Archive for May, 2005

Left and Right Converge on Health Care Coverage

Tuesday, May 31st, 2005

We continue to track the national crisis in health care coverage. we’ve blogged it before and we’ll blog it again. As of 2003 about 45 million Americans lacked health insurance. Of these, there are about 20 million American workers without health coverage, which comprises a seismic undercurrent in workers compensation. Health care coverage tends to follow income: the lower your income, the more likely you cannot afford health insurance. The Kaiser study, which we cited back on April 6, notes that 40% of the workers without health insurance have less than a high school diploma. Twenty two percent of the uninsured report their health as “fair or poor.” In addition, about one third of uninsured workers rely on physical labor for their living. These three overlapping groups are at especially high risk for prolonged disability under workers comp. It’s probably no coincidence that Texas, the state with the highest incidence (27%) of non-covered workers is also the state where workers with a low education are most likely to receive permanent disability payments.
A recent article in the Boston Globe (registration required) by Theo Emery of the AP notes that Massachusetts has joined the ranks of the states singling out large employers who fail to offer coverage to all their employees. The state pays more than $52 million a year to cover workers in a broad range of jobs, from universities and hospitals to the U.S. Postal service. Four employers — Dunkin Donuts, Stop & Shop, Walmart and McDonald’s – have more than 1,000 employees each who received public health benefits. Now there is talk of surcharging these and similarly situated employers. Any such surcharge would provide political fireworks indeed!
Coalition of the Stymied
So I was pleased to read Robert Pear’s article in in the New York Times (registration required) that a group of 24 leaders representing health care, business and workers has been meeting quietly to hash out a concensus for providing coverage to the uninsured. The participants range from the liberal Families USA to the conservative Heritage Foundation, the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM). The group also includes the AARP, the A.F.L.-C.I.O. and the American Medical Association. I am encouraged that, first, they agreed that there is a major problem; second, that they can meet in a room together and just talk and listen to each other; and third, that despite their ideological differences, they might be able to agree on some solutions.
So far they are focusing on proposals to expand coverage to as many people as possible, as quickly as possible. They recognize that there are many reasons for people being uninsured, so rather than trying to come up with a “one size fits all” solution, they are exploring more flexible models.
Neil Trautwein, assistant VP for NAM, compares the talks to medieval alchemy, bringing together disparate and volatile ingredients: “It could produce some wondrous proposal, or could blow sky-high.”
Thus far, here are some of the options they are exploring:
Tax credits to help parents provide insurance for children.
Deduction programs for employees whose employers do not offer health insurance; the employee contributions would be matched by other sources to provide coverage.
Tax credits to small businesses to help pay for insurance.
Expansion of Medicaid.
Federal grants to states to help them establish insurance purchasing pools.
Aggressive Timetable
The working group hopes to have a specific proposal by the end of the year. They have no illusions about the scale of this effort. As Stuart Butler of the Heritage Foundation says, “it’s a coalition built of frustration. True believers on the left and the right have been stymied on this issue.” Here’s wishing them the best of luck in this essential endeavor. We’ll keep you posted.

First Head Rolls in Ohio Coin Caper

Friday, May 27th, 2005

Ok, that headline is not exactly our style, but the shenanigans at the Ohio Bureau of Workers Compensation seem to call for it. In our May 13 blog, we first mentioned the truly bizarre story unfolding in Ohio. The workers compensation bureau has invested $50 million in rare coins, working through Tom Noe, a man prominent in Republican fund raising circles. Indeed, Mr. Noe has been recognized by the Bush-Cheney campaign as a

S. Carolina to bar workers comp for undocumented immigrants?

Wednesday, May 25th, 2005

Apparently, at least a few legislators in South Carolina think that illegal immigrants should be barred from receiving workers comp benefits, and there is a bill to that effect under consideration in the statehouse:
“Thousands of undocumented workers in the Palmetto State could be denied workers’ compensation coverage, including lost wages and medical bills stemming from work-related injuries, under a proposed bill in the Statehouse.
The bill was introduced earlier this year by two Upstate lawmakers and stalled in committee.
Supporters say illegal immigrants often commit fraud, such as fake Social Security and green cards, to obtain jobs and that should make them ineligible to collect benefits.”

