When N.C. employers dodge workers’ comp costs, employees pay the price [The News & Observer, Raleigh, N.C.]
By Mandy Locke and David Raynor, The News & Observer, Raleigh, N.C. | |
McClatchy-Tribune Information Services |
Though the state has the power to crack down on these businesses, it doesn't act until a worker is hurt and left without a paycheck and with mounting medical bills. The state
A News & Observer analysis of the
Businesses with three or more employees are required to buy insurance or certify with the state that they can cover the costs of employees' injuries.
Since the 1930s, state law has put the burden of any workplace injuries on employers and the insurance they purchase. To make sure injured workers get the care they need quickly, the state has established laws to specify exactly how much is owed for degrees of disability and missed wages.
By law, employers are required to certify with the
The commission makes no effort to figure out which employers don't have protection. It only learns of noncompliant companies when a worker has been hurt and appeals for help.
No easy fix?
From
Many of the employees worked in dangerous jobs, such as construction or roofing. Some of the companies were small and struggling; others acknowledged they needed the insurance but decided against it to cut costs.
Many of the workers suffered debilitating injuries that will forever keep them from the manual labor on which they built their livelihood. Sometimes, the claim is simple: a teenager working at a sandwich shop that needed her finger stitched after an accident with a meat slicer.
Last session, the state legislature, in a sweeping bipartisan effort, rewrote portions of the workers' compensation law. Lawmakers trimmed amounts and length of payments due to workers to help drive down the cost of workers' compensation insurance. The changes did not address employers who don't buy insurance.
Speaker Pro Tem
"This highlights that there's a lot of work to do," said Folwell, who noted that the businesses that don't buy insurance have a competitive advantage over those who do. "Our challenge is to make the cheating less rewarding."
"It's been a problem for a long time, and if there were an easy fix, I have to believe it would have been fixed a long time ago," Carpenter said.
The head of the
"What I'd say is we make a good-faith effort given the resources we have," said
Unable to work
Allred's doctors and a deputy commissioner at the
Earlier that year, Allred said a member of his
Wright and his business partner
"It was bad timing," Summey said in an interview. "We both knew we needed insurance ... but we were scraping it together to make ends meet."
Deputy Commissioner
Wright, through his attorney, declined to comment.
For Allred, each day is a struggle. He perches on the edge of his recliner, the only way he can sit without suffering back spasms.
He eats with the help of food stamps, and
About once a week, Allred said he sees a group of workers for Wright pass his trailer on their way to mow a yard. Sometimes, Allred said, they honk and wave.
Enforcement is lax
The commission's six-person fraud team opened a case against the men, as it did with hundreds that year. After presenting the case to a local prosecutor, the fraud team closed the case without charges.
Since
Employers without workers' compensation can be fined
But the commission collects little. Of the 225 uninsured employer cases the fraud unit pursued since
"There are drawers full of uncollected judgments going back for years," said Curtner, now in private practice.
Uninsured employers have been a problem at least since 1997, said state Sen.
The commission has worked some over the years to try to address the problem, Berger said. But he said it has done nothing to ensure that employers carry insurance before an accident happens.
Berger said that he routinely used his power as a deputy commissioner to hold an employer in contempt of court until it paid. Sometimes that meant the threat of jail.
"I thought we should use every tool we had to get payment," he said. "But, some (commissioners) thought we were overstepping our bounds."
Contempt statistics over the years are unavailable, but the fraud unit did collect more civil penalties against uninsured companies in many of the years in Lattimore's tenure, records show. The commission rarely uses its authority to enforce payment now, plaintiffs' lawyers say.
Lattimore said compelling businesses to buy insurance is tough.
"How do you even find these people?" Lattimore asked. "The people who skip out on insurance aren't the people who are in plain sight. They don't buy business licenses or pay their taxes."
Failing to check
When Summey and Wright, owners of the landscaping company where Allred worked in 2006, canceled their workers' compensation insurance on
Liberty Mutual was then obliged to alert the
While the commission uses the database to find the proper insurer when a claim is filed, no one at the
"I'm sure we could do a query in our system to come up with a list of all policies that have been canceled," said
Lawyers who represent uninsured employees wish the state would do more to send a message to employers.
"The commission doesn't seem to want to enforce its orders and use the power it has," said
Some states have done more to help workers insured while working for uninsured employers. In
In
To get money, unless it's handed over voluntarily, the worker must get a judgment issued in state court or persuade the
Summey, the landscaping company owner, said he has nothing to offer Allred, even if he loses on appeal and is ordered to pay. Summey, who parted ways with Wright soon after Allred's accident, said he'll likely end up bankrupt.
Summey said that he has taken a minimum wage job with the city of
"It's not a happy situation at my house, either," Summey said. "I just hope we can put this behind us."
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