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Posts Tagged ‘workers’ compensation’

Lost wages, serious illness and poor labor standards: The dangers of rebuilding Texas and Florida

Monday, September 11th, 2017

As Texas prepares to rebuild after Hurricane Harvey devastated much of the state, and Florida starts picking up the pieces from the destruction wreaked by Hurricane Irma, emergency workers may face exploitation for the sake of greater profits and speedier project completion.

Past abuses after similar natural disasters have left laborers without all of their wages and with serious illnesses that could have been prevented with proper supervision and training, labor experts say. A large portion of these workers are undocumented and likely afraid to alert authorities when their rights are violated. On top of that, the Trump administration’s approach to labor protections doesn’t inspire confidence, according to workers’ safety experts who spoke to ThinkProgress.

Forty percent of Houston construction workers do not have health insurance, retirement, life insurance, sick leave, and paid time off, according to a 2017 report from the Austin-based Workers Defense Project, an organization that advocates for better health, safety, and labor standards. The report was the result of interviews with over 1,400 construction workers. On average, a construction worker dies once every three days in Texas because of unsafe working conditions.

Texas is also the only state in the country that doesn’t require any form of workers compensation coverage, said Bo Delp, Director of the Better Builder Program at Workers Defense Project.

“After disasters like Katrina, there is a lot of construction going on — rebuilding, repairs, and remodels, and a lot of exploitation as well. Texas is a uniquely bad state for construction workers in terms of conditions,” Delp said. “That is compounded with a disaster like Harvey, when we know, in other contexts, that this has led to exploitation on an unprecedented scale.”

“After disasters like Katrina, there is a lot of construction going on — rebuilding, repairs, and remodels, and a lot of exploitation as well.”

Studies after Hurricane Katrina found that wage theft and unhealthy working conditions were rampant and that undocumented workers were particularly vulnerable. A 2006 study from the New Orleans Workers Center for Racial Justice found that 61 percent of surveyed workers had experienced workplace abuses such as wage theft and health and safety violations. A similar 2009 study by the University of California, Berkeley found that there were concerning differences in conditions for undocumented versus documented workers. Thirty-seven percent of undocumented workers said they were told they might be exposed to mold and asbestos, while 67 percent of documented workers reported they had been informed. Only 20 percent of undocumented workers said they were paid time and a half when they worked overtime.

Delp said that there are “good honest contractors” in the state, but he is concerned about “fly-by-night” contractors who will eschew safety measures to get things done cheaply and quickly.

Sasha Legette of the Houston Business Liaison works alongside community partners and policymakers, including the mayor’s office, to ensure better wage and safety conditions for workers. So far, she said that she has been impressed with Mayor Sylvester Turner’s response to the disaster. But she hopes the state doesn’t rush it in a way that could harm workers.

“We know that the water and flooding has created a very toxic environment and what we don’t want to see happen is that workers or that the city is so eager to rebuild that the safety of those who are going to do that work is not taken under consideration,” Legette said.

“They can identify hazards and prevent the need for OSHA to have to enforce after the fact,” Goldstein-Gelb said.

Sharon Block, executive director of Harvard University’s Labor and Worklife Program and former principal deputy assistant secretary for policy at the U.S. Department of Labor, said she is concerned about the administration’s potential response to the recent disasters.

Often, OSHA will begin with “compliance assistance mode,” which means they will help employers comply with rules, and then will eventually move to enforcement mode. But the Bush administration never moved into enforcement mode after Katrina, and she worries that the Trump administration could do the same.

Block is also worried about whether there are enough resources at the agency. In addition to the proposed cuts and business-friendly approach of the administration, there is no OSHA chief.

“They don’t have real leadership in the agency,” Block said. “So having watched Sandy and the Gulf oil spill, these sort of unexpected disaster responses, even for an agency like OSHA, it’s really complicated and it’s really resource intensive.”

“Based on their level of staffing and resources and everything else about their approach on worker protection issues, I’d be worried about how workers post-Harvey and post-Irma are going to be effective.”

“There is a lot at risk,” Block added. “Based on their level of staffing and resources and everything else about their approach on worker protection issues, I’d be worried about how workers post-Harvey and post-Irma are going to be effective.”

There are some potential downsides to not having an OSHA chief at a time like this, such as getting assistance from FEMA to do work on the ground to address workers’ health and safety needs, said Barab.

“A lot of the activity around these national disasters involves agencies working together,” Barab said. “It requires agencies having frank and candid conversations, [such as] getting FEMA to be more accommodating to the health needs of workers. It always helps to have a higher level person doing that.”

In order to get OSHA staff to hurricane-affected areas in Texas or Florida, OSHA would have to transfer some compliance and enforcement staff there temporarily. But this is expensive and the agency has been chronically underfunded. To reimburse the expenses of doing this, FEMA can provide supplemental assistance, Barab explained, but the state must request this and, on top of that, the state has to contribute 25 percent of the funding.