Now it may be sexy for lawmakers to jump on the “illegal immigrant” issue right now, but this is wrong-headed thinking that shows a fundamental lack of understanding about workers comp. For one thing, this proposal is bad for the employer. When workers are afforded the protection of workers comp, in all but extraordinary circumstances, they are then barred from suing their employer. Workers comp becomes the exclusive remedy for any on-the-job injuries. If you remove that protection from the worker, you are also removing the protection from the employer. If injured, these workers would be free to sue the employer (and under such circumstances, we would encourage them to do so!). Of course, we know that many undocumented workers would not have the resources or wherewithal to do this.
Secondly, not only would this measure do nothing to discourage undocumented immigrant workers, it would actually incent unscrupulous employers to increase the ranks of illegal immigrants. If an employer could hire undocumented workers, pay them less, assign them the most dangerous jobs, and then be absolved from any responsibility for a failure to protect them, it’s highly unlikely that the ranks of illegal immigrant workers would diminish – slavery affords a good competitive edge! Relieving an employer of any financial accountability for work injuries that occur on their premises is a distinctly bad idea. If an employer is willing to accept the benefits of an undocumented worker’s labor, why shouldn’t the employer also bear the associated responsibilities?
Scapegoating a vulnerable population won’t solve the problem
It’s popular today to demonize “illegal immigrants” and to lay a lot of the blame for our national woes at their doorstep. Even the very term is loaded – we don’t call the many employers that knowingly hire undocumented workers “illegal employers.” Let’s face it, whether they got here legally or snuck in under the wire, most immigrants are desperate to grab a piece of the American dream, just as your grandparents and mine were. Most are simply trying to eke out a living for their families, and taking great risks to do so. If the flood of immigrants is a problem that needs solving, this does nothing to solve it; such a measure would merely open the door to further abuse for an already exploited population.
There is little doubt that for Mexican and other Hispanic workers, exploitation is a fact of life today. Last year, a study by the Associated Press (AP) documented the plight of Mexican immigrant workers as a “worsening epidemic that is now claiming a victim a day.” Mexican workers are about 80 percent more likely to die from a work injury than native-born workers, and more than twice as likely to die on the job as other immigrant workers. And South Carolina legislators take note: death rates are greatest in several Southern and Western states, where a Mexican worker is four times more likely to die than the average U.S.-born worker.
Most states provide coverage for undocumented workers
If excluding undocumented immigrants from coverage was a good idea, it is likely that more states might have jumped on the bandwagon by now, yet according to the National Employment Law Project, most states do afford coverage (pdf):
“The majority of the states’ workers’ compensation laws include aliens in the definition of covered employees. Entitlement to lost wages under state workers’ compensation laws turns on state statutes and their definition of worker or employee. State courts in California, Colorado, Connecticut, Florida, Georgia, Iowa, Louisiana, Nevada, New Jersey, New York, Pennsylvania, and Texas have specifically held that undocumented workers are covered under their state workers’ compensation laws.”
” … like Virginia, a number of other states also explicitly provide for workers’ compensation benefits for “lawfully or unlawfully employed” employees. They are: Arizona, California, Colorado, Florida, Montana, North Carolina, South Carolina, and Utah. There is only one state, Wyoming, which has a statute specifically limiting coverage to documented aliens.”

With any luck, this measure will simply get quietly tucked away in the “what were they thinking?” file. We hope that this legislation is little more than political grandstanding and wiser heads will prevail.
Here are some additional past posts related to this topic:
Hispanic Fatalities on the job: the Tip of the Iceberg
Modern day slavery
Compensation for an Mexican immigrant worker who dies on the job is roughly half what a Canadian immigrant would get.

