Fact: Workers’ Compensation Insurance is a type of “property and casualty” business insurance required in all states, except Texas where an employer may opt out. It is referred to as a “line” of insurance coverage and is purchased from an insurance agent or broker. For detailed information about your state’s requirements, contact your INSURANCE broker or agent.
Weekly Fraud Blotter from Lexis/Nexis: September 18, 2009
Three Employers Arrested in Two Days
It is illegal for businesses in Louisiana to misrepresent the status of their employees in an effort to avoid paying workers’ compensation insurance, payroll taxes and other employee-related costs. Employers who fail to comply can be fined up to $250 per employee per incident. Continued non-compliance can result in larger fines, an injunction from doing business in the state or possible jail time.
Agents with the Louisiana Insurance Task Force arrested the owner of a cleaning service on charges of insurance certificate forgery. His arrest follows that of two owners of a drywall business on charges of felony theft and workers’ compensation premium fraud totaling an estimated $1.2 million in unpaid insurance premiums.
“All employers doing business in Louisiana are required to provide workers’ compensation coverage for their employees. Businesses not covering their employees are shortchanging those employees and driving up costs for other businesses,” said Curt Eysink, executive director of the Louisiana Workforce Commission. “This is an important step in creating a level playing field for all businesses to compete fairly.”
The cleaning service owner is accused of altering an expired certificate of insurance to make it appear his company was covered by a workers’ compensation policy in order to maintain his service contract with the State of Louisiana. State contractors are required to have a workers’ compensation policy in effect to qualify for work. The investigation was triggered by a report showing the defendant’s work comp coveraged was cancelled due to non-payment.
Following a tip received by LWC, it was discovered the drywall business owners under reported the number of employees — reporting 35 and a payroll of $145,347, when there are more than 300 and a payroll of $4.2 million. (workersxzcompxzkit)
The Louisiana Workforce Commission has worked throughout the year investigating suspected employer and employee fraud. Through the second quarter of 2009, nearly 1,600 investigations were completed by the LWC Office of Workers’ Compensation Fraud and Compliance Units, with 13 referred to the AG’s office for possible prosecution. More than 10 arrests have been made.
Reposted with Permission Visit LexisNexis for more information and full reports. The latest workers’ comp fraud blotter see http://law.lexisnexis.com/practiceareas/Workers-Compensation-Law-Blog/workers-compensation-fraud-/Workers-Comp-Fraud-Blotter-9182009—Recent-Arrests-Charges–Convictions
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker about workers’ comp issues.
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