“To pony up about 25 percent of cost — we haven’t seen a lot of states willing do that. I am not optimistic about Texas and I don’t see them wanting to spend money to get more OSHA enforcement there,” Barab said. “FEMA has the ability to waive that requirement, but they generally don’t, and didn’t, in fact, after [Hurricane] Sandy.”

 One of the other challenges facing OSHA will be outreach to undocumented workers who may be concerned about reporting safety and wage violations. Barab said the government needs to send a message that the U.S. Immigration and Customs Enforcement (ICE) agency will not be involved if workers want to report violations. But because many workers will feel uncomfortable going to a government official in any situation, OSHA needs to maintain relationships with local nonprofits.

“We already had pre-existing relationships with nonprofits that were continuing to train immigrants and day workers during [Hurricane] Sandy,” Barab said. “In terms of being able to reach out to OSHA, the nonprofits had a relationship with these workers and other groups had relationship with OSHA.”

Marianela Acuña Arreaza, executive director of Fe y Justicia Worker Center in Houston, an organization that helps low-wage workers learn about their rights and organizes workers, said the group has been through post-disaster health and safety trainings and has a healthy relationship with the local OSHA office. The center is educating workers on what kind of respirators to use if they’re working in a structure that has mold, for example, while also keeping an eye on any worker safety and wage violations. The center has also benefited as subgrantee from the Susan Harwood program for the last five years.

“Undocumented workers specifically fear retaliation in terms of losing a job or an employer calling ICE on them, and that happens a lot. It is definitely a barrier for people to come forward,” Acuña Arreaza said. “Even other immigrants who have other statuses — some of the fears are similar because they are still worried about losing their job or having their employer retaliate.”

“We try to repeat that and and say, ‘No, you have rights.’ And people start getting it after we repeat it enough.”

By having a staff of mostly immigrants, she said the organization has created an environment where undocumented workers would feel comfortable, never asking workers about immigration status, and working with other nonprofits and local churches to encourage people to come in.

“We try to repeat that and and say, ‘No, you have rights.’ And people start getting it after we repeat it enough,” Acuña Arreaza said. “But there is a huge disconnect that comes from documentation but also comes from not being able to speak English or fully speak English, other cultural barriers, and racism. Lacking papers does not help, but there is this layered separation from justice in the system of worker rights.”

This article was originally published at ThinkProgress on September 11, 2017. Reprinted with permission. 

About the Author: Casey Quinlan is a policy reporter at ThinkProgress. She covers economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.

The War on Workers’ Comp

Wednesday, June 15th, 2016

Stephen FranklinFor nearly a century, millions of workers have endured punishing jobs in construction, mining and factory work—jobs with high levels of work-related disability and injury. As a tradeoff for the dangers, they’ve had the assurance of workers’ compensation if injured permanently on the job. Employers accepted this deal, albeit sometimes grudgingly, because it  removed the possibility of being sued over work-related injuries.

But as labor has weakened and Republicans have won control of more and more statehouses, states have slowly chipped away at workers’ compensation benefits.

Since just 2003, more than 30 states have passed laws that have “reduced benefits for injured workers, created hurdles for medical care or made it more difficult for workers to qualify,” according to a recent investigative series by ProPublica and NPR. Some of the harshest cuts came in California, Arizona, Florida, Oklahoma, North Dakota, Kansas, Indiana and Tennessee. Today, according to the federal Occupational Safety and Health Administration (OSHA), many injured and disabled workers “never enter the workers’ compensation system.” OSHA also estimates that workers’ compensation covers only about 21 percent of the lost wages and medical bills encountered by injured workers and their families.

Illinois, long a union stronghold, could nevertheless join the pack of those closing the doors for some to workers’ compensation if right-wing millionaire Gov. Bruce Rauner gets his way.

Traditionally, when companies hired workers, they bought their work histories. That is, they assumed responsibility for the physical problems employees developed over years of difficult work. But Rauner wants to narrow eligibility for compensation dramatically, requiring an injury to account for at least 50 percent of the claim.

Rauner’s argument is that workers’ compensation was designed for “traumatic” injuries, and that including repetitive injuries which accrue over time, effectively requires employers  to pick up non-workplace injuries. He contends that changing this standard would put Illinois on the same track as many other states.

John Burton, a veteran workers’ compensation industry expert, disagrees.

“What the governor is proposing is to take a lot of cases that have been compensable for the last 50 years and to throw them out,” he said.

One of these is Steve Emery.

The third-generation coal miner rode the wave downward, working in one mine after another as the industry collapsed. Then his hands, once powerful enough to manage the grueling job of breaking up large chunks of coal with a sledgehammer, failed him.

The spiraling numbness in his wrists and hands ended with a doctor saying he would never work in a mine again. He was 50 years old and had spent more than 30 of them in southern Illinois mines.

After a four-year battle with insurance companies arguing that Emery’s injuries were not job-related, he received $1,815 a month in workers’ compensation—enough to live on, but one just about one fourth of what he used to earn

Under Rauner’s proposed rules, Emery might not have received workers’ compensation at all. Democrats asked Emery to tell his story at an Illinois State House hearing last year as an illustration of the workers who would be left out in the cold under Rauner’s plan.

