Workers Compensation

Next month, a little-known state agency that doubles as a $20-billion insurance company will hold its first public board of directors meeting in 94 years. After years of secrecy, questionable behavior by board members and more recently scandal at the agency, the Legislature and Gov. Arnold Schwarzenegger ordered sweeping changes now underway.

Insurance authorities say two Southern California business executives have been charged with defrauding the state of $18 million in a workers' compensation scam. State Insurance Commissioner Steve Poizner said David Zahler and David Tai were charged after a 2 1/2 -year investigation of their temporary employment company, Staffing Services Inc. in Bellflower. Zahler, who is chief executive, and Tai, who is chief financial officer, are accused of misrepresenting the type of employees for whom they were seeking workers' compensation coverage so they could pay cheaper premiums.

Moderately injured workers are getting back on the job more quickly since Gov. Arnold Schwarzenegger signed a 2004 overhaul of California's workers' compensation insurance system, according to a state study released Wednesday. But critics called the findings at best inconclusive and at worst an effort to downplay the effects of Schwarzenegger administration regulations that have cut benefits to injured workers as much as 50%.

City Controller Laura Chick released an audit Monday that found that a contractor, Cambridge Integrated Services, needs to improve its oversight of workers' compensation claims filed by the city's police and fire departments. Chick said that claims are taking longer to resolve and that the firm hasn't done a good job reining in workers' comp costs. Cambridge's contract pays it $7 million annually.

In a victory for the Writers Guild of America, a National Labor Relations Board judge has rejected an NBC Universal complaint that the union illegally hampered the production of Web episodes of such TV shows as "The Office" and "Heroes." NBC had alleged that the guild pressured "show runners" -- writer-producers who oversee shows -- to refrain from overseeing the writing of "webisodes."

Gus Barraza wasn't happy about getting a sprained thumb on the job, but he was impressed by the care he got at the clinic where his company sent him. He was clearing a sewer line in Duarte last month when the snake augur he was using hit a root and wrapped around his left thumb. "It was basically a sprained thumb, not broken or fractured, but they took care of me really well," he said.

The LAPD arrested one of its own Tuesday after discovering that he was working as a celebrity bodyguard while off duty for injuries, the department said. Det. Gilbert Barrow, 37, was arrested at the Rampart station after a department surveillance team found that he had side jobs while receiving time off with pay because of the injuries, said Sgt. Lee Sands.

Charles Lloyd, owner of Scramblez Cafe in Quartz Hill and in Lancaster, lost $2,800 in premiums and went almost a year without valid workers' compensation insurance without knowing it. His insurance agent, who won the business after a cold call, sent Lloyd official-looking documents with an insurance policy number, the name of a major insurance company and details of his supposed coverage. "Everything was perfect," Lloyd said. Then, in 2005, the cafe owner learned that he had been ripped off.

A third top executive at California's government-controlled workers' compensation insurance company has been dismissed amid a continuing probe into allegations of conflicts of interest and fraud involving as much as $1 billion. Charles Savage, a vice president and general counsel to the board of directors, was relieved of his duties at the State Compensation Insurance Fund late Tuesday.

California Insurance Commissioner Steve Poizner recommended Tuesday that insurers slash the rates they charge businesses for workers' compensation coverage by 14.2%, topping the 8% cut proposed by the largest insurer. Poizner also warned insurance companies that he would send in auditors to make sure they don't delay or deny needed medical care for injured workers, citing complaints from advocates for injured workers.