Employers have a legal responsibility to abide by Massachusetts workers’ compensation laws. Despite these clear mandates, many employers try to cut corners or to bend the rules to avoid having to pay for workers’ compensation benefits in the event that an employee becomes injured. The Massachusetts workers’ compensation lawyers at Pulgini & Norton have guided numerous injured workers through the claims process while helping them ensure that they are treated fairly by employers and insurers alike. According to a report produced within the last five years, the Massachusetts Insurance Fraud Bureau (MIFB) concluded that a wide number of employers misreport the number of workers that they have in their employment, or misclassify an employee to reduce the requirements that they must meet for workers’ compensation premiums. The report also shows that employers typically are quick to revise their classification in the event that one of the previously misclassified employees suffers an injury.
This report is not alone in its findings. The Massachusetts Department of Industrial Accidents researched employers’ use of misclassifications and found that as many as 250,000 workers are not classified appropriately by employers. It also found that roughly 13 percent of employers in Massachusetts engage in some type of misclassification. During 2013, there were roughly 6,000 business operations that were investigated regarding their workers’ compensation compliance and insurance coverage. As a result of these investigations, over one-third of the businesses involved were mandated to cease operations, and a total of $1.3 million in fines were assessed against non-compliant employers. Also, employers involved in the investigations added 6,000 or more employees to workers’ compensation insurance policies.
Harvard Law School has also investigated this issue. It concluded that 15 percent of workers in the construction industry are improperly classified as independent contractors. The employers list them as non-employees to prevent having to pay workers’ compensation benefits in the event that the worker becomes injured. Additionally, many employers do not provide accurate information about the risks that their workers face on a daily basis. This is in an effort to prevent having to pay higher premiums for workers’ compensation insurance. The MIFB conducted investigations of almost 400 allegations of insurance fraud and determined that in 10 percent of those cases, the employer was not complying with the regulations. The investigation resulted in convictions of seven individuals and restitution in the amount of $300,000. In the same time period, a Massachusetts task force amassed in excess of $21 million in missed tax income that resulted from employers’ failures to follow the rules.