Articles Posted in Workers’ Compensation

A Worcester Superior Court has ordered a 35-year-old man and his company to pay $500,000 in restitution after the man pled guilty to over 60 charges of committing workers’ compensation insurance fraud and violating Massachusetts wage and hour laws. He has also been ordered to serve five years probation.

Labor Solutions, Inc. reportedly provided temporary labor services to manufacturing facilities around Worcester County. The company was charged with Willful Failure to Pay Minimum Wage (13 counts), Willful Failure to Pay Overtime (6 counts), Workers’ Compensation Insurance Fraud (5 counts), and Willful Failure to Furnish Employment Records to the Attorney General (5 counts), among other charges.

According to investigators, the business cheated their workers’ comp insurance carrier out of at least an estimated $509,000 in unpaid insurance premiums. Attorney General Martha Coakley said she hopes the plea and resulting sentence will discourage other employers from breaking the law.

Our Boston workplace injury lawyers have learned that a man from Acushnet, Massachusetts is the lead plaintiff in a suit filed in U.S. District Court in Boston against FedEx Corp.

Thirty-one current and former truck drivers are suing the delivery company over improperly classifying them as independent contractors. They allege that the degree of control which FedEx has over its drivers creates an employer-employee relationship and seek an injunction changing the classification and monetary damagers.

This is the latest of several similar lawsuits against FedEx. Among the issues related to misclassification of workers is the fact that companies who classify workers as contractors can often avoid paying workers’ compensation.

Our Boston worker’s compensation lawyers recently read about a study by the Cambridge-based Workers Compensation Research Institute (WCRI). The study found that there are dramatic differences among worker’s comp medical fee schedule levels in the 43 states which use them. It used each state’s Medicare fee schedule as a benchmark, although it also recognized that the optimum level of fee schedule rates may not be the same as Medicare.

Only three states, Massachusetts, California, and Florida, set workers’ comp fee schedule rates without 20% of the Medicare rates in those states. Massachusetts’ workers’ comp fee schedule rates were only 8% above Medicare, while Alaska’s rates were 215% above Medicare rates in the state. Five other states also set their rates at levels more than double Medicare rates in the state.

Creating a workers’ comp medical fee schedule is a delicate matter, because if rates are too high, the schedule may not meet the goal of cost containment. However, rates that are too low may jeopardize injured workers‘ access to quality healthcare.

Our Boston workers’ compensation lawyers have learned that the average payment per claim for prescription drugs in the Massachusetts workers’ compensation system was 30% lower than the median of 16 other states studied. Titled Prescription Benchmarks for Massachusetts, the report found that the average payment per claim was $289.

Researchers say this discrepancy is due to Massachusetts’ lower pharmacy fee schedule.

Massachusetts is also one of only three states where physician dispensing of prescription medications is not allowed. In states where this practice is common, physician-dispensers often get even higher payouts than pharmacies for the same prescription. Doctors in Massachusetts were also less likely to prescribe brand name medications to injured workers and other patients.

Source: Massachusetts: WC prescription drug costs per claim lower than most states, RiskandInsurance.com, August 2, 2010 Continue reading

Our workers’ compensation attorneys have learned that FedEx Ground has agreed to pay the Commonwealth of Massachusetts several million dollars to settle allegations that they misclassified drivers as independent contractors. According to the attorney general, FedEx’s classification of drivers denied the state workers’ compensation, payroll taxes, and unemployment assistance contributions, as well as gave the company an unfair competitive advantage.

The $3 million awarded will go to the state’s general fund and to the thirteen drivers named in the suit. There is another lawsuit on behalf of other drivers that is still pending.

The company denies liability in the settlement with the state.

Source: Mass. reaches $3M settlement with FedEx Ground, Bloomberg BusinessWeek, July 15, 2010 Continue reading

Despite a request from the Worker’s Compensation Rating Inspection Bureau of Massachusetts to raise rates by 4.5 percent, Attorney General Martha Coakley has reviewed the industry’s proposed rates and determined that current rates will need to be reduced by 2.4 percent.

Coakley says the proposed rate hikes would have cost employers tens of millions in additional premium payments. In addition to this year’s rate reductions, Massachusetts workers’ compensation insurance companies will be subject to another rate review and possible rate cuts in 2011.

The settlement still needs final approval from the state’s commissioner of insurance. If approved, the lower workers’ comp rates will be in effect next fall. The hope is that lower costs will spur job growth across the state and protect employers from overpaying.

Source: Massachusetts: Attorney general nixes insurers’ request for increase, RiskAndInsurance.com, July 8, 2010 Continue reading