Dave Menchetti, a veteran workers’ compensation attorney in Chicago, adds that the shift proposed by Rauner would be “extremely difficult for doctors,” who are not trained to quantify the causes of injuries. “It would severely prejudice older workers and workers in heavy industries because those are the kind of workers who have pre-existing conditions.”

So what happens when business-minded workers’ compensation reformers get their way?

What the bottom looks like

A federal commission that examined workers’ compensation laws in 1972 was “disturbed” by the wide divergence of rules between states, and an “irrational fear” driving states and employers to search for “less generous benefits and lower costs.”

“We were talking about a race to the bottom,” explains Burton, a Republican, lawyer and economist, who led the groundbreaking study.

The study recommended mandatory federal standards; none were ever put in place.

And the race hasn’t abated, Burton says.

Indiana offers an example of what happens when a state wages the race to the bottom.

Starting decades ago, as Indiana’s leaders sought out factory jobs to supplant the state’s mostly rural economy, they embraced  a low-cost, employer-friendly workers’ compensation system. And it has stuck, as the state’s Senate has largely stayed under control of the GOP.

Workers in Indiana must wait seven days before receiving benefits (as opposed to three in Illinois). While permanently disabled workers in Illinois can receive benefits for life, Indiana caps benefits at 500 weeks, just under 10 years.

To qualify for permanent total disability in Indiana, workers must meet a “pretty high bench.” as Terry Coriden, a former chairman of the Worker’s Compensation Board of Indiana, describes it. “If you can be a greeter at any type of store, then that type of employment could be deemed to be reasonable, which would preclude you from total permanent disability,” he says.

Only 45 workers out of 597,058 who filed claims between 2005 and 2014 received permanent total disability status in Indiana, according to statistics from the Worker’s Compensation Board of Indiana. The rate was twice as high in Illinois, according to data from the National Council on Compensation Insurance provided by Burton. Only 13 percent of the Indiana workers who filed claims over those years qualified even for permanent partial impairment.

And the system simply pays out less.

Consider the case of a steelworker in northwest Indiana who suffered third- and fourth-degree burns over two-thirds of his body after being hit by hot metal and slag from a blast furnace.

In the nine years since, he has undergone 38 surgeries and still has no feeling in parts of his arms and legs.

Before the injury, he was earning as much as $130,000 year because of extensive overtime. Today, he gets $600 a week in workers’ compensation as a totally disabled individual, as well as $2,200 monthly in Social Security Disability income. In order to stay afloat, he has dipped heavily into his savings and his wife has picked up low-wage part-time jobs.

The worker did not want his name used because he feared that the company would retaliate. “I don’t want any blowback from the company until my workers’ comp ends,” he says. “I don’t want them kicking me out of it.”

He is especially concerned, he says, because despite having his employer authorize and provide the majority of his treatment, several recommended procedures were not authorized In Indiana, workers must go to the company’s doctors and follow whatever they prescribe. If they don’t, they lose their benefits.

Steve Emery, in Illinois, saw what happened when he visited a company physician.

His hands were “killing” him when he saw a local Southern Illinois physician of his own choosing in 2010. “The doctor said, ‘We’ll have to do surgery and you’ll never do work again,’ ” he recalled.

Peabody Energy, however, said he had to see the company’s physician in St. Louis. “[The doctor] said, ‘Mr. Emery, did you hurt this way when you was a kid playing baseball or mowing grass?’ ” Emery recalls. “I told him I didn’t play baseball and didn’t push a push mower “ Nonetheless, he says, “They denied my claim ASAP.” Peabody officials in St. Louis did not reply to requests for comment.

Fortunately for Emery, Illinois workers typically have the right to choose their doctor as well as their treatment (unless their employer has set up a “preferred provider” network, in which case they have the right to choose any two doctors within the network). Illinois also allows workers to seek a boost in their payments if they can show that they will suffer from a marked decrease in earnings. Indiana lacks both of these rights.

Low workers’ compensation payouts mean that workers in the state may even have more difficulty getting a lawyer to help them pursue a claim, given that legal fees are set according to the settlements received.

“The well-known truth is that it is hard to make money doing the work,” said Kevin Betz, an Indianapolis lawyer.

The business argument

To justify his plan, Gov. Rauner blames the “high costs” of workers’ compensation with driving jobs to other states, including Indiana.

“Employers are flat-out leaving the state, and they are saying it is because of the workers’ compensation policy,” says Michael Lucci, an official with the Illinois Policy Institute, a conservative think tank that has received financial support from Gov. Rauner and also supports Rauner’s anti-union right-to-work drive.

There’s no disputing that nationwide, the downward race has paid off financially for employers. Workers’ compensation costs as a percent of payroll fell in 2014 to the lowest figure since 1986, Burton notes. Some of the decline has come from improved safety, but some, he says, has come from restrictions on workers’ compensation.

Lucci’s organization has churned out reams of information backing up the argument that Illinois’ workers’ compensation’s costs are uncompetitive as compared to its neighbors, especially Indiana. For Illinois steelmakers, workers’ compensation costs account for about 7.3 percent of their payrolls, for example, as compared to only 1.3 percent in Indiana, according to the Illinois Policy Institute.

