Schnore v. Progress Rail Services – Death Benefits and Workers’ Compensation

Work-related injuries are an unfortunate reality of owning your own business. No matter how careful you try to be and how many safety measures you implement to help protect your workers, a work-related injury is bound to happen eventually. Hopefully, when it does occur, the injury will be minor and the employee’s recovery quick and relatively painless. Unfortunately, in some tragic cases, a work-related injury could result in the death of the employee. When this occurs, the surviving spouse or dependents will still be eligible for workers’ compensation benefits. The California workers’ compensation system requires almost all employers to purchase workers’ compensation insurance to cover this very sort of scenario. However, the system is only set up to cover the employees of the business. Independent contractors are not covered under workers’ compensation insurance or benefits. However, the California labor code does not specifically define what it means to be an independent contractor. In a recent case, the California Court of Appeals was faced with a case involving the death of a worker and the classification of independent contractor versus worker.

In Schnore v. Progress Rail Services, a widow brought a claim for death benefits under the workers’ compensation system. Her husband died after suffering a fatal cardiac arrhythmia while driving a truck belonging to the defendant. The widow claimed that she was entitled to death benefits and her husband had been an employee. By contrast, the employer contended that the husband was an independent contractor, and therefore that the widow was not entitled to benefits under workers’ compensation. The court looked to the controlling case on the subject, S.G. Borello & Sons, Inc. v. Department of Industrial Relations. In that case, the California Supreme Court set out a specific set of factors that will assist in determining if a worker is an employee or an independent contractor. In this case, the court considered the fact that the defendant was the one who established the pick up and drop off points for the deceased’s freight loads. The court determined that this method of control was key and that it suggested the deceased was an employee. The widow’s argument was also helped by the fact the trailer used by the deceased was a specialized trailer, which also suggested employment instead of being an independent contractor. The court accordingly rejected the employer’s independent contractor defense and ruled in favor of the widow.

Making a determination about worker classification can be crucial for your business. Call me today at (714) 516-8188. We can talk about your employees and your business.

Borello and Independent Contractor Inquiry

California law is quite clear about an employer’s responsibility to carry workers’ compensation insurance. With very few exceptions, California employers of almost any size are required to carry workers’ compensation insurance for all employees. There can be complicating issues, however, as not everyone who works for a business is considered an “employee” for purposes of this requirement. For example, independent contractors are not employees, and therefore employers do not have to carry workers’ compensation insurance that would cover independent contractors or their work-related injuries. Employers will sometimes misclassify an employee as an independent contractor, which can result in harsh penalties for the business and its owner. Unfortunately, there is not a statutory definition of “independent contractor” that is applicable to workers’ compensation. Instead, California courts have set out a list of factors to consider. Although labor code section 3357 makes the presumption that a worker is an employee, courts will look at other realities to determine if this is accurate. The California Supreme Court adopted a test in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations that is still important law concerning how to determine if a worker is an employee or an independent contractor.

In Borello, the California Supreme Court was met with the question of whether agricultural workers who were engaged to harvest cucumbers through a “sharefarmer” agreement were independent contractors or employees. The Borello court created an “economic realities” test. Under this test, the most important issues is the control that the employer or principal may exercise over the worker. The focus on what kind of control pivots on not only the type of work that is to be done, but also the manner and way in which it is actually done. In other words, if the employer is telling a worker that he or she must perform the work during certain hours and in a certain location, it makes it more likely that worker is actually an employee, and not an independent contractor. There is  a long list of other factors to consider, including whether or not the type of work to be done is the type usually done by the employer, whether the work done requires a special skill set, and whether the worker is to be paid according to the job or the time spent.

If you have concerns or questions about properly classifying your employees, contact me today at (714) 516-8188. I look forward to answering your questions and discussing your business.

Why Do We Have Workers’ Compensation and How Does it Benefit My Business?

The workers’ compensation system is firmly entrenched in both federal and state laws in the United States. At its core, workers’ compensation is a form of protection afforded to the employee to make sure that he or she receives compensation for a work-related injury. The first employer liability laws were passed in the United States in 1855, and by 1949, every state had created and enacted its own workers’ compensation statutes. The first employer liability statutes made it possible for an employee to sue the employer for injuries resulting from the employer’s negligent or intentional conduct. Today, workers’ compensation is a “no fault” system. This means that the employee is not required to prove any negligence on the employer’s part before being entitled to workers’ compensation benefits. Although it seems at first glance like it might not be “fair” that an employee does not have to prove the injury was a result of wrongful conduct by an employer, this can actually benefit your business. Having to prove fault can make a case last much longer and make it much more complicated. Protracted litigation is not good for your business, so removing the negligence issue can greatly benefit an employer. Workers’ compensation also means that the employee relinquishes the right to sue the employer. An injured employee may file a claim for workers’ compensation to receive medical treatment and, in some cases, salary replacement. In exchange, however, the employee cannot then also file a law suit. This keeps the employee from being able to “double dip,” meaning he or she cannot get paid twice for the same injury. This provision is good for your business because, again, it will help keep you out of court. If you do end up in a workers’ compensation dispute, California has a special court system set up for workers’ compensation, which helps to speed the process. Workers’ compensation will also benefit your business because it provides a powerful incentive to make sure your employees are properly trained and safe. It also encourages the frequent review and revision of safety protocols, and hopefully reduces the number of injuries suffered by your employees.

