt Lake Tribute reported on a spike in the number of independent contractors with one employer in Utah, which officials say is a sure sign that the so-called contractors have been misclassified.

In the most recent data available, Utah saw a steep one-year jump in the number of independent contractors who have only one employer — a typical indicator that the worker has been misclassified, Bill Starks, state director of unemployment insurance, said. Two years ago, 200,000 independent contractors reported only to one employer. Last year, the number swelled to 300,000.

Plenty of people are legally classified as independent contractors. These people, often also called W9 employees or freelancers, perform work for a variety of different employers or clients, set their own hours and derive their income from multiple sources.

But many companies assign the "independent contractor" designation to employees. In doing so, they avoid having to pay for costly workers’ compensation coverage to these workers though they are legally obligated to provide this protection.

There’s a pretty good rule of thumb for knowing a worker’s contracting status: If he only works with one company, that business sets his hours and the company’s success is tied to the worker’s success, the company should probably consider him an employee, not an independent contractor. That means that company needs to issue a W-2 tax form — and pay taxes, Social Security and unemployment and injury insurance on the employee’s behalf, at a cost of about 30 cents more on the dollar.

 

California security firm created shell company to avoid workers’ compensation

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In what may be one of the most egregious cases of workers’ compensation fraud, a California employer created a shell company to avoid workers’ compensation premiums for his 1,500 workers.

Last week, Ousama Karawia, the owner of International Protective Services Inc., and two company vice presidents pleaded not guilty to charges that they defrauded the California State Compensation Insurance Fund of $9 million.

The men are accused of going to extreme measures to deceive the state about the number of people employed by the private security firm.

According to an LA Times article:

 

 

The men allegedly created a shell company, International Armored Solutions Inc., to hide the true number of employees at the security firm to avoid paying higher workers’ compensation insurance premiums to the State Compensation Insurance Fund.

Authorities said Karawia told state officials that he employed about 20 workers at the new company and that it was not part of the main security firm. The company failed to pay $9.5 million in workers’ comp premiums for its 1,500 employees, prosecut

 

 

Employer workers’ compensation fraud, the most common type of fraud, costs not only injured workers but taxpayers, as well. In the event of an accident, workers’ on-the-job injuries may not be covered if their employer doesn’t have adequate insurance, as required by law. In those instances, the burden for caring for these hurt and disabled workers falls on taxpayers and social service agencies.

 

Will economy lead to more employer workers’ comp fraud?

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A story out of California has us wondering if the state of the economy and the financial difficulties  that many businesses are going through will lead to more workers compensation fraud by employers?

Workers’ compensation fraud is most commonly perpetrated by employees — not by injured workers, as is the common perception. Two common tactics — misclassifying employees job duties, treating employees as independent contractors or failing to carry workers’ compensation insurance, as required by law. Misclassification of job duties helps companies keep their workers’ comp insurance premiums lower, but it also means that employees may not be protected if they are injured on the job. Workers’ comp fraud has a huge societal cost, as well.

 

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Employers and Insurers Responsible for Most Workers’ Comp Fraud

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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.

The Real Facts On Workers’ Compensation Fraud

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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

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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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