That’s just as Indiana intended it. The logic behind its laws is “inducing businesses from other states to Indiana,” explains Coriden.

Experts say that the idea that high costs are actually driving companies to relocate, however, may be little more than a myth.

West Virginia is one of those states that have slashed benefits to drive down costs for employers. But Emily Spieler, a former head of the state’s Workers’ compensation Fund, says it didn’t boost business much in the economically troubled state. Similarly, Spieler, a professor at Northeastern University’s School of Law, says she has yet to see any studies showing a positive financial impact for states. She is also dubious that workers’ compensation is a large enough factor to lead a business to change locations.

Asked for evidence that workers’ compensation costs may be driving firms out of state, officials from the Illinois Governor’s office cited their contacts with employers and site selectors and suggested contacting business groups for more information.

But when In These Times posed that question to the Illinois Chamber of Commerce, which has been outspoken about the need to drive down workers’ compensation costs in order to remain competitive, Jay Shattuck, a contract lobbyist for the group, said he was not aware of any studies specifying that workers’ compensation alone made Illinois noncompetitive. (He also notes that the Chamber, while supporting most of Rauner’s plan, doesn’t see Indiana’s low payout system as the ideal.)

Victor Bongard, a lecturer in Indiana University’s Kelley School of Business, is familiar with Indiana’s pitch about attracting businesses through its low-cost workers’ compensation. He agrees that it is one factor in where businesses choose to settle, but “not a determining factor,” he says. He points to California, which “draws business to relocate there and manages to foster lots of new businesses despite its high workers’ compensation costs.”

Cost-shifting—but to whom?

With employers and the states’ workers’ compensation systems paying less, who picks up the bill?

In addition to workers themselves, the federal government is on the hook. These changes shift injured workers from state workers’ compensation programs to the government’s Social Security Disability Income (SSDI) system, as the federal Occupational Safety and Health Administration (OSHA) pointed out in a June 2015 report. OSHA estimated that in 2010, SSDI picked up as much as $12 billion to cover injured and ill workers.

Looking at the District of Columbia and 45 states, where the ranks of workers receiving compensation fell by 2.4 million between 2001 and 2011, researchers at the Center for Economic and Policy Research said last year that more than one-fifth of the rise in disability income payments appeared to be linked to cuts in workers’ compensation.

The calculations were age-adjusted to take in the growing ranks of elderly receiving the federal Social Security Disability Insurance (SSDI) benefits.

“The logic of cutting back on workers’ compensation is that we’ll be tough on these workers,” says Dean Baker, an economist and co-director of the organization. “But if you are just shifting the cost from workers comp to disability, you aren’t saving public money.”

Shifting the financial burden raises another problem. The workers’ compensation system was created to make employers responsible for the problems encountered by their employees. The shift to SSDI not only frees them from any financial accountability, but makes it harder for public officials to spot troubled workplaces and jobs.

In Indiana, because worker compensation payments are so low, attorney Richard Swanson said that injured workers who can’t return to their jobs “often make SSDI their first choice for income replacement.” That’s especially the case for older factory workers used to higher wages. “That’s their first question if they cannot return to work due to their work injury. You see it constantly,” he says.

Which way Illinois?

In Illinois, the fate of injured workers has become hostage to a larger political squabble that has left the state without a budget since last July.

Reforming workers’ compensation is part of a broad package of anti-union measures from Rauner, policies that have had no traction in the Democrat-dominated state legislature.

Rauner’s workers’ compensation proposal isn’t as draconian as some of his other policies aimed at workers, such as letting communities strip out numerous issues from collective-bargaining arguments, killing the Illinois Prevailing Wage Act, and allowing local communities to set up right-to-work rules. His cost-cutting proposal would mirror  the national downward trend in workers’ compensation—but he isn’t proposing (yet) the squeezes that states like Indiana, Florida and Oklahoma have put on injured and disabled workers.

But state Democrats think it’s only a matter of time.

“There isn’t much support for ending the workers’ compensation system, which is where the governor is going,” said Steve Brown, spokesman for State Rep. Michael Madigan, the powerful speaker for the State House.

The thinking of the Democrats, and the state’s trial lawyers, is that Illinois has already opened the door to reforms and cost cutting for the workers’ compensation system with the 2011 reforms and they should be allowed to roll out.

And the figures reflecting the impact of a 2011 reform by the state are significant, as reported by the Illinois Workers’ Compensation Commission. The state’s worker compensation premiums dropped from the nation’s fourth highest to the 7th highest between 2012 and 2014—the largest decline among all states. So, too, benefits payments fell by 19 percent between 2011 and 2015.

Whatever Illinois’ private carriers lost in premium income seems to have more than offset by the savings on benefit payouts. After losses in 2009 and 2010, state insurers broke even in 2011 and have since seen profits climb steadily, according to data from the National Association of Insurance Commissioners. According to Menchetti, “it seems that some of the decision-makers would like stricter scrutiny [of the industry], evident in a provision in House Bill 1287 that has to do with how the Department of Insurance would regulate excessive premiums.”