A Few Thoughts on Comp Medical Networks

Tuesday, May 24th, 2005

Workers comp is about injuries and injuries require medical attention. Our colleague Joe Paduda blogs the problem of finding good medical care under the comp system. Back in the 90’s, there seemed to be a proliferation of occupation medical practices: from hospital based occ clinics to the “doc in a box” walk-in clinics, there were a lot of options for treating injured workers. These options have diminished dramatically over the past few years. Why? It’s pretty simple: a combination of not enough volume (injury rates are declining) and suppressed rates of reimbursement (rate schedules for medical services under comp tend to be low). In addition, you need to consider the context: total health care in this country costs $1.4 trillion, while the comp portion of this is only $30 billion. Comp, in other words, is chump change in comparison to medical care in general.
Paduda’s blog shows that the prevalent trend is away from networks specializing in work related injury and toward bringing injured workers into conventional health networks — in other words, family practices. This is far from an ideal situation. Occupational medicine brings a unique and essential focus to work injury: the goal is always to keep people as productive as possible; to help them heal faster by returning them to work as soon as possible, often through the prudent use of temporary modified duty. I’m not sure that traditional family practices view injuries the same way. Family doctors are perhaps more sensitive to the pressures and issues outside of work. I suspect they are more inclined to give the injured work time away from work, especially when they know that any lost wages will be covered by indemnity payments. They are not used to communicating directly with their patient’s employer. Indeed, if the patient doesn’t like his or her job, the doctor may be inclined to separate the goal of getting the patient better from returning him or her to work.
Paduda highlights one exception to this trend: the recently announced merging of The Hartford’s workers comp business with Aetna’s workers comp specialty network, which is available in Pennsylvania, New Jersey, Connecticut, Texas and Virginia. Aetna’s network includes 130,000 physicians, hospitals and other health care providers. Aetna, along with Corvel, HealthFirst, Concentra and Focus, and a few others, continue to offer occupational services for injured workers.
Preferred Provider Networks that Really Work
I have long been intrigued with the issue of medical care in the workers comp system. I’m not sure that anyone has got it quite right. In the ideal system, doctors explicitly buy into the notion that a rapid return to work is the optimum result. They are committed to a “sports medicine” approach. They limit office visits and therapy to what is truly needed. They prescribe the necessary medications, but are careful to use generics where appropriate (even though the patient doesn’t really care, because there is no co-pay). These doctors are able to resist the raucous pitch of drug companies to experiment with off-line use of branded medications. And they communicate readily with their patients, the employer and the insurance carrier.
In exchange for all this good work, occupational doctors should be paid reasonable rates — which in many states means paying well above scheduled rates. Too often, the established rates (and the rates within many of the formal medical provider networks) are ferociously suppressed, which can lead doctors to make up the difference by over-utilization; in other words, suppressed rates do not necessarily produce lower costs. In addition to paying occ docs above rate schedules, they should also be reimbursed for certain key activities that usually are provided for free — such as filling out return-to-work status reports. If you don’t pay for such reports, the message to the doctor is that the reports are not important. In the comp system, there is no more important communication than the doctor’s take on medically necessary restrictions — what the employee can and cannot do.
We recommend that employers with any significant volume of injuries develop a relationship with their local providers, whether or not they are in a formal provider network. Make sure that the provider understands your commitment to modified duty. And let your carrier or TPA know that you are not interested in saving a few pennies by forcing your medical provider into a punitive rate schedule. Rather, you want to pay a little extra, in order to secure the level and quality of service that ensures success in workers comp cost control.

