Tag Archives: misclassification

Did it get easier for employers to dodge workers’ compensation in Nebraska?

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A recent Nebraska Supreme Court decision, Abotyes-Mosqueda v. LFA, made it harder for some workers to claim workers compensation benefits and easier for employers to classify workers as independent contractors.

Statutory employer

In this case the plaintiff attempted to join LFA as his statutory employer. A statutory employer is a contractor who works with a subcontractor in order to avoid liability under the Nebraska Workers Compensation Act. LFA subcontracted with Ismail Huerta who recruited a crew that included in the plaintiff. Huerta did not have workers compensation insurance. When plaintiff was hurt, he claimed workers compensation against LFA. 

In his favor, plaintiff had evidence showing that after the injury LFA required Huerta to obtain workers’ compensation insurance. That would point towards LFA being a statutory employer.

But the court found that the plaintiff could only join LFA as a statutory employer if he was an employee of Huerta. The court found he was not actually employed by Huerta. The court used a 10 factor test to determine that plaintiff was an independent contractor.

I would note that the court merely went through the traditional 10 factor test rather than look to the economic reality of the relationship between Huerta and the plaintiff. Nebraska appellate courts have traditionally done that analysis. I am not sure if that would have made a difference in this case, but I wish the court would have asked and answered that question.

The ABC Test

The question of whether the plaintiff was an employee likely would have come down differently if the ABC test was applied. In the ABC test a worker is an employee unless: they are 1) free from control of work both under contract and in fact 2) service is outside of normal course of business and 3) the workers is customarily engaged in a trade, occupation, profession or business. The ABC test applies to unemployment benefits in Nebraska.

But there is another distinction between how employees are classified under Nebraska workers’ compensation and unemployment law.

Burden of Proof

Under the Nebraska Employment Security Act (unemployment) the employer has the burden to show they meet the ABC test. But the Nebraska Supreme Court held in this case, that it is the employee who has the burden to prove the employment relationship. The court made a very general citation to the act in support of this proposition. However employees do have the burden of proof to show they were injured arising out of and in the course and scope of employment. It will probably require legislation to shift the burden of proof on employment status onto employers in workers’ compensation cases.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Workers’ Compensation Basics: Are You an Employee?

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Here’s the second blog post in a series on the basics of workers’ compensation.

As its name suggests, workers’ compensation compensates employees for on-the-job injuries. About 95 percent of time, the question of whether an injured worker is an employee is a simple “yes.” If you are paid a regular salary or by the hour via a regularly scheduled paycheck where your employer takes deductions out for Social Security, unemployment, Medicare, etc., you are most likely an employee.

But sometimes the issue of whether you are an employee isn’t as simple. Some states may exclude household and farm workers. Some states may exclude employees performing work for the business outside of the regular course of business hours. An employer might try to exclude an employee from workers’ compensation benefits by alleging the employee is an independent contractor.

If you are hurt on the job and your employer or their insurance company is claiming that you aren’t covered by workers’ compensation, you need to contact an experienced workers’ compensation attorney. Laws about which employees are covered by workers’ compensation are very specific and vary by state. You need an attorney who can tell you whether you are in fact covered by workers’ compensation, and, if not, what other possible ways there would be to compensate you for your injuries.

Read the first blog post in the series by clicking on this link: What is Workers’ Compensation?

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

This entry was posted in Fraud, Workers' Compensation and tagged , , , , .

Misclassification – Department of Labor Recovery

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department_of_labor

 

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm in North Carolina. Employer fraud happens more than businesses would like folks to think, and Mr. Jernigan writes a “Top 10” list at the end of each year talking about this problem. His list in 2012 was called “$97 Million In Fraud: 2012′s Top 10 Workers’ Compensation Fraud Cases.” That blog post includes an example of labor violations when a company in Massachusetts misclassified employees as subcontractors. The article that was the focus in last Monday’s blog post, “Connecticut Employers Shut Down For Not Paying Workers’ Compensation Insurance,” also talked about misclassification as a form of employer fraud. Although it appears to happen in construction a lot, this type of fraud can occur in other industries, too. And as can be seen in just the article below, misclassification fraud isn’t limited to specific states but can happen anywhere. It is helpful to see some action occurring, both in the courts and legislatively.

The U.S. Department of Labor has recovered more than $1 million in back wages and liquidated damages for 196 employees of Bowlin Group LLC and Bowlin Services LLC out of Ohio and Kentucky. Bowlin Services installed cable for Insight Communications, a cable, telephone and Internet provider in Kentucky. The defendants misclassified 77 employees as independent contractors and violated the Fair Labor Standards Act (FLSA) by denying these workers access to critical benefits, including minimum wage, overtime, family and medical leave, unemployment insurance, workers’ compensation and failing to maintain accurate payroll records.