So it appears that the new law has been a boon for both employers and insurance companies—if not workers.

And if employers’ costs have been dropping, “Is there really need for more reform?” Menchetti asks.

The wrong kind of reform

There’s a case to be made that workers’ compensation needs to be reformed in a different way—to help workers get on their lives, not to force them down the economic ladder and into a bureaucratic hell.  Even in relatively worker-friendly Illinois, Steve Emery saw firsthand the determination of employers and insurance carriers not to give up a cent they don’t have to.

Before his hands failed him, Emery worked six or seven days a week, 12 to 16 hours a day, and was taking home as much as $80,000 a year. He worked at a number of mines across southern Illinois, and the last was the Willow Lake mine, owned by a subsidiary of the Peabody Energy Corp., which calls itself the world’s largest coal producer. It recently declared bankruptcy.

The company shuttered the mine and laid off 400 workers in the fall of 2012. The shutdown took place soon after a worker died, and the company said it had difficulties meeting safety and performance standards there. The Mine Safety and Health Administration (MSHA) had put the mine on notice in 2010 for repeat safety violations.

After filing for workers’ compensation, Emery fought the company for four years. Despite the fact that his exceptionally punishing job had left his hands virtually frozen, his attorney Steve Hanagan says, the coal company considered his injuries not job-related. It is a “typical dilemma” that applies “to many,” he said. “The battle over causation is very common.”

Emery appealed his case to the Illinois Workers’ Compensation Commission, which found that his his injury was job-related and hindered his ability to work.

“He essentially used his hands more than you can imagine, having bangs and jolts and all kinds of trauma,” said Hanagan. “The causation is quite evident.”

Confronted by money problems as he waded through his workers’ compensation battle, Emery’s marriage broke up. His wife “just couldn’t take it” and they couldn’t keep the house. He moved into a small apartment and started learning how to cope on his $1,815 a month benefits. He never qualified for a pension or had a pension plan despite decades of work in mostly non-union mines.

Emery, whose father and both grandfathers were miners, never expected things to end this way.

“I lost everything, man. My whole life changed.”

This post originally appeared on inthesetimes.com on June 13, 2016.  Reprinted with permission.

Stephen Franklin, former labor and workplace reporter for theChicago Tribune, is ethnic news director for the Community Media Workshop in Chicago. He is the author of Three Strikes: Labor’s Heartland Losses and What They Mean for Working Americans(2002), and has reported throughout the United States and the Middle East.  He can be reached via e-mail atfreedomwrites@hotmail.com.

Shadowy Corporate Group Fighting to Gut Workers' Compensation Laws

Saturday, March 28th, 2015

Kenneth-Quinnell_smallNearly two dozen major corporations have joined together in recent years in an effort to gut workers’ compensation laws in the states. Walmart, Lowe’s, Macy’s, Kohl’s, Sysco Food Services and others formed the Association for Responsible Alternatives to Workers’ Compensation (ARAWC) in 2013, and the organization already has had success in Tennessee. Mother Jones takes a look at ARAWC’s methods:

Now, ARAWC wants to take the Texas and Oklahoma model nationwide. Tennessee, where Lowe’s, Walmart and Kohl’s each have about 20 locations, is the only state where the group has pushed legislation so far. But ARAWC is already considering its next targets. “ARAWC hopes to see some neighboring states take up legislation this year and we’re ready to assist those legislatures as well,” [Richard] Evans, the group’s executive director, writes in an email.

Conservative Southern states where ARAWC’s corporate funders have major operations—including Florida, Georgia and Alabama—are on the group’s short list. And ARAWC already has hired lobbyistsin North and South Carolina. The group has written model legislation, but ARAWC intends to work closely with lawmakers to adapt its model for individual states.

When ARAWC targets a state, it moves aggressively. In Tennessee, the group has spent more than $50,000 deploying lobbyists to push its legislation. Evans says that state Sen. Mark Green, who introduced the opt-out bill, was already working on the legislation before ARAWC started pushing for it. But a February blog post written by an executive at Sedgwick, an insurance company that helped found ARAWC, suggests the group played a more active role. In the post, the executive boasts that ARAWC “secured a highly respected bill sponsor”—presumably Green—to introduce the bill, which the group “assisted in drafting.”…

Green’s proposal, which supporters are calling the Tennessee Option, bears many of the hallmarks of the Texas and Oklahoma system: It allows businesses to place strict spending caps on each injured worker and to pick and choose which medical expenses to cover. “We took the best of both and put it together to make it work for Tennessee businesses,” Green told an insurance trade magazine.

The bill as introduced does not require employers to pay for artificial limbs, hearing aids, home care, funeral expenses or disability modifications to a home or a car for injured workers. All of these benefits, notes Gary Moore, president of the Tennessee AFL-CIO Labor Council, are mandated under the state’s current workers’ comp system.

“This piece of legislation is designed as a cost-saving measure for the employer,” Moore says. “Anywhere they save a dollar, it costs the employees a dollar. It’s just a shift in costs.”