Pre-existing conditions and second injuries

Tuesday, May 24th, 2005

Over the weekend, one of our regular readers left a comment in another post asking for information about work injuries that are aggravated by a pre-existing condition. At one time, most state laws had Second or Subsequent Injury Funds (SIFs) that offered some measure of recovery to employers/insurers for injuries that were exacerbated by a pre-existing condition, whether that condition was due to a work-related injury or some other prior illness or condition. In workers comp, an employer’s premium rates are based on past loss experience. A second injury can often result in a very expensive claim, so the inclination would be to avoid taking any chances by hiring someone with a pre-existing condition. The purpose of SIFs is to prevent discrimination of disabled employees in hiring. SIFs provide a measure of financial relief for employers, either by reimbursing insurers/employers directly, or by taking over benefit payments for the injured worker.
Since the 1990 enactment of the Americans with Disabilities Act (ADA), many feel these funds have outlived their purpose since the ADA affords job applicants protection from discrimination on the basis of health or disability issues. Because of this, many states have eliminated funds in recent years, but funds are still operational in about 20 states – check with your insurer, your agent, or your state workers comp authority to find out if your state has such a fund.
The way that funds operate varies from state to state. In most states that still have funds, an employer must be able to demonstrate that they knew about the pre-existing injury or condition prior to the second injury. That’s the tricky part. ADA prohibits an employer from exploring past medical history in the hiring process, so any knowledge about pre-existing conditions must be gained after an employment offer and before a work injury. Sometimes, this can be done in post-hire medical exams or through conditional job offers contingent on medical exams, but this is another tricky area. The law firm of Wildman Harald offers an employer guidelines for complying with the ADA in the hiring process.
For more information, Mark Nevils of Insurance Recovery Group has an excellent primer on Second Injury Funds (pdf) that’s worth a read for more details. And California employers take note – he also has an article on the new amendment to the California Workers Compensation Law (SB 899) dealing with apportionment of permanent disabilities (pdf). This amendment offers some loss mitigation opportunities for employers in the event of pre-existing conditions.

Weblog roundup: Fishing safety, hearing loss, BP disaster & more

Saturday, May 21st, 2005

Fishing Safety
Strategic HR Lawyer points us to Dangers of the Deep, an article in which Alex Markel of recounts the sad story of last December’s sinking of the Northern Edge, a scallop boat fishing in the waters off Nantucket. Five fishermen drowned and one survived. The article discusses attempts to impose safety standards on the industry.
“Fishermen are a famously independent bunch, and they have long resisted the sort of safety regulations that are compulsory in other workplaces. Against their opposition, the first and only law aimed at improving the industry’s safety record was passed by Congress in 1988. The Commercial Fishing Industry Vessel Safety Act requires boats to carry life rafts, survival suits, and emergency beacons in the event of an accident–steps that Coast Guard officials say have since helped lower the number of annual fatalities.”
Carbon monoxide, noise tied to hearing loss
RawblogXport points us to a story in The Vancouver Sun that reports on a study showing that the presence of carbon monoxide can intensify hearing damage when coupled with high noise levels.
“They found that workers who were exposed to carbon monoxide and noise levels over 90 decibels (comparable to the noise produced by a chainsaw) displayed significantly poorer hearing thresholds at high frequencies than workers who were exposed to noise levels alone.
The reason, Leroux said, is that the human ear needs oxygen to translate sounds into electrical impulses, which are then transmitted to the brain. Cells in the blood carry the oxygen to the ears, and the louder the noise, the more oxygen is required.
But the presence of carbon monoxide, he said, results in decreased levels of oxygen, which means blood cells carrying oxygen to the ear have to work that much harder if the person is going to hear properly.”

Failure to get to the root cause: BP blames employees for fatal blasts
Jordan Barab at Confined Space discusses the tendency to blame the worker for industrial accidents, as again evidenced in a recent interim report about the BP tragedy. He analyzes the BP report and recent news coverage of the report, pointing out that in this case as in most others, scapegoating doesn’t get to the root cause of an accident, the one that will truly help to prevent future deaths.
“The fact is that human beings inevitably make errors and errors by operators must be expected. But rather than focusing on the operators who make the errors, effective accident analysis – analysis that actually wants to get to the root causes and effective solutions — looks for the conditions which made the errors possible.
These errors can be rooted in poor design, gaps in supervision, undetected manufacturing defect or maintenance failures, unworkable procedures, shortfalls in training, less than adequate tools and equipment. In addition, these conditions can be present for many years before they combine to result in a tragic incident. In fact, BP made the point that they had been operating with questionable equipment for many years with no problem.”

