Corrupt Employers Misclassify Workers to Avoid Paying Workers’ Compensation

Some employers refuse to play by the rules. What is one way in which employers break the rules and harm our workers’ compensation system? Corrupt employers misclassify workers. That is, they incorrectly label employees as independent contractors or outside consultants to avoid important laws related to safety and benefits. This is a disturbing trend which I have previously discussed.

The following is a quote from Leonard Jernigan published on Jon Gelman‘s workers’ compensation blog that sums up the problem misclassification causes in our workers’ compensation system. Both of these attorneys are considered experts in the field of workers’ compensation benefits:

When workers are misclassified, insurance companies do not consider them employees. The injured workers are then denied workers’ compensation benefits. Additionally, the insurance companies are not paid insurance premiums and are not adequately reserved for the risk of injury by those workers.

When employees are misclassified, everyone suffers. The worker will most likely have his claim for benefits denied. That worker may be able to win his claim but the resulting litigation could prove costly to everyone. Additionally, other employers who followed the law lose because they shoulder the costs of the system. Over the years, I’ve litigated many claims where the employer tried to avoid paying for workers’ compensation insurance by misclassifying its employees. Ultimately, we are often able to get these injured workers the benefits to which they were entitled. Unfortunately, the bad acts of these few employers resulted in a lot of pain and expense getting there.




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