If you have questions about workers’ compensation and your business, contact me today at (714) 516-8188. I can help walk you through the process and answer your questions about your business.

Homeowner Issues – Are My Handman And/Or Nanny Covered?

In today’s busy world, it is common for both partners in a relationship to work full time outside of the home. To help get things done around the house, it is very common for people to hire outside help. This comes in many forms, including a handyman for odd jobs or a nanny to care for the children. When a couple decides to hire outside help, they need to be careful about workers’ compensation requirements in California. California Labor Code sections 3351 and 3352 provide guidance for homeowners thinking of bringing in outside parties to assist with household tasks.

California law requires almost all employers to carry workers’ compensation insurance for their employees. Labor Code 3351 has a long list of those who are included under the definition of “employee,” and subsection (d) provides that anyone who is employed by a homeowner “whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children” is considered an employee for purposes of workers’ compensation. The statute does, however, specifically refer to a set of exceptions found in section 3352(h). These exceptions state that if the employee was employed for less than 52 hours in the 90 calendar days preceding the date of the injury or if the employee earned less than $100 from the employer during those 90 days, then the person is not an employee for purposes of workers’ compensation.

With this in mind, the homeowner needs to carefully consider the type and frequency of work being performed by a handyman or nanny. According to the definition, a person who helped put up a fence or paint a house would not fall under the definition of employee, as long as the job took 51 hours or less. Similarly, an occasional babysitter would also not fall under the definition of employee. The law is more aimed at the type of worker who is regularly and frequently inside the home, performing regular work for the homeowner. In other words, a nanny or au pair, as opposed to a babysitter, and a regular maintenance person as opposed to an occasional handyman. If you are employing someone who fits these parameters, you are likely required to carry workers’ compensation insurance.

I have extensive experience helping clients understand their obligations under California workers’ compensation, contact me today at (714) 516-8188 to talk about your options.

How Important Are Documents in the Workers’ Compensation Process?

Lawsuits invariably involve a large amount of paperwork. The initial complaint, the response, discovery work, and motions can all contribute to the large volume. Workers’ compensation is no exception to this rule. In fact, meticulous and detailed documentation are essential to the workers’ compensation process. Documents that carefully detail processes and injuries both before, during, and after a work-related injury can drastically alter the course of a workers’ compensation case.

Before a work-related injury ever happens at your place of business, it is vital to make sure you provide accurate information to your workers’ compensation insurance company. Providing the required paperwork to the company in terms of the number of employees and the nature of your business will help make sure that in the event a work-related injury occurs and you have to file a claim on behalf of your business, the claim will not be denied because of inaccurate or incomplete information.

When an employee actually sustains a work-related injury, it is then vital to complete paperwork related to that injury as soon as possible. This paperwork will include the Claim Forms that you must provide to the insurance company. Providing detailed information about how the injury happened, as well as when and where, will arm the insurance company with important information allowing them to identify any red flags for fraud, malingering, or a pre-existing injury. Witness statements from other employees as well as a statement from the injured employee should be secured as quickly as possible to help nail down the details of what actually happened.

Medical documents from the injured employee’s health care provider are also very obviously central to the workers’ compensation system. The medical providers will determine the percentage of an employee’s injury, necessary course of treatment, and whether the injury is temporary or permanent. All of these will be instrumental in determining the amount and length of benefits an injured worker will receive. Moreover, these medical documents will allow for careful review of whether treatment is appropriate for the injury or whether an insurance company may need to call for an independent medical review.

If you have questions about the documents your business will need during a workers’ compensation suit, contact me today at (714) 516-8188. We can talk about your business and its workers’ compensation procedures.

Violent Acts and Workers’ Compensation

Work-related injuries can happen despite any and all precautions taken by an employer. Even the most careful preparations can fail to protect all employees from all types of injuries. The workers’ compensation system has been designed such that different injuries may receive different treatment with different types of requirements. One example of narrow or particular requirements is in the case of a work-related injury resulting from violent act.

