In August, we wrote about a terrible construction accident in Florida that claimed two lives. Five other workers, including a 13-year old boy, were injured when a roof collapsed as concrete was being poured. A $2.4 million fine was imposed, and state authorities subsequently shut down the contractor when it was learned that the company did not carry mandatory workers compensation insurance.
Last week, the owner of Macs Construction and Concrete Inc. was jailed. Insurance Journal reports that failure to provide workers compensation coverage is a felony and, if convicted, the employer faces up to five years in prison.
“When workers show up to perform a job, they deserve to be protected in case they get injured. This terrible accident is a perfect example of why workers’ compensation is so important,” said Gallagher, who oversees DFS. “Employers who don’t protect their workers will be held accountable.”
In addition to the obvious and terrible toll that employees face when employers lack coverage, other employers pay the price as well. Competitors face unfair competition, and insured employers generally face higher premiums to cover state costs for any benefits provided to workers.
Jordan Barab at Confined Space also discusses this story. He notes the irony that the charges against the employer stem from lack of insurance rather than the unsafe practices that caused the deaths of the workers.
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Posts Tagged ‘employer fraud’
Florida uninsured employer jailed for fraud after two deaths
Wednesday, December 1st, 2004Ohio getting tough on premium compliance
Friday, July 16th, 2004Employers in Ohio would do well to ensure that they keep their workers’ compensation premium payments up to date. The Ohio Bureau of Workers Compensation (BWC) recently issued a press release naming employers who have lapsed premium payments.
Ohio is one of five states where a state fund is the exclusive provider of workers insurance. The other states are North Dakota, Washington, Wyoming, and West Virginia.
According to the release, more than 1,710 Ohio businesses are breaking the law by letting their premium reach a lapsed status of more than $1,000. The BWC takes efforts to bring employers into compliance, but when unsuccessful, the Attorney General pursues legal action. By publicizing the top 150 noncompliant Ohio employers, the state fund is enlisting the help of the public.
“Businesses that do not pay their premiums have an unfair advantage,” [James] Conrad [administrator and CEO] said. “In competitive bidding situations, Ohio employers that do not pay into the workers’ compensation system can undercut competition and unfairly win a job. By stealing from BWC and Ohio, these companies are also stealing work they normally might not win, and it’s imperative the bureau, along with state’s employers and taxpayers, put a stop to this type of activity.”
As part of the push to secure compliance, BWC has added an employer coverage look-up tool to its website. BWC suggests the following scenarios where the tool might be useful:
- Ohio homeowners who have recently hired a contractor for their services;
- Ohio employers who are curious about those with whom they do business;
- Ohio contractors who want to check on the coverage status of subcontractors.
With some few exceptions, failure by employers to secure workers compensation coverage for their employees is illegal in most states, and considered as fraud. Other types of premium fraud include under-reporting the number of employees or payroll, misclassifying employee occupations, or any other scheme to avoid or underpay premium. Many states encourage employees to report any suspected employer fraud to either their state insurance authority or the state