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By STEVE TUCKEY, who has written on insurance issues for a decade for several national media outlets

While law enforcement and insurance officials continue to ferret out employees looking to cheat the workers' compensation system for free vacations and drugs, the flip side of the problem appears to be more vexing than previously imagined.

Financed by the Ford, Joyce, Hanes and Russell Sage foundations, the study looked at a range of labor violations suffered by workers in low-wage industries in the three cities, including minimum-wage violations.

But it was the workers' comp violations that seemed to surprise officials the most.

Managed care consultant Joseph Paduda said the survey could go a long way toward explaining the recent drop in workers' comp claim frequency. "If you're a comp payer, you have been 'lucky' if you insure these businesses," he said. "But that 'luck' will soon change as the Department of Labor dramatically ramps up enforcement."

Paduda stressed that he did not believe carriers were complicit in this rampant underreporting. "In fact the opposite is much more likely, as insurers work very hard to ensure rapid and accurate claims reporting," he said.

Reacting to the study, U.S. Labor Secretary Hilda Solis said, "clearly we have a major task before us."

Annette Bernhardt, policy co-director of the National Employment Law Project, and co-author of the study said employers urge injured workers not to file for comp payments. "They will say 'here's some cash, just go to the emergency room,' " she told a National Public Radio interviewer.

Injured workers often face the threat of dismissal if they do report the injuries, she added.

The study also focused on minimum-wage and overtime-pay violations in the low-wage industries. "Some workers are more vulnerable than others, and especially women and people of color who have had higher violation rates, depending on which violation you looked at," she said.

The problem is not limited to immigrants working for small companies. While violations were often higher in smaller businesses, violations occurred in big companies and even national chain operations, Bernhardt said.

Paduda said that he wanted to give employers some benefit of the doubt that some workers may have been required to report to work if the injuries were not that severe. "But for those workers who were threatened, whose employers refused to help with the injury or were fired because of the injury, there is not only a workers' comp problem, there's a legal, ethical and moral failing,"

November 1, 2009

Copyright 2009© LRP Publications