Jordan’s post on the matter is well worth a read – as per his usual thorough style, he discusses the topic in depth as it relates to the BP incident and other work disasters, and he provides links to several other posts he’s made on the same topic.
Belated congratulations to George and Michael at the ever-excellent George’s Employment Blawg on passing the two year mark of blogging. They cover a fascinating and instructive array of legal and human resource issues ranging from tattoos in the workplace to employment at will. Here’s to many more years ahead!
Other items of interest
Judge Robert Vondada of Pennsylvania Workers Compensation Journal posts on artificial spinal disks and a recent ruling about a claimant that prevailed in a case involving the costs of litigation.
Joe Paduda at Managed Care Matters discusses the worsening problems for AIG.

Today’s Blue Plate Special: Crow with Texas Hot Sauce

Friday, May 20th, 2005

Apologies are in order for yesterday’s posting on U. S. District Court nominee Priscilla Owens. Or as politicians are prone to say: “Mistakes were made.” I made them. I suppose I could have gotten it more wrong, but I surely didn’t get much of the story right. My thanks to a fellow blogger at who understands the law a lot better than I do. Here is the complete Kiva comment, which should set the record straight:
Justice Raul A. Gonzalez, a very conservative Democrat, wrote the Read opinion. Justice Alberto R. Gonzalez, who is now U.S. AG, was not on the Court in 1998. It is confusing, I realize. The Texas Supreme Court has had only two Hispanic members, and both of them have been named Gonzalez.
In Read, the opinion by Justice Raul Gonzalez, was joined by 5 other members of the court. There were two dissents. One by Justice Hecht, whose opinion was that the court overreached because of the horrible facts of the case. Justice Hecht wrote:
The Court’s solution is to limit its decision, as much as possible and well beyond what general principles will allow, to companies that require their products to be sold exclusively in customers’ homes. A company that only allows its products to be sold in homes is unaffected, even if the risk to customers is the same. Today’s “vacuum cleaner rule”, carefully tailored and trimmed, is to apply in all cases exactly like this one, of which there appear to be none. In all other cases, the “taxicab rule” continues to apply, absent other sympathetic circumstances. Employing its chancery jurisdiction, the Court achieves a good result in this one case without adversely affecting the direct sales industry, the employment of independent contractors, or, it is hoped, anyone else at all. Today’s decision is, to borrow Justice Roberts’ metaphor, “a restricted railroad ticket, good for this day and train only.”
The other dissent, by Justice Abbott, who is the current Texas Attorney General, concluded that the court sympathetically misapplied the facts of the case to settled law. Justice Abbott wrote:
I agree with the Court’s analysis of Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex.1985), that “a general contractor, like Kirby, has a duty to exercise reasonably the control it retains over the independent contractor’s work.” 990 S.W.2d at 735. I also agree with the Court’s synopsis of Exxon Corp. v. Tidwell, 867 S.W.2d 19, 23 (Tex.1993), that in determining whether a duty exists in a retained-control case, the “focus is on whether [the] retained control was specifically related to [the] alleged injury.” 990 S.W.2d at 736. I disagree with the Court’s application of this law to the relevant facts of this case.
Justice Owens did not write an opinion in Read. She did, however, join in both dissents.
In my view, there is nothing remotely novel about the Read holding. The disagreement of the court centered on the application of awful facts to settled Texas law.

Moving Along
Thanks again to for straightening this out. Eating crow isn’t half bad, as long as you bury it in the sauce…

FedEx and the Filibuster: The Future of Independent Contractors?

