By DAN REYNOLDS, senior editor at Risk & Insurance®
Think we live in a modern, enlightened age when it comes to workers' compensation insurance?
Have you been to Oklahoma lately?
This year, the U.S. marks the 100th anniversary of the legislation that created workers' compensation insurance. But an incident in August involving grievous injury to two men under the age of 18 in a grain elevator accident serves as a reminder that there are still areas of this country with legislative environments that do not protect workers.
On Aug. 4, two 17-year-old workers each lost a leg when they got caught in a grain auger operated by the Zaloudek Grain Co. in Kremlin, Okla. An investigation by the Oklahoma Department of Labor revealed that the company had not carried workers' compensation insurance for five months prior to the incident. The company picked up the insurance five days after the incident, according to the department.
What's driving online commentators into a fine rage is the fact that the company was fined a grand total of $750 for its failure to carry workers' compensation insurance. The state allows a maximum of $75 per employee for not carrying the insurance. The company had 10 employees at the time of the accident, thus the total of $750.
Further enraging observers is the fact that the company refuses to pay the fine and has requested a hearing. That hearing was scheduled for Oct.11.
The state's Labor Commissioner, Mark Costello, could not be reached for comment. But he issued a release stating that he would call for a "restructuring" of the state's workers' compensation non-compliance penalties in the upcoming legislative session. State Rep. Dale DeWitt and State Sen. David Myers, both Republicans, did not return calls on the topic.
"As a matter of justice, the penalty for non-compliance should match the serious consequence of injury or death," Costello wrote in his release. And that's true.
But why has justice been delayed for so long, some 25 years, in the state of Oklahoma when many parts of the country have done plenty to create a more just environment for workers?
Take Michigan, for instance. In that state, according to Cheryl Cornellier, an administrator of the insurance division in Michigan's workers' compensation agency, employers who fail to pick up workers' compensation insurance can face fines of $1,000 for every day that they don't carry insurance. Think that's a better cattle prod than what Oklahoma is using?
Michigan also allows for criminal fines of $1,000 per day, or six months in prison, or both, depending on the judgment of the county circuit court judge the case lands in front of.
In 2010, neighboring Illinois collected $800,000 in fines from 135 employers covering 2,200 workers, according to that state's workers' compensation commission: That's $363 per worker.
Grain elevator work is scary work, with death by suffocation a risk for workers who can be caught standing in the wrong place as the auger sifts grain from a silo or other container to a waiting truck. Oklahoma's labor department has OSHA guidelines for grain silo safety on its website.
And, according to public statements by U.S. Labor Department spokeswoman Elizabeth Todd, both its Occupational Safety and Health Administration and its wage and hour division have launched open-ended investigations into the goings on at Zaloudek Grain Co.
October 10, 2011
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