THE WORK COMP BLOG

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Workers Compensation Fraud by Employees Gets Lots of Press while Fraud by Employers Costs Big Money

We see regular media reports of employees filing false workers compensation claims, collecting benefits while their Facebook page shows them partying the night away and other actions inconsistent with legitimate disability. Unfortunately, those cases do happen, but it’s not just employees who are trying to work the system. Employers do it too, all too often. How big a problem is it?

In 2011, a New York Supreme Court grand jury estimates the cost to the city and state of New York is approximately $500 million in the local construction industry because employers misclassified the type of work their employees did to get lower workers’ compensation premiums, according to the website Property Casualty 360. The grand jury looked at applications for, and audits of, workers’ compensation policies.

The NY grand jury examined the vulnerability of New York’s workers’ compensation insurance system to employer fraud and misuse and found that the largest losses were from unpaid workers’ compensation premiums, with personal income tax, withholding, unemployment insurance and various other business taxes accounting for the rest. More egregious fraud involved employers misclassifying workers, who are required to be insured under the system, as independent contractors rather than employees, according to New York County prosecutor Cyrus Vance.

Vance is quoted as saying New York’s workers compensation system is vulnerable because it requires employer self-reporting, and is “easily abused by unscrupulous employers who misclassify employees.” He says the grand jury determined, “Employers can easily lie about what work a particular employee performs, for example, reporting a roofer as a clerical worker, and thus paying a significantly lower premium.”

Dishonest employers get lower workers compensation premiums and those lower costs can give them a competitive advantage, according to Vance. “Overall, premium fraud generates an unfair business environment in which honest business owners cannot compete with rogue employers and are either forced out of the market or dissuaded from entering it in the first place,” Vance says.

In 2012, an estimated 30,000 North Carolina employers broke the law by not having the proper workers compensation coverage. If you believe your employer is engaged in workers compensation fraud, you can report it to the North Carolina Industrial Commission Fraud Investigations Section by calling (888) 891-4895.

If you are injured at work and your employer doesn’t have the proper insurance coverage, you still may have options to seek compensation for your injuries. Contact my office for a free consultation so we can discuss your situation.

P: 828-252-2852

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FREQUENTLY ASKED WORKERS' COMPENSATION QUESTIONS

What benefits can I receive under WC?

The employer is normally responsible for any medical expense your doctor feels will make you better. This normally includes prescriptions, medical supplies, TENS units, crutches, braces, physical therapy and any other expenses you would not have incurred but for your injury. These expenses are payable by the employer until the case is settled. While you have a general right to choose your own doctor for treatment, the insurance company retains certain rights to pre-authorize medical treatment. You should never go to a doctor without obtaining insurance pre-authorization. You should also never let an insurance company force their doctors on you without your approval. A rehabilitation nurse assigned by the insurance company does NOT have the right to be in your exam room with the doctor. Lost Wages In N.C., the employer is responsible for paying you only 66 2/3% of your gross average wages, up to a maximum that changes each year....

Do Undocumented Workers Qualify for Workers Compensation?

Immigration reform and enforcement of immigration laws have become a political hot topic, especially in light of Arizona’s enactment of several laws aimed at getting more undocumented residents to leave the state. In North Carolina, that debate hasn’t impacted the state’s workers' compensation laws. Under §97-2 of the state’s Workers' Compensation Act, the definition of “employee” states in part, (E)very person engaged in an employment under any appointment or contract of hire or apprenticeship, express or implied, oral or written, including aliens, and also minors, whether lawfully or unlawfully employed, but excluding persons whose employment is both casual and not in the course of the trade, business, profession, or occupation of his employer… The key language is that the law covers “aliens…whether lawfully or unlawfully employed…” Big picture, national immigration issues took a back seat (if they were thought of at all) when the legislature wrote this section and when...

Q. My spouse was killed while working on the job. Can I make a claim in addition to workers’ compensation?

A. Possibly. You would likely have a workers’ compensation claim regardless of how your spouse’s fatal injury happened. If the cause of death was due to the negligence of a third person, you will probably have a wrongful death claim in addition to the workers’ compensation action. You should consult a lawyer familiar with both personal injury and workers’ compensation law to make sure that the claims are brought in proper legal procedure. Failure to coordinate multiple claims could result in enforceable liens on one or both of the insurance payouts.

Q. What if I cannot return to any gainful employment because of my work related injury?

A. If you can never return to any type of work because of your workers’ compensation injury, the Industrial Commission can award lifetime benefits. These benefits can include payment of your compensation rate for the rest of your life, plus future medical treatment associated with your WC injury. If the treating doctor determines you are disabled and never able to return to any work, you should apply for Social Security disability as well as any other applicable private or group disability plan. Since some disability benefits are offset or deducted by WC benefits, you should consult an experienced lawyer to minimize these reductions in net payments to you.

Q. If I make a settlement in a personal injury arising out of a work injury, do I have to pay the workers’ compensation insurance back for money they have already paid me?

A. Sometimes. NC law is very complicated on these obligations. A Superior Court Judge can be asked to set what, if any, lien is due the workers’ compensation insurance carrier when a settlement is proposed on a civil lawsuit over the same accident. Once the Superior Court Judge sets the amount of the lien that is due, the NC Industrial Commission will issue an ORDER concerning disbursement of future workers’ compensation payments. You should consult a specialist in workers’ compensation law to avoid potential liens and pay back requirements.

Q. Who provides and directs medical treatment resulting from a workers’ compensation accident?

A. The employer or its insurance company, subject to any NC Industrial Commission orders, provides, and directs medical treatment. The NC Industrial Commission may permit the employee to change physicians or approve a physician of employee's selection when good grounds are shown. However, payment by the employer or carrier is not guaranteed unless written permission to change physicians is obtained from the employer, carrier, or Commission before the treatment is rendered.

Our Video Library is not closed-captioned.  Instead of embedding our videos, we have created posts for them, where full transcripts of can be found.
Click on the links below to view the video and its transcript.

Workers’ Compensation Overview on Vimeo

Workers Compensation Overview

Workers’ Compensation Injuries and the Complex nature of the law on Vimeo

Workers’ Compensation Injuries and the Complex Nature of the Law

Waiting Periods for Workers’ Compensation Benefit Payments

Waiting Periods for Workers’ Compensation Benefits

NC Workers’ Compensation Elements of Settlement

NC Workers’ Compensation Elements of Settlement

Settlements of Workers’ Compensation Claims on Vimeo

Settlement of Workers’ Compensation Claims in North Carolina

Pre Existing Conditions and Work Comp in North Carolina

Pre-existing Conditions and Workers’ Compensation Claims

NC Workers’ Comp Covers Many Different Kinds of Injuries

NC Workers’ Comp Covers Many Different Kinds of Injuries

Reopening Workers’ Compensation Cases

Reopening Workers’ Compensation Cases

Can’t Return To Work After an Injury

Workers’ Compensation Benefits When You Cannot Return to Work

Specific Traumatic Injuries

Specific Traumatic Injuries Under Workers’ Compensation

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