This blog originally appeared on aflcio.org on March 28, 2015. Reprinted with permission.

Author’s name is Kenneth Quinnell.  He is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

New Pages to wrap up 2014!

Wednesday, December 31st, 2014

Paula Professional CroppedTo wrap up 2014 Workplace Fairness has added 105 new pages to keep you informed about the latest developments in employment law.

We now offer detailed information, by state, on the processes for filing a workers compensation claim, and for filing an unemployment claim. Find out how to file a claim in your state, what deadlines you might face, and what benefits you may be eligible for.

In our Discrimination section we’ve added a new page on genetic information discrimination, including the Genetic Information Nondiscrimination Act (“GINA”).  As technology progresses by leaps and bounds, new issues of privacy and discrimination can come up in the workplace.  This page answers questions that many workers may have about how accessible their genetic information is to employers.

In our Harassment section our new page on the effects of domestic violence in the workplace helps victims of domestic violence to understand how their situation at home may affect their work and what rights they have when they are treated negatively because of it.

Finally, in our Unions and Collective Action section we’ve added information about the 24 states that currently have right-to-work laws, and what that means for workers.  This page provides an explanation of what right-to-work laws are, and what they mean for workers in states that have instituted them.

Indiana Working Families Win Dramatic Improvements In Workers' Compensation Insurance

Wednesday, July 24th, 2013

Kenneth-Quinnell_smallThe Indiana State AFL-CIO fought for and won dramatic improvements in the workers’ compensation system this year. Over the next three years, several major increases in benefits and new workers’ rights will be phased in. This will mitigate the effect of workplace injuries on those hurt on the job and their families in the Hoosier State, the Indiana State AFL-CIO reports.

The first part of the new legislation will increase wage replacement benefits. Starting in July 2014, the cap (currently at $975) will be raised by 20% over the following three years to a total of $1,170 in 2016. More workers will receive a full two-thirds of their weekly wage.

The next effect of the legislation deals with increasing compensation for people permanently impaired from a work-related injury. Current law requires doctors to determine how much the injuries impair the employee and compensation is paid to the injured party based on the severity of the impairment. Starting in July 2014 and phased in until 2016, the compensation for work-related injuries will be increased 18 to 25% (based on the severity of the impairment).

Finally, the last new effect of the law will be to place a cap on the amount hospitals will be paid for their services. Hospitals will be paid 200% of the amount Medicare would pay for the same service. Injured employees will not be charged for medical services, which are paid by the employer or the employer’s insurer.

Nancy J. Guyott, president of the Indiana State AFL-CIO, applauded the changes as a move in the right direction via press release:

“Let’s be clear: it’s never OK when your job hurts. And we have a long way to go to make our worker’s compensation system what it should be for workers and their families when an injury does happen. However, these increases are the largest increases workers have won in decades and they begin to move us in the right direction. “

This blog originally appeared in AFL-CIO NOW on July 23, 2013.  Reprinted with permission. 

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist whose writings have appeared on AFL-CIO, Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

“But I Signed An Independent Contractor Agreement…”

Wednesday, August 18th, 2010

Patrick KitchinThe Ninth Circuit Court of Appeals Weighs In On Workforce Classification Under California Law

Every time I review an independent contractor agreement I find myself humming George and Ira Gershwin’s song, It Ain’t Necessarily So from Porgy and Bess. In California, at least, such agreements do not prove that a worker is an independent contractor. (“The label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.” SG Borello & Sons v. Dept. of Industrial Relations)

Were it otherwise, of course, companies and individuals who hire workers would have an incentive always to require workers to sign independent contractor agreements so they might avoid the costs associated with maintaining a workforce made up of employees. Complying with minimum and overtime wage requirements, paying workers’ compensation insurance premiums, and making rest and meal breaks available are significantly more burdensome and expensive than maintaining a workforce made up of independent contractors. Further, because independent contractors generally are not protected by federal or state anti-discrimination laws, maintaining a workforce comprised of independent contractors can shield companies from civil rights lawsuits.

California’s Multi-Factor Approach

Under California law the existence of an independent contractor agreement is only one of over a dozen factors used by the courts to evaluate whether a worker has been properly classified under the law. The most important factor is the “right to discharge at will, without cause.” In a state where employment is “at will,” but where contracts often include specific provisions pertaining to the termination of the contractor’s services, the right to fire a worker without apparent consequence is a prime indicator of an employment relationship. As the California Supreme Court ruled back in 1989, other factors crucial to the classification determination are:
• whether the one performing services is engaged in a distinct occupation or business;
• the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
• the skill required in the particular occupation;
• whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
• the length of time for which the services are to be performed;
• the method of payment, whether by the time or by the job;
• whether or not the work is a part of the regular business of the principal;
• whether or not the parties believe they are creating the relationship of employer-employee;
• the alleged employee’s opportunity for profit or loss depending on his managerial skill;
• the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers;
• the degree of permanence of the working relationship; and
• whether the service rendered is an integral part of the alleged employer’s business.

