Tag Archives: misclassification

New York’s Newest Budget Shortchanges Injured Workers

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

A couple of weeks ago Governor Cuomo signed the New York State Budget that contained some potentially detrimental provisions for injured workers. Big business interests are taking their victory laps as they continue with their campaign to dismantle the Workers’ Compensation system by further reducing benefits to injured workers.  See this for what it is- a relentless attack on the working men and women of this state.

If you believe that the majority of those on Workers’ Compensation are frauds, faking an injury, or taking advantage of taxpayers, then you are probably content with the changes in the law. That also probably means you were swayed by the alternative facts that the Business Council was promulgating, including the proposition that Workers’ Compensation benefits are to blame for the high cost of doing business in New York and that many injured workers are not deserving of the benefits they receive.   

My colleague Len Jernigan from North Carolina issues an annual report of the top 10 Workers’ Compensation fraud cases. In 2016, those top 10 fraud claims were against employers – not workers – and totaled more than $400 million! Much of the fraud involved misclassification of employees in order to circumvent payroll taxes and Workers’ Compensation insurance. In fact, very few workers would voluntarily subject themselves to a system that has become so bloated by bureaucracy and is more concerned about precluding medical treatment because a form is not filled out correctly or penalizing counsel for being too overzealous by submitting numerous requests for their client’s day in court. 

Injured workers do not have much political clout. They do not get rich off of Workers’ Compensation benefits. Their weekly benefits can be reduced if they are considered partially disabled without regard to their socio economic status, their educational level or whether or not they are still being treated for their injuries.   Many of them who were union workers now are no longer able to pay union dues; some cannot pay for medical insurance for themselves or their families as Workers’ Compensation insurance only covers the injured worker for the injuries sustained on the job.

Workers’ Memorial Day takes place annually on April 28.  It is a day to remember those who have suffered and died on the job. Each year there are symposiums, panel discussions, acknowledgements, and speeches paying tribute to the men and women who have lost their lives at work. Many of our politicians will issue statements or attend rallies to stand in solidarity with workers’ groups. We will hear how their deaths should not be in vain and how we must make our workplaces safer. We will be saddened to hear the list of names of those who went off to work never to return.

Many of the politicians giving these speeches are the same politicians who voted to reduce benefits to injured workers in order to appease big business interests. It is difficult to comprehend the hypocrisy involved, but we are told this is politics as usual. While it may be too late regarding the further limitation for lost wages, there is still an opportunity to let the Governor know that any further reduction for permanent injuries to limbs is just not acceptable. While honoring those who died on the job is laudable, properly compensating those who have suffered permanent injuries is equally important and ensures that we value both the dead and the living.

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

Cutting Corners Costs Lives: Non-Union Work Sites Twice As Dangerous As Union Sites

This large inflatable rat is a common sight at protests of non-union worksites in New York City.

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

As an attorney who practices in the metropolitan area, I often find myself traveling into New York City. I am amazed at the amount of construction that I see; the cityscape is changing and evolving rapidly. This construction boom means more business, a steady paycheck for workers, and more money for the city and state. Unfortunately, with the rise in construction also comes a rise in safety violations, injuries, and fatalities.

The New York Committee for Occupational Safety and Health (NYCOSH) recently issued a report called Deadly Skyline regarding construction fatalities in New York State. A summary of their findings notes that from 2006 through the end of 2015, 464 construction workers died while on the job, with falls as the leading cause of death. When a fatality occurred, safety violations were inherent in more than 90 percent of the sites inspected by the Occupational Safety and Health Administration (OSHA). The report pointed out that non-union work sites had twice the safety violations of union sites, and in 2015, 74 percent of the fatalities occurred on non-union projects with the majority of the fatalities involving Latinos.       

It is painfully obvious that shortcuts and cost-saving measures result in injury and death. Many employers use misclassification as a means to save money. Misclassification occurs when an employee is labeled as an “independent contractor” so that a business owner doesn’t need to pay Workers’ Compensation insurance, Social Security, Medicare, or unemployment taxes. Some even resort to paying employees off the books as well in an effort to save money. This may not seem troublesome until you realize that this is a one-sided deal that really only benefits the employer. According to the NYCOSH report, misclassification of workers allows an employer to skirt the safe workplace requirement as OSHA does not cover independent contractors.

Employers must provide Workers’ Compensation insurance for their employees, and typically must notify their Workers’ Comp carrier as to the number of employees they have and the type of work they do. A risk analysis is performed and then employers are assigned a premium to pay in order to cover their workers in case of injuries. If injuries occur, premiums may be increased accordingly. Obviously employers in high-risk businesses must pay more for their premiums than those with employees involved in low-risk jobs. As injuries on misclassified workers do not add to an employer’s bottom line, there is less incentive to provide safety measures if it cuts into profits.

To make construction sites safe, NYCOSH recommends adequate education and training as well as legislation to punish those whose willful negligence causes a death. They also recommend passage of the NYS Elevator Safety bill that requires the licensing of persons engaged in the design, construction, operation, inspection, maintenance, alteration, and repair of elevators. It would also preserve Section 240 of the New York Labor Law, commonly referred to as the “scaffold law,” which governs the use of scaffolding and other devices for the use of employees. Weakening the Scaffold Law would shift safety responsibility from owners and general contractors who control the site, to workers who do not control the site and are in a subordinate position.

It is a true tragedy when someone is maimed or killed in an accident that could have been prevented. Not every employer engages in these tactics, and most workplaces are generally safe spaces for workers. However, even one death is too many. 

 

 

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

Misclassification Fraud Across the Country

North Carolina Governor Bev Perdue Signed Executive Order 125

Today’s post comes from guest author Leonard Jernigan from The Jernigan Law Firm.

“Misclassification” is a poorly chosen word to describe fraudulent conduct by employers who misclassify the status of their employees. For example, a roofing company may have 30 roofers doing the actual work but these workers are classified as “independent contractors” instead of employees. Why would they do that? At the end of the year these workers are sent a 1099 tax form that reports the wages paid, but the employer does not make any deductions for Medicare or unemployment, and doesn’t pay for workers’ compensation insurance. If you have a roofing company and you properly classify your employees, you are at a competitive disadvantage in bidding on jobs. Honest businesses are hurt by misclassification, and taxpayers are hurt because they pick up medical bills and other expenses created when one of these “independent contractors” gets hurt.

Another form of misclassification is when a construction company with 85 employees reports to its workers’ compensation insurance company that 75 of these people are staff workers, which results in a significantly reduced premium. Obviously, a construction worker is at greater risk of injury than an office worker. Again, the honest company who accurately reports the status of its employees is at a competitive disadvantage with the dishonest employer.

New York, New Jersey, Massachusetts, Virginia, Michigan, Florida, California, Texas and the vast majority of states across the country have been looking into this issue for several years and they have been aggressively prosecuting dishonest employers who try to game the system. North Carolina has finally joined these states. On August 22, 2012, Governor Beverly Perdue issued Executive Order 125, which created a task force to study this issue and try to get different agencies to communicate with each other and share information to identify employers who are failing to pay employee taxes. Hopefully, this task force will figure out how to enforce existing law. This blog will follow the progress of this task force. Stay tuned.