Thursday, May 19th, 2005

Perhaps you will think that the Insider is reaching a bit, when we state that the current judicial confirmation crisis in the U.S. Senate will eventually have a direct impact on the ultimate status of independent contractors in America, including the FedEx drivers that we have been following of late. Give us a moment to explain.
The first U. S. District judge up for confirmation is Priscilla Owens of Texas. She is widely viewed as ferociously pro-business. Her nomination is supported by the Justice Department and by a number of conservative groups. She is vehemently opposed by a long list of pro-consumer advocates, including People for the American Way.
In her years on the Texas Supreme Court, she has frequently dissented from the opinions of the majority — a majority considered quite conservative in its own right. One of these dissents involved the status of an “independent contractor.” The case is Dena Read v. the Kirby Vacuum Company. For political junkies, it’s worth noting that the majority opinion was signed by then Chief Justice Raul A. Gonzalez, a former Bush staffer who is currently the U. S. Attorney General and rumored to be headed for the U.S. Supreme Court.
Here is the background: A customer who was raped by a door-to-door vacuum cleaner salesman brought a negligence action against the vacuum’s manufacturer and the regional distributor, who operated as an independent contractor to the manufacturer. The trial court rendered judgment for the plaintiff for actual and punitive damages. The court of appeals affirmed the damages. The manufacturer then appealed to the Texas Supreme Court. The question presented to the Supreme Court was whether a company that markets and sells its products through independent contractor distributors and exercises control by requiring in-home demonstration and sales, owes a duty to act reasonably in the exercise of that control. In other words, does the manufacturer have to ensure that the independent sales force is qualified and appropriate to do the work? A majority of the court held that the company does owe such a duty. Accordingly, the court affirmed the lower court judgment.
Due Diligence in Hiring
In applying for employment to the regional distributor, Mickey Carter listed three references and three prior places of employment. Had the regional distributor checked these references, he would have found that women at Carter’s previous places of employment had complained of Carter’s sexually inappropriate behavior. The distributor would also have found that Carter had been arrested and received deferred adjudication on a charge of indecency with a child, and that one of the previous employer’s records indicated that Carter had been fired because of that incident. Further, the regional distributor would have found that these records also contained witness statements, a confession, Carter’s guilty plea, and the indictment charging him with the offense! Unfortunately, the regional distributor did not check any references; his defense, in part, was that Kirby, the manufacturer of the vacuum cleaners, didn’t require him to check references for the independent sales force.
The court actually did not question Carter’s status as an independent contractor, but stated that this status was no defense in this situation. The court found that Kirby required that its vacuum cleaners be marketed solely through in-home demonstration. It was Kirby’s retention of control over this detail that gave rise to the duty to exercise that control reasonably. Even though Kirby’s agreement with the distributors allowed them to independently hire a sales force, this did not excuse Kirby from the duty to act reasonably with regard to the qualifications of that salesforce. So the court found Kirby and the distributer negligent in not checking Carter’s references.
To this point, it all sounds pretty reasonable. Indeed, the Texas Court references a similar case from North Dakota, where a Kirby “independent” salesman violently assaulted a customer (kind of makes you want to buy your vacuum in a store, doesn’t it?). In direct response to this incident, Kirby put warnings in its training manuals of the need to do a “thorough criminal background check” on potential dealer candidates, had discourse with some distributors about the need to do reference checks, and instructed that if “red flags” come up in the process, the distributors should do further background checks. Alas, the changes in North Dakota never found their way into Texas.
Enter Owens
Priscilla Owens dissented from the Texas Supreme Court opinion. While details of her dissent are not available at the website, it appears that she considers the salesman a true independent contractor, so in her view the manufacturer bears no responsibility for his actions. Although the issue is not quite the same, I don’t think that it’s much of a stretch to project Owen’s response to the FedEx business strategy. She appears unlikely to have any problem with their position that their drivers are “independent contractors.”
So perhaps it is not far fetched to link the future of independent contractors — and the FedEx business strategy — with this week’s senate floor drama. While you never know exactly how judges will rule, you can certainly get a sense from their prior opinions. Based upon the history, a Priscilla Owens on the bench may provide the kind of victory in the courts for FedEx that has proven elusive to date. We will keep you posted.

Negligent hiring: Any limits to employer liability?