California courts are required to evaluate the specific terms of engagement carefully and analyze the conditions under which a person works for another before reaching a classification determination in a wage and hour or discrimination lawsuit. Further, under California law, one who works for another is presumed to be an employee, unless the employing party proves otherwise. The burden of proving the existence of an independent contractor relationship shifts to the “employer” to demonstrate its classification is proper once a worker presents sufficient evidence that he or she performed work for the company. Robinson v. George. This burden shifting is set out in the California Labor Code at section 2750.50.

While determining the proper classification of a worker is extremely fact intensive, and not every factor always points in the same direction, California appellate courts have been consistent in their use of the multi-factor approach set out more than 20 years ago by the California Supreme Court.

The Ninth Circuit Court of Appeals Weighs In

On August 5, 2010, the federal Ninth Circuit Court of Appeals analyzed California’s employment classification law in a lawsuit brought by “independent contractors” of a freight pick-up and delivery service who claimed they had been misclassified as independent contractors.

In Narayan v. EGL, Inc. the Ninth Circuit rejected the defendant’s contention that because its workforce signed independent contractor agreements, the court was compelled as a matter of law to find that its workers were properly classified as such.  The court applied the appropriate California classification test to the facts of the case and ruled that the relationship between the drivers and the freight-handling company was one of employment.  The independent contractor agreement was only one of several factors the court considered in coming to its Porgy and Bess conclusion:  Call it what you may, It Ain’t Necessarily So.

Evaluating the many factors deemed relevant to the determination of the nature of the relationship between the drivers and the company, the Court found, among other indices of an employment relationship, that EGL:
• trained the workers;
• provided them some tools of the trade;
• required them to wear company uniforms;
• required them to paint their vehicles in company colors;
• assigned them routes;
• required them to attend company meetings;
• required them to arrive at a company facility at a set time each day; and
• required them to apply for vacation time;

Based on its analysis of all of these characteristics of the relationship between the drivers and EGL, the Ninth Circuit determined that the lower court’s dismissal of the worker’s employment-based claims was contrary to California law. Though the drivers had signed independent contractor agreements with EGL, the facts demonstrated the workers were employees from start to finish.

While the Ninth Circuit decision in Narayan v. EGL is not earth-shattering or unexpected, the decision is important for California workers whose lawsuits are often transferred (“removed”) from state courts to U.S. District Courts within the Ninth Circuit . The decision re-affirms the Ninth Circuit’s recognition that its District Courts, like California’s Superior Courts, are obliged to use the multi-factor test set out by the California Supreme Court in S.G Borello & Sons v. Department of Industrial Relations many years ago. This is good news for California workers.

About the Author: Patrick Kitchin is a labor rights attorney with offices in San Francisco and Alameda, California. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a 1992 graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.

Cheating Workers Out Of Rights, Benefits

Wednesday, June 2nd, 2010

Image: IBEWLawmakers Go After Employers Who Misclassify Workers as Contractors

Nearly three years ago, Warren, Ohio, Local 573 Business Manager Mark Catello found out the hard way how rampant is the illegal practice of misclassifying workers as independent contractors to circumvent labor law and cheat on taxes.

The local tried organizing cable workers at Baker Communications, a subcontractor for Time Warner Cable. Organizers got the majority of the 40-person unit to sign union authorization cards, but the National Labor Relations Board killed the unionization drive after agreeing with the company that most of its employees were independent contractors, making them exempt from the right to collectively bargain. “It’s a scam,” Catello said. “All the employees had to follow the company’s manual, wear the company’s uniform with the Baker Communications logo on it and follow their work schedule.”

San Francisco labor activists protest a construction contractor found guilty of cheating its employees out of wages and benefits.

San Francisco labor activists protest a construction contractor found guilty of cheating its employees out of wages and benefits.

Federal and state officials are now starting to aggressively crack down on employers who mislabel their employees as independent contractors—an act that cheats both taxpayers and workers out of billions of dollars.

According to Steven Greenhouse of the New York Times, more than two dozen states are stepping up their enforcement of employment laws by increasing penalties for employers who misclassify workers as contractors. And Congress recently introduced tougher legislation to punish lawbreakers.

‘Widespread Practice’

The practice is extensive, says James Parrott, chief economist of the Fiscal Policy Institute in New York. He testified earlier this year before the state Senate that an estimated 10 percent of the state’s workers are misclassified as independent contractors.

According to the Bureau of Labor Statistics, that number has been estimated to be as high as 30 percent in some states. Lax enforcement of the rules has only encouraged the practice.

In 2007, the Government Accountability Office reported that 10 million workers were classified as independent contractors, an increase of more than 2 million in just six years.

Misclassification ends up costing federal and state authorities billions in lost revenue. Companies that report employees as independent contractors avoid paying Social Security, Medicare and unemployment insurance taxes.

But misclassifying workers also cheats workers out of their rights and benefits. Laws regarding overtime, workers’ compensation, sick days and minimum wage don’t apply to independent contractors.

