North Carolina employers find mercy on workers’ compensation

Industrial Commission issues arrest warrant, but none sent to jail for failure to pay workers May 23, 2012 


With the support of friend Sharon Maynard, left, Pamela Smith, center, tries to hold her emotions in check during an Industrial Commission hearing on Tuesday, May 22, 2012. In an effort to hold uninsured business owners accountable for going without workers compensation insurance, the commission ordered a dozen or so employers to court to settle their claims or face jail. Smith lost her right hand on the job in February 2006. Her boss, Archie Johnson, right, agreed to pay her $60,000, but she is still due $45,000. Standing before the commissioner, Johnson said he receives $900 a month on Social Security and that his business building wood pallets for shipping tanked as the economy soured.


Employers who skimped on workers’ compensation insurance found mercy Tuesday at the state Industrial Commission.

Threats of jail didn’t materialize as a dozen or so employers whose workers got hurt on the job were granted extensions to make good on settlements. They went home with kind but stern orders to find a way to share whatever paychecks they collect with the injured worker they owe. No one was arrested.

It was another unusual day at the commission, a little-known state agency that handles disputed workers’ compensation claims when people get hurt on the job. Commission officials have beckoned hundreds of uninsured employers to hearings to hold them accountable for unpaid medical bills and overdue paychecks to their former employees.

The commission’s efforts follow an investigation by The News & Observer 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 had been doing little to ensure the employers settle up.

Gov. Bev Perdue ordered swift reform. Despite all efforts, a block away, some state officials were still skeptical about the Industrial Commission’s ability to manage the problem.

State Sen. Doug Berger, a former deputy commissioner who handled uninsured cases, filed a bill Tuesday to move the fraud investigation unit from the commission to the Department of Insurance.

“The agency is not being run by folks who have the experience and interest in managing an investigative unit,” said Berger, a Youngsville Democrat.

Settling one case

On Tuesday, some employers did buckle against the threat of jail time. At the start of the hearing, Deputy Commissioner George R. Hall III read a short list of employers who had settled their claims since being given an order to come before the commission. A few even paid civil fines that had been levied by the commission as punishment for failing to carry workers’ compensation.

Among them: Gregory and Joyce Nixon, owners of a Beaufort County trucking company where two drivers died on the job, leaving their widows in the lurch.

In 2004, the Nixons intentionally dropped their policy to cut costs. Twelve days later, trucker David Murray was killed in a crash. Nearly three years later, they still had no coverage when another driver, Richard Maynard, died in a crash.

The drivers’ widows sued in civil court to collect workers’ compensation, collecting money from the sale of property the Nixons had deeded to their children after the accidents.

On Tuesday, Assistant Attorney General Marc Sneed said the Nixons had paid a civil fine. The commission had fined the Nixons more than $100,000; Sneed declined to say how much was paid.

Few other cases were resolved Tuesday.

Hall floated between a wooden judicial bench and the hallways, where he tried to coax the business owners into reaching new agreements with injured workers or their attorneys.

Again and again, Hall heard hard-luck stories. Some businesses collapsed as the economy faltered. Boyfriends aborted promises to help pay off claims. Excuses piled up: unemployment, sickness, foreclosure, bankruptcy and fixed incomes.

‘Our money ran out’

In the back row, Pamela Smith rubbed the nub that used to be her hand.

Smith was cleaning out a notching machine at Diversified Wood Products of Dunn in February 2006 when the machine clamped around her hand. She lost all her fingers and much of her palm.

Archie Johnson, Smith’s boss at the company of about 50 employees, agreed to pay her $60,000, Smith’s attorney said. The payments came steadily for weeks, but suddenly, they stopped. Smith is still due about $45,000.

On Tuesday, Johnson stood before Hall and said he had little in the world to show for himself now. He told a reporter that he didn’t realize his workers’ compensation had lapsed when Smith got hurt, but commission records show that two years prior, another worker had filed a claim against Johnson’s business. He was uninsured then, too.

Johnson said he receives $900 a month from Social Security and said his business building wooden pallets tanked as the economy soured.

“Our money ran out, and we just had nothing coming in,” Johnson said before his hearing. Hall told Johnson to go home and figure a way to start making monthly payments to Smith.

“We could haul you out of here today, but that’s not going to happen,” Hall said. “But, I can’t say it won’t happen in July.”

Locke: 919-829-8927

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