Carolinas Allowing “Ghost Policies” — Workers Unprotected

The state might never know if your employer has workers’ compensation. If you’re injured on the job, workers’ compensation is going to help you to cover medical costs, wage compensation and other costly obstacles. This is a coverage that’s required by law.
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Yet there were about 300 businesses in the state that were inspected last year who had no coverage or had expired coverage at the time of the inspection, according to the News & Observer. All that officials had to do was crosscheck information that was held by the North Carolina Department of Labor. This is the agency that is in charge of the safety of our state’s workplaces, and the state Industrial Commission. This is the commission who overlooks workers’ compensation insurance. The only problem is that no one’s checking these records and if the insurance isn’t in place, employees aren’t protected in the event of a work accident.

Our Charlotte workers’ compensation attorneys know this isn’t the only criticism about our state-run system that has made headlines. According to NCB News, there are 26 states (including both Carolinas) that administer their own systems. These systems all operate under federal oversight. It’s these programs that have been blamed for getting comfy with employers, not performing strict inspections and failing to keep victims properly informed.

The Occupational Safety and Health Administration (OSHA) recently conducted an inspection into these state-run agencies and found that both Carolinas weren’t collecting levied penalties. It was concluded that violations were also improperly classified in South Carolina. Federal officials say that it’s OSHA’s fault for not keeping a closer eye on the state programs. OSHA says that it’s promises to revamp the system and to make adjustments to make sure that employees are better protected.

Both systems, in North and South Carolina, don’t do the greatest job at publishing violations. Federal violations can be found on a daily basis with the click of a button on OSHA’s website. On North Carolina Industrial Commission’s website, it’s latest press release was dated back in June!

When you have to deal with a state-run bureaucracy after a serious work accident, you should seek the assistance of an experienced and an aggressive lawyer. However, when an employer doesn’t have workers’ compensation insurance for it’s employees, it’s ultimately the workers who will suffer. According to the Charlotte Observer, one common way that a company can get out of providing workers’ compensation for its employees is to list workers as independent contractors. When this is done, an employer is allowed to purchase a “ghost policy.”

Such a ghost policy might cost $850 per year. This is a lot cheaper than the proper coverage for a construction business with 5 employees, which could cost about $30,000. Still, the state doesn’t know exactly which of the nearly150,000 policies are “ghost policies.” According to the North Carolina Rate Bureau, about 16,000 are known.

Bottom Line: Employers are required to have workers’ compensation policies in place to help to cover workers who are injured on the job. When an accident happens, employees should usually be covered for medical expenses, short-term disability, lost wages and more. One of the most important jobs that our state watchdogs has it to make sure that each employer provides this kind of coverage for their employees.

If you have been injured at work, contact Lee Law Offices, P.A. for a free and confidential consultation to discuss your case. Call 1-800-887-1965.

Additional Resources:

Inept bureaucracy lets dishonest businesses win, by Mandy Locke and David Raynor, News & Observer, Aug. 21, 2012.

More Blog Entries:

Young Worker Population Increasing, Hazards on the Rise, North Carolina Workers’ Compensation Lawyers Blog, August 21, 2012

Work Injury Watch: Southeast Officials Pushing Fall Safety on the Work Site, North Carolina Workers’ Compensation Lawyers Blog, August 20, 2012

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