I would like to find out how they could operate without worker’s comp. Even the small business owner here with no other employees has to carry it – is forced to carry it. What happened?
Unfortunately in the construction industry this is fairly common. Employers pay in cash under the table, and try to avoid the responsibility of paying for insurance as everyone else must. Then they scream that rates are too high, and how greedy the insurance companies are. As you can see, payout of WC claims can be astronomical. I feel for those families of the deceased.
This is a very common circumstance here in South Florida. 1st. It is much much cheaper to pay someone in cash vs. witholding taxes, paying taxes and WC. In the construction business it can be well over a 50% savings to the business owner. The employees either do not have the required paperwork to legally work, or jump at the chance to get paid in cash which means more money in thier pocket. I would not be surprised to find out that none of the injured/deceased workers will even qualify for social security benefits, since being paid in cash and not reporting the income will disqualify them from even that benefit.
Someone asked how can a company operate this way. This company used an employee leasing company or PEO to supply it with WC. If the company did not report workers to the PEO, the PEO will not provide those workers with WC. You should advise clients that accept PEO WC certs, to also get a copy of each weeks billing report and spot check againist the numbers and names of the people working. I have the feeling that this company had the owner, the secratary, and mabey a few 5606 supervisors on the PEO payroll. The GC in this case most likely looked the other way when they got a low bid for the work. A cross check againist the biling from the PEO would most likely have let the GC notice that for a company with 12 employees on its site, there were only 3 employees on the PEO invoice.
Personnally I think that until this liability becomes the ultimate burden of the property owner, the cost pressure to cheat will remain and things like this will continue. While not all cases involve death and dismemberment, even a broken arm, or a minor claim can cause great hardship to the uninsured worker. I hope the State uses the new WC law to charge and imprision the owner of the company, and that the property owner is forced to make the workers’ whole, if the GC does not step up to do so.
I find the Workers Compensation regulations here in Florida to be very confusing. Coming from New York and having been in the business of insuring contractors, I find it hard to believe.
Your biggest abuse are the “leasing of employees” This encourages employers to classify the lowest cost employee to the
major classification. And what of COIs?
I am a Florida Bar Board Certified Workers’ Compensation claimant’s attorney. The workers injured and killed were nothing more than slaves to this construction company and it’s owners. They worked for less than documented workers, they got no social security, no unemployment and no workers’ compensation coverage. This business activity won’t stop until the offenders are criminally prosecuted under existing laws and jailed. Manslaughter, insurance fraud, and Federal Tax evasion are just a few of the possible charges. A stop work order and a few small OSHA fines don’t cut it. This company’s contracts will go to another company with the same owners that is able to produce a certificate of insurance. They will then do the same thing again, list a few employees but not all for premium purposes. Or screw the carrier or PEO when an accident happens to one of the uninsured employees by putting him on the payroll for the week of the accident and claim he was just hired, even though he has been on the job a year. But the worker can’t prove it because he never got a paycheck before. And ask our Governor why Florida closed down it’s division of safety and left the job of enforcing safety regs to the 8 or 9 OSHA inspectors assigned by his older brother to the entire state of Florida. It’s just business as usual, except it’s the year 1904 not 2004.
If you participate in an illegal activity (working under the table to bypass local ordinances), and something bad happens to you, is that the fault of the employer, or your fault for doing something you knew was wrong?
Let’s take some accountability for our own personal actions, not blame eevryone else.
reply to Jon: So I assume if your car is parked illegally, like overtime at a meter, and the garbage truck negligently runs into it and crushes it, you don’t get to collect for your damages? Is the illegal worker taking advantage of the employer or vice-versa?
Indeed, is it the fault of the uncovered worker or the GC who hired them? I must say how dismayed I am – and I’m not naive – this does happen all of the time, though. We are a commercial GC in Texas and work very hard at providing a safe place to work for all of our employees and those of our subs. Still, there are those subs and sub-subs who try to circumvent the system. We had a subcontractor employee fall about 30′ a couple of years ago; the sub supposedly was “leasing” their employees — one problem — the insurance was bogus. Luckily, the young man is ok now. Since that time, I check out all leasing arrangements — what codes are included on the workers’ compensation policy, how the agreement between the sub and the leasing company works, check with the carrier to make sure there really is coverage.
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It should be interesting to see how/if they provided Certificates of Insurance and to whom. Keep us posted Ins Journal.
