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Los Angeles Employer Workers' Compensation Law Blog

Consequences for uninsured employers

If you are a business owner in California, failing to have insurance to cover workers' compensation claims could cause serious trouble for you and your company. Here at Sacks & Zolonz, we understand the difficult position your company could be in if you are unprepared for a claim, and we want to help mitigate the consequences.

Not carrying workers' compensation insurance could result in a significant fine, but even that financial hit may not be your greatest concern. You or your company may face a criminal prosecution if an injured employee pursues a lawsuit, and the effects could be so dire that you lose your business. Even if the consequences are not that severe, you could face attorney fees for your injured employee in addition to a 10 percent penalty for not carrying the proper insurance in the first place. These additional expenses may end up costing you more than insurance would have. While you may then choose to obtain insurance, coverage may not help you with the current case.

What should you do after an employee injury?

When a worker is injured on the job, you have several responsibilities as a California employer. Here are some of the steps you should take when an employee comes to you with a workplace injury.

According to the United States Department of Justice, your primary concern after an injury in the workplace should be to ensure that your employee has sufficient medical care. In a non-emergency scenario, you may be able to discuss what happened with your employee; however, if medical attention is needed, you need to ascertain whether the employee can drive and, if not, arrange for transportation to a health care facility.

Workers’ compensation fraud and patient protection

Despite California’s strict penalties for workers’ compensation fraud, there are still plenty of attempts to beat the system in many industries, including medical services. This is evident in a recent legal case that is returning to court this month and that involves not only workers’ compensation but also serious threats to patients’ health.

According to US News and World Report, prosecutors in Los Angeles County took steps this month to reorganize an ongoing workers’ compensation insurance fraud case involving funds up to $150 million. There were 12 defendants in total who were originally indicted in 2015. Those charges have been dismissed, allowing prosecutors to refile allegations with the aim to revisit previously dismissed counts and simplify the litigation process. Defendants include a physician’s assistant who performed surgeries without attending medical school and two fugitives—an orthopedic surgeon and an office manager—who remain subject to the original indictment.

Man sentenced to jail for workers' compensation fraud

California employers are mandated by law to provide workers' compensation insurance for all employees. This is considered a relatively basic right by many workers. What should also be considered a relatively basic right by employers is that right is that employees will be honest about their conditions and only use or collect such benefits when truly needed. Sadly, this does not always happen.

An example of this can be seen in the case of a sheriff's deputy in Orange County. For a period of at least six months, he was found to have engaged in activities that he was reportedly not able or allowed to do during an injury he experienced while on the job. Physicians' orders barred the man from lifting anything that weighed more than 10 pounds after he hurt his back and left side in a trip-and-fall accident.

Workers' compensation requirements

Are you an employer in California? If so, you should know what the state mandates in terms of your requirement to provide insurance for your employees should they become injured or ill due to a job-related situation or incident. As explained by the State of California, Department of Industrial Relations, workers' compensation coverage is put totally on the shoulders of you, the employer. Employees should not be asked nor required to contribute to any premiums for this type of insurance.

There are three options via which you may legally be considered insured in the eyes of the law. One of these is to be self-insured. This requires that you meet some very stringent financial thresholds regarding your annual income and net worth. In addition, you must put up a deposit and be approved as self-insured by the state. You may also purchase workers' compensation insurance through the State Compensation Insurance Fund or through a private insurance company.

What is backdated liability coverage?

Your workforce is one of the most valuable resources your Los Angeles small business has. While you no doubt want to provide every workplace protection you can for your employees, the cost of worker’s compensation insurance may be prohibitive. However, if your company is legally required to carry such coverage, and one of your employees is injured on the job, you and your company could be facing, among other things, substantial fines. According to the Society for Human Resource Management, if one of your employees happens to file a claim that goes before the California Workers’ Compensation Appeal Board, you could be fined up $2,000 for each employee on your payroll if the claim is non-compensable, or $10,000 per employee if the accident is compensable.

A better alternative may be to attempt to ensure that your injured employee’s claim never gets that far. How is that possible if your company is uninsured? You could potentially purchase backdated liability insurance coverage. This is insurance coverage offered after a loss event has already occurred. When you request such coverage, insurers typically skip the standard actuarial analysis and instead estimate the potential financial loss you may be facing.

Detailing the dangers construction workers may face

Those who work in the construction industry in Los Angeles play a vital part in the area’s growth and development. While a good measure of pride likely comes with this knowledge, it may be tempered by the fact that the construction industry currently ranks as one of the most dangerous. The reason for this may not necessarily be a higher rate of injuries compared to other job sectors, but rather the greater potential for fatalities if and when accidents do occur.

Information shared by the Occupational Safety and Health Administration shows that 17 percent of all workplace fatalities in 2015 were attributed to the construction industry. Of the many risks that construction workers may be subject to, four stand out as presenting the greatest potential for death. Known as the “Fatal Four,” these include:

  •          Falls from heights
  •          Being struck by objects
  •          Electrocutions
  •          Being caught in or between equipment or collapsing structures

What happens if my claim is denied?

As an employee in California, you are entitled to certain rights under the law if you are injured during the course of work. In some cases your workers’ compensation claim may be denied, but fortunately you can appeal the decision if you feel it was made in error. To this end, it’s important for you to be aware of the steps involved in appealing a denied claim in order to have the best chance of success.

According to the State of California Department of Industrial Relations, workers whose claims were denied can file an appeal on their own or seek the assistance of an attorney. In any case, timely filing of your appeal is crucial to ensure you’re within the allotted timeframe. You will receive a letter informing you of your denied claim, and you must respond before the deadline to move on to the next steps.

Signs of workers' compensation fraud

If you are an employer in California, you want to maintain a safe and fair working environment for your employees, but some people may try to take advantage of you. Unfortunately, some employees file false workers' compensation claims in order to avoiding paying for an injury sustained elsewhere, or to get undeserved time off work. We at Sacks and Zolonz recognize the pressure employers have to discern between legitimate and fraudulent claims, and we stand ready to help you when dishonesty does occur.

While not every fraudulent claim will look the same, many have similar warning signs. Particularly if a case has several of the following elements, you may want to investigate its veracity. One red flag is a difficulty to specify the details of the claim. If no one else saw the injury, or if the claimant's account of the incident changes, it may be a false claim. The same may be true if an injury report does not support the details of the claim.

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