Workers' compensation enforcers widen focus on employers
Audits of factories, farms and other workplaces highlight violations by employers.
SACRAMENTO — For a decade, California employers and their advocates in Sacramento complained about the high cost of workers' compensation insurance and condemned abuses of the system by employees, who they said fake claims, exaggerate medical conditions and collect fat disability benefits.
But some data suggest that employers -- not workers -- are the bigger workers' compensation cheaters. And the state is stepping up enforcement against businesses suspected of ignoring the law and endangering workers.
Last month, dozens of state agents swept unannounced through 22 garment shops in Southern California and San Francisco, and this week inspectors hit San Joaquin Valley farm labor contractors. They checked for valid workers' compensation insurance policies, business licenses and proper payroll procedures.
Workers' compensation: An article in Friday's Business section on state enforcement efforts targeting businesses without workers' compensation insurance gave an incorrect first name for a spokesman for the Workers' Compensation Action Network. His name is Jerry Azevedo, not Art Azevedo.
"We are out there enforcing these laws," said David Dorame, director of a state and federal task force called the Economic and Employment Enforcement Coalition. "We care about workers' rights and health and safety."
Workers' comp insurance is the state's basic protection for people hurt on the job. A century-old law requires that all employers have policies that pay for medical care, hospitalization and disability payments for job-related injuries.
The heightened enforcement efforts are beginning to show results. In May, state labor officials conducted a quarterly survey of 500 randomly chosen firms and found that at least 12.4% of them did not carry workers' compensation. They assessed $191,000 in fines against 62 companies.
"It's troubling," said John Duncan, director of the state Department of Industrial Relations, which did the survey. "Employers who are operating legitimately are getting undercut by those who are operating on the margin."
No one has ever been able to measure fraud among the hundreds of thousands of employees each year who file workers' comp claims, said UC Berkeley expert Frank Neuhauser. "But it's certainly less than 10%," he said.
Based on complaints by prosecutors, workers' compensation violations by employers outweigh wrongdoing by employees. The California Department of Insurance, state fraud investigators and local district attorneys filed 567 cases against employers during fiscal year 2006-07. Cases filed against employees totaled 473.
