N.C. orders uninsured businesses to pay injured workers

mlocke@newsobserver.comMay 4, 2012 

  • Failing to pay Here’s a look at four cases handled Thursday: • Richard Overton of Big O’s Truck Parts in Macclesfield has owed his former employee Grady Farmer $151.67 each week since May 30, 2007. He’s paid nothing and his lawyer said Thursday that it would be a struggle to pay. Overton suffered a heart attack in recent years and has scaled back his business. Farmer broke his back after falling through the second floor of a home he helped Overton build. He is on Medicare and lives off the charity of his children. Overton returns to the Industrial Commission June 13. He could face jail time if he fails to pay part of the claim. • Fa Li Lin of Peking House in Burlington has owed his former delivery driver, Ae Bounvilay, about $200 a week since September 2010. Bounvilay injured his leg trying to escape from armed robbers who raided the restaurant one night. Lin said he could pay $4,000 and try to assume responsibility for Bounvilay’s medical bills. If Bounvilay accepts the settlement and the commission approves, Lin will avoid jail. • Michael Macko of DMR Reconstruction in Winston-Salem owes the widow of a former employee tens of thousands of dollars. Cheryl McDowell’s husband, Howard McDowell, died after falling off a ladder, and she has received nothing since his death in August 2010. Macko vowed to pay her $10,000 in the coming weeks and have another $23,000 paid by the end of summer. Then he’ll pay her $400 a week for several years. • Victor Rivera Romero owes his brother, Edwin Rivera Romero, thousands of dollars since he fell off scaffolding onto a steel beam in March 2009 while finishing sheetrock. Victor Romero said he shouldn’t have to pay anything since his brother wasn’t a regular employee and knew that he had no insurance. Romero’s insurance was canceled by the insurer after his company failed to comply with an audit. He will return to the Industrial Commission June 13 and offer some sort of proof that he’s attempting to pay or face jail. Staff writer Mandy Locke
  • The story so far The News & Observer reported April 1 that tens of thousands of employers are failing to carry workers’ compensation insurance, which is used to reimburse workers’ medical bills and pay when they are injured on the job. The N.C. Industrial Commission is in charge of settling and enforcing workers’ compensation claims. For years, it has done little to detect employers who go without coverage and for years has done little to punish those who can’t cover a claim when a worker gets hurt. After the N&O report, Gov. Bev Perdue ordered the commission to fix the uninsured problem. Pamela Young, chairwoman of the commission, promised swift action, starting with the hearings conducted Thursday.

Business owners snaked down a dim hallway in the state Industrial Commission’s headquarters Thursday, awaiting stern orders for failing to pay workers hurt on the job.

The message was firm: Pay something. Anything. Make a sacrifice or go to jail.

It was an unprecedented day at the Industrial Commission, a little-known state agency that handles disputed workers’ compensation claims when people get hurt on the job. Commission officials are dusting off opinions rendered years ago and demanding payment. In the coming months, hundreds of employers will be called to hearings to defend themselves and to explain how they will pay.

The commission’s efforts follow a News & Observer investigation that revealed tens of thousands of employers fail to carry required workers’ compensation coverage. When these workers get hurt and the commission orders the employer to pay the workers’ medical bills and missed wages, it has been doing little to ensure the employers settle up.

State officials promised swift reform last month, saying that if necessary they would use their power to toss business owners in jail to force compliance.

On Thursday, the first batch of 50 old cases was resurrected in two hearing rooms; deputy commissioners sorted the same number of new cases involving uninsured employers for future hearings. Similar hearings will continue this month and through the summer.

Of the old, already settled cases, nearly half the employers showed up. Nearly all those were referred to a hearing in June, where they will be taken to jail if they can’t or haven’t made good on at least part of the judgment and established a plan to pay the rest. A handful promised to settle up before it came to that.

“This is unbelievable,” said Lonnie Albright, a lawyer from Greensboro who represented a tree service owner Thursday. “Usually, I’m on the other side of it, representing workers, and I’ve never seen (the commission) put forth this effort to collect.”

Again and again Thursday, as a deputy commissioner asked the business owner what he or she had paid on the claim, the answer came back the same: “Nothing.” Some of the claims dated back six years.

The uninsured employers sheepishly walked into a makeshift hearing room and argued that life had been cruel to them, too.

One mechanic had suffered a heart attack and had to scale back his business. A tree service owner got divorced and owed his ex-wife a hefty settlement. A Chinese restaurant owner was so behind on his rent that he hasn’t paid it for nearly a year. A few said they had gone out of business since the commission’s order or had cut back their business and let go of employees.

One after the other, Deputy Commissioner Philip Baddour III patiently urged each to find a way to reach out to the injured worker and pay up.

“You may not think you have money, but if you think about all you spent in the last month, you will probably find something,” Baddour told business owner Dana Cash.

Cash said her family’s construction company had lost more than a half-million dollars in the past two years as it battled a faltering housing market. She mentioned all the homes she and her husband lost to foreclosure and the utility bill she struggles to pay each month.

Others who came to the Industrial Commission Thursday could relate to Cash’s struggle.

A rising tab

John Ashworth of Franklinton limped into the sixth floor conference room Thursday with more hope than he’s felt since he fell off the roof he was patching in September 2009.

He broke both heels. The pain is still so intense that he uses crutches some days. In February 2011, a deputy commissioner ordered his boss, Roger Wayne House, to pay Ashworth $250 a week until he can go back to work and to pay his $37,814 medical bills. The commission fined House, too, taking his total liability above $100,000.

So far, Ashworth hasn’t seen a dime, and hoped he might collect some Thursday. House didn’t show up Thursday, so a fraud investigator will try to track him down and put him on notice to pay or go to jail.

Ashworth said his former boss still does roofing work but changed the name of his business.

Ashworth collects disability payments from the federal government, and his landlord is kind enough to let him pay rent as he can.

“If I didn’t have friends, I’d be on the street,” Ashworth said. “It’s not the way I want to live.”

Angry defiance

Some business owners met the commission’s firm stance with dismay. Others were bewildered and tried to argue that they shouldn’t have lost the case from the start. Some questioned why workers’ compensation is required of small businesses. Some had let their policies lapse, while others never bought coverage at all.

But no one challenged the commission’s authority as avidly as Jeffrey Jones, a dock builder and repairman from Statesville who represented himself.

Jones, a military vet who worked for US Airways most of his career, told Baddour he will never pay a dime to his former employee, David Hedrick.

Jones, 53, said he has struggled to pay his mortgage each month, and he didn’t believe Hedrick deserved payment for crushing his ankle while helping Jones build a dock. Jones said Hedrick knew he had no insurance and took that risk when he came to work for him. Hedrick didn’t come to Thursday’s hearing.

Baddour warned Jones that refusal to pay could land him in jail.

“I haven’t had health insurance in 13 years,” Jones said. “I need a colonoscopy and my teeth need fixing. I could get that done in prison for free. Go ahead.”

Locke: 919-829-8927

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