Louisiana Contractors – Workers Compensation Insurance

Back in 2009 this blog reported on the very topic of Workers Compensation insurance, stating that 1 and 5 businesses are breaking workers compensation laws. In my everyday practice, I feel like the trend is still prevalent in the construction industry. The main reason being is due to the exorbitant price of this insurance on contractors.

Workers Compensation is codified in Louisiana under Revised Statute 23:1021 et seq. There are a myriad of rules and definitions within this chapter of the code that would make any contractors head spin. There are a few key items to remember when classifying employees. First and foremost is that there is a presumption of employee status, as seen in La. R.S. 23:1044. This can be overcome by a number of factors which would make the worker, an independent contrator rather than a employee. La R.S. 23:1045 is where the law states that independent contractors and subcontractors are exempt from coverage. Although the price to insure all employees under workers comp insurance is high, the price that is paid if an accident happens to an uninsured worker is much higher. Furthermore, when the insuring companies do an audit at the end of the year of the status, there can be a hefty price tag for improper reporting.

I represent a number of clients who are learning the hard way that companies like LWCC and Louisiana Home Builders Association are not fun to litigate against for a contractor trying to make profits. These companies have either in-house attorneys or law firms who handle these cases day in and day out. There is almost no incentive for them to settle claims because there is no fear of pricey litigation. As for the contractor, attorney fee bills keep going higher and at the end of the day the contractor can pay double and triple of what they would have if they had properly reported or settled early.

So let this be a warning to all contractors who are trying to push the line when it comes to workers compensation insurance, its just not worth it. Just like fighting any insurance company, even if the insurer is wrong, they will fight to the bitter end to be proven so. Taking an early haircut, so that you can get back to making money in the industry, can be a win-win for your construction company.

Happy Holidays!

From all of us here at Wolfe Law Group, LLC and ConstructionLawMonitor.com, we would like to wish happy holidays to all. This is the time of year where we look back and reflect on the past twelve months and give thanks to all the good (and bad) that has transpired. Its a time to learn from the successes and the failures of the year and grow wiser and stronger.

In looking ahead, there are good things to come in 2013. Growth and expansion are on the horizon. The promise of new opportunity coupled with the solidification of past relationships makes for a great transition into the new year.

OSHA Testing Can Reduce Employer Liability, Saves Companies Money

This guest post was contributed by Joseph A. Ginarte. He is a specialist New York accident lawyer and the proprietor of the Ginarte Law firm. He enjoys writing and sharing his insights on various legal blogs.

Every day, more than twelve workers die on the job, which adds up to a total of 4,500 worker fatalities each year. Another 4.1 million workers suffer serious injury or illness related to their jobs, according to a white paper published by Occupational Safety and Health Administration of the United States Department of Labor (OSHA).While it’s not possible to prevent every accident, the need to promote safety in the workplace is obvious. Programs designed to prevent workplace injury and illness are well established in countries like Canada, Australia, Norway, Japan, Korea and all the 27 member states of he European Union.  In addition 15 states in the United States, including California, require such programs.

Yet many business owners resist mandatory workplace inspections and tighter safety regulations imposed by OSHA. Conventional wisdom claims that safety testing and workplace regulations, such as those imposed represent a job-killing financial drain on businesses. However, the results of a study conducted in May 2012 by researchers at the Harvard Business School, the Haas School of Business at the University of California at Berkeley and Boston University soundly refute those assertions. In fact, the study shows that OSHA testing can actually result in significant savings for companies along with reducing company liability.

Reduced Employer Liability

According to the study, workplaces in high hazard industries that had been subject to random OSHA inspections reported a reduction of 9.4 percent in injury claims. This reduction in claims translated to savings of 26 percent in workers’ compensation costs in the four years following the inspections.  These figures were compiled in comparison with a similar number of uninspected companies in the same high hazard industries.

Significant Savings

The average savings to companies that had undergone OSHA inspections was $355,000 US, according to the study. Further, savings were realized in workers’ compensation claims as small as $2,000 US as well as much larger.  The study also found absolutely no evidence that workplace inspections had a negative impact on company profits.

In their original report, the researchers estimated that if the conditions of the study were duplicated across the entire country, the potential savings could total as much as $6 billion US to employers and employees, when compensation for pain and suffering are excluded. However, as a result of more recent research, the study’s researchers revised their estimate of savings upward in June 2012, from $6 billion US to $20 billion US.

Objective Measurements

The study was able to overcome design and bias flaws present in earlier studies by taking advantage of a 1993 California mandate that requires the California division of OSHA to conduct random workplace inspections. The study looked ad companies that were randomly inspected between 1996 and 2006, along with a similar number of companies that were not inspected. The number of injuries recorded from both groups of companies was drawn from worker compensation claims and other independent sources. By contrast, previous studies of this type had not used random data. Instead, all of the workplaces studied had been the site of a workplace accident or complaint. The information was drawn from OSHA logs, which often become more detailed as time passes.

 

For Further Reading

  • Harvard Business School: New Study Shows That Workplace Inspections Save Lives, Don’t Destroy Jobs
    hbs.edu/news/releases/toffelscience051712.html
  • Occupational Safety and Health Administration: Injury and Illness Prevention Programs – White Paper
    osha.gov/dsg/topics/safetyhealth/OSHAwhite-paper-january2012sm.pdf

Mediation! New Service Available at Wolfe Law

Seth J. Smiley, partner at Wolfe Law Group, LLC and author of ConstructionLawMonitor.com is now a formally trained mediator. New Orleans just hosted the AAAU’s (American Arbitration Association University), Essential Skills for the New Mediator workshop in downtown, hosted by Neil Carmichael.

Why would parties want to mediate a dispute instead of going to court? That answer is easy, yet has many factors. The most important are that mediation is less expensive and much more efficient compared to litigation. But the most important factor is that the parties control their own outcome, rather than a group of strangers (jury).

So if you are in a dispute and are looking for an economical, logical and swift conclusion that is mutually agreeable between you and your adversary, then mediation may be just what you are looking for. Contact the Wolfe Law Group, LLC for more details.