Workers’ compensation is designed to address an injured worker’s work-related injuries. However, even if the injury is sustained due to willful violence from another worker, the injury is still compensable. For example, if an employee is assaulted by another employee while at work, those injuries will fall under the category of compensable work-related injury. Similarly, if the employee is assaulted by a client or customer, those injuries are also compensable under workers’ compensation. Simply because the assault should not occur during the course of employment or does not directly involve what is an employee’s job duties does not take it out of the realm of a compensable injury. For example, in a 2015 case, the WCAB found that a violent act included a situation when an employee sustained injury after being punched in the back of the head by another co-worker. Similarly, another case found it was a violent act where an employee was injured during a store robbery.

California labor code 3208.3 is one provision that addresses work-elated violent injury. Subsection (b)(2) specifically talks about psychiatric injury that is a result of a violent act. The statute provision states that if the psychiatric injury is resulted from being the victim of a violent act, the employee “shall be required to demonstrate by a preponderance of the evidence that actual events of employment were a substantial cause of the injury.”  A recent case addressed this provision. Larsen v. Securitas Security Services involved a case where a security guard was hit by a car when she was walking through the parking lot, performing her regular duties. Among physical injuries, she also claimed psychiatric injuries arising from the violent act of being hit by the car. The WCAB agreed and pointed out that the injured employee was not required under 4660.1 to prove that the violent act was criminal in nature.

If you have questions about what qualifies as a violent act and how to protect your employees, you need to discuss it with an experienced attorney. Call me today at (714) 516-8188 and let me help you and your business.

Premium Fraud and AA Buffet

Fraud in the workers’ compensation system comes in many forms. It can come from employees, medical providers, and even employers. All types of fraud have a detrimental impact not only on those directly impacted by the case but also on the entire system at large. Fraud costs tax payers millions of dollars and can drive insurance premiums for workers’ compensation even higher. As a result, California takes steps to crack down on fraud, including from employers. Workers’ compensation fraud involving employers can mean that the employer is lying about the nature or number of its workers or about the nature of the work performed. In a March 2017 case, an employer pled guilty to charges arising out of workers’ compensation fraud.

The defendant, Chang Tai Lin, was the owner of AA Buffet. In May 2015, the fraud unit began an investigation into the defendant’s business after receiving a tip from the district attorney. The fraud unit began conducting surveillance, obtaining documents from the police department, health department, insurance companies, and other state agencies. In March 2016, a search warrant was executed not only on the AA Buffet but also at the defendant’s home. As a result of the investigation, it was discovered that from April 2010 through April 2016, the defendant had been underreporting the number of employees working at AA Buffet as well as falsely reporting payroll wages, as he actually paid many of his employees in cash. It was also discovered that the defendant had been committing tax evasion from October 2010 through April 2016 because he failed to accurately report employee wages or payroll taxes to the Employment Development Department. After the investigation, the defendant pled guilty to two counts of making a material misrepresentation in order to obtain a workers’ compensation insurance premium as well as one count of willfully failing to file payroll tax returns with intent to evade tax. Employers are required to accurately report the number of employees to their workers’ compensation insurance company. Failure to accurately disclose the workers or the type of work performed by the company can clearly result in harsh penalties, including both fines and jail time, for offending business owners. It is essential that employers understand and live up to their disclosure obligations to their insurance carriers.

Understanding your insurance obligations is essential to making sure you and your business are not running afoul of the law. Call me today at (714) 516-8188 if you wish to  discuss your business’s obligations.

Fraud and People v. Snow

The State of California has taken many steps in recent years and legislative sessions to lessen the amount of fraud perpetrated in the workers’ compensation system. During the fiscal year of 2015-2016, the California Fraud Division reported over 5,300 cases of suspected workers’ compensation fraud and made 249 arrests. Although the vast majority of employees who sustain a work-related injury have valid claims, there are some unfortunate cases when the employee is defrauding his or her employee. When this happens, employees may face criminal prosecution under a variety of legal theories.

In People v. Snow, the employee faced a number of repercussions for her fraudulent behavior. In that case, the defendant worked at Trader Joe’s stocking shelves, gathering shopping carts from the parking lot, customer service, and other similar tasks. The defendant made a claim for workers’ compensation claiming that her wrist hurt and she had sustained injury from repetitive action required in performing her job duties. The defendant’s claim was approved for three months of disability benefits. After the defendant returned to work, she claimed on her first day back to have injured her back while bringing three shopping carts in from the parking lot. Although she was later cleared to return to work, she did not do so, and instead sought treatment from a new doctor, claiming she had pain while doing household tasks such as laundry, dishes, and driving – claims she repeated during a deposition. The supervisory claims adjustor determined the second claim required further investigation and hired a private investigator. The investigator observed her at the beach, lifting a paddleboard from the roof of her SUV and carrying it and the paddle approximately 150 feet to the beach. After paddleboarding for approximately 45 minutes, the defendant returned to shore and carried the paddleboard and paddle back to the SUV and strapped the on the roof herself. Nevertheless, the defendant persisted in telling her doctors she could not lift things over her shoulder or stand for prolonged periods of time, which she repeated during depositions. Ultimately, the defendant was charged with perjury after the video of the defendant at the beach completely undermined her claim of disability. Thereafter, the defendant was charged not only with insurance fraud but also with perjury based on statements made at depositions concerning her second workers’ compensation claim. She was ultimately convicted of two counts of perjury as well as three counts of making false or fraudulent statements to obtain workers’ compensation benefits. Although the defendant then appealed her conviction claiming that this violated her right against double jeopardy as the convictions were based on the same incidents, the court disagreed and affirmed her convictions.

