Illegal Practices by Employers in America

October 23, 2019 - 9:32 pm
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It’s no secret that workers rarely receive sufficient compensation after receiving an injury while on the job. It’s also common knowledge that insurance companies make millions and millions of dollars each year on unused premiums in workers’ comp policies. But what some people don’t know, is that many employers in America commonly participate in illegal practices regarding workers’ compensation claims. The following are examples of how employers may be breaking the law and how in the end, the injured worker is left with inadequate coverage and significant unjustness.

1. The Use of Shell Companies.

 There are many businesses that choose to not follow the law in regard to paying workers’ comp benefits because they themselves want to reap monetary gain. One such way is by establishing a shell company, so they can avoid paying the state-mandated coverage by misrepresenting the number in their workforce. Essentially they are buying one policy for multiple companies. Others even go so far as to rent out their policy. The fact is, shell schemes are on the rise and generally have the goal to hide their payroll, so they can avoid workers’ comp premiums, taxes, and overtime pay. The shell also creates a nonexistent layer of workers’ comp insurance coverage between the injured worker and the employer.

2. Paying Cash Off the Books.

Georgia’s workers’ compensation law states that businesses with three or more workers need to purchase workers’ comp coverage. According to the State Board of Workers Compensation, if this law is broken penalties include fines, potential misdemeanor charges against business owners, and criminal penalties of up to one year in jail. Despite this, many companies still try to work around the system to save money. 

One way they do this is by paying workers under the table or off the books. Basically, a worker getting a cash payment is probably not technically “employed”, therefore will not receive the benefits that come with employment like workers’ compensation. So, what happens when the uncovered worker gets injured on the job? There are no resources to help pay the medical expenses and loss of wages. You see this happen commonly with seasonal workers as well as the construction industry.

3. Misreporting Dangerous Jobs.

Another way employers break the law by fraudulently under-reporting/misreporting payroll for calculation of workers’ compensation premium—or forgoing the purchase of insurance in its entirety. They also misclassify their employees into a less dangerous job code to decrease the level of risk. For example, the employer may classify a construction worker using the code assigned to an office assistant job. The reason is that it costs less to insure a low-risk professional, like an office assistant than it does to insure construction workers who carry considerably more risk. But it is against the law and leaves an injured worker without benefits or help. 

Employer workers’ comp fraud is a serious offense with significant financial repercussions. If you are an injured worker and have any doubts about your claim or how things are being handled, don’t hesitate to contact an experienced attorney in your area. Your attorney will help answer any questions you may have and get the process started so you can move forward with your case.

 

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