January 2013

An Idaho woman who was collecting on a Workers Compensation claim for an alleged foot sprain, combined with a case of depression, decided that a change of scenery would be the perfect cure – or so it seemed.

Her suspicious employer retained the services of a professional claims investigation firm. The chase was on. First, the firm tracked the claimant down to a small tourist island off the coast of Washington and videotaped her as she ran errands around the island. Then another investigator followed the claimant by ferry to another island, where she got into a friend’s car and was filmed as she shopped and dined.

Later, the claimant was taped boarding a plane from Seattle to Boise, Idaho. In a single day, she was able to keep two doctor appointments in town, return to the Boise airport, and fly back to Seattle. She was back on the island soon, apparently walking quite well on her injured ankle and in a great mood for someone so depressed.

Once the employer turned the video over to the insurance company and the state insurance fraud division, we suspect that the claimant’s depression became quite real.

Although exposing Workers Comp scams might seem like the stuff of intrigue novels, businesses such as yours do it all the time. If you suspect fraud, please contact us. We can provide suggestions and solutions.

Although there’s nothing new about perils on the job, the dangers facing workers today – from deranged employees with firearms to the threat of mass terrorism – are increasingly complex and dangerous. This makes it essential to integrate a security policy into how your business operates, rather than seeing it as an add-on service.

Use this questionnaire to assess your readiness and ability to create and maintain a secure workplace:

• Do you check references and conduct background checks when hiring new employees?
• Are supervisors trained to heighten awareness and use conflict resolution?
• Do you have written policies covering employee theft, workplace violence, drug trafficking, and other criminal activities in the workplace?
• Are employees told to report any strangers they see in the facility or on company property?
• Are employees instructed never to lend their security badge, keys, access cards, etc. to anyone?
• Do you use surveillance cameras to monitor high-risk areas of your facility, such as loading docks, warehouses, and outdoor storage areas?
• Are keys and access codes or cards given only to employees who need them to gain access to their work area(s)?
• Do you recover keys, access cards, and ID badges when employees leave the company?
• Are locks and codes changed after any incident of suspicious activity, or when an employee with access to critical areas or information is fired or leaves under strained circumstances?
• Are computers protected by passwords known only to operators and other authorized personnel?
• Do you require all visitors to sign in and out at a central reception area and be escorted to and from their destinations within the facility?
• Are employees required to enter and leave the facility through assigned entrances and exits?
• Are staff members trained to identify suspicious packages and know what to do if one arrives?

Our agency’s professional staff would be happy to provide a complimentary review of your security procedures and recommend upgrades to make it even more effective. Just give us a call.

If your workers take a “rules are for fools” attitude when it comes to workplace safety, and supervisors don’t enforce these standards, you could end up paying through the nose for their indifference.

Consider this story, based on a real court case:

Joe was a wrapper at ABC Furniture. One afternoon, he worked overtime to help his supervisor, Mario, build an enclosed office within the company warehouse. Late that afternoon, Mario told him to pick up a load of sheetrock, using a forklift – even though Joe wasn’t trained or certified to use it. The result: he overloaded the forklift, which turned over and crushed his leg, an injury that required amputation. When Joe applied for Workers Compensation, ABC fought the claim, arguing that because he violated company safety policy by operating a forklift without authorization or training, he was injured while acting “outside the scope of his employment.”

However, a state superior court, disagreed, ruling that Joe could collect benefits – even though he had violated company safety rules and wasn’t performing his usual job. In this case, both he and his supervisor, Mario, clearly had no commitment to a policy that would have prevented the accident.

All too often, employees sidestep safety rules, while their supervisors turn a blind eye to this reckless behavior. Many of these cases involve misuse of equipment and forklifts, usually by younger, risk-taking workers.

The bottom line: If employees don’t know and/or follow safety rules, and supervisors don’t enforce them, resulting in an accident – especially one that involves a serious injury – your business will suffer such unpleasant consequences as higher Workers Comp rates, lower productivity, and declining workplace morale.

It happens every day. A firm faces a large increase in its Workers Compensation premiums because the government or insurance carrier has decided that all of its independent contractors are really employees. All too often, the true relationship between the firm and the other party was left ambiguous. When it comes to Workers Comp, “ambiguous” often means “employed.”

It makes sense to minimize this gray area. In many states, laws define the independent contractor relationship. Where there’s no such definition, the worker’s status is usually determined by applying the “common law test,” which the IRS uses for FICA, FUTA, and FIT withholding.

This standard has three parts: behavioral control, financial control, and the relationship of the parties – all considered together. The IRS offers these guidelines:

• Behavioral Control shows whether your company has a right to direct or control how the worker does the work, whether or not it actually does so.
• Financial Control shows whether there’s a right to direct or control the business part of the work. For example, workers who are not reimbursed for some or all business expenses might be independent contractors. Also, workers’ ability to make a profit or incur a loss suggests that they might be in business for themselves as independent contractors.
• Relationship of the Parties illustrates how the business and the worker perceive their relationship. For example, a written contract might show what both you and the worker intend. This might be highly significant if it’s difficult to determine status based on other facts.

For more information, or to be certain that you’re up to date on the latest requirements in your state, please contact our Workers Compensation specialists. Minimizing the gray isn’t just about hair color anymore.