Workers’ compensation fraud is a serious problem and you should take all steps to protect your business. Contact me today at (714) 516-8188 if you wish to discuss fraud and protect your  business.

IMR in 2016

When an employee is injured on the job, he or she will need to get medical treatment to proceed with a workers’ compensation claim. The physician will make an assessment of the injury and decide what type of course of treatment will be best to treat and hopefully cure the injured employee. In some situations, an employer can request an Independent Medical Review of the physician’s diagnosis and treatment plan. When a claim is made for workers’ compensation, the claim must go through a “utilization review” process in order to confirm the treatment is medically necessary before the claim is paid out. If the claim is denied, the employee may request an IMR. If an employer believes the claim should not have been approved, the employer may request an IMR. The purpose of instituting the IMR system was done with an eye toward reducing workers’ compensation disputes and speeding settlement, in order to help ease the congestion in the court. A recent analysis done of IMR volume shows that the process is perhaps not meeting its intended purpose.

The California Workers’ Compensation Institute conducted an analysis of almost half a million IMR decision letters from 2014, 2015, and 2016. These letters were from applications submitted to the state after a utilization review physician’s medical service was modified or denied. In 2016, IMR was at record high levels, with 10,477 more cases in 2016 than in 2015. The IMR analysis showed that in over 90% of cases, the IMR upheld the decision to modify or deny a requested medical service. The types of services did not change much, with prescription drug requests comprising over half of all IMRs, 28.5% of which were for opioids. The rate at which the IMRs upheld the decision made by the utilization review varied from 78.9% for evaluation services to 93.6% for acupuncture. The analysis also found that IMR requests varied widely by geographic region, with Los Angeles County and the Bay area representing a disproportionately large amount of IMR requests vis a vis their percentage of involvement in workers’ compensation medical services across the state. Similarly, areas with low population typically had a disproportionately small amount of IMRs, as did Orange County and San Diego.

If you own your own business, you need an experienced attorney to help you navigate the system. Call us today at (714) 516-8188. I can help you understand your business’s obligations and the claims process.

Psychiatrist Fraud in Workers’ Compensation Cases

The workers’ compensation system is designed to cover a large variety of work-related injuries. These injuries could range in type from a broken finger to repetitive stress injury to psychiatric injury. Unfortunately, some types of injuries are more likely to be a source of a fraudulent claim or unnecessary treatment, such as soft tissue injuries. Psychiatric injuries can also be a source of fraud, both in the case of the injured worker and the psychiatrist.

One red flag for fraud on the part of the psychiatrist is a very short amount of time spent with the patient. A real psychiatric assessment should take no less than a couple of hours. A quick “in and out” could be a red flag that the psychiatrist is simply trying to move the patients through without providing actual care or careful diagnoses

Another red flag could be a lack of using common and accepted diagnostic tools. For example, there are widely used and accepted tests to look for malingering. A psychiatrist in a workers’ compensation case should be on the look-out for malingering, and a failure to attempt or recognize this type of fraudulent behavior on the part of the patient could be a sign of fraudulent behavior on the part of the psychiatrist.

Finally, employers should be on the look-out for the type of assessments and also that a differential diagnosis actually demonstrates a disability. Although a diagnosis of psychiatric injury absolutely can result in temporary or permanent disability, this is not always the case. Employers need to be vigilant for a situation wherein a worker has a psychiatric injury diagnosis that may be long term but still is very high functioning.

California has been cracking down on fraud and taking steps to end fraud both on the part of workers and medical providers. In a recent case, a psychiatrist named Jason Hui-Tek Yang was suspended from participating in the workers’ compensation system after he was convicted for involvement in an insurance fraud conspiracy. The conspiracy involved referring patients for unnecessary treatment in order to bill the workers’ compensation system. It was determined that Yang had over 2,000 active liens worth over $13,000,000.

Fraud in the workers’ compensation system can come in many forms. If you have questions about how to protect your business, call me today at (714) 516-8188. We can discuss your business and what we need to do to make sure you are protected.

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