I would like to find out how they could operate without worker’s comp. Even the small business owner here with no other employees has to carry it – is forced to carry it. What happened?
Unfortunately in the construction industry this is fairly common. Employers pay in cash under the table, and try to avoid the responsibility of paying for insurance as everyone else must. Then they scream that rates are too high, and how greedy the insurance companies are. As you can see, payout of WC claims can be astronomical. I feel for those families of the deceased.
This is a very common circumstance here in South Florida. 1st. It is much much cheaper to pay someone in cash vs. witholding taxes, paying taxes and WC. In the construction business it can be well over a 50% savings to the business owner. The employees either do not have the required paperwork to legally work, or jump at the chance to get paid in cash which means more money in thier pocket. I would not be surprised to find out that none of the injured/deceased workers will even qualify for social security benefits, since being paid in cash and not reporting the income will disqualify them from even that benefit.
Someone asked how can a company operate this way. This company used an employee leasing company or PEO to supply it with WC. If the company did not report workers to the PEO, the PEO will not provide those workers with WC. You should advise clients that accept PEO WC certs, to also get a copy of each weeks billing report and spot check againist the numbers and names of the people working. I have the feeling that this company had the owner, the secratary, and mabey a few 5606 supervisors on the PEO payroll. The GC in this case most likely looked the other way when they got a low bid for the work. A cross check againist the biling from the PEO would most likely have let the GC notice that for a company with 12 employees on its site, there were only 3 employees on the PEO invoice.
Personnally I think that until this liability becomes the ultimate burden of the property owner, the cost pressure to cheat will remain and things like this will continue. While not all cases involve death and dismemberment, even a broken arm, or a minor claim can cause great hardship to the uninsured worker. I hope the State uses the new WC law to charge and imprision the owner of the company, and that the property owner is forced to make the workers’ whole, if the GC does not step up to do so.
Michael Speizman
PEO Experts, Inc.
5612397356
I find the Workers Compensation regulations here in Florida to be very confusing. Coming from New York and having been in the business of insuring contractors, I find it hard to believe.
Your biggest abuse are the “leasing of employees” This encourages employers to classify the lowest cost employee to the
major classification. And what of COIs?
I am a Florida Bar Board Certified Workers’ Compensation claimant’s attorney. The workers injured and killed were nothing more than slaves to this construction company and it’s owners. They worked for less than documented workers, they got no social security, no unemployment and no workers’ compensation coverage. This business activity won’t stop until the offenders are criminally prosecuted under existing laws and jailed. Manslaughter, insurance fraud, and Federal Tax evasion are just a few of the possible charges. A stop work order and a few small OSHA fines don’t cut it. This company’s contracts will go to another company with the same owners that is able to produce a certificate of insurance. They will then do the same thing again, list a few employees but not all for premium purposes. Or screw the carrier or PEO when an accident happens to one of the uninsured employees by putting him on the payroll for the week of the accident and claim he was just hired, even though he has been on the job a year. But the worker can’t prove it because he never got a paycheck before. And ask our Governor why Florida closed down it’s division of safety and left the job of enforcing safety regs to the 8 or 9 OSHA inspectors assigned by his older brother to the entire state of Florida. It’s just business as usual, except it’s the year 1904 not 2004.
If you participate in an illegal activity (working under the table to bypass local ordinances), and something bad happens to you, is that the fault of the employer, or your fault for doing something you knew was wrong?
Let’s take some accountability for our own personal actions, not blame eevryone else.
reply to Jon: So I assume if your car is parked illegally, like overtime at a meter, and the garbage truck negligently runs into it and crushes it, you don’t get to collect for your damages? Is the illegal worker taking advantage of the employer or vice-versa?
Indeed, is it the fault of the uncovered worker or the GC who hired them? I must say how dismayed I am – and I’m not naive – this does happen all of the time, though. We are a commercial GC in Texas and work very hard at providing a safe place to work for all of our employees and those of our subs. Still, there are those subs and sub-subs who try to circumvent the system. We had a subcontractor employee fall about 30′ a couple of years ago; the sub supposedly was “leasing” their employees — one problem — the insurance was bogus. Luckily, the young man is ok now. Since that time, I check out all leasing arrangements — what codes are included on the workers’ compensation policy, how the agreement between the sub and the leasing company works, check with the carrier to make sure there really is coverage.