Report: North Carolina Offices Communicate Poorly on Employers

North Carolina state agencies do a poor job communicating with each other to identify employers who are possibly breaking the law because they don’t have workers’ compensation insurance or fail to pay withholding taxes for their employees, a newspaper reported Tuesday.

State offices involved in worker safety and employer taxes rarely share information with counterparts that could be used to investigate insurance and tax scofflaws better, according to The News & Observer of Raleigh.

Leaders of the agencies – the Industrial Commission and departments of revenue and labor among them – said they don’t have time to help each other because of their own limited resources. They also choose to focus on the specific missions of their offices.

For example, the Department of Labor doesn’t seek proof of workers’ compensation coverage when they perform workplace inspections. The News & Observer reported in April at least 30,000 businesses required to carry the insurance for worker injuries don’t.

The Industrial Commission, which hears disputes over workers’ compensation claims, is trying to create a compliance system to ensure employers are insured. Meanwhile, the commission doesn’t inform the Department of Revenue when it finds an employer isn’t accurately reporting what it pays a worker, the newspaper said.

Commission Chairwoman Pam Young said it’s not the commission’s job to contact other agencies when it appears other businesses might be cheating.

“The Industrial Commission’s role, as I see it, is to ensure that there is coverage for employees who are injured on the job,” Young said. “Whether or not that business is competing fairly or unfairly, we don’t get into that debate because that’s not our charge.”

A little extra effort could go a long way. The News & Observer performed a crosschecking of databases of workers’ comp policies and 4,900 Labor Department inspections in 2011 and found 300 businesses whose policies had expired at the time of their inspections. More may have had no coverage at all.

Checking for workers’ compensation insurance isn’t the job of the Labor Department, Commissioner Cherie Berry said.

“We’re not set up as a state to have a place that’s a repository for that information so that it could be taken to the next level,” said Berry, adding that giving the information to the Industrial Commission would have limited effect because of the panel’s antiquated computer system. Young said the system keeps the commission from sharing information with others easily. A new computer system could be online in 2015.

The newspaper reported the Department of Revenue sends a list of new business to the Division of Employment Security, but not to the Industrial Commission so it can check for worker’s comp coverage.

Revenue Secretary David Hoyle said the law prevents his agency from sharing revenue data, which includes federal tax information.

The trouble with businesses skirting the law became more blatant with the bad economy, according to business owners who say some competitors are offering low bids because they aren’t paying insurance and taxes.

“It’s one of those things where everybody’s turning a blind eye,” said Roger Baker, who, along with his brother runs Southern Metal Systems in Wendell.

North Carolina legislators consider occasionally ways for agencies to share information, but those talks have often dissolved quickly, the newspaper said. That means agencies revert to operating in silos without regard to what another office is doing.

“We just suck at synchronizing things that are supposed to be helping people,” said Rep. Dale Folwell, R-Forsyth, who has worked on workers’ compensation legislation. “None of this surprises me, but it disappoints me.”