Wednesday, May 18th, 2005

We read in today’s Boston Globe (registration required) that the family of Christa Worthington, a woman who was brutally murdered in her isolated Cape Cod home in 2002, has filed a $10 million wrongful death suit against her alleged killer and the trash-hauling company that employed him at the time of the slaying. We can assume that the alleged killer has no assets and that the employer carries liability insurance: one has deep pockets, one does not. At this point the employee, 33 year old Christopher McCowen, has been linked to the crime by DNA but has not yet been tried. The issue here is similar to our May 12 blog on an intoxicated employee who drove his car into another vehicle and wiped out a family. What did the employer know and when did they know it? In today’s example, was the trash hauler negligent in hiring and retaining a man with a criminal history that includes burglary, grand theft, felony assault and threats to women?
Criminal Background Checks
Not every job requires a criminal background check. Where a company’s employees routinely enter private homes (plumbers, electricians, painters, carpet installers), where there is contact with school children (bus drivers, school cafeteria workers, school volunteers), or where there is ongoing public contact (bus drivers, catering services), employers clearly have an obligation to ensure that they are hiring people who do not put their customers or the general public at risk. These employers generally request a criminal background check from a state authority. Of course, these checks usually only reveal convictions in that particular state. When criminals or predators move from state to state, they are much harder to track.
When you hire someone to haul garbage, is a criminal background check necessary? At first glance, this appears to stretch the concept of negligent hiring to the breaking point. Garbage haulers do not enter homes; they do not generally come into direct contact with the company’s customers. What makes this case a bit different is the isolation of the victim’s home — she lived in a remote part of the Cape, far from any neighbors. But does this unusual circumstance require a higher level of diligence on the part of the employer? Does McCowen’s history raise any red flags about his ability to perform this particular job without endangering others?
Chilling Effect
While the lawyers bringing this suit will have their day in court, I believe they are trying to cast too wide a net in this particular situation. I suppose on some level you could argue that virtually any job could require a background check. The public interest requires that we balance any concerns for public safety with the need to create meaningful employment opportunities for everyone, including those who have engaged in criminal activity in the past. If you categorically reject every job applicant with a criminal history, you virtually force these people to engage in new crimes. Your categorical ban has a chilling effect on their ability to earn a living. On the other hand, individuals with a history of criminal activity and violence do pose risks, and in some circumstances these risks are substantial.
What’s an employer to do? We have often stated that managing a company is comparable to building a home on the San Andreas fault. The ground is always shifting and bad things can happen if you don’t pay attention. Know your work. Know your people. Keep your eyes open. It sounds simple, but it isn’t. In the world of business, one person’s mistake becomes another’s opportunity. Prudent managers try to keep these basics firmly and constantly in mind.

New York Rates: Follow the Bouncing Ball

Tuesday, May 17th, 2005

New York is famous for being a high cost state for workers compensation. By any reasonable measure, New York falls within the top four states for high comp cost, sharing the dubious spotlight with California, Texas and Florida. With its unique paternalistic approach, the state requires multiple hearings during the course of a routine claim. While attorneys in most states earn their fees by negotiating lump sum settlements, in New York they just have to show up. And show up. And show up.
Trending Up
New York is a tough state for writing workers comp. They are in the midst of a struggle to establish new rates — and unlike many states, this is not a question of how deep to cut current rates, but rather how steeply to raise them. The initial request from the New York Compensation Insurance Rating Board was designed to get everyone’s attention: a whopping 29%. As that most quotable of New Yorkers, Yogi Berra, might say, “It’s deja vue all over again.” It’s been over a decade since most states have seen a rate increase request of that magnitude. But that extravagent request was subsequently withdrawn by the board and replaced by a more modest — but hardly less aggravating — 9%. Wait a few days and it changes again. The most recent request on the table is for 16.1%.
Bouncing Ball
It’s hard to follow the bouncing ball, but one thing is clear. Rates are likely to go up, because costs are out of control. New York’s system, one of the first in the nation, still embodies the deeply adversarial divides of labor and management. It’s a system full of friction and conflict. When the ball bounces in New York, it lands squarely on the heads of New York’s employers, who pay the price for a dysfunctional system. Overall, New York ranks pretty low (45th) in general friendliness to small business. It will take political will and courage to turn this situation around. That’s not exactly what we see on the immediate horizon. So for the time being, when it comes to rates for comp in New York, it’s like the architecture in Manhattan: how high will they go and how fast?