“This denies many workers their basic rights and protections and means less revenues to the Treasury and competitive advantage for employers who misclassify,” Jared Bernstein told the New York Times. Bernstein is a noted economist and aide to Vice President Joseph Biden. “The last thing you want is to give a competitive advantage to employers who are breaking the rules.”

The practice is particularly common in trucking and some sectors of the construction industry. It is also found in the telecommunications industry, particularly in satellite dish and cable installation.

And it’s not just fly-by-night operations that are guilty. Corporate giants FedEx, Target and Comcast have all been sued for misclassifying workers.

Counting their workers as contractors has also proven to be an easy way for employers to prevent unionization.

‘Keeps Them From Joining a Union’

For Eighth District Organizer Bob Brock, a crackdown on industry violators is long overdue.

Brock has been trying to organize workers who install home satellite dishes for more than a year. Many of these workers—located mostly in Idaho, Montana and Colorado—endure long hours, low pay, draconian work rules and unsafe working conditions. But according to their employers—including Direct TV and Star West Satellite—they are their own bosses.

“Most of these (satellite) companies operate a whole separate wing, which they staff with what they call independent contractors,” Brock said. “But they have to follow the companies’ regulations, their work hours and use their equipment. What kind of boss is that?”

Brock says that the IBEW has been successful in getting many of these workers to talk with organizers, but until their job status is changed, they can’t legally form a union.

He says he has seen workplaces where two different workers are doing the exact same job, but one is labeled an employee while the other is an independent contractor. “It’s a selective way for the company to get out of paying benefits and taxes and to keep them from joining a union.”

Educating Workers on Their Rights

But the IBEW hasn’t given up on organizing the satellite sector. The Eighth District has started an organization—Satellite Techs Allied for a New Direction—which brings together satellite workers to improve their working conditions. Organizers help workers document what’s going on in their workplace so they have evidence to back up their claims that they are full-time employees.

STAND also helps misclassified workers with tax advice and how to avoid being preyed on by unscrupulous insurance agents who try to sell them overpriced liability policies. It’s a long-term strategy, Brock says, but the campaign is starting to pick up steam. “The word is spreading throughout the industry. A lot of them don’t know about their rights and they are hungry to find out.”

The campaign is now moving into lobbying mode, with organizers talking to state leaders about rampant abuses in the satellite installation industry. “This is a good time, because with the budget shortfalls, politicians are more eager to crack down on tax cheats,” Brock said.

Rampant Abuse

Broadcasting is another industry where the practice has become widespread. “Many broadcast technicians will work for one of the big networks, be considered an employee, but then go work for another network, do the exact same job, and all of a sudden they become contractors,” said Broadcasting Department Director Ro Wratschko.

Many smaller production companies are also notorious for misclassifying employees to give them unfair advantage over local signatory companies. “They are bidding for the same work as our union shops but they are illegally getting out of paying the same taxes we do, so they have a leg up,” he said.

While not as rampant in the electrical construction industry as it is in other trades, many inside locals have confronted nonunion contractors trying to pass off their employees as contractors. Last fall, Dublin, Calif., Local 595 helped bring to light one Bay Area contractor who cost the state and her employees millions of dollars by illegally misclassifying them.

“It’s the primary means for nonunion contractors to get out of their responsibilities to their employees and try to cut into our market share,” said Kirk Groenendaal, Special Assistant to the International President for Membership Development.

Federal prosecution of companies that misclassify their workers as contractors was nonexistent under the Bush administration, says Political and Legislative Department International Representative Dan Gardner, but the tide is turning.

President Obama has promised to hire an additional 100 investigators to look at companies accused of misclassifying workers and the Internal Revenue Service announced in February that it was launching a three-year nationwide investigation of the practice.

On Capitol Hill, Massachusetts Sen. John Kerry (D) has introduced the Taxpayer Responsibility, Accountability, and Consistency Act of 2009—with Rep. Jim McDermott (D-Wash.) sponsoring a House version—which beefs up enforcement of worker classification regulations and closes tax loopholes used by unscrupulous employers.

In April, Ohio Sen. Sherrod Brown (D) introduced a similar bill—the Employee Misclassification Act—that focuses on tougher enforcement of the Fair Labor Standards Act.

The Department of Labor also recently announced tougher regulations of worker classification regulations, calling on employers to disclose to their employees their work status.

State authorities are also intensifying their crackdown. In Iowa, a six-month investigation by the labor department recently found more than 100 companies guilty of misclassifying employees, while in California, Attorney General Jerry Brown is aggressively going after lawbreakers, recently filing a $4.3 million lawsuit against a construction company with several public works contracts that he says cheated workers out of wages.

In Nebraska, a bill is under serious consideration that would target trucking and construction companies that abuse the independent contractor label.

Gardner said that the IBEW is working closely with NECA contractors and other businesses to push Congress to endorse Sens. Kerry’s and Brown’s legislation to crack down on lawbreakers. “It’s wrong for workers, wrong for taxpayers and wrong for the businesses that play by the rules and follow the law.”

This post originally appeared in IBEW.org on June 2, 2010. Reprinted with permission.

About the Author: Alexander Hogan is Communications Specialist for the IBEW.

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