Misclassifying employees negatively impacts our economy, generating losses to the U.S. Treasury, Social Security and Medicare funds, state unemployment insurance, and state workers’ compensation funds. It also leads to unfair competition because businesses that play by the rules are at a disadvantage.

This problem has become so acute in Tennessee that last month the legislature passed Senate Bill 833, which has been signed into law and imposes penalties on construction companies for misclassifying workers in an attempt to evade workers’ compensation premiums. A Tennessee study in 2012 revealed losses of up to $91.6 million in workers’ compensation premiums. North Carolina has identified the problem but has yet to take any action. Until states aggressively prosecute misclassification, this fraud will continue.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Texas Stories: Symptom of Bigger Workers’ Comp Debates

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We have been listening with interest to a recent National Public Radio (NPR) series about construction workers and businesses in Texas. The series about this industry confronts many of the issues that are being debated by society these days, whether in the judicial, executive or legislative branches.

To add some context, these topics include employing immigrant workers; paying a living wage; calling an employee an independent contractor; and ensuring workplace safety, workers’ compensation, and payroll taxes are all done, practices that specifically are not happening in Texas, according to the stories. A notable quote from the first piece is “Texas is the only state in the nation without mandatory workers’ compensation, meaning hospitals and taxpayers usually end up shouldering the cost when uncovered construction workers are hurt.” And we think the information from the second piece is quite telling that the business owner “asked that NPR not use his last name because the IRS might take an interest in his business, designs and builds landscapes in the Dallas-Fort Worth area.” Because he treats his crew as “self-employed contractors,” meaning that the IRS would likely see his interpretations of tax law as illegal. From the story: “This is a key distinction. If Trent were to classify his workers as employees, he’d have to pay taxes, Social Security, unemployment and overtime. But by saying his workers are actually independent contractors – in essence, business owners – he’s off the hook.”

We think listening to these two pieces, at less than 15 minutes total, is a good opportunity to experience an applied illustration of what happens to the vulnerable when such protections as workers’ compensation are effectively dismantled for profit-taking and political reasons. Respected colleague Jon Gelman in New Jersey recently wrote a blog post that focuses on the first NPR report and “how bad it is for workers who get injured in Texas.”

Although things are allegedly always more extreme in Texas, attacks on the vulnerable aren’t limited to that state, unfortunately. Ms. Cathy Stanton, president of the Workers’ Injury Law and Advocacy Group (WILG), and a respected colleague from Pasternack Tilker Ziegler Walsh Stanton & Romano in New York, recently wrote an extremely useful article about “Emerging Trends in Legislative Attacks on Injured & Ill Workers.”

In Nebraska, the anti-worker, pro-business Nebraskans for Workers’ Compensation Equity and Fairness group is backing LB 584 that would dramatically limit protections that workers have when it comes to being injured through a concept called evidence-based medicine/utilization review. In addition to our firm writing numerous blog posts about this legislation, EBM/UR is #8 in Ms. Stanton’s list of “trends throughout the country which would negatively impact existing Workers’ Compensation benefits.” And according to this article, politicians in Tennessee are looking to gain some brownie points with business and insurance by overhauling the workers’ compensation courts to the detriment of injured workers. Iowa workers and attorneys have to contend with #6 on the list, restricting doctor choice, while a bill in Nebraska’s legislature is in the works to do the same if passed.

We agree with what Ms. Stanton writes: “All workers need to be aware of these trends because the likelihood of legislation being introduced in their state against their interests is strong. Employee immunity has remained untouched, but workers’ benefits are consistently under attack as a result of the collective lobbying efforts of the insurance industry and large corporations.   Unfortunately the great compromise is turning out to be one sided as workers are forced to endure multiple obstacles and hurdles to be entitled to fewer and more restricted benefits.”

So we would encourage you to join us in educating yourselves about how workers’ compensation “reform” can lead to stories like NPR’s cautionary tales about the construction industry in Texas and to explore what’s going on in your state legislature. Finally, get involved in your state’s political process to advocate for workers!

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Corrupt Employers Are Ruining Our Country

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This interview by our good friend Leonard Jernigan is a really good way to understand the constant battle to take workers’ rights away and the history of this perpetual fight between working people and their employers.

In the video, Professor Jernigan talks to Sam Gold, director of the National Association of Injured Workers (NOIW) and producer of Injured On The Job.

You can see Professor Jernigan’s original post at his blog:  http://www.ncworkcompjournal.com/2012/01/corrupt-employers-just-keep-cooking-the-books/

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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